In July, a 2,700-square-foot, three-bedroom residence on the 26th floor of Lumina at 338 Main Street sold for just under $6.7 million. It had been bought new in 2016 for almost exactly the same price. After a decade of ownership, the seller's gain was $18,300, according to The Real Deal. The buyer was the chief technology officer of an AI data firm.
The sale was not unusual for its building. The same report found that more than 75 percent of Lumina condos sold since the prior year closed at roughly or below their 2016 prices. San Francisco's median home sale price, by contrast, reached a record in March 2026, the San Francisco Chronicle reported. For buyers comparing a Rincon Hill or eastern SoMa tower with a house elsewhere in the city, the gap has a specific cause. The towers have lagged because of friction on both sides of the deal. Sellers are anchored to what they paid, and lenders screen condo buildings before they lend. Watch inventory and cash share. They tell you more than the median does.
Sellers who are waiting to get their money back
A seller's purchase price shapes how they behave. Altos Research figures cited by The Real Deal put the citywide median condo price at a peak of $1,200 per square foot in 2020. By 2025 it had fallen to $950, the lowest since 2016. So a large share of downtown owners bought at prices the market has not yet returned to.
Those owners have mostly chosen to wait. In May, the San Francisco Chronicle reported that many condo owners were holding off on selling for fear of taking a loss. That left more competition, and higher prices, for the units that did come to market.
SoMa has a clear example of this. A 44-unit building at Seventh and Minna streets was permitted and built during the boom, then delivered into a dead market. Its buyers paid 35 percent less than the developer had originally expected. According to The San Francisco Standard, most of them have stayed. Milan Jezdimirovic, the SoMa specialist who sold the building, told the Standard, "They might want to sell, but they're kind of stuck, and they have their interest rates locked at 3%."
Two forces keep these owners in place. Peak-era buyers are waiting for their price to come back, while those who bought at a discount have a 3 percent mortgage they would lose by selling. Either way, the unit doesn't get listed.
What happens when nobody lists
Inventory is where all that waiting shows up. In September, The Standard reported that condo inventory across the city was down 50 percent from a year earlier, after years in which supply had outpaced demand.
Halving the supply changes how a purchase works. When a building has a dozen comparable units listed, a buyer can take a week, order inspections and compare floor plans. With half as many listings, the same buyer may be up against several others for one unit. In that situation, a lender's timeline can decide who wins.
The lender check that pushes condo deals toward cash
Every condo loan carries a step that a house loan does not. Lenders evaluate the building as well as the buyer. The Chronicle reported that lenders look closely at condo associations' reserves and maintenance, and that weaknesses there can leave a buyer unable to get a loan. The same article named insurance problems and association dues that can reach four figures a month as headwinds across most of the Bay Area.
In San Francisco, many buyers skip that step entirely. Public records compiled by Deirdre Connor of Old Republic Title Company show that one in three San Francisco homes sold for all cash between January 1 and September 1, 2026. Connor's biggest surprise was that condos at every price point were more likely than houses to sell for cash, The Standard reported.
The explanation lies in who buys condos. The Standard describes typical condo buyers as downsizers, single people, couples without children, investors and second-home buyers. These groups are less likely to need financing than someone stretching to afford a house. So far in 2026, 61 percent of Jezdimirovic's transactions have been all cash.
"A financed transaction takes longer to close, while a cash offer can close in under two weeks. That speed gap often decides who wins." Milan Jezdimirovic, speaking to The San Francisco Standard
Financed offers can still win. The same article describes a financed buyer who won a North Beach condo against multiple all-cash offers by waiving contingencies and offering 16 percent over asking. Agents described it as the exception. A buyer who plans to finance a tower unit will be in a stronger position after reviewing the association's reserves and the building's lending history before writing an offer.
Demand that is moving in next door
The towers are reactivating now partly because buyer demand is arriving in the neighborhood around them. The Standard reported that SoMa office leasing has more than tripled since 2023, the largest gain of any San Francisco submarket. Brex leased all 200,000 square feet at 270 Brannan Street, Harvey AI expanded to 150,000 square feet at 201 Third Street, and Anthropic has built what the Standard calls an urban campus on Howard Street. Street-level retail is following. Highwire Coffee Roasters signed a five-year lease, with a five-year extension, on the ground floor of the Quincy at 555 Bryant Street, its first San Francisco location.
Rents are adding pressure on the buying side. On KQED's Forum in September, San Francisco's average two-bedroom rent was put at $4,600, up more than 25 percent from the year before. Chronicle reporter J.K. Dineen described a Rincon Hill tower apartment that rented for $21,000 a month, with the tenant paying a full year up front. The Chronicle has also reported investors converting condos into rentals to capture those rising rents. When renting a tower unit costs that much, buying one for cash at roughly 2016 prices starts to look like the cheaper option.
What the year-to-date numbers show
The San Francisco Association of Realtors' MLS data, dated October 14, 2026, compares year-to-date median sale prices through September for each of the past three years:
| Year-to-date median, through September | 2024 | 2025 | 2026 |
|---|---|---|---|
| Single-family homes | $1,638,000 | $1,700,000 | $2,053,500 |
| Condominiums | $1,140,000 | $1,125,000 | $1,279,250 |
SFAR's figures show the 2026 condo median up 13.7 percent from the same period in 2025, against 20.8 percent for single-family homes. Over two years the gap is wider. The 2026 single-family median is about 25 percent above its 2024 level, while the condo median is about 12 percent higher.
These are citywide figures. They mix tower units with Noe Valley flats and Pacific Heights condos, which the Chronicle notes are in high demand because they look like houses and have their own street entrances. Even so, the direction holds. The condo market is improving from a lower starting point, with fewer listings and a larger share of cash buyers. Compass chief economist Mike Simonsen told The Real Deal in July that condos "have a long way to climb again," and that this year is "the first time demand is improving in a long time."
So in a tower, the median tells a buyer little. What matters is the building's own sale history since 2016, and how many of its recent sales closed at or below their original price.
The reserve rule that arrives in 2032
There is one more cost a tower buyer will eventually face, and it comes from Sacramento. Governor Newsom signed Assembly Bill 2050 on September 29, 2026, as Chapter 796. According to the enacted text, starting January 1, 2032:
- An association must fund its reserve account each year at no less than the minimum contribution level in its most recent reserve study.
- If reserves are projected to fall below zero at any point in the next 30 years, the association must transfer at least 15 percent of its gross annual budget to reserves each year until the projection no longer shows a shortfall.
- If the budget alone cannot meet the minimum, the association must levy a reserve-funding special assessment. If the amount needed exceeds the cap on assessments that can be levied without a vote, the membership votes on the excess.
- An association may not levy a reserve-funding special assessment more than once every nine years.
The rule is more than five years away, but its effect starts now. Buyers today will be the owners when it takes effect. And because lenders already review association reserves, a building's current reserve study is likely to influence both its financing and its future dues. This is general information, not legal, tax or financial advice. Buyers should review a specific association's documents and obligations with a qualified attorney, accountant or lender.
Frequently asked questions
Why have downtown condos lagged houses during the AI boom? Owners who bought near the 2016 to 2020 peak have been waiting to break even, and lender reviews of condo associations add a step that house loans do not have. Both slow the market, even with demand improving.
Is the condo segment recovering? SFAR's year-to-date data through September 2026 shows the citywide condo median up 13.7 percent from the same period of 2025, and The Standard reported condo inventory down 50 percent year over year in September. Both point to a segment that is re-engaging from a low base.
Can a financed buyer still compete for a tower unit? Yes. The Standard reported a financed buyer who won a North Beach condo against multiple all-cash offers, though agents described that as the exception.
In a building where most recent sales closed near their 2016 prices, a pricing strategy depends on the building's own history, its association's reserves and the buyers able to close quickly. Ardila Costello Team builds that analysis for each tower and helps owners and buyers plan when to list, how to price and how to structure an offer. Schedule a Confidential Consultation to review your building's numbers.