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San Francisco’s AI boom has buyers spending unprecedented amounts of money on homes – much more than sellers are asking for.
A new analysis from real-estate brokerage Compass, found that in the first half of ۲۰۲۶, more than ۱۴۰ homes in the city sold for at least $۱m above their asking price, ۴۴ of them in June alone.
The figure is a huge jump from January through July of last year, in which only eight homes sold for more than $۱m, according to Compass data. Just six homes sold above that amount in the first six months of ۲۰۲۴.
The skyrocketing demand for homes in this price range is “absolutely BANANAS”, according to Mike Simonsen, Compass’s chief economist. Simonsen has previously explained that the widespread overbidding was “of course related to the AI boom. It’s migration and hiring, as well as preparing for mega IPOs.”
OpenAI and Anthropic, both headquartered in San Francisco, have filed to go public on the US stock market at valuations approaching $۱tn. Their debuts promise to mint a new class of multimillionaires in San Francisco, which is already home to the highest concentration of billionaires per capita in the world.
San Francisco’s single-family home prices have risen about ۱۷% year over year, while inventory has plummeted roughly ۴۵%, according to Compass’s market intelligence report published last month. The single-family median home price has increased from $۱.۷m to $۲.۲m, and houses are getting snapped up at an average of ۱۸ days on the market, the fastest pace in five years.
The sky-high sales in San Francisco’s housing market marks a shift from a few years ago when departures as well as concerns about crime and homelessness contributed to a slump.
Compass’s report noted that in San Francisco, “AI and tech-driven demand has created aggressive bidding wars on the scarce inventory” and that “skyrocketing rents are back in the norm”. Simonsen explained that the resurgent demand is so far concentrated “to a very small section in the city, and luxury markets in Peninsula and Marin”. The report describes a “housing market increasingly segmented by income tier and proximity to AI-driven employment centers”.
San Francisco stands out as having the highest median home price in the country, according to a May ۲۰۲۶ analysis from real estate firm Redfin. Simonsen also said it was notable that other tech hubs across the country have not seen a similar trend of overbidding.
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Redfin found that San Francisco had the highest nationwide increase in the median sales price of homes from a year earlier, followed by Detroit and Providence, Rhode Island. The city reported a more than ۱۰% increase in April, compared to the prior year.
“What’s different this time is that the benefits or the prosperity of AI seems much more concentrated,” said Daryl Fairweather, the chief economist at Redfin, according to the New York Times. “It’s not that everybody is going out and buying homes.”
