AI Wealth Sparks Home Buying Surge in San Francisco’s Market

UPDATE: The housing market in San Francisco has experienced a dramatic turnaround, with homes selling at an unprecedented pace, driven by a surge in wealth from the booming artificial intelligence (AI) sector. In September 2025, homes in San Jose sold in a median of just 19 days, while San Francisco homes were gone in 21 days, significantly faster than the national average of 51 days. This rapid change comes after years of stagnation in the market.

The catalyst for this housing frenzy? A flood of cash from AI companies like OpenAI and Anthropic, which are aggressively hiring and offering substantial salaries. According to Redfin, pending home sales in the Bay Area skyrocketed 17.1% year-over-year in September, marking the largest gain among major U.S. metropolitan areas.

Local real estate agent Ali Mafi noted, “San Francisco is seeing a homebuying boom among young tech workers who just got big signing bonuses with AI companies or other tech companies.” This influx of well-paid workers is changing the landscape, as many are seeking to purchase homes to accommodate growing families.

The impact of the AI boom is unmistakable, with OpenAI‘s valuation recently soaring from $300 billion to $500 billion. Unlike previous tech booms, current employees at these firms can cash out their shares pre-IPO, fueling the housing demand.

The area most affected by this boom is Mission Bay, where OpenAI occupies nearly 1 million square feet of real estate. The company’s expansion includes a new 315,000-square-foot building at 550 Terry Francois Boulevard, previously the Old Navy headquarters.

Real estate dynamics are shifting dramatically. Homes in neighborhoods like Sunset, Parkside, and Golden Gate Heights now sell in an average of 19 days, while other areas struggle to keep up. Properties in these high-demand locations are fetching prices 20% above listing in the past year. Brokers have dubbed this trend the “Sunset Special,” where sellers list homes below market value to generate bidding wars.

The return-to-office mandates are also reshaping the market. Office visits in San Francisco increased 19% year-over-year in September, prompting more to relocate closer to their workplaces. In contrast, suburban areas like Dublin and Pleasanton have seen home prices decline by approximately 6% as demand shifts back to the city.

Mortgage rates have dropped below 6.3%, currently averaging 6.26%, further stimulating buyer interest. Mafi emphasized that even a minor decrease in mortgage rates can significantly lower monthly payments for high-value homes in the area.

Crucially, the inventory of homes for sale in San Francisco has also dropped by 7.7% year-over-year, intensifying competition. Unlike the national trend, where there were 36.7% more sellers than buyers, San Francisco reports a mere 10.2% surplus, a stark contrast to the 47.1% peak in May.

The speed of sales is remarkable, with 48.7% of homes going under contract within two weeks in September. This is a substantial increase from 26.1% a year earlier, highlighting the city’s rapid market turnaround.

Despite these rapid sales, prices have yet to surge dramatically. The median home price in San Francisco remained stable at approximately $1.7 million in September, with single-family homes holding their value. However, analysts like Patrick Carlisle predict that the combination of rising sales and dwindling inventory could signal price increases in the near future.

As San Francisco’s housing market emerges from its post-pandemic slump, it does so with a remarkable vibrancy, propelled by AI wealth, return-to-office trends, and an ongoing supply crunch. Buyers are urged to act quickly or risk missing out in this rapidly evolving landscape.