The AI boom has seemingly pulled San Francisco’s housing market out of the trenches.
The median home sale price last month was $1.963 million, according to a report from Compass on Monday. That’s up 23% from a year ago and the highest monthly median since May 2022, Patrick Carlisle, chief market analyst at Compass, noted in the report. Condo prices also increased, rising 12% annually to $1.225 million.
“In my 37 years in real estate, I’ve never seen a market shift and accelerate so fast,” Carlisle wrote. “The effect of the AI startup boom—marked by skyrocketing market values and stupendous new wealth creation—on San Francisco’s housing market is unparalleled, even compared to the other furious high-tech booms over the last 30 years.”
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Heading into the spring, historically the peak for the city’s housing market, Carlisle predicts San Francisco will “almost certainly” exceed its monthly median sale price record of $2.05 million, set in April 2022.
The city saw a slight uptick in new listings from January to February, though total active inventory was down 29% from a year ago, putting further pressure on home prices as AI startup employees flock to the Bay Area.
Sellers are benefiting from the competition—properties sold for 10% over the original list price on average last month. That’s the highest reading since spring 2022, though the report noted that this statistic can be distorted by “strategic underpricing.”
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Luxury sales—homes that sold for $5 million and higher—rose a whopping 200% annually to the highest February sales total ever, according to the report.
“Affluent and very affluent buyers continue to play an outsized role in the market, and home value appreciation is highest in the more expensive price segments and neighborhoods,” Carlisle wrote in the report.
Though optimism around San Francisco’s housing market recovery is high, it’s too soon to tell how much the Iran war will impact interest rates, financial markets and overall consumer confidence.
“Barring an extreme decline in economic conditions, we currently consider a significant negative impact on the city’s housing market unlikely,” Carlisle said.
