Time to get back to work! After a typical summer slumber, the San Francisco real estate market is waking up, and the early signs point towards a strong fall season. The most exciting news from the latest August report is that San Francisco’s median house price has appreciated by over 5% year-over-year, making it the strongest market in the Bay Area. In a striking contrast, almost every other county in the region has seen a decline in the same period, with the exception of Santa Clara. We owe a large part of this success to the AI revolution currently sweeping through the city, making it a truly exciting time to be in San Francisco.
On the ground, we are already seeing a significant uptick in activity. Open houses have been busy, and we anticipate a steady increase in inventory in the coming weeks. The market feels more heated than usual for this time of year. Just last week, we successfully secured a condo for a client in the Marina, winning out against 12 other offers. This level of competition on a condo is a clear indicator of the renewed energy in the market.
The impact of the AI boom is undeniable. According to a recent report, apartment asking rents have seen notable growth and are now at their highest since 2020. This aligns with what I’m hearing from rental agents, with one telling me that 40% of their recent applicants are relocating to San Francisco for jobs in the AI sector. While we haven’t seen quite that percentage in our buyer pool yet, we are fortunate to be working with a growing number of clients in the AI industry, thanks to referrals from past clients like you (THANK YOU!).
Before we get to the data below here is what our strategist Patrick Carlisle had to say:
San Francisco has had its share of tech companies since the dot-com boom, but the money pouring into artificial intelligence has lately supercharged the city’s tech profile…Last year, [SF companies] raised nearly $35 billion [in venture capital funding]…The change is visible. Rents are climbing again. City buses are filling back up. And the face of San Francisco is starting to look younger…The city is the tech industry’s hub for artificial intelligence.” “What if San Francisco is the new Silicon Valley?” The New York Times, 8/4/25
Over the past couple years, the AI boom has most dramatically affected the housing markets in Silicon Valley, with their established players like Nvidia. San Francisco, though home to major AI firms like OpenAI and Anthropic, has been affected, but much more modestly – but that is now rapidly changing. The AI industry is exploding in the city, with dozens of new startups making San Francisco their home, and the city has become a powerful magnet for those eager to participate in perhaps the biggest technological/economic revolution of our times. Just as in the dotcom and recent high-tech booms, they are doing so due to the network effect, i.e. the tremendously dynamic synergies of being within a half mile – or even a hundred yards – of each other. That is a huge plus for the best and the brightest flocking to AI, for companies growing fast, and for the intense cross-fertilization of ideas characterizing the industry.
This has shifted the SF housing market into one of the strongest in the Bay Area, diverging from the cooling trends seen in most other counties and the country at large. Unlike most other markets, the supply of listings is dropping, price reductions are declining, and home prices are starting to climb year-over-year. And these are very early days for the AI boom in the city: If trends continue on course, hiring accelerates, startups grow, and privately held companies eventually move toward IPOs, the explosion of new wealth will likely be astounding.
Report created in good faith using data from sources deemed reliable but may contain errors and subject to revision. Last period figures are preliminary estimates based on data available early in the following month. All numbers approximate, and may change with late-reported activity.
