The short answer: buyers who can’t win in the single-family market are flooding into condos.
After several years of stagnation, condo prices rose 27% citywide in a single year. That’s a city-wide average, in the most prime neighborhoods, the appreciation is meaningfully higher. The shift is being driven by buyers who have $3–4 million budgets, want walkable, sunny neighborhoods like Noe Valley or Eureka Valley, and are being outcompeted or outright priced out of single-family homes. Rather than compromise on location, they’re compromising on product type. They’re looking at condos, and in some cases, multi-unit buildings they plan to use as a single-family home, in areas they’d previously ignored.
I was involved in an offer situation recently that illustrated exactly where this is heading. A condo on Scott Street in Alamo Square sold at over $3.1 million. The sellers had purchased it in 2021 for approximately $2.3 million. That’s more than 33% appreciation in roughly four years, on a 1,500-square-foot unit. The buyers bidding on that property were people priced out of single-family homes. Once I see that dynamic in an area like Alamo Square, I know immediately what it means for other centrally located neighborhoods.
Luxury home sales, properties over $5 million, jumped more than 220% year-over-year, and homes that weren’t luxury before are now priced into that category.
In a lot of areas across San Francisco, single-family home prices are up 25–40% in 2026. It hasn’t been unusual to see homes sell $1 million or even $2 million over asking. What used to be a $3.5 million home in Noe Valley is now close to $5 million — sometimes $4.5 million. We’ve worked with buyers this year who increased their budgets by millions of dollars to get a house that, last year, they could have taken their time to find.
The 220% increase in luxury sales isn’t because more lavish homes are suddenly on the market. It’s that homes which weren’t considered luxury before have crossed the $5 million threshold. For buyers at $4 million, the data right now is genuinely disappointing — that budget, in many central neighborhoods, gets you something that feels very modest. I talked to a buyer at that price point recently and I did not disagree with their frustration.
The surge in buyer wealth traces back to tech liquidity events — and it’s broader than just AI companies.
In October 2025, OpenAI allowed roughly $10 billion in stock to trade on the secondary market. This April, Anthropic allowed about $5 billion in secondary shares to be sold. I also had a client from Waymo reach out a couple of weeks ago; they recently allowed about $1 billion of stock to be sold on the secondary market. These liquidity events have sent a wave of buyers into the San Francisco housing market.
But it’s not only AI. Lots of tech companies are freeing up equity as a way to retain talent because they have to compete with AI salaries and offer packages. Combine that with years of stock market growth from the Mag 7. If someone invested $250,000 a year in the S&P 500 for the last decade, that $2.5 million would double. If they concentrated in Mag 7 stocks, that same $2.5 million could easily be worth $10–20 million today, depending on the company and the concentration. Add generational wealth transfers from parents helping millennials buy, and you have more purchasing power in this market than I’ve seen in 16 years.
My team alone has ratified over $110 million in sales across more than 50 transactions this year, and it’s April. We’re putting multiple deals into contract every single week. As of Wednesday this week, we’d sold eight homes.
As of this writing, there are 188 single-family homes on the market in San Francisco — roughly half the ~400 that would normally be available at this time of year.
When I analyzed notes from seller meetings over the last few months, a consistent pattern emerged: many sellers are intentionally timing the market. They believe, and probably rightly, that prices could continue climbing for another 12 to 24 months, and they want to build more equity before listing. Another group, particularly those in condos in non-prime locations who bought in 2020–2022, simply cannot break even yet. They’re underwater or close to it, and they’re waiting.
Then there’s a third group: tech employees who simply don’t want to leave San Francisco right now. So many homeowners here are in tech, and the city is at the center of the industry’s momentum. No one wants to sell and leave.
What I tell sellers is this: markets don’t go up forever, and they don’t give a warning when they turn. If you’re ready to sell and the market is strong, that’s a legitimate reason to consider it. I’m not in the business of pressuring anyone, but I do think that if you’re in a prime central location with a three-bedroom, you should look into it.
Pacific Heights was the first neighborhood to show a major shift, with condo prices up 20–25% from December levels, and that wave is spreading.
It makes sense that Pacific Heights moved first. It’s one of the city’s most premier neighborhoods, and it happens to have an unusually large share of bigger condos — 2,000 to 2,500 square feet — that function more like single-family homes. When buyers priced out of single-family homes go looking for a substitute, Pacific Heights condos are the closest match.
But we’re also seeing multiple offers reappear in high-rise buildings in SOMA, South Beach, and downtown — something we hadn’t seen since before COVID. This is being accelerated by AI companies leasing office space downtown. One of the largest AI companies in the world just leased an entire office tower. When major employers anchor in a neighborhood, housing demand follows. I expect downtown, Mission Bay, and South Beach to be meaningfully stronger markets than they’ve been in recent years.
Russian Hill and Nob Hill still have deals. Sellers in those areas who bought in 2016 or 2017 are, in some cases, not yet positioned to make money selling. That window won’t stay open long. The caveat: some of the older, larger buildings in those neighborhoods have significant deferred maintenance issues and infrastructure costs that can surface as special assessments. Read disclosures carefully in early 1900s buildings.
Yes, and not just as a fallback. Condos currently offer more inventory, lower price per square foot, and access to the same neighborhoods where single-family homes are out of reach.
There are currently 488 condos available in San Francisco, more than double the 188 single-family homes. The price per square foot is still meaningfully lower, which means your budget stretches further. And in neighborhoods like Pacific Heights, you can find condos in the 2,000–2,500 square foot range that genuinely function like a house.
The condos moving fastest right now are three-bedrooms in centrally located, walkable neighborhoods. They most closely resemble single-family homes and are being targeted by exactly the buyers who’ve been priced out of them. Those will continue to move up first. Smaller condos and downtown high-rises are also appreciating, but I think they’re about six months behind the curve. The bigger money in this market right now isn’t focused below $3 million. But a trickle-down effect does happen in real estate, and it’s already beginning.
For a buyer who would be happy in 1,500 to 2,500 square feet, the condo market gives you real options. If you need 4,000 square feet, it’s much harder. And if you’re willing to consider a multi-unit building — using the whole thing for your family, even if it’s not connected — that’s another path. I just helped a buyer who was priced out of single-family homes and kept losing on condos get into contract on a sweet multi-unit building: two bedrooms upstairs, a detached one-bedroom studio below, in a great central location, for $3.4 million.
HOA fees are often less than the actual cost of maintaining a single-family home — and in large buildings, they cover things single-family owners pay out of pocket.
This concern comes up in almost every condo conversation, and it’s worth addressing directly. If you own a single-family home and you’re maintaining it well, your ongoing costs — roof replacement ($20,000), HVAC repair or replacement ($2,500–$7,000), and everything else — likely exceed what a well-run condo building charges in monthly fees. The difference is that HOA fees are visible and recurring; single-family home costs are lumpy and easy to underestimate.
The caveat is building reserves. Smaller buildings often don’t collect enough reserves, and when major maintenance is needed, it can result in a special assessment. Older buildings — particularly large, early-1900s structures in Russian Hill and Nob Hill — are especially prone to this. Some are facing significant retrofitting and infrastructure costs.
On the high end, some downtown high-rises offer concierge services, stocked-fridge amenities, door staff, and full-time management. For busy professionals or people who travel frequently, the ability to lock up and leave, knowing everything is managed, is a real value. We have buyers who prioritize exactly that.
Buyers under $3 million have more flexibility than they may realize, but it requires being open to neighborhoods or product types that aren’t at the top of the wish list.
The biggest mistake buyers in this range are making is insisting on the same neighborhoods and product types as buyers with $5–7 million. That’s a losing strategy in this market. Here are the options I’m actively recommending:
If downtown high-rises are on your radar, this may be the window. There are still meaningful deals in those buildings relative to where I think they’ll be in 12–18 months, particularly as AI companies establish offices nearby. Some of those buildings have three-bedroom units worth exploring.
Whether you’re thinking about buying or selling or just trying to make sense of what’s happening in the San Francisco real estate market, I’d love to connect with you.
