Monday Market Update: The San Francisco Market Is In A League Of Its Own

A mansion shortage. A million dollars over asking price. A median down payment of 35%. These are things you don’t see everyday in every market – but you can absolutely find them in San Francisco. While the vast majority of metros are seeing less urgency, the city most heavily impacted by AI has the opposite problem. While the National Association of Realtors® reported a decrease in pending home sales in all 4 regions of the country last month, San Francisco trends differ exponentially. Here’s why & how… 

Why

Realtor.com® states that “The bidding competition has emerged as San Francisco draws talent and wealth tied to the artificial intelligence boom, prompting a modern day gold rush for the Bay Area.” AI giants Anthropic (who filed for IPO today!) and Open AI (projected to now go public in 2027) are expanding fast, bringing more workers back into the office and as such – the city – and is sparking what NPR calls “…a flood of wealth already, with a bigger one to come.” 

How 

Those who follow the luxury market know that it is not impacted by rates. The SF Chronicle reports that 79% of San Francisco homes selling for over $7 million had no mortgage at closing as of September 1, 2026. In the first 6 months of this year, over 140 homes in San Francisco sold for $1 million above list price (compared to just 8 homes in the first 6 months of 2025). Last month, Compass reported that the median price of a home in SF was 25% higher than 12 months prior, with bidding wars reaching 50 offers on account of a ‘mansion shortage.’ 

While data demonstrates that these luxury sales are currently concentrated to a few upscale neighborhoods now, NPR predicts that there will be “… a ripple effect across the Bay Area and beyond, as people priced out look elsewhere.” 

Bay Area luxury buyers who do obtain mortgages are putting down the highest down payments in the country – with a median amount of 35% (nearly 7% over the down payment average here in 2023). The Mortgage Point attributes the down payment increases to “a dense cluster of AI-native companies whose equity began converting to cash at scale starting in 2024, via employee tender offers, secondary market sales, and surging company valuations.” Realtor.com® verifies that “The Bay Area down payment data tells us something the mortgage rate story can’t explain on its own. The persistent elevation in down payments, timed precisely to when AI equity began converting to liquid cash at scale, points to a localized wealth effect that is reshaping who can compete at the top of the market.”

We have no doubt that AI will continue to shape the San Francisco market and surrounding areas, while we are also realists that non-luxury buyers face an entirely different set of obstacles and opportunities. Please let us know if you want to chat with a local, experienced and integrity-driven agent who can talk you through the potential impact (or not!) to your own buying and selling strategy.

All my best,

Bobbi 

Bobbi Decker
DRE#00607999

Broker Associate, Bobbi Decker & Associates
650.346.5352 cell
650.577.3127 efax
www.bobbidecker.com
NAR Instructor….“Designations Create Distinctions”
CIPS, SRS, ABR, CRS, SRES, GRI, CLHMS, REI, AHWD, RSPS, MSLG

Bobbi Decker & Associates fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. For more information, please visit: http://portal.hud.gov/