Real estate in San Francisco has never been very affordable. But the record sales currently occurring in the city’s luxury market are testing the upper limits of what even this famously unaffordable city thought was possible.
Consider a six-bedroom, 5,700-square-foot home in Cow Hollow, one of San Francisco’s most coveted neighborhoods. It was listed two weeks ago at $7.95 million, so it’s not cheap. It just sold for $15 million. The sellers, who bought the property for $7.8 million in the summer of 2020 as the pandemic drove residents out of cities, nearly doubled their money in less than six years.
San Francisco Real Estate Agent Rohin Dhar marked the sale at X, where it generated the kind of reactions one would expect from people who thought they had seen everything this market had to offer.
Then there’s a 4,100-square-foot home in Presidio Heights, one of the city’s most exclusive enclaves, that was listed in late April for $4.4 million and sold a week later for $8.2 million, nearly double the asking price. Venture capitalist Nichole Wischoff, who toured the property before selling it, was not impressed with what the money was buying.
“Mediocre house, good location” she wrote inpointing out that the view from the patio was of a neighboring house that appeared to have caught fire. “Someone just bought this for $8.2 million,” he wrote. “If you like watching cash burn, come tour SF real estate.”
It’s not just the ultra-high-end that’s seeing action. A 2,300-square-foot home in Bernal Heights sold this week for $4 million — $1 million over asking — just two years after the same owners tried, unsuccessfully, to sell it for $2.95 million. That sale represents a different but equally telling story: The frenzy isn’t limited to the rarefied tier of eight-figure homes. Across a wide swath of the market, buyers are making aggressive offers, with homes routinely selling for $1 million above the asking price.
The numbers back up the anecdotes. New data from Redfin shows that luxury home sales in San Francisco increased 22% year over year in March, with homes going under contract in an average of just 12 days, up from 28 days a year ago. Almost two-thirds of luxury properties signed contracts within two weeks. By contrast, non-luxury sales rose less than 4% and prices were virtually flat. The high-end essentially operates in a totally different universe.
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The invisible force behind all this is no mystery to anyone paying attention to the city’s tech economy. San Francisco is home to some of the most valuable private companies in the world, and its employees have been quietly amassing (and, increasingly, getting paid) fortunes.
OpenAI and Anthropic, two of the most valuable AI companies ever created, have allowed employees to sell portions of their shares in secondary market transactions in recent years, putting a lot of money in the hands of people who, in many cases, already live here and want to improve. That liquidity flows directly into the real estate market and the market is responding accordingly.
The truly surprising part may still be ahead. SpaceX, OpenAI, Anthropic and a bevy of other tech giants have yet to go public. When they do (and conventional wisdom holds that some of them will sooner rather than later), the wealth unlocked could make the current moment seem quaint in comparison. Thousands of employees who own shares in companies worth hundreds of billions of dollars will become even more liquid almost overnight.
What that means for a housing market that’s already producing $15 million in sales just a week after listing is, frankly, hard to fathom at this point. San Francisco has spent decades being the center of conversations about housing affordability. It will be strange, to say the least, if $15 million soon seems like an opening offer.
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