San Francisco’s housing market goes haywire

San Francisco real estate has never been easy to navigate, but the current wave of record-breaking sales at the high end is stretching the limits of what even this famously expensive city thought was possible.

Take a six-bedroom, 5,700-square-foot home in Cow Hollow, one of San Francisco’s most desirable neighborhoods. Listed two weeks ago at $7.95 million , already a hefty price , it just closed for $15 million. The sellers, who bought the property for $7.8 million in the summer of 2020 when the pandemic was driving people out of cities, nearly doubled their investment in under six years.

Local real estate agent Rohin Dhar flagged the sale on X, where it sparked the kind of reactions you’d expect from people who thought they’d seen everything this market could dish out.

Then there’s a 4,100-square-foot home in Presidio Heights, one of the city’s most exclusive enclaves, listed in late April for $4.4 million and sold a week later for $8.2 million , almost double the asking price. Venture capitalist Nichole Wischoff, who toured the property before it sold, was unimpressed with what the money bought.

“Mediocre house, good location,” she wrote on X, noting that the patio view featured a neighboring home that appeared to have burned down. “Someone just bought this for $8.2M. If you like to see cash lit on fire, come tour real estate in SF.”

But the action isn’t confined to the ultra-luxury tier. A 2,300-square-foot home in Bernal Heights sold this week for $4 million , a million dollars over asking , just two years after the same owners failed to sell it for $2.95 million. That sale tells a different but equally revealing story: the frenzy is spreading across a broad swath of the market, with buyers bidding aggressively and homes routinely selling for $500,000 to $1 million above list price.

The data confirms the anecdotes. New figures from Redfin show luxury home sales in San Francisco jumped 22% year-over-year in March, with properties going under contract in a median of just 12 days , down from 28 days a year earlier. Nearly two-thirds of luxury homes were under contract within two weeks. In contrast, non-luxury sales rose less than 4%, with prices essentially flat. The high end is operating in a completely different universe.

The invisible force behind all of this is no secret to anyone watching the city’s tech economy. San Francisco is home to some of the world’s most valuable private companies, and their employees have been quietly accumulating , and increasingly cashing out , 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 serious money into the hands of people who, in many cases, already live here and want to upgrade. That liquidity is flowing directly into the housing market, and the market is responding accordingly.

The truly astonishing part may still be ahead. SpaceX, OpenAI, Anthropic, and a cluster 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 look quaint by comparison. Thousands of employees holding equity in companies valued in the hundreds of billions of dollars will become even more liquid almost overnight.

What that means for a housing market already producing $15 million sales within a week of listing is, honestly, difficult to grasp right now. San Francisco has spent decades as the punchline of conversations about housing affordability. It will be strange, to say the least, if $15 million soon looks like an opening bid.