Sales of single-family homes are driving San Francisco’s real estate rebound. Agents credit the artificial intelligence boom and renewed optimism about the city’s future.
Carlos Avila Gonzalez/S.F. ChronicleThe Bay Area housing market is in something of a lull, with sales down slightly this year compared with 2024. But sales in San Francisco are on the rise, a trend real estate agents attribute to the artificial intelligence boom and renewed optimism about the city’s future.
The number of Bay Area homes, including condominiums and co-ops, sold from January to July is down more than 2% from the same period last year, according to data from online real estate brokerage Redfin. But in San Francisco, sales are up 5%, rising from about 2,870 in 2024 to 3,010 in 2025.
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The rise of AI companies in San Francisco, and the city’s affordable housing shortage, has already contributed to a surge in rents. While the growth in sales hasn’t yet translated to rising home prices — the city’s typical home value of $1.27 million is about 1% lower than it was last year, according to real estate company Zillow — some real estate agents believe that could soon change.
“I don’t want to say (the market’s) hot, but it’s very, very, very warm,” said Ruth Krishnan, a San Francisco real estate agent with Compass.
When mortgage rates spiked in 2022, home sales in San Francisco — and just about everywhere else — plummeted. Markets heated up again after those rates dipped in 2023, with prices soaring in Silicon Valley, where return-to-office policies and strong tech stock growth drove competition among buyers. This year, the market cooled again, thanks to a combination of tech layoffs, volatility in the stock market and the unlikelihood that mortgage rates will fall much further.
But San Francisco is proving to be a partial exception. Sales have gradually recovered over the past two years, even nearing pre-pandemic levels. Krishnan said renewed enthusiasm about the city and its new mayor, as well as AI companies’ move to the city, have led to a jump in sales. Some buyers may also be capitalizing on the dip in San Francisco home prices suspecting that prices will soon increase, she added.
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The single-family home market is the primary driver behind the increase in sales, Redfin data shows, with condo sales practically flat from last year. Condo listings in San Francisco and San Mateo County have actually dipped, said Redfin senior economist Asad Khan, possibly indicating that some condo sellers have simply given up on finding a buyer. A May report by the company showed that more than a third of for-sale condos in the San Francisco metropolitan area were at risk of selling at a loss.
The condo market could eventually shift as competition for homes near tech offices heats up, said Patrick Carlisle, chief market analyst at Compass. But the biggest impact — at least at first — will probably be on rents, he added.
Besides San Francisco, only a few mid- and large-size Bay Area cities have seen home sales rise from last year, with sales in Vacaville and Oakland rising by about 10% and 5%, respectively. But both cities are much further from their pre-pandemic sales numbers than San Francisco.
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In Oakland, those numbers reflect a market that remains fairly soft, according to East Bay real estate broker Daniel Winkler. An increase in inventory over the past couple of years has forced many sellers to offer deals, such as paying buyers’ closing costs or subsiding their mortgages.