San Francisco’s housing market has flipped from a city people were leaving to one where buyers are paying seven figures above the asking price, and Compass’s chief economist is attributing the shift squarely to the AI boom.
More than 140 homes in the city sold for at least $1 million above their asking price in the first half of 2026, according to a new analysis from brokerage Compass, and 44 of those sales happened in June alone.
Compare that to the same period last year, when only eight homes cleared the US$1 million-over-asking mark. In the first half of 2024, just six did.
Mike Simonsen, Compass’s chief economist, described the surge as “absolutely BANANAS” in a post on X.
He linked the overbidding directly to the AI industry, saying it was “of course related to the AI boom. It’s migration and hiring, as well as preparing for mega IPOs.”
That IPO pipeline is significant. OpenAI and Anthropic, both headquartered in San Francisco, have filed to go public at valuations approaching US$1 trillion between them.
Their listings are expected to create a fresh wave of multimillionaires in a city that has been widely ranked among the world’s highest concentrations of billionaires per capita.
Compass’s data shows the following trends: San Francisco’s single-family home prices are up roughly 17 per cent year over year, while inventory has fallen about 45 per cent, according to Compass’s market intelligence report.
The median single-family home price has climbed from US$1.7 million to US$2.2 million, and homes are selling in an average of 18 days – the fastest pace in five years.
Compass’s report describes “AI and tech-driven demand” as having “created aggressive bidding wars on the scarce inventory”, adding that “skyrocketing rents are back in the norm”.
It characterises the city’s property market as “increasingly segmented by income tier and proximity to AI-driven employment centers”.
Mr Simonsen explained the frenzy isn’t spread evenly across the city, saying it’s concentrated “to a very small section in the city, and luxury markets in Peninsula and Marin”.
He also pointed out that other US tech hubs haven’t seen comparable overbidding, making San Francisco something of an outlier even within the AI economy.
Redfin data from May 2026 confirms the city now has the highest median home price in the country. Its April figures showed San Francisco recording the largest year-on-year increase in median sale price nationwide, ahead of Detroit and Providence, Rhode Island, with a rise of more than 10 per cent.
Daryl Fairweather, Redfin’s chief economist, told the New York Times the wealth effect from AI is unusually narrow compared with past booms.
“What’s different this time is that the benefits or the prosperity of AI seems much more concentrated,” she said. “It’s not that everybody is going out and buying homes.”
The rebound marks a sharp reversal from just a few years ago, when departures from the city and concerns about crime and homelessness contributed to a housing slump.
This story draws on “‘Absolutely bananas’: San Francisco homes sell for $1m above asking price amid AI boom”, The Guardian and Tech wealth reshaping San Francisco’s housing market, Real Estate News.