It was a topsy-turvy year for San Francisco residential real estate.
Buying fixer-uppers and downtown condos became a thing again for the first time in years. Spring was cold, but fall was hot, as the city’s AI boom propelled sales across the city. And by Christmas, there were signals that things could get even busier in 2026, with Open AI, Anthropic, and Databricks all predicted to go public in 2026, minting a crop of buyers flush with IPO cash.
The year in review
There were several big-ticket sales in January. But by Groundhog Day, buyers had seen their shadows and retreated, as the threat of tariffs roiled financial markets and led to widespread economic uncertainty. The usual active spring market, when price benchmarks are set for the year, never sprang.
Instead, it took a resurgence of confidence brought on by the AI economy to trump the “Trump Slump.” By late summer, house hunters were on the loose again. But with limited inventory, offers often outstripped asking prices, adding frenzy to the fall market. The luxury market comeback got even frothier: In October, there were more sales above $5 million — mostly in northern neighborhoods like Pacific Heights and Presidio Heights — than there had been in four years, according to Compass.
“I’ve seen this behavior among buyers on the north side before,” said broker Karen Mendelsohn Gould. “That market will be really quiet, and then all of a sudden, it just goes.”
The renewed optimism culminated in October with the year’s biggest sale (the third biggest in San Francisco history): a $42 million Billionaire’s Row home that changed hands for the first time in more than 50 years. The LLC for the buyer in the off-market sale is linked to Katie Schwab Paige, the youngest daughter of finance giant Charles Schwab, and her husband, Matt Paige, who appear to be upgrading from their 10,000-square-foot abode near Alta Plaza Park.
What’s ahead
The fact that wealthy buyers are willing to drop more than $40 million on a San Francisco home (that may need a multimillion-dollar renovation) indicates how tech, AI, and finance are pushing the market to new extremes. Nina Hatvany of Compass said she had a client bid and lose on a Presidio Heights listing that hadn’t been on the market for 40 years. The house was listed this fall at less than $6 million and sold for $7.3 million in a matter of weeks.
“People are willing to take on quite a big fixer,” she said.
So what will the new year hold? Hard to say; after all, few anticipated that the tariff talks would so quickly cool what had started as a spritely spring market. And despite some records, prices are still down overall from pandemic-level peaks. But that may not last long.
By virtually every indicator of supply and demand, San Francisco is one of the hottest U.S. markets, according to Compass data that measures price appreciation, overbidding, speed of sales, quantity of sales, reductions in listing inventory, and price reductions.
“It is certainly the standout market in the Bay Area,” said Patrick Carlisle, chief market analyst at Compass, “though the Silicon Valley markets are also still very strong.”
The difference between previous tech-centered buying sprees and the current frenzy is that AI has its epicenter in San Francisco, not Silicon Valley. Removing from the equation the drudgery of a South Bay commute makes owning a home in the city, especially on the tony north side, that much more desirable.
“In the last boom, Noe Valley and Bernal Heights were so popular because everybody needed to get to Mountain View and Cupertino,” Gould said. “This time, so much is happening in San Francisco. So much is happening in Jackson Square. Now you can live on the north side and still be really close to work.”