The Bay Area housing market is heating up once again thanks to rising incomes, an AI boom and a return to the office, according to a report from Redfin.
The real estate brokerage says pending home sales in San Francisco last month jumped 17.1% year over year to the highest September level since 2021, the biggest jump among major metros in the U.S.
Nationwide, pending sales rose less than 1%, the report shows.
Bay Area home sales also were faster than any other metro area, according to Redfin’s report. In San Jose, the typical home for sale was under contract in 19 days. San Francisco was second at 21 days, the city’s quickest September pace since 2021.
Nationally, the typical home sat on the market for 50 days, Redfin’s data shows.
Home affordability is improving in the Bay Area, according to the report, even as the region remains the most expensive place to buy a home in the nation. While median sale prices hover around $1.5 million in both San Francisco and San Jose, those cities are home to many affluent workers who have watched their incomes grow and home prices stagnate. That has boosted homebuyer demand.
Meanwhile, Oakland’s median home sale price dropped 1.3% in September compared with a year ago. San Francisco also saw September prices dip by 0.7%. San Jose, on the other hand, saw a year-over-year price gain of 6.9%.
“San Francisco is seeing a homebuying boom among young tech workers who just got big signing bonuses with AI companies or other tech companies and are thinking about starting families,” local Redfin real estate agent Ali Mafi said in a news release. “A lot of people have more confidence in buying homes because they’re making more money, which means they’re spending less of their paycheck on housing costs.”
Redfin’s report also noted mortgage rates have fallen to around 6.2% from a peak of nearly 7% at the start of the year, a trend that has boosted buyed demand in the Bay Area.