A recently listed house in San Francisco’s Duboce Triangle promises “the perfect backdrop for your new life” — one that “will redefine how you live.” The property in question is 160 Noe St.: a fully renovated 1907 Edwardian on a tree-lined slow street featuring three bedrooms, two bathrooms and 2,495 square feet full of Calacatta marble, designer lighting and custom woodwork. Listed for $2,995,000, the home has another standout characteristic.
The seller will consider Anthropic or OpenAI stock as payment.
That single line in an otherwise typical luxury listing may be the most succinct summary of what’s been going on in San Francisco for the past two years. It’s hard to believe that just a few years ago, the city’s obituary was being written in real time. Office vacancies soared. Retailers fled downtown. Then, of course, there was the doom loop.
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Now, with the artificial intelligence industry clustering its offices and workforce in a city strapped for housing, the pressure on rents and home prices has been palpable and far-reaching. The effects of the shift aren’t staying in the city, either; they’re fanning out across the Bay Area.
View of Telegraph Hill and Coit Tower in San Francisco, Nov. 18, 2024.
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It’s been a marked and sudden turnaround. Here’s what the people watching it closely are actually seeing.
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Neighborhood by neighborhood
Crystal Chen, a housing expert at Zumper, has been analyzing the rental data and sees what she describes as a wave radiating out from specific points on a map. SoMa and Mission Bay — the neighborhoods where many AI companies have inked leases — are seeing substantial rent growth. SoMa is up 36%, Mission Bay is up 22%, and South Beach is up 21% year over year for one-bedrooms. But the steeper increases are happening just beyond those corridors in residential neighborhoods, Chen said.
“This shows more of the spillover pattern in miniature, just within city limits,” she wrote in an email to SFGATE. “The priciest job-center neighborhoods push demand into the next ring of desirable residential areas, causing prices there to rise even faster.” Centrally located and scenic, Alamo Square is up 42%. Cole Valley is up 39%. The Inner Sunset is up 32%. Double-wide stroller haven Noe Valley is up 36%.
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PromptArmor’s billboard at the intersection of Liberty and Valencia streets in San Francisco.
Timothy Karoff/SFGATE
According to Chen, the reason those neighborhoods are feeling the squeeze even more comes down to supply. All the hottest neighborhoods have fewer large, multifamily buildings and more single-family homes.
The two areas that have barely budged sit at the edge of the city. Bayview is up just 1.4%, and the Excelsior is up 2.9%.
Chen compares today’s scene to what was playing out in the 2010s, when Twitter, Uber and Salesforce took root and drove up rent across the eastern half of the city. “The mechanism seems to be the same,” she said. “When a high-wage industry concentrates its workforce in a supply-constrained market, housing absorbs a big share of those wages, and the effect ripples outward from the job centers into the neighborhoods and cities that workers can reach.”
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What’s different this time is that the rest of the country hasn’t followed. During the last boom, rents rose across most major U.S. markets. This one hasn’t, making SF’s surge even more notable.
Areial image of Alamo Square with a backside view of the Painted Ladies in San Francisco, Oct. 20, 2023.
Nicholas Klein/Getty Images
Zumper’s May data shows the same pattern regionally: The cities closest to the AI hubs are climbing the fastest. Just across the Bay Bridge, Emeryville is up 16.7% year over year. Redwood City is up 11.1%. Mountain View — where a large OpenAI campus just opened — is up 8.8% and is now the second-most expensive city in the region, with one-bedrooms at $3,710. The farther out, the quieter it gets. Vallejo is down 3.9%, San Leandro is down 1.5%, and Concord dropped by 1.1%.
In San Francisco, the median price for a one-bedroom apartment has hit an eye-watering $4,000, up 21.2% from 2025.
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Expanding the search
On the real estate side, Don Cruz Datanagan, managing director of Serhant’s Northern California office, is witnessing similar patterns.
Buyers losing bidding wars in Noe Valley, Cole Valley, the Inner Richmond and the Inner Sunset aren’t pivoting to other neighborhoods. “Many don’t simply move to another part of San Francisco,” he said in an email to SFGATE. “Instead, they often expand their search to communities such as Mill Valley, Tiburon, Burlingame, Hillsborough, San Mateo, Lafayette, Orinda, Walnut Creek, Danville, and Alamo where they can find more space while maintaining many of the qualities that attracted them to their original search.”
Datanagan recently sold a home at 124 Sycamore Ave. in Mill Valley. The home is steps away from Miller Avenue and close to Sycamore Park and popular dining options like Sol Food and Joe’s Taco Lounge.
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Aerial view of a residential neighborhood with scattered houses built on hill slopes in Mill Valley, Calif.
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It sold for more than $1 million over asking.
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Some of that overbidding could be coming from SF buyers who got priced out closer to the city, but Datanagan noted that it’s also not that simple. “I don’t think the story is purely one of San Francisco pushing buyers into neighboring markets,” he said. “Many of those communities are highly competitive themselves and create ripple effects of their own.” Places like Mill Valley also have limited inventory, good schools and buyers expecting to compete hard for the amenities the town offers. Datanagan sees two forces — SF spillover and local demand — layered on top of each other, causing price spikes and overbidding.
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Silicon Valley mirrors this trend. “For decades, rising home prices in Palo Alto, Los Altos, Menlo Park, and nearby cities pushed buyers into surrounding markets,” Datanagan said. He thinks that dynamic is now visible across the Bay Area.
“My view is that there is some spillover from San Francisco’s most competitive neighborhoods, but what we’re really seeing is buyers competing for a limited number of desirable homes across the entire region,” he said.