Paying cash for a home isn’t too unusual in some markets, but in San Francisco — a city known for multimillion-dollar properties — paying cash used to be rare.
That is no longer the case. A red-hot housing market is driving a surge in all-cash offers.
According to data from Redfin, 30% of all home sales in the San Francisco Bay Area market from April through June were cash transactions. That is a significant change from 2021, when less than 20% of sales were for cash. Currently, cash sales in the region are slightly higher than the national average.
In Noe Valley, one of the city’s most sought-after neighborhoods for families, homes listed by Compass Realty agent James Rowbotham and his sister, Zara, are being snapped up fast in cash — even with price tags of $5 million to $6 million. Rowbotham said they sold a similar nearby home a few months ago.
“It was a couple that bought the house. And that was all cash. That was a cash buy, but just the two of them for seven bed, seven bath,” Rowbotham said.
In the past, most buyers couldn’t come up with that much money on the spot. But with San Francisco’s continued surge of artificial intelligence money into the local economy and housing inventory that continues to be tight, prices in the city are rising, along with the number of cash sales.
However, not everyone is cashing in AI stock to make those offers. Dan Risman Jones of Ascend Real Estate noted that family wealth is also a factor.
“I have one transaction right now; parents are purchasing the property for the kids using all cash. I assumed that at some point the kids will get loans for it, for the property,” Risman Jones said.
According to Rowbotham, San Francisco is once again a prime destination. People who moved to cities in Texas or Florida during the pandemic are now trying to return, and being the epicenter of the AI economy is part of that draw.
“The city is booming. It’s on fire. And I don’t see it going down anytime soon because of the location, the weather, the people,” Rowbotham said.
Rowbotham and Risman Jones both acknowledge that competing against a cash offer can be intimidating for buyers. But they note there are strategies they have used to help their clients beat out cash offers, recommending that buyers be prepared to be flexible and find real estate agents who know the market well.