Bloomberg: Driven by the AI boom, San Francisco's median home price soars to record highs

BlockBeats message, April 7, according to a report by Bloomberg, data from brokerage firm Compass Inc. shows that the median home price in San Francisco surged to a record $2.15 million in March, up 18% from the same period last year, driven primarily by an influx of wealth to the city created by AI startups. Similarly, San Francisco apartment prices also rose sharply, up 27% to $1.36 million, slightly below the peak of $1.38M in April 2022.

In the report, Compass chief market analyst Patrick Carlisle said: “Economic changes brought by the Iran war—such as higher interest rates and volatility in financial markets—have not affected San Francisco’s extremely hot market dynamics. This heat is driven by new jobs and wealth created by the thriving AI startup sector.”

AI companies like OpenAI and Anthropic have sparked a new gold rush in San Francisco, with employees putting their wealth into a city with land that is tightly packed and almost no new housing development. Compass said that at least 22 homes were sold in March for more than $5 million, setting a monthly record. In addition, there were 24 apartment sales priced above $3 million—also a monthly all-time high.

The surge in San Francisco home prices contrasts with the comparatively modest rise across the United States. According to tracking data from Zillow Group Inc., as of March over the past year, home prices nationwide increased by only 0.8%. The city’s prior peak in California occurred in April 2022, when buyers raced to complete deals before interest rates spiked.