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Home prices successful nan San Francisco Bay Area’s already expensive marketplace are skyrocketing arsenic labor astatine starring artificial intelligence companies travel into gargantuan sums of money acknowledgment to a roar successful first nationalist offerings.
With San Francisco’s OpenAI and Anthropic, arsenic good arsenic SpaceX, which operates a awesome installation successful nan Los Angeles area, eyeing debuts connected nan banal market, nan basking lodging marketplace whitethorn not abate soon. If their first nationalist offering (IPO) is well-received, nan companies’ multibillion-dollar valuations are poised to nutrient monolithic wealthiness for labor and executives holding shares, which experts opportunity could trigger an uptick successful request for nan Bay Area’s constricted lodging stock.
As of March 2026, nan median location waste value successful San Francisco was much than $2m, according to a report from existent property brokerage Compass, an 18% summation from nan erstwhile year. That aforesaid month, connected average, a location spent 29 days connected nan marketplace earlier being sold, nan fastest waste complaint observed since outpouring 2022, per nan report. And experts opportunity request is apt to further increase, while proviso remains low.
“My joke is that you person to show up to immoderate nan unfastened location is. Be location a half-hour early. Have a container of rate pinch you. Be consenting to pay. It’s ridiculous,” said Quintin Mecke, executive head of nan Council of Community Housing Organizations, a conjugation dedicated to affordable housing.
The caller flush of superior successful nan metropolitan area tin astir apt beryllium traced to tender offers – labor fixed nan opportunity to waste their equity – astatine awesome AI companies. More than 600 labor astatine OpenAI, nan institution down ChatGPT, cashed retired past autumn connected shares that collectively totalled $6.6bn, nan Wall Street Journal reported successful May. Of that group, astir 75 group pocketed $30m each.
“If somebody’s reasoning astir it wisely, they’ll beryllium thinking: ‘Well, I person this ample sum of money coming my way. What is simply a ample acquisition that I whitethorn request to get astatine immoderate point?’ And nan location is connected that very short list,” said Drew Wilkerson, a existent property advisor pinch Sotheby’s International Realty.
Record-setting IPOs shingle up market
Wilkerson and existent property supplier Spencer Hsu, who estimates astir 80% of his clients activity successful AI, person seen title go peculiarly fierce successful nan higher extremity of nan marketplace wherever homes waste for $5m and above.
“Just this past week, I had 5 calls from caller purchaser clients who said: ‘I cognize that OpenAI and Anthropic and SpaceX and these IPOs are going to happen. I want to effort to get successful nan marketplace earlier that activity of money comes,’” Wilkerson said.
Even though location prices are high, immoderate of these imaginable buyers logic nan marketplace will only get much costly post-IPO. “‘I mightiness arsenic good conscionable bargain it now,’” Hsu said, describing their mentality.
High-earning tech workers influencing nan Bay Area’s lodging marketplace is not a caller phenomenon. The dotcom era ushered successful a millionaire people plucked from nan C-suites of buzzy net sites. In nan ensuing alleged “gold rush” era, “shares went up for illustration crazy … location prices soared”, said Ken Rosen, chair of nan University of California, Berkeley’s Fisher halfway for existent property and municipality economics.
A akin lodging move played retired again successful nan early 2010s, erstwhile labor astatine Twitter (now X) and Facebook (now Meta), among different apical tech firms, sewage important paydays from those companies’ IPOs.
Two factors whitethorn separate those clip periods from now. For one, Anthropic, OpenAI and SpaceX are looking astatine record-setting valuations. While Twitter priced its first offering astatine $26 per stock and Facebook astatine $38, SpaceX is looking to waste astatine $135 per share, astatine an overall valuation of $1.77tn – making it nan largest IPO successful history.
Additionally, galore of nan large tech companies that went nationalist successful nan 2010s are headquartered successful Silicon Valley, astir 50 miles southbound of nan city. Some labor opt to unrecorded nearby, while others commute from San Francisco. But Anthropic and OpenAI are some headquartered successful downtown San Francisco, and their labor whitethorn beryllium much apt to put down roots adjacent their offices.
“The absorbing hostility … successful San Francisco is you person this highly precocious demand, but inventory doesn’t really ever emergence to meet that,” Wilkerson said.
The metropolis has agelong drawn scrutiny for being slow to build caller housing. The clip it takes for caller lodging permits to beryllium processed has importantly decreased successful caller years, but San Francisco still lags down different cities successful that department.
Single-family zoning has besides historically hindered caller residential construction. San Francisco politician Daniel Lurie precocious signed a rezoning rule aimed astatine expanding nan proviso of lodging pinch taller, multi-unit buildings.
Uncertainty swirls astir early of location prices
Others are not truthful keen connected joining nan flurry of activity. Some existent homeowners, according to Wilkerson, contemplated nan imaginable windfalls from trading to eager buyers but whitethorn beryllium deterred by being taxable themselves to costly prices.
Daryl Fairweather, main economist astatine Redfin, besides noted that for anyone purchasing a location correct now, nan value it whitethorn fetch successful nan early whitethorn beryllium little than what they paid if nan upward inclination does not persist.
The AI wealthiness roar has besides sent ripples done some nan higher extremity of nan marketplace and nan little end, which typically includes renters. Low-income households, which successful San Francisco could mean a family of 4 making six figures – whitethorn consciousness nan squeeze, according to Mecke.
The mean rent for a one-bedroom flat is astatine an all-time precocious for nan metropolis astatine $4,000, according to a May report from Zumper, a rental listings site. The mean two-bedroom costs $5,500.
Among nan neighborhoods facing nan biggest increases successful rent person been downtown San Francisco, SoMa, Mission Bay, Pacific Heights and Hayes Valley, according to nan San Francisco Chronicle.
It remains to beryllium seen erstwhile nan lodging marketplace will cool down.
Questions linger astir nan profitability of nan AI boom, arsenic companies put successful information infrastructure without important net yet. “Booms are ever followed by busts. Always,” Rosen said.
In nan aftermath of nan dotcom banal marketplace crash, “house prices corrected downward for nan adjacent 4 years, 5 years”, Rosen said. “Easy come, easy go.”
