San Francisco house prices hit record US$2.15 million on AI

[LOS ANGELES] San Francisco’s median house price jumped to a record US$2.15 million in March, up 18 per cent from a year earlier as wealth generated by artificial intelligence (AI) startups flooded the city, according to brokerage Compass.

Condo prices also surged, rising 27 per cent to US$1.36 million, Compass said. That was just below the US$1.375 million peak of April 2022.

“The economic changes created by the Iran war, such as rising interest rates and financial market volatility, have not affected the extremely heated market dynamics in San Francisco, which are being fuelled by the new employment and wealth generated by the AI startup boom,” Compass chief market analyst Patrick Carlisle said.

AI companies such as OpenAI and Anthropic PBC have created a new gold rush in San Francisco and employees are pouring their wealth into homes in the compact city, which has little new housing development.

At least 22 houses sold for more than US$5 million in March, a one-month record, Compass said. In addition, 24 condo sales topped US$3 million, also an all-time monthly sales high.

Buyers faced heated competition for listings, with houses selling an average of 23 per cent above asking price. That tied the April 2022 record for overbids.

SEE ALSO

US mortgage rates march higher to seven-month high of 6.57%

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

The price jump in San Francisco contrasts with a modest 0.8 per cent US price increase in the year to March, as tracked by Zillow Group.

The previous price peak for houses in the California city was April 2022, when buyers rushed to close deals before interest rates soared. BLOOMBERG