The San Francisco Housing Market Has Turned into a Knife Fight

You used to be VIP in San Francisco if you could buy a multimillion dollar home with all cash, but now cash is just a general admission ticket. The purchase processes for homes, even those listed at $10 million, $20 million, even $40 million plus, are turning into full-on knife fights. Cash is no longer king. Bidding wars are a dime a dozen, and homes are trading in just a week and a half on the market for millions and millions of dollars above their list price. Not just a million over or $2 million over,, but sometimes $4 million, $8 million, or even $11 million over ask. It's happening all across the city. This is Austin Klar, your lawyer turned real estate agent in San Francisco. And if you've been paying any attention to headlines recently, you've probably seen a ton of stories about cash flooding our housing market because of the AI boom. It's not just sensational headlines, it's actually happening. And in this video, I'm breaking it all down with the data to back it up. What specifically is happening in the luxury tier of San Francisco's housing market? What we're seeing with supply-demand dynamics, pace of sales, prices, actual examples of homes that have sold for wild numbers, the factors driving these changes, and what it means for you as a buyer or a seller heading into the rest of the year. So if you're thinking about buying or selling a place in the city, you've got a head start on your research. Let's get right to it and start with supply and demand, because like any functioning economic market, supply and demand rules everything, and housing is no different. All right, so this video is all about what's happening with the luxury housing market. How am I defining luxury for purposes of this video? For purposes of the data that I'm going to show you, I'm cutting starting things off at $5 million for single-family homes and $3 million for condos because that represents approximately the top 5% of sales over the past year. Of course, when you get into neighborhood breakdowns and subpockets of San Francisco, luxury is going to mean different things. $5 million for a single-family home or $3 million for a condo is barely table stakes if you're looking in Presidio Heights or Pacific Heights, for example, but it can mean something completely different if you're looking in a place like Potrero Hill or Glen Park or NOPA. [FOREIGN LANGUAGE] All of those are great neighborhoods. It's just a different flavor, a different tier than those earlier neighborhoods that I talked about. Before I get into the specific data for the $5 million homes and $3 million condos, if you can do me a huge favor, if you like videos about San Francisco real estate, lifestyle, current events, new developments, or its incredible history, subscribe to my channel because I make videos about that stuff every single week. And if you're thinking of buying or selling a place in the city and have questions about what's going on in particular geographic areas of interest for you in light of all the changes that we're seeing, reach out to me. I was a lawyer at one of the biggest law firms in the world before getting into real estate, and I've helped numerous people relocate from all over the country and from within the city. Be happy to be a resource for you. I'll put my contact info in the description below. Reach out anytime. Now let's get right into the data. And the best way to explain how our housing market is functioning is looking at how supply relates to existing demand. It's not just one or the other, it's the interplay between the two. You can't just look at how many houses are for sale. If the number of houses for sale doubles, but the number of buyers looking triples, then the effective supply level actually went down, even though the absolute values of supply went up. So you have to look at how the two interact with each other, not just one or the other. And the best metric for that, in my opinion, is monthly supply. It measures how quickly it would take to sell out of all existing inventory based on the pace of sales that we're seeing right now if no new inventory came to market. A higher number means higher monthly supply, slower pace of sales, more homes selling than buyers looking. In other words, a more buyer-friendly market. In contrast, a lower monthly supply means Fewer homes selling in relation to the number of buyers looking, a more seller-friendly market. A neutral market for a, like, normal, healthy, functioning housing market is in the 4-month range. And unfortunately for people looking to buy in San Francisco right now, and very fortunately for people selling in San Francisco right now, is that we are so far below neutral. We are so firmly entrenched in a seller's market in the city, way more than we were last year. And that's even more true in the luxury sector, in that $5 million+ single-family homes, and $3 million plus condo territory. And I promise I'll show you multiple examples of how this has played out in real life, but the data will be helpful context. For single family homes above $5 million, we have 0.9 months of supply for the past 3 months, February through April of 2026, and that's compared to 4.8 months the same period in 2025. So that's an 81% decrease in effective supply levels for homes priced above $5 million. And it's a similar story for condos, just 1.6 months of supply over the past 3 months compared to 5.8 months over the same 3 months a year ago. So about a 73% decrease in effective supply. So in both cases, in just a year, we went from basically a neutral market, or in the case of condos, a buyer-friendly market where buyers had leverage to negotiate. Maybe they were the only offer on a property, maybe one of 2 offers. We went from there to an absurdly competitive seller's market where buyers are one of potentially a dozen or more offers on a property with zero leverage to negotiate whatsoever. Another way to look at this is from a closed sales volume standpoint. We've had 72 new single-family home listings above $5 million this year compared to 76 last year. Slight decrease, not super meaningful. But over that time period, we've had an 81% increase in the number of closings above $5 million. And if you look at just the past 3 months, it's almost 150% increase in the number of homes that have closed over $5 million. In fact, earlier this year, we had the highest monthly count of home sales over $5 million than we've ever had in San Francisco's history, eclipsing even the pandemic peak in 2021. And again, it's a similar story for condos, about a 10% drop in the number of condos that are listed for north of $3 million, but a 154% increase in the number of closed sales of condos above $3 million. So demand for these top-tier properties, homes over $5 million, condos over $3 million, is substantially higher than it was even just a year ago. And what happens when supply falls and demand goes up? Prices go up too. The average price per foot of single-family homes above $5 million over the past 3 months is up about 15% to almost $1,900 a foot, compared to the same period last year. And the average price per foot of condos above $3 million is up even more, about 27% over that period to over $2,200 a foot. And not only are these places selling for a lot more money, they're selling in substantially fewer days on market. 50% fewer days on market this year compared to the same period last year, just shy of 3 weeks on average, and about half that time in the ultra prime neighborhoods like some of the others I mentioned on the north side of the city and in places like Noe Valley, for example. And about 30% fewer days on market for condos just about a month on the market and about a week and a half in those ultra-prime neighborhoods. So we have a big uptick in the number of transactions at that higher tier. We have an increase in prices at the higher tier, and they're selling in significantly less time on the market. Why is this happening right now? What changes are we seeing in the city that is causing such a rapid change in a market that typically is very slow to react to more broader economic changes? Well, it's a few things. It's return to office, It's improved city conditions. And a big one is AI money. Think about all the reasons why San Francisco real estate corrected during the pandemic. Substantially fewer people needed to come to the office, needed to live near work, so didn't need to spend exorbitant amounts of money on smaller spaces in the heart of the city. So that caused an overall decrease in demand for property in San Francisco, and prices fell as a result of that. But now we have a reversal in office trends, and it's a big reversal. Office vacancies have fallen for the past 2 years. Office demand has surpassed past pre-pandemic levels, and more and more companies are mandating return to office. So a lot of people who left the city are coming back. People getting new jobs in the city are now moving here to be near their work, and it's reigniting demand for local real estate. And more people are willing to invest in local real estate because of improvements in city conditions. After years of rising unsheltered homelessness, rising crime, rising retail vacancies, we're seeing a reversal in all of those trends. Retail vacancy is declining. Stores and restaurants are coming back. In fact, a number of big retailers who left during the pandemic are coming back, and some of them in the exact same spaces they left a few years ago. Unsheltered homelessness is falling. Crime is at multi-decade lows. The city is just in a much better place than it was even 2 years ago. And when people increasingly need to be here, they're more willing as a result of these improved conditions to invest in real estate here. And importantly now is that more and more people have money to spend on that real estate. The Bay Area has far and away the highest concentration of new venture capital investment of any major metropolitan area in the country. And with recent raises, especially in the AI space, employees of companies like OpenAI, Anthropic, and many others have cashed out billions and billions of dollars, and they're on the prowl for luxury homes in the city. And the neighborhoods that have seen the biggest benefits are the neighborhoods that are traditionally the hardest to break into, places like Noe Valley, Seacliff, St. Francis Wood, Jordan Park, Presidio Heights, Pacific Heights, Cow Hollow Marina, Russian Hill. Inventory, especially in these ultra-prime neighborhoods, is extremely low. And the number of buyers with the money to spend is higher now than it's been over the past several years. And that's causing extremely severe competition, more severe than in recent memory. And here are some examples of how it's played out in real life. 2512 Union Street in Cow Hollow. Incredible home, views from every level, great backyard, walking distance to shops and restaurants on Union Street and to the Presidio listed for $7.95 million and sold after 10 days on the market for $15 million. So $8 million over ask. 2206 Lake Street out near Seacliff in West Calais Park, very similar vibe, more updated than 2512 Union, but not as walkable of a location. But you still got views from every level. It was a detached home on a flat block, listed for $8.7 million and sold for $11 million after 9 days on the market. 212 Spruce in Presidio Heights, a fixer-upper on a prime block, walkable to Sacramento Street and the Presidio in one of the most peaceful, sought-after neighborhoods in the city, listed at $4.395 million and sold for $8.2 million. I had a client looking at 212 Spruce Street that wanted to offer $7.2 million, and it was one of the toughest conversations to have with him, saying that basically $3 million over ask probably wasn't going to be enough to get the job done. And he was a cash buyer, could close in 5 days. So we're having a lot of these very tough conversations right now, even at this ultra-luxury tier. This was an $8 million house. 4268 26th Street in Noe completely renovated home, insane downtown views and bay views, incredible outdoor space, walking distance to 24th Street and Douglas Playground Park, listed for $6,995,000 and sold for $8,595,000 without even hitting the open market. And even homes at the super ultra luxury tier, the $20 million plus, even $40 million plus tier, are seeing bidding wars. This home next to Billionaires Row in Pacific Heights was off market for $45 million and sold with multiple offers for $56 million. Never hit the open market, still got multiple offers. Not even people with $50+ million to spend on a house are safe from what's happening in the market right now. And it's happening with condos too. 2459 Buchanan, sellers bought it in 2023 for $2.4 million, sold in March 2026 for $3.4 million.

A+ location right by Fillmore Street in Pacific Heights, right near Alta Plaza and Lafayette Parks.

I repped the buyer on that.

There were 9 offers on that condo and we weren't even the highest bidder, but still won. 56 casas away, top top floor, 2-level condo in the Marina with private roof deck and 3-car parking. Very rare profile in the Marina, listed for $3.7 and sold for $4.7. 3036 Pierce, a top floor condo with a private deck and a private garage in Cow Hollow, listed for $2.4 and sold for $3.7. And there are countless examples all over the city that are a very similar pattern.

To be clear, this is not happening on every single home. There are homes that still sit on the market, homes with infrastructure issues or on busier streets or in non- neighborhoods that are trying to overcapitalize on what's happening in the market and listing too high. So not every place is trading at warp speed for millions of dollars over ask, but it's happening now more than we've ever seen it. Homes that check all or most of the boxes for you are probably going to check all or most of the boxes for a lot of other people. And because inventory is so low, the competition for those specific homes is going to be even more extreme. It doesn't matter if you're looking at a $2 million house $5 million house, $10 million house, or even a $50 million house, you're probably going to see competition. So if you're a seller who doesn't need to buy another house in the city right now or is okay with downsizing and you've been on the fence about whether to sell, conditions are about as favorable as they've ever been to sell your place in San Francisco. Could it get better? Especially if, you know, the upcoming IPOs for Anthropic and OpenAI and SpaceX and a lot of other companies go well. Absolutely, it could get better, but I can't predict that for sure. Nobody has a crystal ball and can predict the future with 100% certainty. But what I do know is what's happening right now, and the conditions are as favorable as they've been in many, many years for sellers. If you invest in necessary prep to help make your property stand out— fresh paint, updated lighting, repairing floors, updating electrical, things like that— you have a very good chance at getting a significant ROI on your investment. And having great success on the market. And if you're a buyer right now in San Francisco, unfortunately it's never been harder for you. If you want to be successful in this market, you need to be hypervigilant about touring as soon as possible when things come up, ideally even before things hit the open market. You need to be hypervigilant about getting through disclosures and open diligence items right away, as soon as you get those documents. And for the love of God, you need to stop paying attention to what homes are listed for because the list price is just a marketing tool designed to get you into the door. It is completely untethered to the actual market value of property. So stop paying attention to it. The sooner you can untether your brain from the list price and start focusing on the actual data and what's happening around you, the more successful you'll be. If you're thinking about buying or selling a place in the city and have questions about how different neighborhoods are performing or how you can best position your home to capitalize on today's market, reach out to me. I've lived in the city for almost 14 years and I've helped numerous people relocate from all over the country and within the city. Be happy to be a resource for you. I'll put my contact info in the description below. Reach out anytime. And remember, if you like videos about San Francisco real estate, lifestyle, current events, new developments, or its incredible history, subscribe to my channel because I make videos about that stuff every single week. And before you go, if you want to learn about some factors that might make homes sit on the market for a long time, even in today's hypercompetitive market, I've got a separate video on that. I'll link in the description too. Go check it out. I hope you enjoyed the video, and I'll see you in the next one.