Bay Area’s 2025 market: Booms, Busts and Scandals

“The Comeback” tickled Bay Area readers and storytellers throughout 2025.

The trendline has been particularly pronounced in San Francisco, where observers not so long ago wondered whether the city would ever recover from the pandemic.

Then came the burgeoning artificial intelligence industry to thrust the gold rush town into its latest boom. Employers began calling workers back to the office en masse, pulling the city out of its extended work-from-home malaise. Sleepy neighborhoods such as the Outer Sunset awoke to new interest, and became one of the city’s most competitive housing submarkets thanks to new shops and restaurants, as well as “white collar surfers” seeking to enjoy San Francisco’s beachy side.

Tourism even got some shoring up to its precarious footing, as evinced by Blackstone’s move on the downtown Four Seasons hotel, which it bought for a song at $130 million. As one hotel executive said during an industry panel earlier this month, once Blackstone shows interest in hotels, it was a good sign for the market.

In this comeback story, first-year Mayor Daniel Lurie has assumed the dual role of protagonist-evangelist. He sat down with The Real Deal in June, and talked about the importance of getting a handle on public safety as well as “the perception” of public safety. He also touted his “Family Zoning Plan” which upzoned a majority of the city for the first time in decades. The vibes, the mayor said, are high.

Of course, a comeback story requires something to overcome. After shaping the post-pandemic Bay Area narrative, “The Struggle” still reared its head for readers in 2025.

The San Francisco Centre Mall best encapsulated this archetype. Once a trophy asset situated in the center of a great American city, it more recently has sparked wonderment over how low the shopping center’s value could fall. At more than 90 percent vacant, it eventually went back to its lenders for $133 million, a fraction of its one-time $1.2 billion valuation. Whether the mall can have its own comeback story will be a continuing curiosity of 2026.

The mall wasn’t the only property to return to its lenders at a loss. According to experts, one-third of distressed borrowers in San Francisco were opting for deeds-in-lieu of foreclosure, in which they hand their properties back to their lenders to avoid costly foreclosure proceedings. However, developers were jumping in on deals as well. The buzziest buy was perhaps local firm RedCo’s purchase of the Wells Fargo Building at 420 Montgomery Street for $55 million. It came on a heavy discount for the 12-story office building, a property in which Wells Fargo Bank had invested more than $90 million in renovations over the last decade.

“Movements of the Wealthy” continues to be another alluring story line. On television, look no further than The Kardashians or the Real Housewives franchise. In real estate, look to Atherton, the Silicon Valley community where $15 million home sales hardly move an eyebrow. However, $51.5 million still means something in the elite enclave–and that’s how much former Seagate Technology CEO Stephen Luczo and his wife, fashion model Agatha Relota Luczo, got for their Atherton mansion in March. The off-market sale might have been Atherton’s highest of 2025, but it was trounced by Green Gables, a century-old Woodside estate that sold in September for $85 million, topping the list of the Bay Area’s most expensive home sales this year.

Close observations of the rich and famous extended into San Francisco as well. The Shorensteins, one of the city’s best-known real estate families, sold their 8,300-square-foot home in the Sea Cliff neighborhood for $30 million in January, about 10 times what they paid in 1988. In January, OpenAI CEO Sam Altman bought three properties next to his Russian Hill mansion for $14 million according to city records.

It’s not just home ownership, either. In June, The Real Deal reported that the luxury home rental market has been “absolutely insane” in 2025. Leasing agents say the rush for homes at $10,000 to $35,000 per month has been driven by low inventory and more high-income renters returning to the city as more employers have called workers back to the office.

Last but not least, we have “The Scandal.” Who doesn’t love reading about a good scandal? Readers particularly enjoyed the scandal of Alexander Beckman, the former CEO of the AI company GameOn who allegedly defrauded investors out of $60 million and used the money with his wife to buy two homes in Presidio Heights. Then there was the fall of local Bay Area developer Kenneth Mattson, who in May was cuffed by federal agents in a Napa parking lot for allegedly leading a Ponzi scheme that cheated senior citizens and churchgoers out of $46 million.

Yet real estate mogul Michael Shvo’s legal trouble may bring the greatest consequence to Bay Area real estate. In November, Shvo, whose company SHVO rose to prominence in San Francisco after investing $1 billion to buy and revitalize the Transamerica Pyramid, was accused of running a yearslong Racketeer Influenced Crime Organization (RICO) conspiracy. In a lawsuit, Shvo is alleged to have misled “investors, condo purchasers, tenants, and business partners into multi-million dollar transactions, the proceeds of which were diverted to enrich Shvo and his associates, and to fund their lavish lifestyles.” The lawsuit was only the latest drama for Shvo in 2025, who has had to fight a barrage of lawsuits, and drew attention for his dramatic exit from a high-profile Miami Beach development.