Mansion Shortage in San Francisco Continues Into 2026

The mansion shortage in San Francisco spurred by the artificial intelligence boom continues.

Since last fall, buyers at the top end of the market haven’t taken their foot off the gas, snapping up listings in days, often with all-cash, no-contingency offers, the San Francisco Standard reported.

Active listings in San Francisco fell about 20 percent year-over-year from January 2025, with the “egregious shortage of inventory” forcing buyers to act fast, according to Compass’ February market report cited by the Standard. One in four active listings went into contract last month as the city sees an absorption rate 45 percent higher than last January. From last January to this January, there were roughly 33 percent fewer price reductions year-over-year, and nearly 75 percent of single-family homes and more than 25 percent of condos sold for more than the asking price.

Per the Standard, many agents are linking the urgency to a wave of anticipated initial public offerings from AI heavyweights like OpenAI, Databricks and Anthropic, all of which have established headquarters in San Francisco. Goldman Sachs analysts pegged the potential value of this year’s predicted IPOs at a record $160 billion. Confidence in the city’s market, increasing return-to-office policies and widespread venture capital funding are also driving movement in the marketplace.

Buyers looking to get into the local market as well should act fast, according to some agents, taking the opportunity to hype the trend.

“They likely will pay themselves big economic dividends from buying now,” City Real Estate’s Alexander Lurie, half-brother of San Francisco Mayor Daniel Lurie, told the Standard. “Properties will literally show themselves, and within a day or two, they will be sold.”

The current state of the San Francisco market is similar to that of the late 2010s when IPO anticipation around Uber, Airbnb and Zoom pushed home prices higher. As AI firms have scaled rapidly, valuations are newer and macro risks, such as tariffs and geopolitical flare-ups, could chill demand if sentiment shifts. But if the IPO wave materializes, San Francisco’s housing shortage could worsen even further and potentially leave many millionaire buyers fighting over shrinking inventory.

— Chris Malone Méndez