SF Homes Sell $1M Over Asking as Office Boom Flows South

Got an extra million?

Purchasing a home in San Francisco has long required deep pockets, with its median home price remaining above $1 million since 2014. Now, competition has grown so fierce for a slice of Fog City that even the wealthiest would-be residents are failing to find a foothold.

If you want to close a deal today, particularly at the higher ends of the market, it increasingly requires an extra million dollars, according to new data from Compass. In the first six months of this year, 144 homes sold for at least $1 million over the list price — a 1,700 percent jump from 2025, when only eight such sales were recorded during the same span.

The frenzy has been set off by a perfect storm of new wealth in the region. San Francisco is now the center of gravity for high earning artificial intelligence workers. Tens of thousands of Mag 7 employees are benefitting from a record-breaking stock market, and the forthcoming IPOs from trillion-dollar companies OpenAI and Anthropic are set to mint a new class of millionaires. The price tags on the limited supply of local homes are trying to keep up with these soaring riches.

The sense from local brokers is that the housing market will only get crazier.

“We are only getting started,” Rachel Swann, an agent with Coldwell Banker Realty, told The Real Deal this week. “Yesterday’s bidding wars are tomorrow’s deals.”

The peculiar shape of the Bay Area’s office recovery

After years of the “doom loop” narrative, the real estate market’s commercial sector has also continued its surging trajectory. Though, this boom has taken a peculiar shape according to observers.

To lure workers back from their couches to their cubicles, companies have sought offices with high-end amenities, comfort and views. Yet, this flight-to-quality may finally be reaching its limit. Vacancy in the city’s trophy office spaces sits around 5 percent, said research analyst Chris Pham at JLL. Citywide, the office vacancy rate is between 28 and 32 percent according to local brokerages.

Despite that relatively high vacancy rate, some experts believe that, later this year, the city could see something it hasn’t since the pandemic: a groundbreaking for a new office tower. It might appear counterintuitive given that roughly one-third of the city’s office stock sits empty, but the artificial intelligence boom has reaped a bumper crop of new, billion-dollar companies that continue to want the best space in San Francisco.

In previous up cycles, San Francisco often benefited from the success of Silicon Valley — think Apple, Meta, and Google expanding from their Santa Clara County headquarters into offices in the big city. The AI industry has inverted that geographic relationship, as more San Francisco companies are expanding south into large campuses. Some of the most notable leases over the last few months include OpenAI’s 450,000 square-foot office in Mountain View, and Databricks’ 635,000 square-foot assemblage in Sunnyvale.

Silicon Valley’s office vacancy rate has fallen to 14.1% per the latest numbers from Colliers, the lowest of the three regional markets in the Bay Area.

Dead mall deal dies

After making a splash in March by contracting to purchase the San Francisco Centre Mall, Presidio Bay Ventures and the Prado Group have backed out of the deal, sending the 1.2 million square-foot dead mall back on the market.

The developers had asked for an extension on their 60-day due diligence period, but eventually ditched the deal without a clear explanation. Sources have speculated that the developers couldn’t renegotiate the long-term ground lease held by the San Francisco Unified School District, or that they couldn’t secure the financing for such a high-risk investment, according to the San Francisco Chronicle.

The property, seized by lenders Goldman Sachs and JPMorgan Chase in November through a $134 million credit bed in a foreclosure auction, now heads back to the market without a plan.