SF Buyers Flood Into Marin as Bidding Wars Push Them Out

When a six bedroom house in San Francisco’s Cow Hollow neighborhood hit the market for $8 million in late April and closed within two weeks for nearly double its asking price, it marked an eye-popping example of the city’s frenzied housing landscape.

Good homes in good locations are seeing dozens of offers, and even those willing to pay millions over asking price are struggling to win bidding wars in San Francisco. Eventually, the frustrated shake free of the Stockholm Syndrome inflicted by the city’s housing market and begin looking elsewhere. Increasingly, that means Marin County.

“The consensus among those clients is, ‘Yes, we can’t find anything and we’re frustrated,’ but also, like, ‘have people lost their minds?’” said Alexander Narodny, a real estate agent who has worked in Marin since 2012. “It’s just too bananas to consider a single-family home in San Francisco right now.”

San Francisco’s recent surge in wealth — buttressed by the artificial intelligence industry — has outpaced its already tightening housing supply. The city had only one month of inventory as of mid-July, with only 590 active listings on the market, down about 30 percent from this time last year, according to Compass. The number of single-family houses that sold for at least $1 million over asking price shot up by 1,700 percent year-over-year. The median home price sits at $2.1 million, a 25 percent surge over this time last year.

Marin County was the only other Bay Area market to see a double-digit price jump year-over-year, according to Compass. The cost of a median home there rose nearly 11 percent to $1.8 million. It’s a spillover effect that agents say is unique to the AI boom, and one that is only just beginning.

Quieter and sunnier, with more room to stretch out and some of the best public schools in the state, Marin County has often been the choice of young families looking to leave the big city behind. But the market’s latest surge is hardly the result of natural migration of choice. Rather, it’s part of a new role in Marin County’s long held psychogeographic relationship with San Francisco.

Narodny recently worked with a young family in their mid-30s ready to buy a home after years of renting in San Francisco. They preferred to stay in the city to minimize the husband’s commute to his AI tech job. Yet even when they offered $3.5 million over asking on one home, they continued to get outbid.

“I don’t think that the story of offering $3 to $4 million over and not getting the property is uncommon in San Francisco right now,” Narodny said.

The family is now focusing their search in southern Marin County, something that would have seemed counterintuitive in previous up cycles. During the dot-com boom of the late 1990s and the tech boom of the 2010s, Silicon Valley-based companies such as Meta, Apple and Google held the center of gravity, and the proximate housing markets — or at least those easily accessible by public transit — benefited. Marin County, which sits across the Golden Gate Bridge and has a ferry line but no rapid public transit, was largely left off Silicon Valley tech employees’ lists.

However, with San Francisco as the node of the artificial intelligence industry, a 30-minute ferry commute doesn’t sound so bad, and Marin is becoming more of a preferred second option.

“It usually takes about six months after the booms in San Francisco for the peripherals to really feel it,” said David Cohen, cofounder of City Real Estate, a San Francisco brokerage that recently expanded to Marin County. “People are about to start flocking to these peripheral markets, especially Marin.”

Demand is already impressing itself upon Marin’s market. While the median square footage of homes sold has remained relatively the same in recent months, the median price per square foot jumped 28 percent since December, to $958, according to Compass.

The East Bay, on the other hand, has seen a slight bump in median prices, but Cohen expects areas like Piedmont, Oakland, Alameda and Berkeley to pick up soon thanks to their relative affordability and connection to San Francisco through the BART trains. Compared to December, Alameda County’s price per square foot in June jumped about 18 percent to $765, according to Compass. Year-over-year sales prices increased a modest two percent.

“I have clients who are looking in Marin and the East Bay,” Cohen said. “It’s a whatever comes first, beggars can’t be choosers kind of thing.”

Although more buyers are being forced into considering Marin, the market is also benefitting from homeowners in San Francisco who want to take advantage of the hot market and trade their property for something more spacious up north, said Erin Thompson, real estate agent with Compass.

“It’s an opportune time in the market for people who need more space,” Thompson said. “Marin is more affordable, but there is still a lot of competition.”

Southern Marin County is starting to see its own bidding wars take shape. In Sausalito, a four-bedroom home at 18 Laurel Lane got five offers and sold for $4.6 million in April, $800,000 over asking price, while a three-bedroom compound at 22 Filbert Ave sold for $3.5 million after receiving seven offers and fetching more than $1 million over asking price, Narodny said.

However, Narodny doesn’t see Marin’s housing market reaching “San Francisco levels of craziness.” There’s only one San Francisco, but plenty of second choices.

“When people leave the city, if they’re getting exhausted, well, now they have more options, it’s not only Marin,” Narodny said.