Artificial Intelligence In The Bay Area

While the real estate market in lingering in much of the country, there's a dramatic exception in the Bay Area, especially San Francisco. Artificial Intelligence wealth is driving up prices. "As the AI wealth drives up home prices, buyers are racing to purchase properties ahead of highly anticipated potential public offerings from Open AI and Anthropic" (Wall Street Journal). 

Prices in San Francisco for the first half of 2026 are up over 22%. YTD 144 homes have sold for $1,000,000 or more over list price. In June alone, 44 homes closed for $1,000,000 or more over list price, compared to 8 homes in 2025. A dramatic example is 2512 Union Street, which closed nearly double its $8,000,000 asking price...almost $16,000,000.

Parts of the Bay Area are exposed to the market's other edge...jobs, inflation and interest rates. Most buyers need a mortgage, and rates have stayed elevated in the 6% range. Sellers are hesitant to leave their low interest rate loans, forcing a shortage of available inventory. In many ways, the Bay Area is going in two directions. New wealth is pulling the top of the market to record highs, while job insecurity and interest rates weigh on buyers further down.

We're seeing a similar two-way effect in Marin County . Not yet from the direct AI impact San Francisco is seeing, but the wealth effect from the stock market and generational wealth from baby boomers has especially impacted Southern Marin. Mill Valley's median price this year to date for the first half is  $2,550,000 vs. $2,095,000 last year, and the average $/square foot is $1,225 TY vs $1109 LY.

Marin in total is not so dramatic. The 2026 YTD median price is $1,817,000, compared to $1,760,000 LY. Price /square foot is also just slightly up at $1,028 TY vs. $954/square foot in 2025.

Need help navigating this crazy real estate market? Contact us! Bernard can be reached at 415-336-8676, and Julie at 415-310-6019.