SF’s housing market is so hot buyers are offering $1 million over

Key Points:

• In the first half of 2026, over 140 San Francisco homes sold for at least $1 million above their asking price, with 44 such sales occurring in June alone, driven by a surge in demand linked to the city's AI wealth boom.
• The average home sale price in May 2026 was nearly 16% above the list price, more than double the 7% premium seen in May 2025, indicating a significant widening gap between asking and final sale prices.
• Luxury homes, representing the top 5% of properties, experienced the largest year-over-year increase in sale prices above asking, averaging 7% over list price in 2026 compared to under 2% in 2025, surpassing starter homes for the first time.
• This intense competition in the luxury market may spill over into mid-tier and starter-home segments, exacerbating affordability challenges for upper-middle-income buyers amid high mortgage rates and economic uncertainty.
• Existing San Francisco homeowners face a dilemma: while selling could yield substantial profits due to rising prices, purchasing a larger home is more difficult as they compete with newly wealthy buyers in a highly competitive market.