San Francisco's housing market has split in two. Median prices hit a record roughly $1.7 million in March, up 14.4% from a year earlier — the biggest jump of any major US metro — on an AI hiring and wealth boom. Yet San Francisco still logs one of the highest shares of money-losing home sales of any major metro, condos have badly lagged single-family homes, and the low-lying waterfront is in dire need of a $13.6 billion seawall.

1. Buy the Bottom — SF Always Wins (Ali Mafi, Ruth Krishnan)

The AI money is real and the inventory is scarce, so the downtown discount won't last.

This is no dying city. Median SF prices rose 14.4% year-over-year to a record roughly $1.7 million in March, the largest gain of any major US metro, and condos posted their best year since 2013. Redfin agent Ali Mafi credits the AI surge: "A lot of 22-year-olds are getting $500,000 signing bonuses from AI companies, and they're excited to buy homes."

Downtown is on sale, and it won't last. Top agents like Ruth Krishnan report multiple offers returning to SoMa and South Beach high-rises for the first time since COVID, as AI firms lease office space and pull workers back downtown. The bull case is simple: the cheapest corner of the most supply-starved market in America is bottoming.

2. It's a K-Shaped Mirage (Daryl Fairweather, Redfin)

A handful of AI winners are bidding up mansions while the rest of the city slips backward.

The "boom" is a luxury boom, and luxury is not the whole city. Since ChatGPT launched, Bay Area luxury home prices are up about 13% while the most affordable neighborhoods are down about 4%. Redfin chief economist Daryl Fairweather ties the split to AI wealth — "there are lots of people who have gotten very rich off of AI" — even as salaried white-collar workers "worry that AI is going to replace them."

A market that rises and falls with one industry is a bet, not a recovery. Redfin senior economist Yini Xu notes the divergence shows up only where AI wealth is concentrated. Skeptics warn that when AI cools, SF housing falls with it, and a $1.5 million-plus median already prices out nearly everyone who isn't holding equity in a model company.

3. Condo Owners Already Underwater (Redfin data, the Millennium Tower)

Behind the record headline, the people who bought condos at the peak can't get out.

The record price hides a market where losing money happens a lot. Through the downturn, San Francisco logged one of the highest shares of losing home sales of any major US metro — close to 1 in 5, several times the national rate. Condos have badly lagged single-family homes, so buyers who paid 2021-2022 peak prices for a condo are often still below water, unable to sell without locking in the loss.

Rising costs are nailing the door shut. HOA dues have climbed sharply — driven by surging insurance and state balcony-inspection mandates — with special assessments looming over buildings that kept thin reserves. Millennium Tower is the poster child, where units have resold for average losses around 20% even after the $100 million fix to stop it sinking. For these owners, "underwater" is not a metaphor about the bay — it's their mortgage.

Where This Lands

The bulls are right that the money is real: a 14% jump and the return of bidding wars are signs of a genuine turnaround. The skeptics are right that a recovery based on a single industry is fragile, and that a luxury surge is not the same as a healthy city. And the owners stuck at 2021 prices are a reminder that "the market" is really many markets.

Sources