A new study by Redfin has found that the housing market in the San Francisco Bay Area picked up steam in September, a boost attributed to rising incomes, a boom in artificial intelligence (AI) technologies, and a return to the office.
In September, pending home sales in the San Francisco area jumped 17.1% year-over-year to the highest September level since 2021 一 the biggest gain among the major metropolitan areas that Redfin analyzed. Nationwide, Redfin reported that pending sales rose less than 1%.
Homes In The Bay Area Moving Quickly
In San Jose, the typical home that went under contract in September did so in just 19 days, faster than any other major metro. San Francisco came in second place, at 21 days — its quickest September pace since 2021. San Francisco is one of just three major U.S. metros that saw homes sell faster year-over-year, as nationwide, the typical home that went under contract sat on the market for approximately 50 days.
In San Jose, 48.5% of homes that went under contract in September did so within just two weeks, up from 16.8% year-over-year. That 31.7-percentage-point gain is the largest of any major metro. The next biggest gains were reported in San Francisco (+22.6 percentage-point gain to 48.7%) and Oakland (+11.9 percentage-point gain to 34.5%).
Nationwide, Redfin reported that just 32.8% of homes that went under contract last month did so within two weeks, a total down from 34.9% a year earlier.
Bay Area Market’s Jump Start
The AI boom and return to office provided a major boost to the Bay Area in September. With Silicon Valley playing home to numerous major AI companies, including OpenAI and Anthropic, many have been hiring scores of workers and offering generous pay packages.
Many companies are also requiring workers to return to the office, prompting more to move into or near the city. San Francisco office visits jumped 19% year-over-year in September, the largest increase among markets analyzed by Placer.ai.
Another factor resulting in the Bay Area experiencing a very positive September sales report was due to an improvement in affordability.
While the Bay Area remains one of the most expensive places to buy a home in the U.S. (with a median sale price of approximately $1.5 million in both San Francisco and San Jose), the region is also home to many affluent workers who have watched their incomes grow as home prices stagnated. Those factors alone have boosted homebuyer demand.
Oakland’s median home sale price dropped 1.3% year-over-year in September — marking the fourth biggest decline among the metros Redfin analyzed. San Francisco also saw prices fall slightly, posting a 0.7% drop, compared to a nationwide gain of 1.7%. San Jose did buck the Bay Area trend, with a price gain of 6.9%.
Falling condo prices may be skewing overall prices downward in some parts of the Bay Area, according to local Redfin Premier real estate agent Ali Mafi, who noted that single-family home prices have held up relatively well.
“San Francisco is seeing a homebuying boom among young tech workers who just got big signing bonuses with AI companies or other tech companies and are thinking about starting families,” Mafi said. “A lot of people have more confidence in buying homes because they’re making more money, which means they’re spending less of their paycheck on housing costs.”
Also in the Bay Area, housing supply is shrinking, as active listings of homes for sale fell in just two major metros last month: San Francisco (-7.7% year-over-year) and San Jose (-6%). The combination of increasing demand and decreasing supply can cause a market to heat up because it often means buyers are fiercely competing for a small allotment of available homes.
“There aren’t a ton of homes for sale in the Bay Area because many prospective sellers here can afford to wait until the price is right,” Mafi said. “A lot of homeowners are considering selling but holding off until home prices go up and mortgage rates drop further.”
In most U.S. housing markets, buyers hold negotiating power because they are outnumbered by sellers. But this dynamic seems to be on its way out in San Francisco.
Nationwide, there were an estimated 36.7% more home sellers than buyers in the market last month — a near-record gap. But in San Francisco, there were only 10.2% more sellers than buyers, down from a peak of 47.1% in May.
