According to Compass, San Francisco is proving that this cycle’s real driver isn’t the mortgage rate — it’s the paycheck. Even with rates parked near 2026 highs, AI-fueled wealth pushed the city’s median single-family price to $2.05 million in July, up 25% year over year, while inventory sits nearly 41% below where it stood twelve months ago. That heat barely spills past city limits: San Mateo County is up roughly 10%, while the Bay Area’s other eight counties are essentially flat, tracking the national slowdown instead. The divide traces straight back to hiring: AI companies are still adding headcount in San Francisco even as the broader region’s job growth cools, leaving the Bay Area split between a red-hot urban core and a market that looks like everywhere else.
Within the city, the two segments are diverging too. Single-family homes got pricier and scarcer at once: July’s $2.05 million median (+25.2% YoY) came with inventory down 41% and closed sales off a sharp 35% from June. Condos told a steadier story — prices rose a milder 13.6% YoY to $1.25 million, but closed sales actually climbed nearly 25% year over year even as available listings tightened by 42.5%.
Compass RE is a licensed real estate broker. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.
