For buyers and sellers wondering why San Francisco condos are suddenly outperforming the rest of the Bay Area — the office-leasing story behind the numbers
Short answer: Yes, at least in part. San Francisco’s condo market has gone from the segment everyone worried about to the one showing the sharpest turnaround in the region, and the timing lines up closely with a wave of AI companies leasing office space downtown. More employees working in person near the Financial District and SoMa appears to be translating into real demand for nearby condos — not a guaranteed cause-and-effect, but a pattern too consistent to ignore.
San Francisco’s Office Market Is Having an AI Moment
Short answer: AI companies have become the dominant force in San Francisco office leasing, concentrating their expansion almost entirely in SoMa and the Financial District — the same neighborhoods that struggled most after the pandemic.
The scale of this shift is hard to overstate. Anthropic alone has leased close to a million square feet across several buildings along Howard Street, an area brokers have started calling San Francisco’s own “AI Alley.” Citywide, AI tenants have been actively seeking roughly 9 million square feet of office space, up from about 6.5 million square feet in early 2025, according to commercial brokerage reporting. The vast majority of that activity — brokers have put the figure at around three-quarters of all AI-related leases — has landed specifically in SoMa and the Financial District, the two neighborhoods that emptied out most dramatically when remote work took hold.
That matters beyond commercial real estate circles. SoMa’s office vacancy rate has been sitting near 50 percent, but recent leasing activity — including large commitments from AI firms — has brokers describing the neighborhood as bottoming out and turning a corner.
Read more: How Much Is AI Wealth Actually Affecting San Francisco Home Prices in 2026?
The Condo Data Is Already Catching Up
Short answer: San Francisco condo prices have been accelerating through the summer, and the city now stands out as the only Bay Area county where condos are showing meaningful growth in both price and sales activity.
For years, condos were the soft spot in San Francisco’s housing story — plentiful supply, slower appreciation, and a market that lagged well behind single-family homes. That’s shifted noticeably in 2026. Local market reporting for July put the citywide condo median around $1.25 million, up roughly 14 percent from a year earlier. More recent September reporting shows that trend accelerating further, with condo medians climbing above $1.2 million and posting some of the largest year-over-year gains in the region, even as available inventory has tightened sharply — down by roughly a third to more than 40 percent from a year ago, depending on the report and the month measured.
Different market reports use slightly different methodologies and timeframes, so exact figures vary from one to the next. The consistent thread across all of them is the direction: condo demand is strengthening at the same time inventory is shrinking, and San Francisco is the outlier doing this while most of the surrounding region’s condo markets stay flat.
Read more: August 2026 San Francisco Real Estate Market Report
Which Neighborhoods Are Actually Benefiting
Short answer: The neighborhoods seeing the most direct spillover are the ones closest to the new office leases — SoMa, South Beach, and Mission Bay on the east side of downtown, with the Financial District and Nob Hill corridor benefiting as well.
San Francisco’s condo stock isn’t evenly distributed, and neither is this recovery. District 9 — SoMa, South Beach, Mission Bay, and Dogpatch — sits closest to the bulk of new AI office leasing and has some of the city’s highest concentrations of condo inventory, making it the most direct beneficiary of workers returning to the neighborhood in person. District 8, covering the Financial District, Nob Hill, and North Beach, is positioned to benefit similarly as downtown office activity continues to recover from its pandemic-era lows.
That doesn’t mean every condo building in those districts is seeing the same lift — building age, HOA costs, and unit type still drive a lot of variation. But the broad geographic pattern lines up with where the office leasing is actually happening.
Read more: Why Are San Francisco Homes Selling So Far Above Asking Price in 2026?
What This Means If You’re Buying
If you’ve been waiting for San Francisco’s condo market to stay soft indefinitely, the data suggests that window may be narrowing, particularly in SoMa, South Beach, and Mission Bay. That doesn’t mean every condo purchase needs to happen immediately — but it does mean treating this segment as permanently discounted relative to single-family homes is a riskier assumption than it was a year ago.
What This Means If You’re Selling
Condo sellers who’ve been discouraged by a few slow years now have a more concrete story to tell than “the market is improving” — thousands of well-paid employees are being asked to work in person within walking distance of your building. That’s a legitimate, explainable driver of renewed interest, particularly for units in or near District 9 and District 8.
A Note on Our Sources
This article draws on commercial real estate leasing coverage of San Francisco’s AI office market, along with local residential market reports on San Francisco condo pricing and inventory from mid and late summer 2026. Figures on office square footage and condo pricing come from third-party market reporting rather than a single unified dataset, and exact numbers vary by source and reporting period — the trend direction is the more reliable takeaway than any single figure.
Frequently Asked Questions
Are AI companies really driving San Francisco’s condo market? They’re one significant factor. AI firms have leased large amounts of office space concentrated in SoMa and the Financial District, and condo demand in those same areas has strengthened at the same time — a strong correlation, though not the only force at work.
Which San Francisco neighborhoods benefit most from AI office leasing? SoMa, South Beach, Mission Bay, and Dogpatch (District 9) sit closest to the bulk of new leasing activity, with the Financial District and Nob Hill (District 8) also positioned to benefit as downtown recovers.
Is the San Francisco condo market actually outperforming the rest of the Bay Area? Recent reporting suggests San Francisco stands out from surrounding counties, where condo prices and sales have stayed closer to flat. San Francisco has shown both price growth and, in some reports, transaction growth at the same time.
Should condo buyers expect this trend to continue? Commercial brokers project AI’s office footprint in San Francisco could continue expanding over the next several years, which would support continued residential demand nearby — though real estate trends can shift, and this shouldn’t be treated as a guarantee.
The Takeaway
For buyers: San Francisco’s condo market is no longer the reliably slower, cheaper alternative to single-family homes it’s been in recent years — especially in neighborhoods close to the city’s new AI office corridor.
For sellers: If your condo sits in or near SoMa, South Beach, Mission Bay, or the Financial District, the renewed office activity nearby gives you a genuine, explainable reason for renewed buyer interest — not just a hopeful market narrative.
Have questions about how this trend applies to your specific building or neighborhood? The Wiley Team would love to walk you through it. Reach out anytime at todd@sanfranciscorealestategroup.com.
