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Despite a higher cost of living, recent data indicates a significant shift in buyer behavior within the San Francisco housing market, with more residents choosing to buy homes locally rather than looking to leave. A spring 2025 report from real estate analytics firm ok.com® reveals that only 62.9% of listing views by San Franciscans were for homes outside the metro area, a notable decrease from 68.9% six years ago. This trend suggests a renewed confidence in the city's real estate market, driven by factors like relative affordability compared to neighboring areas, urban revitalization efforts, and a booming AI sector.
A primary reason for this shift is that some surrounding metropolitan areas have become even less affordable than San Francisco. According to the report, the median list price in San Francisco was $998,500 in June 2025. In contrast, the nearby San Jose metro, home to Silicon Valley giants, had the highest median list price among the top 50 U.S. metros at a staggering $1,398,000. For a typical buyer with a 20% down payment and a 30-year fixed mortgage rate of 6.82%, housing costs in San Jose would consume over 72% of their median income, compared to less than 60% in San Francisco. Economist Jiayi Xu notes that while San Francisco remains expensive, "prices have cooled from their pandemic-era highs, making entry somewhat more feasible for some buyers." Areas like the Tri-Valley region are cited as offering more attainable options within the broader metro.
Another significant factor is a concerted urban improvement plan initiated by the city administration. Since taking office in January 2025, Mayor Daniel Lurie has prioritized addressing crime, open-air drug use, and homeless encampments—issues that previously drove businesses and residents away from the downtown core. These efforts have shown early progress, including a reported reduction in crime rates and encampments. The response in the downtown housing market has been visible; in May 2025, the median list price in downtown San Francisco surged more than 50% compared to the previous year, signaling a sharp rebound in demand and confidence in the urban center.
The artificial intelligence industry is credited with attracting and retaining a significant number of tech workers in the city. Tech leaders, including Nvidia CEO Jensen Huang, have publicly stated that the AI sector is a major force in revitalizing San Francisco. This "AI gold rush," involving hundreds of billions of dollars in investment, is creating high-paying jobs and reinforcing the city's status as a tech hub, which in turn sustains demand for housing. This economic driver provides a strong counterbalance to the city's elevated unemployment rate, which increased from 2.3% in May 2019 to 3.9% in May 2025.
San Francisco's trend is part of a broader pattern seen in a select group of U.S. cities. The ok.com® study, which analyzed cross-market home shopping in the 100 largest metros, found six others where the share of out-of-market listing views decreased between 2019 and 2025. Portland, Oregon, saw the most significant shift, with a nearly 10% drop in residents looking elsewhere. San Francisco ranked second with a 5.9% change, followed by Houston, Texas, with a 4% change. Xu observes that these markets often share traits like relative affordability, diverse job opportunities, and access to amenities.
For prospective buyers, this data indicates that San Francisco's market is displaying signs of resilience. Key takeaways include:
Based on our experience assessment, while the market presents opportunities, buyers should conduct thorough due diligence given the high price points and evolving economic conditions.
