Home prices in the San Francisco Bay Area are climbing sharply as employees at leading artificial intelligence companies realize massive gains from equity sales and position themselves ahead of a wave of initial public offerings. OpenAI, Anthropic, and SpaceX — all headquartered in or with major operations in California — are expected to go public in the coming months, with valuations that could generate tens of billions of dollars for shareholders.
A report from real estate brokerage Compass found that the median home sale price in San Francisco was more than $2 million as of March 2026, an 18% increase from a year earlier. Houses spent an average of 29 days on the market, the fastest sale pace since spring 2022. Experts said that demand is likely to continue rising while supply remains limited.
“The joke is that you have to show up to whatever the open house is. Be there a half-hour early. Have a bag of cash with you. Be willing to pay. It’s ridiculous,” said Quintin Mecke, executive director of the Council of Community Housing Organizations, a coalition focused on affordable housing.
The recent cash flow can be traced in part to tender offers at AI companies — opportunities for employees to sell their equity before an IPO. The Wall Street Journal reported in May that more than 600 OpenAI employees cashed out shares totaling $6.6 billion last fall, with roughly 75 individuals receiving $30 million each.
Drew Wilkerson, a real estate adviser with Sotheby’s International Realty, said that clients receiving large payouts often turn to real estate. “If somebody’s thinking about it wisely, they’ll be thinking: ‘Well, I have this large sum of money coming my way. What is a large purchase that I may need to acquire at some point?’ And the home is on that very short list,” he said.
Competition has become particularly intense at the higher end of the market, where homes sell for $5 million and above. Wilkerson and real estate agent Spencer Hsu, who estimated that about 80% of his clients work in AI, said they are fielding calls from buyers trying to get into the market before the wave of IPO wealth arrives. “I might as well just buy it now,” Hsu said, describing the mentality.
The dynamic echoes earlier tech booms. Ken Rosen, chair of the University of California, Berkeley’s Fisher Center for Real Estate and Urban Economics, noted that during the dot-com era, “shares went up like crazy … house prices soared.” A similar surge occurred in the early 2010s when Twitter and Facebook went public.
This time may be different in scale. SpaceX is looking to sell shares at $135 per share at a valuation of $1.77 trillion, which would make it the largest IPO in history. Additionally, OpenAI and Anthropic are headquartered in downtown San Francisco, which real estate agents said may lead more employees to buy homes in the city rather than commute from Silicon Valley.
Supply constraints continue to drive prices higher. The city has long been slow to build new housing, though permit processing times have improved in recent years. San Francisco Mayor Daniel Lurie recently signed a rezoning law intended to allow taller, multi-unit buildings. Some current homeowners, Wilkerson said, are weighing whether to sell but are deterred by the high cost of purchasing another home.
The pressure extends beyond homebuying to rentals. Average rent for a one-bedroom apartment in San Francisco reached an all-time high of $4,000 in May 2026, according to Zumper. Two-bedroom apartments averaged $5,500. The neighborhoods with the biggest rent increases include downtown, SoMa, Mission Bay, Pacific Heights, and Hayes Valley, according to the San Francisco Chronicle.
Low-income households — which in San Francisco can mean a family of four earning six figures — are feeling the squeeze, Mecke said.
Daryl Fairweather, chief economist at Redfin, cautioned that buyers who purchase now may not see the same gains if the upward trend reverses. Ken Rosen pointed to the aftermath of the dot-com crash, when “house prices corrected downward for the next four years, five years.” He added: “Easy come, easy go.”