San Francisco house sells for double its list price as AI money floods the city

A home in San Francisco has sold for $15 million – almost double its asking price of $8 million.

The 4,490 square foot home, located at 2 Sixth Avenue, was put on the market on September 17. It was built in 1914 and remained in its original owners’ possession for 70 years before it was sold for the first time in 1984.

Maureen Terris, the listing agent for the home, described it to SFGATE as a “once in a generation listing.”

She told the paper that the sellers were in their 90’s and ready to pass the home along to a new owner.

The house sits on an unusually large lot for San Francisco – 9,233-square-foot, which is more than three times the size of the city’s typical lots, according to the publication.

The house has a library, a reading garden, a large terrace, and a detached two-car garage.

Despite paying nearly double the asking price, the sale wasn’t even record setting. A property in Cow Hollow sold for 88.7 percent over its asking price in May. That property also closed around $15 million, but the asking price was much lower than the Sixth Avenue house.

San Francisco has long had the reputation for being a city with a wildly expensive housing market, and the influx of AI-developer money into the market has only reinforced the idea.

In March, the median home price in the city topped $2 million, and seeing bids of more than a million over a home’s asking price — like the Sixth Avenue home — are not uncommon.

According to Redfin, San Francisco has both the highest and the fastest-rising home prices in the U.S.

Insiders in the real estate industry contribute some of that to the AI race, as startups and major tech companies alike toss huge amounts of money onto the table to attract top-level talent to San Francisco.

Dimitris Drolapas previously told The Independent that the AI development frenzy has helped to reverse the impact of the Covid-19 pandemic on the housing market. During the pandemic, residents fled the city in droves. Now, everyone is flooding back.

Mike Simonsen, chief economist at real estate firm Compass, previously told The Independent that he doesn’t think the San Francisco housing market is a bubble, at least not yet.

He said that a lot of the individuals buying up — and overpaying — for new properties are people whose money is already tied up in the city’s housing market.

“Much of the wealth generation, especially around real estate, as a result of the AI companies is actually already in the system,” he told The Independent. “These are people who are already moved into town with big salaries and go, ‘I‘ll take whatever apartment is available.’”