How AI Professionals Are Inflating California Real Estate—and Evicting Families From Their Homes

Welcome to San Francisco in 2026, a city that is also home to AI giant Anthropic. San Francisco is the epicenter of the artificial intelligence revolution and real estate prices in the city have risen dramatically this year. “Prices are just astronomical,” says Daryl Fairweather, chief economist at Redfin, a real estate company that tracks U.S. home prices. "People have money to spare and are ready to buy." In March, San Francisco regained the title of most expensive city for homebuyers in the US, overtaking rival San Jose, located 80 kilometers to the south, in the heart of the traditional Silicon Valley. That month, the median home price in San Francisco rose 19% from the previous year, and that trend continued, with increases of 14.5% and 14.1% in April and May, respectively, according to data provided by Redfin. The city's average sales price in May 2026 hit a record $1.76 million, compared to nearly $400,000 in the U.S. as a whole, where prices rose just 1.4% in March and 2% in April and May. The opinion of virtually everyone in the city is that money from artificial intelligence is the main driver of San Francisco's booming real estate market. "We came to this conclusion based on what we're seeing in the data and what we're hearing from our agents," says Fairweather. It highlights the sharp increase in prices at luxury addresses in the San Francisco Bay Area – which includes the Duboce Triangle – since OpenAI launched ChatGPT in late 2022. This halted the recession that San Francisco suffered during the Covid pandemic, when the population declined and property prices fell. Today, the high salaries and hiring bonuses paid to the city's top AI professionals can be extraordinary, even by Silicon Valley standards. Even more generous are the stock options that employees have been able to partially redeem through limited stock sales. Last October, more than 600 current and former OpenAI employees sold shares worth a total of $6.6 billion, an average of $11 million per participant, as recently reported. At Anthropic, whose flagship product is Claude, it was recently disclosed that employees were also authorized to sell shares worth a total of about $6 billion. And with both companies poised to go public this year or next, creating more multimillionaire employees, many believe San Francisco's real estate sector will appreciate even more. Three-bedroom apartment in the Duboce Triangle has been luxuriously furnished Open Homes via BBC "Today's price war will be seen as a bargain, and it already is," says Rachel Swann, the broker responsible for the property in the Duboce Triangle. Enrico Moretti is an economics professor at the University of California, Berkeley, and lives in the city. He says the AI ??boom is still in its infancy and highlights that although the city's population and employment levels are increasing, they remain below pre-pandemic levels. There are also opposing forces that may be impeding progress. Large technology companies, like Meta, have recently recorded mass layoffs. And as the AI ??industry moves from its rapidly growing innovation phase to one of established companies, it is likely to require less skilled workers, who will be less able to demand the same compensation. Moretti also highlights that most of the wealth coming from OpenAI and Anthropic's upcoming initial public offerings (IPOs) will go to investors rather than employees, and that these companies are located in different parts of the world. But in the meantime, San Francisco real estate agent Matthew Goulden says the current situation is "crazy." Goulden, who has worked in this market for more than 20 years, says he began to notice an increase in the number of potential buyers – many from the AI ??world – at the end of last year. According to him, the upward trend is not just restricted to luxury properties, but extends across the entire market, from single-family homes to one-bedroom apartments, and although it is most pronounced in desirable neighborhoods, it is being felt almost everywhere. He says bidding wars — in which buyers are willing to pay increasingly higher prices — are common right now, sometimes pushing sales prices millions above the asking price. At the same time, he adds that homes are selling faster than ever, and the number of cash purchases appears to be increasing considerably, particularly in the high-end end of the market. Danielle Lazier, another experienced San Francisco realtor, describes a similar situation but adds a different perspective. According to her, there has long been a trend in San Francisco to advertise properties below market value to create an auction effect. And supply is chronically limited – San Francisco is small, has a high proportion of renters, and has struggled to build new housing (even though the city's new mayor, focused on growth and recovery, is seeking to change that). “Suddenly, money coming from AI could have a disproportionate effect,” she says. Meanwhile, as the new AI boom gains momentum, the story of who gets to stay in San Francisco and who doesn't is being told by its residents. Two San Francisco families with school-age children, who requested anonymity to protect their privacy, were recently able to purchase move-in-ready homes to meet their urgent need for more space — but only one of them was able to do so within the city. This family managed to buy a house in the disputed residential neighborhood where they had been renting for a long time, after one of the parents, who works at OpenAI, sold some shares in the company last October, giving the family the financial boost needed to buy the property in cash. The couple say they feel "conflicted and embarrassed" by the fact that it was artificial intelligence money that made all this possible. “We are not extravagant people,” they say. “We just did what we could with the opportunity.” In contrast, the other family, which does not derive its income from AI or the world of technology, had to move to a more suburban city in the northern San Francisco Bay Area. Their new home, purchased in part with a mortgage, includes a pool and additional land. It's a different kind of life, the mother of the family notes, and they've largely adapted – although it involves a long daily commute for her husband, who holds an important government position in San Francisco. “We wouldn’t have left if we had the means to stay,” she reflects. "It's kind of frustrating and it makes me a little upset to see all this extra AI money crowding everyone out." The Duboce Triangle condo sold for $3.2 million — $200,000 above the asking price, according to the real estate agent. He did not say whether the deal included shares in AI companies. We use artificial intelligence to translate this report, originally written in English. The text was reviewed by a BBC journalist before publication. Find out more here about how the BBC is using artificial intelligence (link to English text).