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Add The California Post on Google A growing number of wealthy homebuyers are skipping mortgages altogether as all-cash offers flood San Francisco’s luxury housing market amid the city’s AI-fueled resurgence.
Redfin data showed that 30% of home sales across the San Francisco Bay Area between April and June were purchased entirely with cash — a sharp increase from 2021 when fewer than 20% of sales were all-cash transactions.
The region now ranks slightly above the national average for all-cash home purchases, NBC reported. The shift is playing out in Noe Valley, one of San Francisco’s most sought-after family neighborhoods. Compass Realty agents James Rowbotham and Zara Rowbotham told the outlet that homes priced between $5 million and $6 million are being snapped up quickly by cash buyers.
“It was a couple that bought the house. And that was all cash. That was a cash buy, but just the two of them for seven bed, seven bath,” Rowbotham said.
The increase has coincided with an influx of artificial intelligence wealth flowing into the city, while a limited supply of homes has continued to push prices higher.
Not every buyer is cashing in AI fortunes. Dan Risman Jones of Ascend Real Estate explained that family wealth also fuels the surge, with some parents buying homes outright for their children.
“I have one transaction right now; parents are purchasing the property for the kids using all cash. I assumed that at some point the kids will get loans for it, for the property,” Risman Jones said.
Rowbotham also told NBC that San Francisco has once again become a destination for affluent buyers, with some people who relocated to Texas and Florida during the pandemic now returning as the city reasserts itself as a hub for the AI industry.
“The city is booming. It’s on fire. And I don’t see it going down anytime soon because of the location, the weather, the people,” Rowbotham said.
Both real estate agents acknowledged that competing against all-cash offers can be daunting for buyers who need financing, but said that experienced local agents and flexible offers can still help clients remain competitive.
Meanwhile in Southern California, the historic initial public offering (IPO) has significantly impacted the real estate market as thousands of SpaceX employees recently acquired millionaire status.
While the company moved its headquarters to Texas, SpaceX maintains an active engineering and production hub at Hawthorne in Los Angeles County with over 7660 employees.
Real estate agents from Hawthorne to Manhattan Beach, Venice, and Santa Monica report early inquiries on $5-million-plus properties, raising fears of speculative price spikes and even tighter inventory.
The median single-family home price for California is $930,260 according to the California Association of Realtors – the highest in the country – while the median price in Los Angeles County is around $999,000.