San Francisco is notoriously a boom-and-bust town. But this spring, the real estate market was at its boomiest.

In the single-family home market, where extremely limited inventory and the fear of a flood of newly minted AI millionaires pushed buyers to the brink, homes regularly sold within days. Others were snapped up before they even hit the market. The momentum was so swift that appraisers had to look at homes in contract rather than recent sales just to keep up. 

Offering millions over asking became a thing, with the city seeing sales across a variety of neighborhoods, not just the north side, for anywhere from 40% to 90% over the listed price. 

“It feels very crazy that you can put an offer in for $1 million over asking, and that ends up not even being in the ballpark,” said Erin Medlin, who has been scanning Noe Valley listings for months for a home to relocate her East Coast parents. 

They finally went into contract this week after offering 54% over asking. Even at that premium, Medlin is still in shock that they actually won. 

“I didn’t think they’d say yes,” she said.

More than half of all properties in San Francisco, not just single-family homes, sell for over asking, according to Compass. That’s by far the highest ratio in the country, with Chicago a distant second at 30% and the national rate just over 16%. San Francisco’s median price of $1.6 million across all property types is also an outlier, at nearly five times the national figure.

Some people have given up on their San Francisco homebuying dreams, searching the suburbs instead for better value and more space. Others are taking an indefinite break to gird their loins to reenter the fray. But agents say that, overall, buyers are doubling down, willing to compromise their wishlists and raise their budgets to get in before prices climb even higher. 

“People feel like in the next couple of years, with all these upcoming IPOs for these AI companies, how can prices not go up?” said Michelle Pender of Engel & Volkers. 

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In April, Pender sold a Buena Vista Heights home in three days for $7 million — $2 million over the asking price. She knew that the home, with its expansive outdoor entertaining space and remodeled interiors, would be popular and had set an offer date. But when the buyers came in with a preemptive offer, she was obligated to show it to her sellers. It was so far beyond what they had imagined that they decided to accept it without waiting to see what else came in. 

Pender said she had thought the home would fetch $5.5 million or $6 million — “which is kind of what things go for, 20% over, not 40% over.”

Not anymore. While the Buena Vista home was move-in ready, even fixer-uppers in popular neighborhoods are fetching prices that are startlingly over asking. In mid-May, a 1930s-era Great Highway home — unstaged and in largely original condition but with a charming facade and an extra-wide lot with ocean views — got 23 offers and sold for $3.5 million. It was the highest price ever paid for a fixer on the Great Highway, according to listing agent Jeremy Rushton of Coldwell Banker.

Rushton put 1956 Great Highway on the market for $1.5 million and expected it to close around a million more but said the $2 million overbid was not “unreasonable” given the potential upside of owning what he considers the “second-best house on the Great Highway.” The best, he said, is 2020 Great Highway, which sold for $7.1 million last year. 

“Homes are worth what someone is willing to pay,” he said. “If the listing agent is off by $1 million, the market will speak up and correct that.” 

Rushton said he is seeing more “buyer fatigue” at this late stage in the season. June is usually when the market starts to die down, as kids get out of school and summer travel begins, so it’s possible a much-needed lull is around the corner.

Some buyers are ready for a break, not because they think the market is going to be any less crazy in the fall but because they’re so discouraged by how spring has gone. But the vast majority are in it to win it, even if that means compromising on parking or outdoor space or digging deep for a bigger down payment.

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“It’s a very emotional process,” said Vanguard’s Dan Dodd. “You fall in love with it, and then if you don’t get it, and that happens two or three or four times, you have to grieve a little bit. Then you come back in full force, and gosh darn it, you’re going to get a house.” 

Dodd represented the buyers of Robert Fisher’s home on Russian Hill; they paid the full $17.25 million asking price and closed the deal just two weeks after the home was listed in late April. Luxury buyers are less likely to compromise on what they want and are more willing to be patient until the right home comes along, he said. Then they pounce. Many properties don’t even make it to the market before getting snatched up.

But at all price points, a similar herd mentality seems to have taken over. Dodd thinks that is just as big a factor as AI in pushing prices to head-scratching heights.

“It seems that everybody picks up the phone and calls each other to say, ‘OK, today’s the day, let’s go,’” he said. “There’s not always rhyme or reason to it.” 

Given the frantic spring, he expects summer to be more active than usual — which is just what listing agents are hoping for if they’re bringing on new inventory this late in the season.

“The word on the street is that there is no summer market,” said Cynthia Traina of Vantage Realty. “It’s just going to continue to rage.” 

She listed an 1880s Cottage Row home in Lower Pacific Heights just after Memorial Day for $1.25 million. Traina said that’s well below today’s value for the 1,200-square-foot home, which sits on a manicured mini park just off Fillmore Street. She spent months fixing up the space and finding a leased parking spot after signing the listing agreement with the elderly seller last year. Traina decided to just keep the price rather than updating it for the new market, figuring it would be bid up anyway. 

“People are getting tired of bidding wars, but then, if they see a good property, they’re still going to hop on it,” she said. 

These buyer battle royales are worrisome for San Francisco’s affordability crisis, Traina said, but her job is to get the highest possible price for her clients, especially those selling the homes they’ve lived in for decades to retire on the proceeds. 

Her happiest clients may be the ones who bought last year. 

“They think I’m a genius, because they’ve made millions already,” she said.