Miriam and her husband were fed up with renting on the Peninsula but knew that their budget of less than $2 million wouldn’t get them far toward buying a home in Palo Alto or Menlo Park. After losing out on two homes that received multiple offers, they set their sights on San Francisco; in particular, neighborhoods right off I-280, like Miraloma, offering a relatively easy commute to work on the Peninsula.

They soon realized that in San Francisco, the asking price is just a suggestion, and the final sales price can be $1 million more.

They didn’t bid on the Piedmont properties but a short time later saw a renovated 1929 Tudor in the North Berkeley hills near Tilden Park, with three bedrooms and four bathrooms in nearly 2,900 square feet. They had to fend off a few other offers on the property, which was listed at $1.4 million, but they prevailed and are set to close this week. It’s a longer commute than they had wanted, but overall they feel lucky. For the same price point on the Peninsula, Miriam said, they’d be in a 900-square-foot property with no architectural charm. 

“Even though it’s competitive, it’s an exciting time to get something wonderful and be part of communities that are a little bit more reasonable,” she said. 

As San Francisco prices rise so quickly that even appraisers are having a tough time keeping up, buyer burnout is setting in. Some who are committed to the city at all cost may take a break and return in a few months, after the spring fever has passed.

Smith said she started noticing the spillover trend this month and suspects it will pick up steam in May. The same thing happened during the pandemic: first a trickle, then a flood of interest from San Franciscans looking for more space at a lower price point. But while those relocations were spurred by the COVID-related desire for outdoor living, as well as the city shutdown, this one is caused by buyers with money but no inventory to spend it on.

Smith said most of the buyers at her Marin open houses these days are from San Francisco, with budgets around $3 million. What they find in Marin would cost $4.5 million back in the city. 

“If you ask them, ‘Are you looking in both places?’ They’ll say, ‘Yes, but there’s no chance. We’re tired,’” she relayed.

The movement isn’t coming solely from first-time buyers, she added. Her recent $7.5 million Mill Valley listing went into contract in just two weeks, with three offers coming from San Francisco buyers. One bidding party said they have a home in the city but had been considering an eventual move to Marin. The crazy market helped push up the timeline, because they realized they could get a great deal if they sold the San Francisco home and made the move sooner.

San Francisco-based City Real Estate opened its second Marin office, in Kentfield, just last month. It’s an expansion that isn’t necessarily a response to the recent uptick in demand, Lurie said, as 70% of Marin buyers historically have come from the city. Any increase on that figure is likely to lead to more competition and higher prices. He predicts single-digit price growth in the North Bay county this year and double-digit growth in 2027. 

“Marin is now in the early innings of seeing the market that has otherwise been relatively flat for the last several years reaccelerate,” he said. 

Just as Marin has long been a major market for San Franciscans, the Inner East Bay market has also seen a symbiotic relationship with the city, especially for young families yearning for single-family homes.

Diana Klein of Compass has been helping San Francisco clients find more value for their money across the Bay Bridge for years, but the contrast between the two markets feels “particularly sharp” at the moment, she said. She and business partner Lauren Steinberg are the agents who represented Miriam on her new Berkeley home and, for a similar price point, recently helped different buyers get a two-bedroom Pacific Heights condo with 40% less square footage and no outdoor space on a busy commercial corridor. 

“For essentially the same capital outlay, Inner East Bay buyers can access materially more space, outdoor living, and a different lifestyle proposition,” Steinberg said. 

The median house in the Inner East Bay is less than $700 per square foot, according to Compass, versus nearly $1,100 per square foot in the city. But the agents cautioned that buyers shouldn’t expect to find bargain-basement pricing throughout the East Bay; exceptions are prime pockets of Oakland and Berkeley getting a lot of attention from San Francisco transplants. 

They recently represented buyers — who initially started their search in San Francisco — in a competitive situation in Rockridge where they had to beat out four other offers by paying $500,000 over the $1.25 million asking price on a 1,000-square-foot Craftsman. 

The sale price of nearly $1,800 per square foot wasn’t a one-off. A nearby property closed at approximately $2.4 million, or nearly $1,900 per square foot, “an exceptional result for that neighborhood and a level we haven’t seen there in years,” Klein said. While she can’t trace every overbid back to a San Francisco buyer, “the velocity and pricing in these pockets point to a clear influx of highly motivated, well-capitalized demand.”

Miriam hasn’t even moved into her new home yet, so resale and appreciation are not top of mind, though she can imagine that the slew of upcoming AI IPOs will continue to push the market “up and out.” With two children in elementary school, she can’t wait to put down roots, literally and metaphorically.

“I’m really excited to have a garden and neighbors and be in schools that are inclusive, where kids can live more of a free life,” she said. “It’ll be exciting to be in a place that I’m sure has its own challenges but will allow for a little bit more ease.” 

Correction: An earlier version of this story misstated how many offices City Real Estate has in Marin.