ew could have predicted the turmoil and instability the U.S. is presently experiencing: The CBOE Volatility Index, also known as the “fear gauge,” which measures the market’s expected unpredictability over the next 30 days, hit 53.76 on April 8 — a level unseen since the start of the pandemic, when it briefly surpassed 80. But as the stock market seesaws and businesses try to find their footing amid tariff whiplash, the Bay Area is once again proving itself to be an exception — for now, at least.
Here, housing markets strengthened in the first quarter of 2025, with increased sales volume, rampant overbidding and homes spending minimal time on the market, largely driven by the AI tech boom, according to local real estate professionals. However, the benefits of this recent gold rush aren’t evenly dispersed, and most sales that closed in March went into contract in February, before the major chaos ensued in the Trump administration.
The Bay Area market now
As of April, listings have increased across the Bay Area, though San Francisco saw minimal growth. Per NorCal MLS Alliance data compiled by Compass, the amount of active and coming soon listings in San Francisco rose just 7% year-over-year — and just 27.5% of those listings were single family homes. By comparison, in the inner East Bay, defined as the cities of Oakland, Berkeley, Piedmont, Alameda, Emeryville, Albany, Kensington, El Cerrito and Richmond, active and coming soon listings are up 48% year-over-year, by far the highest they have been in April for the past four years, according to MLS data.
Home prices are up 2% from last year in San Francisco, and the number of home sales has also risen by 8.5% according to Daryl Fairweather, Redfin’s chief economist. Fairweather told SFGATE that while the San Francisco market is not where it was before the pandemic, overall, it is pretty stable.
Hannah Jones, a senior economic research analyst at Realtor.com, agrees. “Inventory levels have improved in the Bay Area, but the market varies greatly geographically,” Jones wrote in an email to SFGATE, adding that homes in the Bay Area tend to sell in less than half the time of a typical U.S. home.
Mortgage rates are high, and will continue to stay high, per Fairweather, but have gone down slightly recently, giving buyers a small opening. “The advice to buyers is to jump into the market now,” said Nina Hatvany, president of Compass SF’s luxury advisory group. Hatvany also said that she’s seeing a lot of sellers deciding to come to market quickly, sharing that a client recently decided not to move out and stage their home, but simply tidied it up and put it on the market while they were still living in the house.
Don Cruz Datanagan, the San Francisco district manager of Coldwell Banker Realty, told SFGATE in an email that while some customers have adapted their purchasing plans due to the recent stock market volatility, there is no outright retreat for buyers.
“We had an Apple employee pause his $2M Peninsula purchase to avoid selling his shares that have dropped 20% in a week,” he wrote. Cash buyers are still driving fierce competition, he said.
Luxury homes and the AI boom
The luxury home market remains white-hot, according to Patrick Carlisle, chief market analyst for Compass San Francisco Bay Area. As of April 2, 104 sales over $5 million were reported in the San Francisco and San Jose metro areas, an 82% month-over-month jump from February, and a 65% year-over-year increase from March 2024. These figures match those of March 2022, when the market was peaking in the last months of the pandemic boom, and Carlisle is still expecting more sales to be reported in the coming days.
“Santa Clara [County] has been the main beneficiary of the AI boom and has had the most feverish market in the Bay Area, and certainly among the most heated in the country,” wrote Carlisle, noting that the region saw a 115% year-over-year increase in luxury home sales in March.
The escalating prices in two Santa Clara County towns make this clearly visible. In Palo Alto, the median price for a single family home has reached $4.2 million. In Los Altos, that figure is now $5.7 million. These astounding sums aren’t dampening demand, either. Homes in both cities are only spending about a week on the market, on average.
“There was a feeling of gloom and concern last fall in San Francisco, but this spring no one is talking about the tech layoffs but rather about the explosive impact of AI on local growth,” Hatvany wrote. Something to keep in mind is that, traditionally, the luxury home market is “fiercely seasonal,” with high activity in the spring, meaning this hot streak is likely to cool.
Underpricing skews the picture
A recent Redfin report highlighted that Bay Area sellers are more likely to get more than their asking price, compared to other major U.S. metros. Topping this list is San Jose, where about two-thirds (67.1%) of homes sold in February of this year went for more than asking price. Oakland is next up, with 57.7% homes selling over asking, followed by San Francisco (57.2%).
Indeed, in San Francisco’s Sunset, Parkside and Golden Gate Heights neighborhoods, a staggering 84% of listings sold over asking price in the past year. “We just saw 100+ visitors at one of our Sunset District open houses, with multiple offers received, over asking on Tuesday,” wrote Datanagan, confirming the craze.
According to Redfin, the Bay Area always tops this list due to the common practice of underpricing homes to fuel bidding wars, but this time around, it’s special. “The Bay Area not only has the highest share of homes selling above asking price, but is also seeing this trend increase faster than anywhere else,” the company’s report read.
The future of the market
With interest rates slightly dipping, there’s a glimmer of hope the market remains hot, even with looming worries surrounding tariffs. Strong stock market performance since late 2023 has increased consumer wealth overall, boosting local spending.
The full effects of recent market volatility remain to be seen in the coming months. In the meantime, the market doesn’t appear to be slowing.