Even Offering Millions Over Asking, All-Cash Deals Sweep San Francisco Real Estate as AI Billionaires Take Over

Median Home Price in San Francisco Hits $2.9 Million
Cash-Rich Buyers Fuel K-Shaped Polarization Amid AI Boom
Market Heats Up Ahead of OpenAI and Anthropic IPOs

Generative artificial intelligence (AI) billionaires are taking over the real estate market in San Francisco, USA.

Scenic view of the northern region of San Francisco, USA. Photo by AP Yonhap News.

According to foreign media outlets such as The New York Times (NYT), Business Insider, and the San Francisco Chronicle on June 1 (local time), the median sale price for homes in the San Francisco metropolitan area reached $1.7 million (approximately KRW 2.3 billion) in April, an increase of more than 10% year-on-year. This is the highest level among major metropolitan areas in the United States. According to the real estate brokerage firm Compass, the median sale price had already hit an all-time high of $2.15 million (approximately KRW 2.9 billion) in March this year.

In this region, where the median annual household income is $162,000 (approximately KRW 245 million), only 6% of homes on the market are affordable for those earning that income. The NYT analyzed, "Since the launch of ChatGPT in 2022, the market has begun to split in a K-shaped pattern," adding, "Home prices in high-end areas have soared, while prices in lower-end neighborhoods have actually fallen." This phenomenon is rarely seen in other major cities in the US.

There is a direct trigger behind the surge in all-cash purchases. In October last year, more than 600 current and former employees of OpenAI sold their shares, collectively pocketing $6.6 billion (approximately KRW 900 billion) in cash. Local real estate agents report that a significant number of buyers of luxury homes priced over $5 million (about KRW 6.8 billion) are from the AI industry, and that in most cases, these homes are purchased entirely in cash, without loans. There have also been frequent cases where buyers immediately offer millions of dollars above the asking price.

The rental market is also heating up. As rents, which had dropped during the COVID-19 pandemic, are rising rapidly again, the housing burden for middle-class and ordinary workers is increasing. Daryl Fairweather, chief economist at the real estate platform Redfin, said, "The benefits of the AI boom appear to be heavily concentrated among a small minority."

Unique transactions generated by the AI boom have also appeared. A home in San Francisco's Duboce Triangle neighborhood was recently listed for $3 million (about KRW 4.1 billion) with a condition that unlisted shares of OpenAI or Anthropic would be considered as payment. This targeted AI company employees who have difficulty converting their stock into cash before IPO, and it is reported that inquiries poured in less than a day after the property was listed. However, for an actual deal to close, a separate contract specifying the number of shares, value assessment date, and other details would be necessary.

People are coming and going at Anthropic's Claude Developer Conference held last month in San Francisco, USA. Photo by AP News Agency

Meanwhile, as competition for AI talent intensifies, the amount of money flowing into Silicon Valley is also increasing. The NYT reported, "The AI talent market is reminiscent of the NBA star recruitment scene," and noted, "Companies with deep pockets, such as OpenAI and Google, essentially have no salary cap." According to The Wall Street Journal (WSJ), the average stock compensation per OpenAI employee is expected to exceed $1.5 million (about KRW 2.27 billion).

There are predictions that the market will heat up even further in the near future. If OpenAI and Anthropic proceed with initial public offerings (IPOs), a new wave of "AI millionaires" could be created. Private market analytics firm Sacra estimated that IPOs by both companies could produce more than 16,000 new millionaires. Economist Fairweather commented, "There is a high likelihood that additional upward pressure will be added to an already overheated market."

This content was produced with the assistance of AI translation services.