The "Eye of Sauron" Shifts: Why San Francisco Luxury is Leading the National Rebound
I recently sat down with The Wall Street Journal to discuss a shift we’ve all been feeling on the ground here in San Francisco. After a few years of being the national "political punching bag," the narrative is changing—and the market data proves it.
As I shared with the Journal:
“The Eye of Sauron has sort of turned away from San Francisco. We’re in legitimate recovery mode.”
While the rest of the U.S. housing market has been mired in a slump, San Francisco’s ultra-luxury sector ($10M+) saw a 50% jump in sales volume in 2025. This isn't just a "bounce back"; it's a fundamental repositioning of the city as the epicenter of the global AI boom.
The AI Catalyst: From "Doom Loop" to "Gold Rush"
For years, headlines focused on the "doom loop." Today, those same critics are watching as AI titans like Anthropic and OpenAI absorb millions of square feet of office space, bringing a new wave of high-net-worth individuals into our residential market.
This "Cerebral Valley" effect has created a high-stakes environment where:
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Inventory is at historic lows: We entered 2026 with less than half a month of housing supply.
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Competition is fierce: Over 80% of houses are currently closing over asking price.
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Luxury leads the way: The $5M+ sector in neighborhoods like Pacific Heights and Cow Hollow is seeing its strongest activity in four years.
What This Means for Buyers and Sellers
The luxury market typically takes its cues from the stock market. With tech stocks hitting all-time highs and interest rates stabilizing, the "wait and see" period of 2023 and 2024 is officially over.
For Sellers: The market has moved into a new business cycle. If you’ve been holding onto "golden handcuffs" (low pandemic-era rates), the current equity gains in SF may finally outweigh the cost of moving.
For Buyers: Precision is everything. In a market where "everything is flying off the handlebars," having a representative who understands the nuance of off-market opportunities and hyper-local trends isn't just an advantage—it's a necessity.
The Wall Street Journal article by Katherine Clarke: The Housing Market Is Slumping—but Sales Over $10 Million Are Skyrocketing
The Bottom Line
San Francisco has always been a city of reinvention. Whether it was the Gold Rush of 1849 or the Tech Boom of the 2010s, we are a city that knows how to innovate its way out of a slump.
As we move through 2026, the data is clear: San Francisco is no longer the underdog. We are the lead story.
Want the full breakdown?
Read my End Of the Year Report including all $10Million+ sales here
To discuss your property or your next move in this resurgent market, reach out to me directly at [email protected] or visit MaxArmour.com
Most recent San Francisco COMPASS data: Annual $5M+ sales and by District.
