San Francisco’s Luxury Housing Boom Is a Warning

San Francisco’s luxury housing market is booming, fueled by the stunning wealth created by the nascent artificial intelligence industry and a record stock market. Sure, the California city has always been an outlier relative to the rest of the real estate market, but the recent developments nevertheless suggest the modest gains in affordability we’ve seen in the US may be nipped in the bud.

San Francisco’s luxury market is characterized these days by bidding wars and scarce inventory. If history is any guide, we’ll likely see this wealth-driven momentum broaden out. It will ripple through Manhattan and Miami’s luxury segments; the truly rich will start to price out the merely affluent, who will take their budgets to less pricey neighborhoods, or perhaps to other metros that often appeal to coastal residents seeking a little more bang for their buck, places including Austin, Denver and Nashville.