Are you considering buying property in San Francisco in 2025? Perhaps you are longing to buy a home in San Francisco to raise your family and wondering if it’s a good idea? You’ve come to the right place. As someone who has lived in San Francisco since 2001 and owns multiple properties, I’ve experienced the city’s real estate market firsthand.
In 2017, I even sold a rental property here after the birth of my first child to simplify life, so I understand the complexities of buying and selling in this unique market. In retrospect, I should have held onto the property I sold, but I had just become a father and wanted to simplify my finances.
In short, I believe 2025 presents an excellent opportunity to invest in San Francisco real estate, whether you’re eyeing a single-family home or a condo. Let me walk you through all the reasons why buying property in San Francisco this year is a financially smart move.
Why Buying Property In San Francisco In 2025 Is A Good Move
Here are eight reasons why I believe buying a home in San Francisco in 2025 is a good idea. There are obviously no guarantees, but if you buy responsibly and hold for at least five years, I think San Francisco homebuyers today will turn out fine.
1) San Francisco is the epicenter of the tech and artificial intelligence revolution.
With the NASDAQ surging 43% in 2023 and another 28.6% in 2024, the tech sector is thriving. This explosive growth is setting the stage for a significant uptick in demand for Bay Area real estate, particularly in San Francisco and down to San Jose. The vast majority of residents feel wealthier because the vast majority invest in stocks or have company RSUs.
Since the pandemic, an extraordinary amount of wealth has been created in the stock market. Eventually, a portion of this paper wealth will be cashed out to fund purchases like San Francisco property, luxury goods, travel, and other lifestyle upgrades.
AI Investment Boom Helps San Francisco Tremendously
San Francisco remains at the forefront of artificial intelligence and tech innovation, making it a magnet for high-paying jobs and talent. According to the IDC, Global AI spending will more than double to reach $632 billion by 2028, and San Francisco, as the AI hub, will benefit.
As the tech ecosystem continues to expand, the demand for housing is bound to rise, further boosting property values. Owning property now allows you to benefit from the region's growing population and wealth.
Notably, OpenAI, valued at approximately $100 billion, is aggressively expanding its offices and workforce in San Francisco. Similarly, Anthropic, now worth over $40 billion, is also scaling up its operations in the city. Other rising stars like Databricks and Perplexity are contributing to San Francisco's AI boom.
What's remarkable is how rapidly these companies are appreciating in value—much faster than Facebook and Google did in their pre-IPO days. When the time comes for these AI companies to IPO, expect to see a surge of liquidity flooding the San Francisco real estate market and beyond.
As such, not only would I invest in San Francisco real estate today, but I would also invest in private AI companies. I'm doing so through a long-time Financial Samurai partner, Fundrise, with their venture capital product. Over 50% of its portfolio, which you can see before investing, is in AI companies like OpenAI. The investment minimum is only $10, so it's accessible to anybody.
This unprecedented growth signals a bright future for the Bay Area's economy and housing market, making 2025 an opportune time to invest in San Francisco real estate.
2) New San Francisco City Government Leadership
San Jose property prices have already rocketed higher. But San Francisco has lagged, partly due to the waiting of who would become mayor in 2025. Now that London Breed is out, and Daniel Lurie is in, there is new hope that San Francisco will experience a boom loop thanks to new city government initiatives.
This includes being tougher on crime, clearing the streets of homelessness, getting rid of the drug dealers, and bringing common sense back to San Francisco. Further, there should be less government graft with the new mayor, since he is already extremely wealthy (heir to Levi Strauss fortune) and doesn't need the money.
3) Post-Pandemic Recovery of Urban Living
The pandemic accelerated a temporary exodus from cities like San Francisco as remote work gained popularity. However, as companies call employees back to the office and hybrid work becomes the norm, urban living is making a strong comeback. Every company from Google, to Amazon, to JP Morgan is requiring the majority of their employees to return to in-person work.
San Francisco, with its world-class dining, entertainment, and cultural offerings, is regaining its allure. This resurgence in demand for city living is likely to drive property prices higher in the coming years.
4) Historically Low Inventory and Pent-Up Demand
San Francisco’s geography limits its ability to expand, and strict zoning regulations make it difficult to build new housing. After all, the city is only seven miles by seven miles. This persistent supply constraint ensures that demand will always outstrip supply over the long term.
High mortgage rates since 2022 have also served to keep buyers on the sidelines. However, as life goes on and expect to see massive bidding wars become regular occurrences. The bidding wars in Spring 2024 were intense. I expect the demand for San Francisco real estate to continue in 2025.
Although the city experienced a lull in demand during the pandemic, many prospective buyers are now re-entering the market, creating a sense of urgency and competition.
5) Attractive Pricing Compared to Peak Levels
San Francisco real estate prices in many areas have not fully recovered to their early 2022 peaks, presenting a unique buying opportunity. If you buy now, you could benefit from this “discounted” pricing before the market catches up with other booming areas like San Jose, at all-time highs, which hires the same employee demographic.
Historically, San Francisco property values have always trended upward over time, making now an ideal time to secure a deal before prices inevitably rise again.
6) Tax Benefits of Homeownership
Federal and state tax deductions for mortgage interest and property taxes remain significant incentives for buying property. For high earners in the Bay Area, these deductions can substantially offset the cost of homeownership, making it an even more attractive investment.
Let's also see if the new Trump administration does anything to bolster homeownership, given his campaign promises to lower interest rates and his background as a residential real estate developer.
There should continue to be the $250,000 / $500,000 tax free profits for homeowners who live in their homes for at least two out of the past five years of ownership. This type of tax incentive is unparalleled.
7) The Return of International Buyers
International travel and investment are bouncing back after years of restrictions. San Francisco has long been a favorite destination for global investors looking for safe-haven assets. The pandemic throttled foreign demand for U.S. property for four years. Now, expect to see foreign capital from China, India, Hong Kong, Taiwan, Singapore, and Malaysia get unleashed onto San Francisco real estate.
With the U.S. outperforming the world since the pandemic began in 2020, American exceptionalism is alive and well. Owning U.S. real estate, and particularly San Francisco real estate, is a prized asset for many international buyers. For wealthy foreigners, buying San Francisco real estate is also a way to expedite getting a visa and green card to the U.S., and sending their children to top U.S. colleges.
I've lived in 13 countries and visited over 60. San Francisco is one of the cheapest international cities in the world when compared to income potential. Despite cities like Hong Kong, Singapore, and Paris being more expensive, San Francisco citizens can make much more.
8) San Francisco as a Solid Long-Term Investment
Despite short-term fluctuations, San Francisco real estate has consistently proven to be one of the best long-term investments. Its status as a global city with unmatched tech, finance, and cultural significance ensures that demand for property will remain strong for decades to come. Buying now could mean significant appreciation over the next 5–10 years.
Technology is the future. And with new city government leadership eager to change the city for the better, San Francisco is poised to continue booming for years to come. If and when mortgage rates finally begin to consistently decline, as the Fed cuts rates, expect the demand for San Francisco real estate to surge in a step function increase in prices.
Here's an article on how to better prepare for upcoming bidding wars. The problem with real estate is that the herd can move quickly. It's best to buy when there is still a lot of skepticism and weakness, not when it's madness, like what I predict will happen with all the AI company employees get liquid.
The Best Types of Property to Buy in San Francisco
The ideal property to buy in San Francisco depends on your household size and lifestyle. However, some types of properties stand out as exceptional opportunities. Here’s a breakdown of the best options to consider.
Single-Family Homes on the West Side of San Francisco
The west side of San Francisco is undergoing a renaissance, making it one of the best areas for real estate investment. Key developments fueling this boom include:
- The $4+ billion renovation of UCSF Parnassus hospital, school, and research center.
- The relocation of the Chinese American International School across from Stonestown Mall, a school with over 550 children
- A $2+ billion redevelopment of the Stonestown Mall parking lot by Brookfield Properties.
- $200+ million renovations at St. Ignatius College Prep and other surrounding upgrades.
The pandemic spurred many residents to migrate westward, drawn by the relative affordability, outdoor space, and the flexibility of remote work. Now, the west side has been “discovered,” and the momentum is undeniable. With so much money being poured into the west side over the next 10 years, there will be thousands of new jobs created, bringing about more demand for property.
Best Neighborhoods to Buy Property in San Francisco
Here are the neighborhoods, in order, where I think you'll be able to make the most amount of money from your San Francisco property purchase.
It's harder to make a high percentage return in some neighborhoods like Pacific Heights, Presidio Heights, Sea Cliff, The Marina, and St. Francis Wood due to the higher median price points. That said, all neighborhoods in San Francisco should do well as the city goes through another boom loop.
- Golden Gate Heights
- Forest Hill
- West Portal
- Inner Sunset
- Parkside
- Outer Sunset
- Balboa Terrace
- Cole Valley
- Noe Valley
- Western Addition
- Inner Richmond
- Outer Sunset
- St. Francis Wood
- Russian Hill
- Pacific Heights
Why Golden Gate Heights Stands Out: Ocean Views, Quiet, and Safe
Golden Gate Heights is a prime choice due to its single-family homes with breathtaking panoramic ocean views. Globally, properties with water views typically command a 50%-200% premium over the median home price. Yet, in San Francisco, ocean-view homes are still reasonably priced relative to the city’s median—an undervaluation that likely won’t last beyond the next five years.
If you find a single-family home with panoramic ocean views, bid aggressively to secure it. Or, hope nobody else finds it! Not only will you enjoy stunning sunsets every evening, but for remote workers, the therapeutic benefits of gazing at the ocean are priceless. Incredibly, home prices in Golden Gate Heights are still relatively affordable.
Features to Prioritize: Decks and West-Facing Exposure
Beyond views, homes with decks off living rooms or bedrooms that face west are highly desirable. A deck allows you to step outside for fresh air, enjoy a morning coffee, or unwind with a beverage in the sun.
The more levels with views and the more decks, the better. For example:
- A home with a large deck (300+ sqft) accessible from inside can effectively function as an outdoor living space.
- Decks require less maintenance than yards but provide similar benefits—just add potted plants or outdoor furniture to create an inviting space.
Building a deck and opening up the window space with a sliding glass door is one of the best home remodeling additions ever. The combination of indoor and outdoor living is wonderful.
The Unicorn Property: Views + Usable Land
San Francisco’s 49 square miles of land are limited, driving up land value. Most ocean-view homes lack significant usable flat land due to the city’s hilly terrain. If you find a home that combines stunning views with a lot of usable flat land, you’ve found a unicorn. This is a property to buy and hold for generations.
When large yards aren’t available, prioritize homes with ample deck space as a substitute. Decks are lower maintenance and can be transformed into beautiful, functional outdoor areas.
Condos On The East Side And In Prime Areas
If you are single or a couple, you should also consider bargain hunting for condos near downtown or in prime areas like Pacific Heights. The condo market has done relatively poorly since the pandemic, however, that means there's also a lot more value to be had. As more people return to the office downtown, the demand for condos should gradually increase. Just be cognizant of any new construction near the condo building you want to buy.
Personally, I would look for two bedroom, two bathroom condos in prime areas like Pacific Heights, Presidio Heights, The Marina, or downtown with views of the park or the water. Buy in established prime neighborhoods with a more cozy feel while taking advantage of any weakness in condo prices. Or buy near the Ferry Building, with great transportation access, restaurants, and activities.
Always think about buying a condo with views, close to a park, or close to a lot of great restaurants, shops, and bars.
Yes, You Should Buy A Home In San Francisco In 2025
Buying property in San Francisco in 2025 presents an incredible opportunity to invest in a city that’s poised for a comeback. With new leadership, a booming tech sector, and growing demand for urban living, the potential for appreciation and long-term financial gain is strong. If you’ve been waiting for the right time to buy in San Francisco, this may be it.
Make sure to buy your San Francisco home responsibly. This means putting down at least 20%, maintaining a 6-12 month liquidity cushion, and ensuring the purchase price doesn’t exceed 5X your annual household income. By following these guidelines, you can buy with confidence and take pride in owning real estate in one of the most dynamic and fastest-growing regions in the world.
Diversify Your Investments Into Private Real Estate
In addition to investing in San Francisco real estate, consider diversifying into private residential commercial real estate in the Sunbelt region, where valuations are lower and yields are higher. You're only really long real estate if you own more real estate than your primary residence, since you have to live somewhere.
You can invest in private real estate without the burden of a mortgage or maintenance with Fundrise. With almost $3 billion in assets under management and 350,000+ investors, Fundrise specializes in residential and industrial real estate.
I’ve personally invested $300,000 with Fundrise to generate more passive income. The investment minimum is only $10, so it's easy for everybody to dollar-cost average in and build exposure. Fundrise is also a long-time sponsor of Financial Samurai.
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About Sam Dogen
In 2009, I helped ignite the modern-day FIRE movement by sharing my journey to achieve financial independence and retire early. In 2012, I retired from a successful 13-year career in investment banking to focus on writing and pursuing my passions. He is the author of Millionaire Milestones: Simple Steps To Seven Figures and a couple more bestselling books.
Since 2001, I’ve called San Francisco home, where I live with my wife and two children. Over the years, I’ve experienced both the highs and lows of this iconic city. Despite its challenges, I truly believe San Francisco is one of the greatest cities in the world, offering unparalleled opportunities to build wealth and achieve your dreams. You can read more by clicking my About page.
Should I Buy A Home In San Francisco In 2025 is a Financial Samurai original post. All rights reserved.