For the past three years pundits have claimed that San Francisco was finished, that tech talent would never return, and that any capital deployed south of the Golden Gate was doomed. We disagreed, kept buying, and now the numbers are lining up with our thesis. Below you will find the latest data points real estate professionals should track as the market recovers.

A New Mayor, Cleaner Streets, Safer Blocks

When Mayor Daniel Lurie took office in January he inherited a city synonymous with encampments, open-air drug markets, and stalled permitting. His first budget targets core services: policing, sanitation, and a reset of social-service spending to close an $800 million deficit. Early results matter for property values:

Overall crime down 30% year to date. Car break-ins at a 22-year low. Street encampments at the lowest level since 2019.

Visible progress in Union Square and surrounding corridors is already pulling shoppers and tourists back downtown, which translates into foot traffic for retail tenants and confidence for residential buyers.

Downtown Pricing Surges on Targeted Demand

In May the median list price in the downtown ZIP code (Nob Hill, Union Square, parts of the Tenderloin) jumped 51 % year over year, according to Realtor.com. Even with the usual caveats—small sample size and product-mix shifts—such a move signals renewed absorption at the heart of the city’s grid.

Case-Shiller shows San Francisco values fell 12 % from the May 2022 peak through spring 2023, but pricing traction is clearly back. List prices in most ZIP codes remain below 2019 levels, giving value-add investors room to underwrite growth without stretching exit assumptions. The broader metro’s median list price sits at $998,000, still 4 % below last year, which means spreads remain attractive relative to long-run replacement cost.

Put differently, pricing momentum is rising first in the neighborhoods most beaten down, the classic early-cycle tell we look for in every turnaround market.

Office Foot Traffic Still at Half-Speed, and That Is an Opportunity

Placer.ai’s cellular mobility data shows downtown office visits 50% below 2019, but directionality matters more than the absolute number. Tenants are enforcing structured hybrid schedules, tech teams want face-time with AI product leads, and sublease blocks are finally shrinking instead of expanding. That trend supports apartment absorption and pushes vacancy toward the high single digits by 2026 in our base case.

AI Gold Rush: The Structural Tailwind

Nvidia CEO Jensen Huang put it bluntly last month: “It’s because of AI that San Francisco is back.” The city hosts the densest ecosystem of AI-native startups, data infrastructure vendors, and venture dry powder on the planet. CBRE tracks more than 4 million SF of AI-driven office requirements in the pipeline, a figure that has doubled in just twelve months. High wage growth follows that demand, which flows directly into rent rolls for both multifamily and mixed-use product.

What the Market Got Wrong and Where We Go Next

They priced in permanent flight risk. Remote work is sticky, but it is not binary. Hybrid patterns still concentrate discretionary spend within a five-mile radius of Market Street. They assumed public order could not be restored. Comparable turnarounds in Manhattan (1990s) and Downtown LA (2010s) show that political leadership can shift perception—and cap rates—rapidly when basic services are delivered. They discounted AI as hype. When the top five public AI equities hold a combined market cap north of $4 trillion, follow-through demand for office, lab, and urban housing is inevitable.

For investors, the playbook is clear: control well-located assets now, execute light-to-moderate renovations, and stage delivery around 2026–27 when office utilization and inbound hiring crest a new equilibrium.

Closing Thoughts

We believed San Francisco’s fundamentals were bruised, not broken, and we put capital behind that conviction. The early data tell us the bet was justified: crime trending down, downtown pricing moving up, and a once-in-a-generation AI boom creating fresh demand for urban space. If you skipped San Francisco in your 2022 or 2023 allocations, it is time to revisit your pipeline while pricing still reflects yesterday’s pessimism rather than tomorrow’s reality.

Stay tuned at DanielKaufmanRealEstate.com for granular deal flow and market intelligence you can plug directly into your underwriting model.