AI, Cryptocurrency technologies, and space exploration will change the world. AI this, AI that. So I have lived in the SF Bay Area for exactly 30 years moving here straight out of my MBA program. I have lived and worked through multiple economic highs and lows and tranformational changes to the world – I’ve did it, done it, and lived it.

I was an early pioneer during the Internet boom in the late 90’s, early 2000’s creating new technologies, marketplaces, business models, and most importantly how people lived. The Internet changed the world, but took longer than expected. After the bubble burst, the economy ramped up rapidly thereafter.

• In the mid-2000’s when I held Internet VP of Biz Dev roles, some of the largest subprime lenders were clients. As a former strategy, M&A and line manager in financial services, I anticipated this bubble when anyone with a pulse qualified for these subprime (“liar”) loans and no down payment to purchase real estate. The mortgage meltdown was a horrible time period as millions lost their homes to foreclosures tanking the US housing and financial markets that took many years to rebound.

• More recently, the Covid “black swan” event was a shock to the world. From a real estate perspective in SF Bay, we saw a drop in the 1st year of shelter-in-place, but then real estate demand spiked for single family residences outside major metropolitan cities like SF as people worked remotely and wanted more space during the lockdown. They moved to the suburbs and in mountain and ocean/lake vacation towns. High density cities with financial districts were deserted for a few years affecting both commercial and residential real estate markets in those cities. 

SF BAY REAL ESTATE IS A CONTRADICTION

The current SF Bay real estate market is in a really confusing dynamic now. First, on the negative side “Big Tech” companies have laid off large groups of employees as AI has made some functions much more efficient allowing companies to operate with fewer people. I’ve personally known highly skilled software engineers, data scientists, product managers, and many people in business functions across junior to mid-level roles get laid off. Some well known tech firms announced cuts in 2026.

• Meta saw a deep 10%
• Linkedin 500 local
• Cisco 4000 global, 500 local
• Intuit 17% or 3k
• Oracle 30k (yes, that’s thousands) globally, up to 1k local

But secondly, over the past 6-12 months there are a dichotomy of factors pulling at real estate supply and demand:

1. Engineers and other skilled technical and businesspeople who have worked in Big Tech for a number of years have savings “in-the-money” stock options and/or RSU. As of July 10, 2026 YTD Nasdaq is up 13% and up 70% from 5 years ago.
2. Very motivated, highly qualified buyer pools out there who are actively looking particularly in the $1.5-3.5m range.
3. Given the current shaky local job market, high inflation and general economic uncertainty, many potential buyers have postponed purchasing or decided to only casually look to buy real estate.
4. With few active “move-up” buyers, this has affected the supply of available properties at the entry-to-mid level causing a supply constrained market.
5. The SF condo segment was one of the slowest markets since the pandemic in the entir Bay Area. Demand finally accelerated in 2025, and the spring of 2026 saw a material increase in demand (and thus price) for condos in SF due to the recently announced liquidity event with SF Bay based AI start-ups – acquisitions as well as IPOs.

• Anthropic: The AI developer filed S-1 with anticipated valuation approaching $1 trillion, plus its many major acquisitions of other companies. 
• OpenAI: The ChatGPT maker filed IPO paperwork with a current valuation of over $850 billion.
• Databricks: Data and AI analytics platform is close to filing.
• SpaceX: IPO with current valuation of $1.5T, that’s “T” as in Trillions!

QUESTIONS AND TAKEAWAYS FOR REMAINDER OF 2026

1. Supply is low in SF, Peninsula and South Bay right now. Will supply increase in September/October?
2. San Francisco real estate is surging with low supply and heightened demand such that many properties including SFR, condos and even some duplexes are setting offer dates. Condos that are vacant, move-in condition, in desirable neighborhoods are going multiple offers after being relatively dorman.
3. Segment of buyers who are waiting and seeing how the economy evolves and whether their companies will lay off more people as many are feeling uncertainty.
4. Move up buyers are shaky given the economy, plus a slight dynamic that their current property likely has a <3% interest rates compounding the opportunity cost of purchasing a larger/better home. This then hampers the entry level inventory.
5. Current uncertainty of the US and International political climate adds to nervousness of current economy.
6. Lastly, for my SF Bay Area readers, what will the Golden State Warriors do with the team without Lebron joining the team? Will they now trade Steph Curry and Draymond Green for young players and a haul of 1st round picks to rebuild?

As always, feel free to reach out to Peter.Tao@cbnorcal.com if you ever wanted to talk SF Peninsula real estate.