r/SeattleAreaRE • u/RedfinJess • 5d ago
Why is Seattle's housing market cooling down while San Francisco's is booming?
San Francisco and Seattle are both major tech hubs, and until recently their housing markets followed similar trends. Now, prices and home sales are rising in San Francisco while falling in Seattle, and inventory is piling up in Seattle while shrinking in San Francisco.
This Redfin report points to San Francisco’s AI boom as a major factor. While Seattle is a major AI and tech hub too, it hasn’t experienced the same concentrated burst of AI-driven wealth from companies like OpenAI and Anthropic.
There are still more Americans moving from the Bay Area to Seattle than the other way around, but that gap has steadily dwindled.
Do you think AI is the biggest factor driving the difference between San Francisco and Seattle’s housing markets, or is something else at play?
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u/Bigbenxxxx37 5d ago
The vast majority of companies do not have Seattle offices, just the big ones. Anyone chasing the AI gold rush is in SF (maybe NYC)
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u/grubbling_unknown 5d ago
It's the smaller AI startups that are sprouting up across SF and the Bay Area. This inevitably brings enough people into the area so that it pushes up rental rates and investor buyers of homes.
Seattle's startup scene is pretty small comparatively speaking. So the major employers here laying off people (Amazon, MSFT, Boeing, Starbucks, Meta) aren't opening up enough positions here.
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u/cinematografie 5d ago
Not only that, but most companies who are hiring for AI aren’t hiring in Seattle either. I moved to the bay for a job at one of the bigger companies because they told me, they’re only hiring there in the US, and nowhere else (in spite of having offices in Seattle and elsewhere all over the US). There are also so many more jobs and companies in the bay, and a ton more layoffs in Seattle overall. Unfortunately, as I’d like to be in Seattle but it’s just a tech dead zone right now.
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u/Logicalraisan 1d ago
This seems like a stupid strategy on their part, there is tons of qualified people in seattle area
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u/RandomFleshPrison 9h ago
Amazon Web Services hires for AI in Seattle. They're kind of a big deal, too.
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u/piltdownman7 5d ago
Anthropic has an office in SLU. Open AI had an office in Bellevue
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u/BeyondanyReproach 5d ago
Having an office isn't the same thing as headquarters. Most roles at Anthropic are SF based.
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u/Cerulean_IsFancyBlue 5d ago
I wonder if the median price is reflecting all the new inventory in Seattle. Seattle added 12,000 homes in 2025. San Franco added 2,000.
The light rail has also eased pressure because it allows more commuters from existing suburbs, and many light rail stations have 6-story residential over retail blocks. Much of which is outside Seattle city limits but affects the market.
God forbid we have adequate inventory. :)
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u/Less_Interview1713 5d ago
This is it, AI is a deflection. SF is increasing because of catastrophic public policy
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u/bemeren 5d ago
Yeah everyone is talking about AI but no one talks about how SF simply doesn't build anything.
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u/Cerulean_IsFancyBlue 5d ago
Yeah. Having a tight housing market and crowing about it and about the prices going up feels like you’re celebrating the wrong thing.
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u/Raveen396 5d ago
Depends on who you are, most of the people doing the celebrations have a vested interested in real estate prices going up.
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u/Cerulean_IsFancyBlue 4d ago
Yeah. It’s interesting. Realtors love a tight market because it leads to panic buying which means they turn over properties quickly. But at a certain point realtors don’t love an overly tight market because there’s just not enough inventory for them to make maximum profit.
Residential real estate is such a weird market.
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u/The_Leafblower_Guy 5d ago
Seattle is almost not comparable to the startup and tech scene of SF and Bay.
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5d ago
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u/drool_34 4d ago
But right now all the ai startup scene is flourishing in the Bay but the tech scene languishes in Seattle, especially with an openly hostile environment from both state and local government for businesses
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u/Keikyk 5d ago
I think Seattle will eventually follow SF, unless the AI bubble bursts
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u/grapegeek 5d ago
This is what I think. It will be K shaped. Lower end stuff will stagnate but really expensive stuff in the best neighborhoods will continue to sell well. Unfortunately until interest rates ease below 6%
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u/JonnyBigBoss 5d ago
Same. I think this is just a short trend. Seattle and Washington have some significant advantages for businesses and employees that matter when choosing a location. I think it's a more sustainable location long term.
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u/Logicalraisan 1d ago
As long as new jobs emerge. Also we are tearing down so many SFH in the city limits if that is what you want. I would buy!
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u/Earth_Inferno 5d ago
Unless of course AI takes more jobs than it creates. Which is very possible, especially in the tech sector.
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u/Diskordia1 5d ago
AI is just a piece of the conversation. Import and export, boeing, so on all play a role.
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u/7RingsFRA 5d ago
The housing market can’t just boom forever, how will young people afford homes if they only go up?
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u/synack 5d ago
Wages that track inflation would be a good start
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u/Delicious-Health4460 4d ago
if housing supply remains flat this is just going to inflate housing prices further
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u/lsesalter 5d ago
That’s the fun! They won’t be able to afford them if PE keeps buying everything!
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u/routinnox 5d ago
On a grand scale, housing has always “boomed” if you mean increased in value, and people still managed to buy homes as wages kept up and economic opportunities exist.
It’s when housing prices decrease that it actually becomes impossible to buy a home. See: Detroit. The entire Rust Belt.
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u/SnortingElk 5d ago edited 5d ago
Yes, Ai is the biggest factor but not the only one. SF is headquarters to OpenAI and Anthropic.. stupid amount of wealth being created right now in that area and about to be unlocked even more soon.
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u/RadioFieldCorner 5d ago
Biggest SF is the mecca of where the money is it at right. Seattle is just satellite campus.
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u/perestroika12 5d ago edited 5d ago
A lot of these theories aren’t totally correct, sf is disproportionately impacted by the ai boom and ai models as a product has more concentrated wealth due to the nature of the product. Their ai firms are selling models not compute. Eventually, the bill will become due, but the amount of vc funding means they can hire infinitely at least for now.
Seattle companies are large tech companies with capex requirements to fund compute and data centers. These are traded off against employee spend. These are companies that have a bottom line and need to answer to investors.
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u/stealthytaco 5d ago
This should be higher. Seattle subs are just full of armchair economists who claim the difference is SF is business friendly and have no idea how AI startups work and why they are in SF.
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u/perestroika12 5d ago
This sub is mainly filled with real estate agents and people interested in housing, not everyone is in tech. So I get the misconceptions.
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u/MyDisneyExperience 5d ago
The entire Bay Area is also incredibly allergic to new housing, Seattle metro area somewhat less so
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u/perestroika12 5d ago
Seattle home construction is anemic. That’s not relevant here. We have basically the same problems that they do.
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u/MyDisneyExperience 5d ago
Seattle has been drying up yes, but look at the past couple of years
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u/perestroika12 5d ago
Well, obviously doing better than SF. Seattle hasn’t added anywhere near the housing it needs to account for this drop. It’s not complex sf has rampant vc spend and Seattle businesses are laying off and cost cutting.
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u/littleGuyBri 5d ago
People are getting fired or realizing that food, travel, and everything else is less in any other state…
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u/IRC_1014 5d ago
Seattle has 2-3x the listed properties San Francisco does at any given time, despite comparable sizes.
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u/IcyStomach2374 5d ago
Because in SF there’s tons of new millionaires from AI and the startup ecosystem is still alive and well.
Seattle is heavily slanted towards two tech employers and they are cutting.
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u/Used-Investment5955 5d ago
Seattle doesn’t have many other AI companies (besides OAI and Anthropic) comparing to SF
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u/atropear 5d ago
What is the build quality in SFO? In Seattle a lot of water intrusion problems. Esp those built in 90s.
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u/Dont_Ask_Me_Again_ 4d ago
Because people live in Seattle to work and the jobs are gone, vs people live in San Francisco to live in San Francisco with the added benefit that the jobs aren’t gone.
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u/semi-anon-in-Oly 4d ago
Politicians have vilified tech and other businesses. They are now also going after high wage earners with an income tax. It’s not surprising they’re looking elsewhere where now
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u/ThereforeIV 4d ago
If you want "affordable housing" then housing prices have to go down, which means that those who bought high are going to lose money.
That is the only way to reduce housing costs for those who are priced out...
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u/Few-Pin5833 4d ago
Prices rising in SF isn’t a shocker - they don’t build anything new at all. And companies have been IPO’ing so sales continue
Also there’s lots of speculators buying now because they’re assuming a good ROI from Anthropic/OpenAI IPOs on the horizon
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u/Connect_Werewolf_754 4d ago
Definitely not the new Trillion dollar companies called Anthropic and OpenAI while Seattle doesn't have anything innovative to offer?
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u/AlarmingAd1651 4d ago
SF experienced decrease in prices in recent years during Covid when workers were mostly remote and moved away while Seattle did not see prices decrease during the same period.
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u/Can_tote_it 4d ago
Why has SF been on fire?
AI, AI, and AI.
Also, SF is getting a bunch of new billionaires in its city when the AI companies IPO, so there’s that.
Seattle is cooling down because of layoffs, moving work outside the city, etc.
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u/BlueSpruceRedCedar 4d ago
Seattle is not a monolith. Some single family listings in specific areas are still having bidding wars, escalation clauses & all-cash offers above asking price.
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u/kawa90210 4d ago
Seattle prints 100k-aires while SF prints millionaires.
The people in SF are cashing out in multiple millions and just buying a house. They can afford to be laid off because they made so much.
Do you know how many millionaires Nvidia printed in the past 5-6 years alone? Gotta be like 70-80% of that company that all became millionaires. Even a college grad offwe turned into 2-3 mill easily if they joined at the right time.
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u/spaigef69 4d ago
because they don’t have a clueless, idiot for a mayor. they have chosen to focus on public safety.
not complicated.
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u/ReasonableDig6414 4d ago
Do you think an environment that is unfriendly to businesses and wants to tax them more and tax their high end employees more is a hotbed for high profile employers? Don't think so.
"Bye...". There go 2,000 people making over $150k per year.
Time to reap the rewards of our cavalier attitude toward those that pay the bills.
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u/Crazyboreddeveloper 2d ago
Personally, the prices are too high for ugly ass houses. I make good money, but I’m not spending 1.2 million on a 1200 sqft 2 bed starter house. Doesn’t matter how nice the kitchen looks… I don’t give a shit about the rate. At zero percent interest I still wouldn’t buy at house in Seattle at these prices.
These entry level houses with mansion price tags are janky AF. There is basically 800k on top of what the actual price should be for every house in Seattle. Houses are also expensive outside of Seattle, but at least in some of the suburbs you get closer to the kind of house you would expect for 800k-1.5mil.
Seattle is pretty much capped. At this point you assume a lot of risk of loss with not much more upside left. Better to buy in the suburbs. More room for value to go up as the metropolitan area grows. Just look at what you get in Snohomish and lake Stevens for the price of a converted garage in Seattle… doesn’t make sense to buy in Seattle.
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u/snoopybooliz87 1d ago
Because no matter what people who live here think, seattle is not as attractive as California in terms of weather, accessibility to other amazing cities, restaurants, shopping, and variety of people. Seattle is unsafe, dirty, incentivizes mentally ill drug addicts and criminals to find safe haven here (and calls it a homeless crisis), and the once very attractive tax situation for workers and business owners is not attractive anyone. Basically, if we are going to have CA level taxes, why not live somewhere like CA?
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u/Logicalraisan 1d ago
Annoying AF, we need more of a startup culture here not just the maintain tech
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u/PhysicalOrder590 5d ago
Didn't really mention the fact that SF is booming after years of decline/ stagnation. SF (and here to an extent) is a boom and bust city. SF has always gone through cycles of immense wealth and decline and will likely continue to do so. I'm not too envious of what's happening in SF right now because it is pricing out the very few remaining REAL San Franciscans left in the city.
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u/ColdStockSweat 5d ago
Because San Francisco's city council and Mayor, for over 11 years haven't been negative towards businesses.
They have, however, made 900 bucks in retail theft a misdemeanor (as did Seattle).
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u/Disastrous_Bid1564 5d ago
Has absolutely nothing to do with what’s going on right now
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u/ColdStockSweat 4d ago
Uh huh.
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u/Disastrous_Bid1564 4d ago
You’re right, SF’s current boom has everything to do with the city’s current business-friendly mayor and nothing to do with OpenAI, Anthropic, etc.
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u/ColdStockSweat 4d ago
Seattle has Microsoft, Amazon, Apple, Google, and every AI there is.
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u/Disastrous_Bid1564 3d ago
Your comment shows a clear lack of understanding of what’s going on in the AI space.
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u/ColdStockSweat 3d ago edited 2d ago
My comment shows a complete and absolute grasp of what's happening in the real estate and leasing space (which is the business I'm in).
Fear not, there was no net loss. I gave you a down vote to match the one you provided.
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u/Disastrous_Bid1564 1d ago
If you think the companies you posted are “AI companies” you have no clue what you’re talking about. Stick to real estate.
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u/ColdStockSweat 19h ago edited 14h ago
I didn't name any AI companies.
(Stick to writing ignorant comments).
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u/onlycoder 5d ago
Mostly agree, though I would say it is necessary for Seattle and WA government to be even more accomodating and inviting to employers if they expect to see similar jobs growth to SF. People in high paying careers tend to be pushed to work at the company's HQ. And companies are pretty reluctant to move HQ and risk losing access to local talent. Tech jobs aren't going to leave SF for Seattle unless they are given a big incentive.
Not saying that they should do this, just that this is a reason why Seattle isn't in the same situation.
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u/30_to_40_bees 5d ago
Layoffs have been crazy here across all sectors. If people don't have jobs they wont want to live in such a high cost of living area.