AI Gold Rush Drives Demand For High-End Homes In Silicon Valley – Deals Over $5 Million Jump 68%

Luxury home sales in Santa Clara, the core of California's Silicon Valley, surged alongside the artificial intelligence (AI) boom in 2024.

According to real estate brokerage Compass, the tech epicenter recorded an unprecedented number of home sales priced at $5 million or more last year.

Mansion Global reported that 349 homes in the price range were sold, a 68% rise from 2023. In contrast, overall sales in the Santa Clara market increased by only 17%.

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Home prices in Santa Clara County – home to Google, Intel and Nvidia – rose by 9% in 2024, with the annual median house price reaching a record $1.9 million. In April, the median price for single-family homes hit $2 million for the first time, according to the Santa Clara County Association of Realtors.

Significant stock option gains provided tech workers the means to purchase higher-priced properties, said Nicole Brown, a Northern California agent at Corcoran. Meanwhile, tech stocks, including Nvidia – which surged nearly 90% over the past year – experienced substantial growth.

According to Brown, employees holding valuable stocks were less deterred by persistently high mortgage rates and could afford substantial down payments, while many other buyers stayed on the sidelines.

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According to Compass's report, all-cash purchases in California accounted for 27% of transactions last year, reaching their highest levels since 2012.

Several cities in Santa Clara County contributed significantly to the surge, including Los Altos Hills, Los Altos, Saratoga and Palo Alto, where median single-family home sale prices ranged from $3 million to $5 million. According to the Compass report, these cities also led in transactions exceeding $5 million, with Los Altos topping the list at 90 sales.

Brown noted that just before the pandemic, Silicon Valley's housing market experienced a similar surge fueled by growth in the fintech sector.

"Specialized subsets of the tech industry are creating these booms," Brown told Mansion Global.

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Despite soaring sales, the county's housing inventory has remained tight. Brown said that well-funded buyers are quick to snap up desirable properties, pushing prices higher.

Brown said the post-2008 foreclosure crisis recovery brought about low prices and greater stability for families.

"There's a gridlock we see nationally," she said. "People are in such a great place financially and they don't want to disrupt that by selling."

San Francisco mirrored trends in Santa Clara, with increases in new listings, sales and prices compared to 2023, though volumes remained "well below long-term norms," according to Compass. While sales above $5 million rose in San Francisco, the growth was less pronounced than in Santa Clara.

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