By Editor,Martha Williams

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The city where salary increases outpace the rise in home prices, but there’s a catch

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By MARTHA WILLIAMS, US NEWS REPORTER

Published: 06:55 BST, 18 September 2025 | Updated: 07:10 BST, 18 September 2025

San Francisco is the only major US metro where housing prices have returned to ‘normal’, but the city is still facing a massive problem.

A report by Redfin published earlier this month used the mortgage payment-to-income ratio, which indicates how much of a resident’s salary is spent on housing costs.

It found that after a tumultuous period of rising costs and elevated mortgage rates, the ratio in the California city has returned to its July 2018 levels — and is therefore considered ‘normal.’

But this does not mean that housing has become affordable for everyone in the city.

Right now, San Francisco housing costs may be around the same as they were before the Covid-19 pandemic, but that is relative to how much money people are making.

The median home price in San Francisco has gone up 8 percent since July 2018 — significantly less than the national rise of 56 percent.

But household incomes in the Northern California city have also risen 7.7 annually — almost double the 3.9 percent annual national increase.

Since 2018, household incomes in San Francisco have increased by approximately 26 percent — far outpacing the rise in house prices.

San Francisco is the only major US metro where housing prices have returned to ‘normal’

San Francisco homes cost around the same as they did before the Covid-19 pandemic, relative to how much money people are making

The city itself is also continuing to deal with extreme levels of homelessness and high crime rates.

San Francisco’s homeless population was recorded to be 8,323 people in the 2024 Point-in-Time Count.

In mid-2024, San Francisco began more aggressive sweeps of its encampments to address its raging homeless crisis.

And while the extreme measures have resulted in more arrests, people are rarely charged for illegal camping and usually end up returning to the streets.

‘I’m going to get kicked out of the shelter, I’m going to come back on the street. I’m going to get cited again, it’s a broken system,’ unhoused San Francisco resident Reily told CBS News.

Meanwhile, crime is still through the roof.

Annually, San Francisco sees a total of 51,034 crimes — including violent and property. The crime rate per 1,000 residents is 63.08 — one of the highest rates in the US, according to California crime analytics.

In San Francisco, your chance of becoming a victim of a property crime is 1 in 18, making it a less-than-ideal spot to spend millions of dollars on a home.

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San Francisco is continuing to deal with extreme levels of homelessness and high crime-rates

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In July 2025, the median home price in San Francisco was $1.64 million — up from about $1.1 million in mid-2024, according to Realtor.com.

That is a steep price to pay for a high risk of burglary, vandalism and motor vehicle theft.

Part of the reason why so many are willing to foot the bill is because major tech and AI industries are based out of San Francisco.

Workers at such firms have a reason to live there, and the cash to afford it.

The AI boom has certainly ignited San Francisco’s housing market, with prices and rents inflamed by tech workers going back to in-person work.

Real estate agents say return-to-office mandates are fueling the real estate boom, with the AI industry being especially office-based, according to Business Insider.

AI workers are earning huge salaries, including multimillion-dollar compensation packages — making employees more than capable of affording San Francisco’s hefty home prices.

‘We live in a bit of a bubble,’ said Ali Mafi, a Redfin Premier agent in San Francisco.

‘AI companies are setting up shop here — not just in Silicon Valley — and they’re offering unusually high salaries and big signing bonuses to attract talent.

‘I’m seeing more young tech workers and couples moving in with the means to buy. With incomes rising and home prices holding steady, those buyers view the market as an opportunity for relative value,’ he said.

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The city where salary increases outpace the rise in home prices, but there’s a catch

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