More than 80% of single-family homes in San Francisco sold above asking, and 8% sold for 150%–234% of the asking price.Why is this happening?One reason is strategic underpricing. San Francisco agents often list homes below their expected market value to generate more traffic, more showings, more offers, and ultimately more competition.That distinction matters. Selling for 150% of the asking price does not necessarily mean selling for 50% above market value. A home listed at $1 million and sold for $1.5 million may have been worth approximately $1.5 million from the beginning. The asking price created attention; it did not establish the home’s value.But underpricing doesn’t explain everything. In some cases, buyers are paying more than even the highest comparable sale in the neighborhood.Closed sales tell us what buyers agreed to pay weeks or months ago. When demand changes quickly, those sales may not fully reflect the competition a buyer faces today. The next accepted offer can establish a new benchmark, especially when several buyers are competing for a home with few similar alternatives.A significant share of San Francisco buyers are paying cash, and inventory of desirable single-family homes remains limited. The basic principle of supply and demand is moving the market faster than closed comps can keep up.And buyers are not necessarily competing for every available property equally. Someone looking for a single-family home with outdoor space, parking, a functional layout, and a convenient location may have relatively few options. More listings overall would not automatically solve that buyer’s shortage.We’re also seeing a new wave of buyers with substantial cash and financial flexibility competing for a limited number of homes. And there may be another wave coming: 2027 could turn some of today’s private AI wealth into liquid, spendable wealth.Owning shares in a valuable private company is different from having that money available to buy a house. An IPO or an approved employee share sale could change an employee’s purchasing power. However, the timing, selling restrictions, taxes, and actual proceeds matter. A potential valuation is not a guaranteed homebuying budget.Still, if more employees become able to use their company wealth, some may decide to buy their first home. Others may move from a condo to a single-family house, purchase a larger property, or reconsider neighborhoods they previously thought were out of reach.That demand could also spread beyond San Francisco. Buyers weighing space against commute time may explore the Peninsula, Marin, or the East Bay. Where they choose to live would determine which local markets feel the additional competition.For buyers, the practical question is: what would it take to buy the home you want in today’s market?That means looking beyond the listing price, studying comparable sales, understanding the disclosures, and setting a comfortable limit before becoming emotionally attached to a property. A possible future increase in competition deserves consideration, but it should not replace your own financial priorities.For sellers, the opportunity is to understand how their property compares with the alternatives buyers actually have. Pricing and preparation still matter, even when demand is strong.So the question is: What happens to Bay Area real estate when even more of that money enters the housing market?The answer will depend on how much wealth becomes available, how many people decide to buy, and how many suitable homes are there to meet them.