While a fresh wave of AI-generated wealth is pouring fuel on San Francisco’s housing market, Seattle’s real estate scene is getting left out in the cold, stuck in a slump driven by ongoing local tech layoffs, soaring costs, and persistent worker anxiety.

A new report published Wednesday by Seattle-based Redfin illustrates just how dramatically the housing markets in the West Coast’s top two tech hubs have split.

In July, San Francisco’s median home-sale price jumped 6% year-over-year to $1.6 million as home sales rose 8.5%, fueled by an 18.4% drop in active listings—the largest inventory contraction in the country.

By contrast, Seattle’s median sale price dropped 3.6% to $809,479 as home sales fell 9.1% and active listings surged 16.7%, the nation’s steepest inventory increase, leaving local sellers outnumbering buyers by 65%. Redfin detailed the drop in pending sales in the city in an earlier report.

San Francisco’s resurgence is fueled by a concentrated wave of AI wealth. Driven by big salaries, six-figure signing bonuses, and anticipation of massive IPOs for Bay Area giants OpenAI and Anthropic, affluent buyers are aggressively bidding up homes, frequently paying hundreds of thousands over asking price.

The frenzy mirrors findings from The New York Times, which reported in May that cash-flush AI startup employees and secondary stock sales are fueling hyper-concentrated bidding wars across the Bay Area.

In Seattle, the dynamic is reversed. While local tech giants pour billions into AI infrastructure, corporate belt-tightening and lingering layoff fears at companies like Amazon and Microsoft have squelched buyer confidence, leaving prospective buyers cautious, job mobility low, and listings piling up.

Ground-level real estate agents in the Seattle area are feeling that buyer hesitation firsthand.

“Layoffs in the tech world are dampening homebuying demand in the entire area,” said Sheryl Wingate, a Redfin Premier agent, noting that return-to-office policies are further squeezing demand in outlying suburbs as tech workers avoid long commutes amidst job uncertainty.

Seattle-area real estate isn’t just feeling the squeeze from the heavyweights. Job cuts have hit nearly every tier of the regional tech ecosystem this year, sweeping through engineering hubs for Meta, Google, and Salesforce, consumer brands like Zillow, T-Mobile, and Starbucks, corporate divisions at Expedia and TikTok, and startups including Qualtrics and Amperity.

The chill is hitting the region’s high-end neighborhoods hardest. According to Bloomberg, pending luxury home sales in the Seattle area plummeted 15%, driven by a double hit of tech-sector layoffs and Washington state’s higher taxes on top earners. Once-frenzied markets in Eastside suburbs like Bellevue and Sammamish have stalled, with homes priced over $2 million sitting for an average of 44 days as affluent tech buyers pull back.

By comparison, high-end buyers in San Francisco are doubling their budgets as AI confidence surges. Redfin noted that luxury pending sales in the Bay Area jumped 46% year-over-year, with local agents reporting tech clients doubling their price points — in some cases expanding from $2 million budgets to nearly $4 million — and placing offers as much as $900,000 over asking price.

The shift is also severing a key migration pipeline that long fueled Seattle’s housing boom. While high-earning Bay Area transplants historically moved north to stretch their tech compensation, Redfin migration data shows the net inflow of home shoppers moving from San Francisco to Seattle plummeted to just 369 people in the first quarter — down from over 5,100 five years ago.

Looking ahead, Redfin economists expect these diverging trends to play out across other tech hubs as artificial intelligence reshapes the labor market.

“AI is reorganizing the tech labor market, with San Francisco and Seattle representing two sides of that transition,” said Chen Zhao, Redfin’s head of economics research, adding that while AI creates rapid wealth in some markets, it drives corporate restructuring and caution in others.

As prospective buyers face steep borrowing costs and a turbulent tech job market, home sales nationwide have fallen to their lowest point in nearly two years — and Seattle is feeling the brunt of the slowdown.

According to a new report by Redfin, pending home sales in the Seattle area plunged 15.6% year-over-year in July. It’s the sharpest drop among major U.S. metropolitan areas as prospective buyers grapple with steep prices and job insecurity driven by recent tech-sector layoffs.

Seattle’s drop in pending sales led all major U.S. metro areas in July, outpacing other slowing markets like Houston (-14.3%) and Phoenix (-13.3%). In closed home sales, Seattle’s 9.1% drop put it among the five steepest declines nationwide alongside Detroit (-9.3%) and major Texas metros.

Housing costs in the region remain a primary barrier for buyers. With a median sale price of $809,479, Seattle home prices sit at roughly double the national average of $408,795, making the local market particularly sensitive to elevated mortgage rates and tech-industry caution.

Real estate agents on the ground report that shifting dynamics at major tech employers are directly tempering local home-buying demand.

“Seattle is a tech-driven market, and right now a lot of buyers are feeling cautious about layoffs, AI and job security,” said Chase Costello, a Redfin Premier agent in the Seattle area. “Tech workers aren’t moving between companies — or moving into the area — as much as they used to, and that means fewer people are trading up into new homes.”

High-earning tech workers have long served as the primary engine for Puget Sound real estate growth. But ongoing staff cuts and corporate belt-tightening at major employers such as Amazon and Microsoft have created a chilling effect that extends beyond those directly affected. According to Redfin, even workers who remain comfortably employed are increasingly hesitant to stretch for expensive mortgages amidst broader economic uncertainty.

Amazon started the year with 16,000 corporate job cuts, which came on the heels of about 14,000 layoffs last fall. Microsoft cut about 15,000 jobs in two separate rounds of layoffs in 2025, and last month cut another 4,800, with about 1,600 of those in the Xbox division.

Layoffs have also impacted a variety of tech roles at companies big and small, including T-Mobile, Zillow, Starbucks, Meta, Google, Oracle, Epic Games, Bungie, Salesforce and others, as detailed in GeekWire’s layoff tracker.

The report comes following a period of transition for Seattle-based Redfin itself, after the completion of its acquisition by Detroit-based Rocket Companies and the exit of longtime CEO Glenn Kelman. The Seattle-based real estate brokerage hasn’t been immune to layoffs, cutting 450 employees in February 2025.

While Seattle and major Texas markets saw the nation’s sharpest home-sales pullbacks, a handful of regions managed to buck the broader downturn. According to Redfin, home sales posted strong year-over-year growth in markets like West Palm Beach, Fla. (+17.1%), San Francisco (+8.5%), and Milwaukee (+7%).

In South Florida and the Bay Area, affluent buyers less sensitive to cost helped drive activity, with San Francisco getting an extra push from the ongoing AI boom, while Milwaukee benefited from relative affordability.

Pending sales also surged in West Palm Beach (+14.2%) and Milwaukee (+4.5%), illustrating a stark divergence between tech-heavy, high-cost markets in the West and resilient pockets elsewhere across the country.