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| Guest column: Embarcadero Media periodically publishes guest columns by local real estate experts. This week, Ken DeLeon shares insights into how the artificial intelligence sector is impacting the ultra-luxury market. DeLeon is the founder of DeLeon Realty based in Palo Alto. He graduated from Berkeley Law and attended the Stanford Graduate School of Business. He frequently writes and speaks about trends shaping Silicon Valley’s housing market. |
Silicon Valley’s newest superstars do not wear jerseys. They write code. Fueled by the rise of artificial intelligence, a fresh wave of wealth is reshaping the local housing market at a pace that rivals any past boom.
In the first quarter of 2025, sales of homes priced above $5 million rose 82% across the Bay Area. In Santa Clara County, March closed with a 115% year-over-year spike. While the U.S. housing market has cooled under high interest rates, the region’s luxury is accelerating.
I’ve been in Bay Area real estate for two decades, and I’ve never seen demand shift this quickly. Today’s AI innovators are receiving compensation packages on par with professional athletes. That liquidity flows directly into real estate, often within days of stock vesting or acquisition announcements.
Silicon Valley has always minted millionaires, but what’s different now is the speed of wealth creation. Companies barely five years old are minting billionaires, and their executives are seeking homes that signal both success and sanctuary. Buyers accustomed to making complex business decisions are applying the same logic to real estate: Identify the best property, move quickly, close fast.
Luxury redefined
This new class of buyers is changing the definition of luxury. They want estates that double as personal innovation hubs: properties with server-ready infrastructure, theater-grade acoustics for private briefings and layouts designed for both prestige and privacy. Advanced security systems are nonnegotiable, and the infinity pool is no longer the defining feature. Today, comfort has to pair with features fit for a global chief executive.
Geographic hot spots
The hot spots for high-end homes are starting to shift, too. Atherton and Palo Alto, longstanding ultra-luxury enclaves, are reigniting with bidding wars as AI executives vie for proximity to Stanford. Menlo Park and Los Altos Hills are rising stars, thanks to their proximity to labs, venture capital corridors and private schools. In the East Bay, vineyard estates and hilltop compounds are being reimagined as serene, but connected, retreats.
These shifting patterns are redrawing the Bay Area’s real estate map. Where past booms concentrated wealth in a handful of ZIP codes, today’s AI buyers are broadening the ultra-luxury market.
A new unicorn, a new wave of buyers
Each AI unicorn triggers another wave of buyers. When a startup announces a multibillion-dollar funding round or acquisition, my phone lights up with inquiries for premier listings. One buyer recently toured half a dozen properties in one afternoon and wanted to put in an offer that evening. The pace reflects not only urgency but confidence.
It’s not just Bay Area talent reshaping demand, either. Buyers from New York, London and Asia are relocating to be near AI founders, investors and research centers. They view Silicon Valley not only as a workplace but as a global capital of innovation. They want to be part of its social and intellectual ecosystem.
Looking ahead
For longtime residents, this influx raises both opportunities and challenges. Rising valuations strengthen neighborhood equity but also intensify competition for inventory. While affordability concerns are real, so are the philanthropic and civic contributions many of these new homeowners bring. The balance between growth and community will define how Palo Alto and its neighbors evolve in this new era.
Markets rise and fall, but this cycle feels less like a bubble and more like a structural reset. Artificial intelligence is not a single product or trend. It is a general-purpose technology reshaping industries worldwide. The fortunes it generates are fueling a sustained demand for homes that meet the ambitions of those at the forefront.
For homeowners considering selling, the opportunity has rarely been greater. For buyers, decisiveness is key. For all of us, the arrival of AI’s new elite is a reminder that Silicon Valley’s greatest export has always been reinvention.
Correction: The prior version of this story had misstated Ken DeLeon’s education background.
Ken DeLeon is the founder of Palo Alto’s DeLeon Realty.
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