SAN FRANCISCO (KPIX 5) – While high prices and overbidding have become the norm in the Bay Area real estate market, a home that sold for $1 million above asking in San Francisco is raising eyebrows.

It’s a newly updated, 2,400 square foot, 4 bedroom home, with a two car garage and an incredible view. The home is located in a quiet neighborhood in San Francisco near Mt. Davidson, west of Twin Peaks.

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Interior of San Francisco home near Mt. Davidson that fetched $1 million above asking.

Interior of San Francisco home near Mt. Davidson that fetched $1 million above asking. (Lunghi Media Group)

Real estate agents Richard Woo and Holly Phan listed the home for just under $2.5 million. Three days later, they’d ink the sale at $3.5 million.

“We were all very surprised, because they were not just over – they were way over,” Woo said.

“We expected more, a little bit more, but we didn’t expect a million dollars more,” Phan said.

With the current market conditions, it’s pretty typical for Bay Area homes to sell at the list price or a little bit over the list price.

Home that sold $1 million over asking in San Francisco. (CBS)

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“It’s been one of the most ferocious markets in history this past year,” said Patrick Carlisle, the Chief Market Analyst for Compass. “We have been seeing some very spectacular over-bids, not only within the city, but around the Bay Area.”

Available housing inventory is still incredibly low throughout the Bay Area. That makes for more competition among buyers, which can drive sale prices up.

“Though a fair number of new listings have come on the market, they’ve been snatched up faster than ever – maybe at the fastest rate in history,” Carlisle told KPIX 5. “Virtually every segment in the Bay Area has gone bananas.”

There has been a huge surge in property sales in San Francisco, specifically, according to Carlisle.

“Of course, part of that is some people are leaving. But the other side of it is, there are still plenty of people who are very eager to live in the city, own homes in the city, and are willing to pay higher prices than they’ve ever paid before,” he said. “Sooner or later, upcycles do end. What history has taught us though, is that it is extremely difficult to predict when upcycles will end.”

Potential buyers should have all of their ducks in a row, according to Woo.

As for sellers?

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“It’s a seller’s market,” Woo said. “Of course timing is important, location is important. But, to prepare the house right is the most important thing.”