Last week’s closing on a $238m penthouse on Central Park South caught our attention. Yes, of course, $238,000,000 is an astonishing sum by almost any standard. But what really struck us was the sheer difference between this record-breaking sale and comparable listings in San Francisco. While the two markets are often compared for being the two priciest cities in the country, the most expensive house ever sold in San Francisco fetched a mere $38m — $200m less than the recent sale in New York.

So why is there such a difference between the top end of both markets? We think there are three factors:

• Price per square foot and cost of living: Based on data collected in August, the average price per square foot for residential sales in Manhattan is $1,773, compared to $902 in San Francisco. This discrepancy is echoed in the difference in cost of living. NerdWallet's calculator (worth checking out!) shows that the cost of living in Manhattan is 26% higher than in San Francisco.

• Industry: While the Bay Area tech industry really only took off in the early 1970s with the development of integrated circuits in Silicon Valley, Manhattan’s origins in financial services dates to the rise of the New York Stock Exchange in 1792. While both industries have created tremendous wealth in each region, this has been the case in New York City for much, much longer.

• Towers: Many of Manhattan’s most expensive properties are apartments in high-rise residential towers, which offer sweeping views of one of the most famous skylines in the world. Despite recent developments, San Francisco’s strict zoning restrictions on building height means that such inventory is — at least for now — less available.

While San Francisco real estate values have gone up considerably over the past several decades, we will likely have to wait for some time for local top-of-market prices to catch up with Manhattan’s. However, with the number of $7.5m+ listings in San Francisco continuing to rise (see below) at a time of explosive wealth creation from new IPO activity, expect continued upward pressure!