Number of Employed San Franciscans Reaches All-Time High

Recently, we posed the question on the blog, “Is San Francisco in a Housing Bubble?” Our conclusion: It’s not. Instead, the rising housing costs can be attributed to the law of supply and demand. Inventory remains extremely low, while the city’s well-paid workforce has grown rapidly since the recession. In fact, demand – i.e. more buyers and renters – is greater than ever. Here’s more proof of the growth in demand: Earlier this month, the state released updated data showing that San Francisco now has an estimated 520,900 workers – an all-time high. Consequently, the city’s unemployment rate dipped slightly to 3.6 percent, which is the lowest it has been 2000. Now, all of these additional employed residents, often in highly paid fields like technology and finance, are competing for a limited housing inventory. That’s one of the biggest reasons we’re seeing consistent overbidding, record fast turnaround, and exploding rents. Plus, at the same time, housing supply just hasn’t been keeping pace. Modest Development Leads to Low Inventory Another problem is that as the economy has recovered, the city has only produced a modest number of new units. To illustrate the point: Since 2009, the city’s workforce has grown by 20 percent, or by roughly 95,000 jobs. In that same timeframe, just 2,075 new units were added to the inventory each year, or a total of about 10,000 units. That’s a nearly 10-to-1 ratio of workers to new units. In fact, according to SF Planning 2014 Housing Inventory report, from 2011-2014 just more than 7,000 new units were added to the city’s housing inventory. Similarly, in that timeframe, employment...

Is San Francisco in a Housing Bubble?

By now, you’ve probably heard the speculation. The San Francisco real estate market is in a bubble. The speculators have their reasons. Real estate prices are climbing too quickly, they say. For instance, since 2011, San Francisco rents have risen by 50 percent, while average home prices have climbed 45 percent. Plus, they say, construction is booming. Cranes have popped up everywhere, and new developments are rising quickly in the south, around Hunter’s Pointe and Mission Bay. That’s partly true, development is ramping up. Last year, San Francisco added roughly 3,000 new units, compared to a historical average of about 2,000 units per year over the last decade. This year, new construction will outpace that 3,000-unit count. In fact, there are roughly 7,000 units under construction. So what’s the conclusion: Is this the next big Bay Area housing bubble? Or is the city’s bullish housing market being driven by deeper issues? Is this just a classic case of supply and demand? Rising Home Prices in San Francisco It’s true that home prices have exploded in the city since 2011. But homes in San Francisco are only slightly overvalued. In fact, according to Jed Kolko, an economist for Trulia, home prices in San Francisco were overvalued by 12 percent at the beginning of 2015. That may sound like a cause for alarm. But remember that at the height of the 2007-2008 bubble, overvaluation had risen to more than 50 percent. Plus, overvaluation, in and of itself, doesn’t necessarily indicate a housing bubble. It’s more complex than that, and it’s often tied to wage growth. Here’s another way to look at...
San Francisco Condo Watch: New Construction Inventory to Grow in 2015

San Francisco Condo Watch: New Construction Inventory to Grow in 2015

Several new developments in San Francisco have started selling in the last 6 months, and it’s clear that the market isn’t losing steam. It took just a matter of months for projects like 870 Harrison and Amero in Cow Hollow to sell out completely. And Arden in Mission Bay, a 267-unit development, set speed records for selling through its inventory in a just a few months. Since then, sales have been swift elsewhere, which has resulted in a dwindling supply of new construction condos in San Francisco. Fortunately, that’s likely change in 2015, as a host of new developments are coming online. Here are some developments to watch in the next few months. San Francisco Developments That Are Actively Selling The most notable development to hit the market recently was the Lumina building in SoMa. The demand for these ultra-luxury condos has been unbelievable; the first 270 appointments were booked, an hour after the sales office opened. And all 52 first-phase units were under contract in record time. Currently, 160 units are under contract, and the sales office only opened the first week of October. Other projects across the city haven’t sold as quickly, but sales remain steady. For instance, the much-buzzed-about 8 Octavia, which opened in late summer, has sold through the majority of its 47 units. Currently, there’s just a handful left. And in Mission Dolores, just off of Market Street, the majority of units at Thirsty-Five Dolores are under contract. Plus, there are about 50 units available at Vida in the Mission. Not as surprising, it appears sales have been slow at two ambitious projects that...
Mobile, Online Listings Are Increasingly Important for Marketing Your Home

Mobile, Online Listings Are Increasingly Important for Marketing Your Home

Today, we use mobile devices to do everything. We use them to buy movie tickets, find nearby restaurants – and increasingly – we’re using them to shop for homes. According to a recent National Association of Realtors survey, 50 percent of buyers said they used a mobile device to shop for their home in the last year. Traditional marketing methods like yard signs and open houses are attracting a smaller pool of buyers. Just 9 percent of respondents said they found their home this way. Instead, the survey highlighted the importance the Internet and mobile devices play in selling a home. For instance, 43 percent of buyers browse online listings as their first-step in buying a home, and that’s even more accurate for younger buyers. Sixty-five percent of buyers aged 25-44 years old use a mobile device in their home search, compared to just 45 percent who attended open houses. What Does Mobile Mean for Sellers? There are dozens of real estate listings apps from sites like Redfin, Trulia, Zillow and the Chinese portal Juwai.com the list continues to grow. They’ve made it easier than ever to search for homes by price, location, lot size, etc. Today, your listing is at the fingertips of millions – if it’s marketed correctly. Effective mobile and Internet listings are much like “digital yard signs.” Buyers want to see photos, detailed property information, neighborhood data and virtual/interactive tours. Today, a thorough mobile listing is as effective as a well-attended open house. Equally as important, your listing needs to appear in the right online channels. At Urban Focus Real Estate, we understand the importance...

Median Sales Price Rose 5.4% in January 2015

It’s no surprise to you that inventory in San Francisco remains tight with new listings down 20.8 percent for single family homes and 35.8 percent for Condo/TIC/Coop properties. Let’s hope that with the spring showers (which we desperately need!) and flowers comes more inventory. January saw the median sales price climb 5.4 percent to $975,000 for single family homes, while Condo/TIC/Coop saw a decrease of 2.4 percent to $927,000. Months Supply of Inventory, which looks at how long it would take to sell all of the active inventory given the current pace of sales, decreased 26.7 percent for single family units and 29.4 percent for Condo/TIC/Coop units. Low levels of inventory has meant that more than half of all properties are selling for more than the listing price, which is good news for your sellers and those who are thinking about selling. More than 60 percent of buyers of a single family homes and condos, TICs, and coops paid more than the listing price. A look across San Francisco’s 10 districts, shows that District 10, comprised of the Outer Mission, Mission Terrace, Excelsior, Portola, Bayview, Silver Terr, Hunters Pt, Candlestick Pt, Bayview Hts, Little Hollywood, Visitation Vly, and Crocker Amazon, saw the most single family home sales in January 2015, while District 3, Pine Lake Park, Lake Shore, Merced Manor, Stonestown, Lakeside, Merced Heights, Ingleside, Ingleside Heights, Oceanview, saw the largest jump in median sales price. Read Full...
3 Reasons the San Francisco Real Estate Boom Will Continue in 2015

3 Reasons the San Francisco Real Estate Boom Will Continue in 2015

San Francisco real estate has been pulling in the records in 2014. Earlier this year, we saw the highest price per square foot in Hayes Valley at 8 Octavia. And condos have been selling at the speed of light. The 267-unit Mission Bay development Arden by Bosa, for instance, sold out in a few months this summer. Recently, though, there has been some evidence the market is starting to plateau. For instance, the median home price in San Francisco hit a record $1.072 million in November, but sales volume dipped by 20 percent. But that shouldn’t be a cause for alarm. The San Francisco housing market traditionally slows down late in the year.  In fact, it’s not likely prices will come down in 2015. Why? The laws of supply and demand are alive and well in the city, and the huge demand and short supply are contributing to surging home prices. Plus, interest rates remain low, although they’re projected to climb, so there are more buyers looking. Here are a few market factors to consider in 2015: 1. Demand for Housing Is Off the Charts: Since 2010, San Francisco has added about 10,000 residents per year, and new housing construction hasn’t come close to keeping pace. According to The Chronicle,San Francisco added roughly 10,000 residents in 2013, while just 2,300 new housing units were built. The math doesn’t add up. Unfortunately, San Francisco’s population is estimated balloon to 1 million by 2032; it’s roughly 840,000 residents now. Plus, many new residents are employed in the booming tech industry, i.e. they’re earning high wages are ready to buy. In fact,...