10 Aug Bay Area Income, Employment, & Home Prices
Dear Friends and Clients,
We just returned from a trip to my hometown where the boys got to fish, ride on four-wheelers, pick fresh veggies from the garden for dinner and fresh eggs from the hen house for breakfast. It was a lot of fun to get away to the country and reconnect with my family for a few days. Tomorrow, I hope I can get back on my regular diet and exercise routine as I may have taken the break a bit too seriously. 🙂 Summer just flies by – for those of you with children, I hope you were able to fit in those last-minute vacations before school starts.
The team hasn’t missed a beat and we’ve been working hard to get ready for the business that will accompany the fall market. We have several fun listings coming up in September and October including a stunning home in Napa and great properties in North Beach, the Mission, Noe Valley and Mission Terrace, to name a few. This month, our newsletter takes a departure from the “SF-only” update and steps back to look at the Bay Area as a whole, which is fun to do once a year.
Lastly, I sent out an offer last month to donate to charities and the following charities will receive a $1000 donation from the Krishnan Team: De Marillac Academy provides a life-changing educational experience for under-served children. Japanese American Citizens League safeguards the human rights of communities affected by injustice. Rise2Shine
Bay Area Income, Employment, Education, Poverty & Home Prices
A Survey of San Francisco Bay Area
Appreciation trend lines are largely similar across the Bay Area, but some counties have outperformed others. Solano is still well below its previous peak price ten years ago, and Sonoma and Napa are just now coming back up to their previous highs. Most of the other counties have exceeded their 2006-2007 peaks, sometimes by very wide margins. As will be explored further below, proximity to the heart of the high-tech boom has been one of the major factors in recent appreciation rates. Still, it is worth noting that in the past year and a half, appreciation rates in less expensive towns and neighborhoods have typically been higher than in more expensive areas, an indication of the sometimes desperate search for affordable housing – however that might be defined within the context of any given market.
The Most Expensive Places in the Bay Area
By clicking on map, you can also access our full collection of home price
maps delineating current city home prices throughout the Bay Area.
Note: Diablo in Contra Costa with 6 sales at a median price of $2.73m, and Penngrove in Sonoma with 13 sales at a median price of $919,500, had higher prices than Alamo and Healdsburg in the period measured, but because of their very low number of sales, we highlighted the larger markets on the map above.
Annual Home Price Appreciation Rates
since 1996 and 2011
There are 3 big factors behind local appreciation rates: 1) the emergence of the Bay Area in the past 20 years as an international, economic powerhouse, which generally lifted all markets, 2) how close the specific market is to the white-hot centers of the high-tech boom (SF and Silicon Valley), and, 3) how badly the county was hammered by the foreclosure crisis, since those markets whose prices fell 50% or more to unnatural lows bounced back more on a percentage basis than those counties less affected by the subprime catastrophe.
SF has had the highest compound annual rate since 1996: It is the epicenter of the Bay Area high-tech, bio-tech and fin-tech economic miracle. But Oakland soars above all other markets in appreciation since 2011, because of a combination of factors: It is the closest affordable alternative to much higher SF prices; it is a lively, multi-cultural urban area appealing to high-tech workers; and its housing prices dropped an astounding 60% after the 2008 crash, which set them up to fly upward once the heavy anchor of distressed property sales was removed.
Having complete confidence in our ability to predict what will happen in the past, we now recommend that all our clients go back in time to 1995 or 2011 and buy as many homes as possible.
In Marin County, Belvedere, Tiburon, Kentfield and Mill Valley make the lists; in Contra Costa, the Diablo Valley & Lamorinda communities of Blackhawk, Alamo, Lafayette, Orinda and Moraga rank highest; in Alameda, Piedmont is in the top 10 cities for median worker earnings.
Bay Area zip codes utterly dominate the CA rankings for higher education, taking 14 of the top 15 spots out of about 2600 zip codes. Unsurprisingly, high positions in income usually correlate with the same in education (and having UC Berkeley and Stanford in our midst was a help): Top Zip Codes for Higher Education If you wish to explore Bay Area rankings by other criteria: Top 25 Rankings in California
Employment & Unemployment
High-tech employment in SF & San Mateo Counties illustrates
broader trends in hiring: massive growth and some recent cooling.
Unemployment rates are bumping against historic lows.
Bay Area Poverty Rates & Housing Affordability
Beneath surging affluence, significant percentages of county populations
are living in poverty. High housing costs are a big factor.
Housing affordability percentages are approaching historic lows in some counties,
a huge Bay Area political, economic and social issue. If interest rates start to go up
considerably, the picture will worsen, but so far they have remained quite low.
Santa Clara is by far the biggest luxury home market in the Bay Area by the number of homes selling for $2m+, but then its overall market is also the largest, more than 2½ times larger than that of San Francisco. Average dollar per square foot values for luxury house sales are surprisingly similar across Santa Clara, San Mateo and San Francisco, with Marin County just a notch lower. Moving further out, one gets considerably more luxury house for the money.
Generally speaking, SF luxury condos and co-ops command the highest dollar per square foot values in the Bay Area: Think fabulous units on high floors of prestige, ultra-amenity buildings with absolutely staggering views.
Calculating luxury markets by the top 10% of sales, the thresholds for the luxury designation vary widely: For example, in Sonoma, the threshold is about $1,125,000 for houses, while in San Francisco, it is about $3m.
Other Angles on Bay Area Market Dynamics
Bay Area Condo Markets
Average Days on Market
Bay Area Market Sizes
Bay Area Rents
Rents are even more sensitive to hiring trends than home prices.
for the San Francisco Bay Area
All C-S data points refer to a January 2000 home price of 100. Thus a reading of 250 signifies a price 150% higher than in January 2000.
More affordable homes have been appreciating much more quickly
in the past 15 months than more expensive price segments.
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