Bay Area Income, Employment, & Home Prices

Bay Area Housing Prices Graph San Francisco real estate - 20 S&P

10 Aug Bay Area Income, Employment, & Home Prices

Sharing is caring!

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. ūüôā 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 ‚ÄúSF-only‚ÄĚ 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 alleviates the suffering of young children in impoverished communities worldwide. Help a Mother Out improves family well-being by increasing access to clean diapers for families in need. Elizabeth Nash Foundation. dedicates in improving the lives of those affected by cystic fibrosis. Thanks for all your responses, and for your willingness to help us make a difference!

Sincerest Regards,

Ruth

Bay Area Income, Employment, Education, Poverty & Home Prices

Real Estate Markets & Demographics
A Survey of San Francisco Bay Area
August 2017 Report

Bay Area Housing Prices Graph San Francisco real estate - 1

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.

Bay Area Housing Prices Graph San Francisco real estate - 2 average dollar per square foot

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.

 

Bay Area Housing Prices Graph San Francisco real estate - 3 cities highest median

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
This table below illustrates annual compound appreciation trends going back to the post-recession recovery that began around 1995, and also from the current post-2008-crash recovery which started in 2012. This is based upon someone purchasing their home all cash: If one had purchased with a 20% downpayment, then the annual compound rate of appreciation of that cash investment would be much, much higher.

Bay Area Housing Prices Graph San Francisco real estate - 4 Annual compound

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.

 

Economic & Demographic Factors 
Underpinning the Bay Area real estate market and general economy are often amazing, but sometimes worrisome statistics. Below are tables and charts ranking counties, zip codes and cities by a variety of parameters. The Bay Area ranks extremely high in income, education, employment rates and general health factors, often grabbing almost all the top rankings, but it is also unhappily high in income inequality, housing unaffordability and poverty.

Bay Area Housing Prices Graph San Francisco real estate - 4 Ranking Counties

Bay Area City & Zip Code Income Rankings
Atherton has the highest median household income and the highest median income per worker in the state, followed by a handful of other nearby, highly affluent, Silicon Valley communities. In San Francisco, South Beach and the Presidio zip codes make the top rankings, but note that several of the most expensive neighborhoods in SF are in zip codes that mix highly affluent with less affluent areas (such as Pacific Heights and Western Addition, or Russian Hill and the Tenderloin). SF also has much higher percentages of residents who are tenants, and generally speaking, renters have lower incomes than homeowners.

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 Housing Prices Graph San Francisco real estate - 6 median zip codes

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.

Bay Area Housing Prices Graph San Francisco real estate - 7 High Tech

Unemployment rates are bumping against historic lows.

Bay Area Housing Prices Graph San Francisco real estate - 8 Unemployment

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.

Bay Area Housing Prices Graph San Francisco real estate - 9 population

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.

Bay Area Housing Prices Graph San Francisco real estate - 10 housing affordability

Link to our mortgage interest rate chart

Link to our full report on Bay Area housing affordability

Bay Area Housing Prices Graph San Francisco real estate - 11 bay area trend

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 2¬Ĺ 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

Bay Area Housing Prices Graph San Francisco real estate - 12 condo market

Overbidding 

Bay Area Housing Prices Graph San Francisco real estate - 13 overbidding

Average Days on Market 

Bay Area Housing Prices Graph San Francisco real estate - 14

Bay Area Market Sizes

Bay Area Housing Prices Graph San Francisco real estate - 15 county market sizes

Bay Area Housing Prices Graph San Francisco real estate - 16 house sizes

Bay Area Housing Prices Graph San Francisco real estate - 17 era home construction

Bay Area Rents

Rents are even more sensitive to hiring trends than home prices.

Bay Area Housing Prices Graph San Francisco real estate - 18 bay area rents

Link to our apartment building market report

Additional Demographic Snapshots
The foundation of the Bay Area economy is a richly multi-cultural society constantly infused by many of the best and brightest from around the world.

Bay Area Housing Prices Graph San Francisco real estate - 18 ancestry

Bay Area Housing Prices Graph San Francisco real estate - 18 bay area rents

Bay Area Housing Prices Graph San Francisco real estate - 19 race

S&P Case-Shiller Home Price Index
for the San Francisco Bay Area
Case-Shiller charts are complicated, which is why we have put them at the end of the report, but they do give perspectives on home price appreciation by price segment. The different price tiers had bubbles, crashes and recoveries of very different magnitudes, with the low-price tier having an extravagantly enormous subprime bubble and a disastrous crash, while more costly home tiers having lesser bubbles and crashes. The end result now is that all three tiers are relatively close in their current prices as compared to 2000 values, but are in very different circumstances when compared to their 2006-2007 bubble peaks. Around the Bay Area, generally speaking, San Francisco, San Mateo, Marin, Santa Clara and Diablo Valley-Lamorinda have high-price tier markets with smaller mid-price segments; Alameda, Sonoma, Napa, Solano and non-central Contra Costa have mixes of low-price and mid-price markets (though there are, of course, pockets of high-price homes as well).

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.

Bay Area Housing Prices Graph San Francisco real estate - 20 S&P

More affordable homes have been appreciating much more quickly
in the past 15 months than more expensive price segments.

Bay Area Housing Prices Graph San Francisco real estate - 21 s&p index

Link to our full S&P Case-Shiller Index Report

All our reports, including dedicated analyses of the SF luxury home segment, and of the Marin, Sonoma and Diablo Valley-Lamorinda markets, can be found here: Market Trends & Analysis

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in the Bay Area, each with its own unique dynamics. Median prices can be and often are affected by other factors besides changes in fair market value, and longer term trends are much more meaningful than short-term. It is impossible to know how median prices apply to any particular home without a specific comparative market analysis. All numbers in this report are to be considered approximate. 
 
© 2017 Paragon Real Estate Group

 

 

 

 


 

More San Francisco market newsletters can be found here:

www.SFMARKETNEWS.com

Facebooktwittergoogle_plus