Why the SF Market may be finally turning upward:
- Strong demand/ low supply: It appears that the decline in values has bottomed out: median prices and average dollars per square foot are beginning to climb (though itâ€™s too soon to know if itâ€™s the start of a longer term trend)
- Interest rates continue to be incredibly low.
- Rents in San Francisco have been rising for the past year. When rents rise, the financials of home-buying improve.
- High-paying high-technology employment is soaring in the Bay Area and many of those people want to live in the city, whether their company is in SF or outside of SF. And then there is the beginning of the surge in new high-tech IPO-enriched employees.
- SF has always had a low foreclosure rate and distressed-home percentage when compared to the rest of the Bay Area, state and country, and now that market appears to be declining in the city. (Again, itâ€™s too soon to be absolutely sure that the decline in distressed home listings and sales in the city is the beginning of a longer term trend.)
- New-development home inventory â€“ mostly condos, since the city has very limited space for new home construction — has been steadily declining and probably wonâ€™t significantly increase anytime soon because of the multi-year time-cycle for large development projects in SF. This will further constrain supply in the face of buyer demand.
- General improvement in consumer confidence and optimism regarding the direction of the economy.
- The recent run up in the stock market has improved the financial condition of the affluent more than that of the general population. Because of our prices, our buyers are almost always at the upper end of affluence.