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New Case-Shiller shows another jump in Bay Area home prices

The new Case-Shiller Index report for the 5-county San Francisco metro area , for March, is showing the same acceleration in home prices that buyers and sellers are experiencing in the market. The 2.4% increase from February to March 2014 is the largest since spring 2013, and further significant increases are expected in the Index reports for April and May when they come out in the next two months. Nationally, home prices saw only a .17% increase month over month, and Case-Shiller’s 20-City Index showed a .87% increase, so San Francisco and the Bay Area is strongly outperforming the rest of the country in home price appreciation.

Since the market recovery began in earnest in early 2012, northern Bay Area home prices have appreciated approximately 37.5% through March, according to Case-Shiller.

Case-Shiller_High-Tier_2011

Case-Shiller_from_1990

What are the financial advantage of U.S. homeownership?

Of course there are financial benefits to owning a home in the U.S., but you may be wondering what exactly those are. Here are a few:

· Leverage: Investing in real estate can provide superior gains.

· Long-term, fixed-rate home loans: These substantially lock in monthly housing costs (as opposed to rent, which continues to rise) and can be refinanced when the opportunity arises. A low rate can make a huge difference in monthly housing costs.

· Multiple homeownership tax deductions: These include the mortgage interest deduction, which basically subsidizes monthly housing costs. Along with low interest rates and ongoing principal repayment of the loan, this makes net monthly homeownership comparable to and often less than the cost of renting the same home. Check our Rent vs. Buy Calculator.

· The huge capital-gains exclusion on the sale of a primary residence: This is to the tune of $250,000 for singles and $500,000 for couples. This rare investment allows you to walk away with large, untaxed profits.

Wondering about your own piece of San Francisco paradise? Get in touch.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com

Bay Area Home Purchase vs. S&P 500

Return on Investment: 1994 – 2014

May 2014 Report

We recently put together an analysis comparing the comparative investment returns of buying a San Francisco Bay Area house, gold, Apple stock, an S&P 500 Index fund or putting money into a bank CD in January 2012 (Of Real Estate, Gold & Apple Stock). Not unreasonably, the issue arose regarding returns over a longer term. Now, whatever time period is used will always be fundamentally arbitrary, and different periods will often generate dramatically different results. Twenty years is a round number, which allows a nice mix of recessions, bubbles, crashes and recoveries to be encompassed within our inquiry.

Stock and home purchases cannot really be compared apples to apples: This is a simplified, good faith illustration pertaining to the investment of $100,000 in January 1994. February 2014 was chosen as the home sale date because that is the last published Case-Shiller Index (as of 5/20/14). Home prices in San Francisco have actually surged yet again in the past few months, but this is not reflected below. April 2014 was chosen for the stock sale date because that was last published update for the DQYDJ S&P 500 calculator.

S&P 500 Index Investment, 1994 – 2014

In hindsight, 1994 was an excellent time to put money into the stock market.
If hindsight investing was viable, we would all be rich as Russian oligarchs.

Invest-ROI_S&P-500_20years

Bay Area Home Purchase, Buy in 1994, Sell in 2014

1994 was an even better time to purchase a San Francisco Bay Area home.

Invest-ROI_Home_20years

Return on Cash Investment: S&P 500 vs. Bay Area Home

Certain benefits to U.S. homeownership boost return on investment over stock market.

Invest-ROI_S&P-vs-Home_20years

Including dividend reinvestment, the S&P 500 appreciated approximately 9% per year for a total of 473% over the 20 year period. (If account and transaction fees were deducted, the return would be somewhat reduced.)

Bay Area home prices appreciated much less than the S&P 500 during this period, approximately 5.5% per year for a total of 189%, but the return on cash down-payment investment would be approximately 733%, significantly out-performing stocks. This difference increases when taxes on gain are included in the equation.

Note: Adjusting for inflation, investment returns would be about 2.5% lower per year (the approximate, average inflation rate over the past 20 years). Both stocks and home investments significantly outpaced inflation.

Financial Advantages Peculiar to American Homeownership

1) Leverage: 189% appreciation of a $500,000 home = over 900% appreciation, before closing costs, of the $100,000 down-payment. If one pays all cash this advantage disappears, but one’s monthly cost of housing plunges (though probably not close to making up for losing the supercharging that leverage adds to investing).

2) Long-term, fixed-rate home loans: Which substantially lock in monthly housing costs (while other costs, such as rents, continue to increase) and can be refinanced at opportune times. When one can get a 30-year mortgage at what is, historically speaking, an extremely low interest rate, it makes an enormous difference in total interest expense and monthly housing costs. As an example, in 1994, the average 30-year rate was 8.4%; now, in mid-May 2014, it’s 4.2%, (in 2013, it dipped to below 3.5%) i.e. today’s million dollar loan charges the same interest as 1994′s $500,000 loan.

3) Multiple homeownership tax deductions: Such as the mortgage interest deduction, which effectively subsidize monthly housing costs. (Consult with a qualified accountant regarding your own tax situation.) These deductions, along with low interest rates and ongoing principal repayment of the loan, generally make net monthly homeownership costs comparable to and often less than the cost of renting the same home. (Rent vs. Buy Calculator)

4) The huge, capital-gains exclusion on the sale of a primary residence: $250,000 for singles/ $500,000 for couples. It’s a rare investment that allows you to walk away with large, untaxed profits. For a couple selling their home in the above investment scenario, it means an extra $75,000.

It’s worth noting that advantages 2, 3 & 4 above are not found in most other countries, and indeed some of them remain issues of political contention in our country as well.

Homeownership as Investment & Homeownership as Housing

In this analysis, home-ownership is divided into two distinct financial spheres: 1) the investment return on the $100,000 down payment: you put in $100k cash and upon sale, you receive a certain amount of cash proceeds back. And 2) the cost of living in the home you purchase, i.e. the monthly net homeownership cost (principal, interest, taxes, insurance and maintenance, after tax deductions and principal pay-down), which is minimally assumed to be, over the course of time, comparable to the cost of renting.

Upon purchase in 1994, with interest rates at over 8%, the net homeownership cost probably exceeded the cost of renting by a good margin. But interest rates then started to decline: to under 6%; then under 5%; and in 2013, to under 3.5%. As of mid-May 2014, it is 4.2%. Refinancing at selected times over the 20 year period would have dropped net monthly homeownership costs substantially, while San Francisco rents over the same period have soared to historic highs. Ultimately, the monthly cost of owning would be far below – probably more than 50% below – the market rental rate for the same home.

The cost of housing issue is not figured into the return on investment scenario, because the equation simply gets too complicated. This is one of the ways in which comparing homes to stocks is not an apples to apples comparison.

Asset Building One Loan Payment at a Time

This analysis does not adjust proceeds of home sale for the reduction of outstanding loan balance over the 20 years, i.e. of the original $400,000 loan, only $153,000 remains due and payable upon sale. If this was done, then cash after-tax proceeds of sale would be almost $250,000 higher.

Homeownership over time — especially longer periods of time — not only typically delivers a good return on investment, but as long as one doesn’t refinance out increasing home equity to buy yachts or finance a child going to college, it acts as a lay-away savings account that grows each month as your loan payment reduces the principal loan amount due. In earlier generations, this was a classic strategy: buy a home, live in it for 30 years, retire, and then either live in it at a very low cost, since there is no longer a mortgage payment, or sell it and recoup not only appreciation but the initial purchase loan amount which has turned into home equity. Many of us are not that good at saving: Mortgage repayment can act as a “forced” savings account to be tapped far in the future, such as upon retirement.

If you want to read even more analysis regarding leverage, inflation and home equity, please see our October 2013 article: Home-Buying as Investment

Real estate markets, like other financial markets, typically move in cycles:
Where you buy and sell within these cycles can dramatically affect the outcome.
 

Comparing Bay Area home purchases to the stock market

Is the Bay Area real estate market a better bet than the S&P 500? That question is the subject of Paragon’s recent report, which details a 20-year comparison of return on investment. The analysis look at the comparative investment returns of buying a Bay Area house, gold, Apple stock, an S&P Index fund or putting money into a bank CD.

Now, let’s face it: Stock and house prices can’t be compared apples to apples. What Paragon has done here has made a simplified, good-faith illustration of the investment of $100,000 in January 1994, having chosen February 2014 as the home sell date since that is the last published Case-Shiller Index (as of May 20, 2014).

In hindsight, 1994 was an excellent time to put money into the stock market. If you include dividend reinvestment, the S&P 500 went up approximately 9 percent per year for a total of 473 percent over the 20-year period.

Meanwhile, Bay Area home prices went up much less than the S&P during this period – about 5.5 percent per year for a total of 189 percent. That said, the return on cash down-payment investment would be about 733 percent – a significant outperformance of stocks. This difference only increases when you look at taxes on gain.

Tomorrow we’ll look at the financial advantages particular to American homeownership.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com

Inner Mission Real Estate

innermission2

For a district that covers so much ground, the Inner Mission has a dearth of available for-sale real estate. While it’s true that this may in part be due to a region-wide housing inventory shortage, this neighborhood’s situation is nothing new. The situation in the Inner Mission is this: it’s a long-time neighborhood of renters, full of multi-unit housing. The Inner Mission has within its borders a smattering of single-family homes, but it’s not unusual to find only one or two for sale at any time.

Why are there so many hot restaurants and bars in the Inner Mission? Because it’s very popular with young San Franciscans; why is it so popular with young San Franciscans? Because there is so much happening in the Inner Mission! It’s a “chicken vs. egg” situation; one hand feeds the other.

This is not to say that there are zero options for homebuyers in the Inner Mission. Besides the odd single-family home, interested parties will find a handful of Tenants-in-Common units, condominiums and lofts for sale there, a combination of rehabbed and non-rehabbed vintage properties (many dating back to the 19th-century) and recently built condos generally ranging in size from studio to three bedrooms. What’s missing of late are the bargains that drew pioneering buyers to the Mission in the past.

A recent check of the Multiple Listing Service (MLS) revealed this: the least expensive for-sale property in the Inner Mission is a one-bedroom unit at VIDA, a new condo building at 2558 Mission, next to the old Mission Theater. It lists for $579,000, well below the neighborhood condominium median of $749,000. The same MLS perusal shows four condo and TIC units listed for more than $1 million, along with three more at $995,000 and above. This is what happens when a neighborhood becomes popular.

And popular the Inner Mission is, because of its vibrant nightlife and its central location, three BART stops from the Financial District, close to SOMA and a short drive from the nearest Highway 101 on-ramp. As a result, a district once known for real estate in a state of disrepair is now white hot among ambitious, would-be rehabbers, restoring properties either for themselves or for their would-be tenants.

Along with the Western Addition, the Inner Mission boasts San Francisco’s largest concentration of Victorian and Edwardian buildings. Until recently, these beautifully -detailed, spacious living spaces lived lives of slow decline and deferred maintenance, housing longtime owners or generations of short-term renters. With the district’s gain in popularity, buyers are targeting the Inner Mission’s aged housing inventory, snapping up condos, TICs, multi-unit buildings and single-family homes on Bartlett, Capp, Shotwell, Treat and other Mission streets.

Developers found the Inner Mission during the first dot-com explosion, adding low- and mid-rise condominium and apartment complexes to the neighborhood. Expansion continues with recent construction at 1501 15th (known as Fifteen Fifteen, for-sale condominiums under construction), 2258 Mission (known as VIDA, for-sale condominiums under construction), 1600 15th (known as Vara, apartments for rent), 3500 19th Street (new condominiums, sold out) and 299 Valencia (new condominiums, sold out) finding buyers and renters almost immediately.

As for those rental properties, a recent study by Trulia.com named San Francisco the fourth-most expensive city for rentals. A two-bedroom apartment in the city requires 51 percent of the average local wage, a figure trailing only Miami, New York and Los Angeles. As of this writing, two-bedroom apartments and houses in the Inner Mission fetch between $3,500 and $5,000, one-bedroom units between $2,000 and $3,000.

The Inner Mission has taken its place among San Francisco’s most popular neighborhoods, especially with young professionals. Its home prices reflect this, but that doesn’t mean it’s become completely devoid of bargains. Those with the time and resources can still find gems hidden both in its quiet side streets and its bustling main thoroughfares. Either way, those who choose to live in the Inner Mission find no shortage of vibrancy, architectural diversity and local color.

Condo prices keep on upward trajectory

With lack of inventory at historic lows, San Francisco condominium prices continue to press northward. That’s according to the San Francisco Business Times, which reports that condo prices went up 19 percent in April as compared to last year, hitting an average of $1,115 per square foot for new construction. The report was based on research by condo marketing and research firm The Mark Co.

Meanwhile, inventory was down 45 percent over last year, with just 136 units available. The Business Times quoted Mark Co. senior director of research Erin Kennelly as saying the results were “by far its single month gain this year.” Kennelly added that they were “building on an already strong market in San Francisco caused by low inventory and extremely strong demand.”

However, Kennelly added, a large bulk of new condos set to come online this year could ease the inventory crunch. Those include the Linea project at 1998 Market Street (115 units) as well as Vida at 2558 Mission Street (114 units). Other developments set to come online later this year include Amero (27 units), Arden (267 units) and Lumina (665 units).

But this year, less than 1,500 condos will come online. In contrast, more than 5,000 new apartments will be finished and ready to be leased. This traces back to a few years ago, when it was easier to finance apartments than condos.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com

Just sold: 451 Kansas Street #458

I’m happy to announce that 451 Kansas Street #458 has just been sold for $1,025,000. This two-bedroom, two-bathroom condo has a washer/dryer, closets for days and parking for a single car. This professionally managed building has HOA dues of $503.33 per month.

With the bedrooms set to either side of the living room with their own ensuite baths, this condo has an ideal floor plan with extras including walk-in closets, hardwood floors, stainless GE Profile appliances, closet built-ins, glas shower doors and custom window coverings.

As for the building, known as the Whole Foods Building, The Potrero has 140 condominiums divided between two buildings with mature landscaped courtyards, a fully equipped gym and spectacular roof deck with city views.

Wondering what to do with your own piece of San Francisco paradise? Get in touch!

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com

More on new construction in San Francisco

Let’s continue our discussion of new construction in our fair city – specifically, housing construction. Paragon’s latest Housing Development Report finds that almost all of the projects in today’s pipeline have at least a partial residential component, with only 8 percent specifically non-residential developments.

And the beat continues rolling on. In the second week of May, Van Ness denizens Honda and KRON were reported to be on the chopping block in favor of large-scale residential projects. Looking at the last seven years of MLS sales of condos built between 2001 and 2014, we find that the smaller the unit, the higher the dollar per square foot value on sale or rental. That said, in San Francisco, three-plus bedroom condos are often high-floor units with extraordinary views that sell for equally extraordinary amounts. However, these are exceptions to the general rule.

It seems as though the city plan has a bias for two-bedroom units. It designates these as “family units” – but Paragon wonders if this isn’t a bit of an anachronism since nearly 40 percent of city residents live on their own and San Francisco has the lowest percentage of children in any major American city.

Things started changing in 2012, though, when they city consented to allow the construction of 375 micro-units, which are apartments of 220 to 300 square feet, including kitchen and bath. It will be intriguing to keep tabs on this trend to see if it takes off – or not – in both rental and for-sale markets.

We’re seeing most construction on or near Market Street, where many young high-tech residents are congregating, but will that change? Stay tuned.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com

New Housing Construction Report

San Francisco New-Housing Construction Trends
Within its 47 square mile envelope, San Francisco is already the 2nd most densely populated 
city in the United States, and it’s growing denser, more affluent and more expensive.
May 2014 Report with 13 Custom Charts

The charts included are mostly based on the San Francisco Planning Department’s excellent Housing Inventory and Pipeline reports, which can be accessed using the links at the bottom of this article. Quotes below are excerpted from these reports.

Packed with information, the data in one report section will not always agree perfectly with that in another – due to the multiple sources of data used by the Planning Department – and this is reflected in our charts as well. In the complex, lengthy process of new-housing application and review, public hearings (and, lately, ballot proposals), revisions, entitlement, permitting, construction and completion, how and when a project is counted may vary. Housing units are being built and being removed, and there are so many types: rental or sale, market rate or affordable, social-project housing or luxury condominiums.

Last but not least, this landscape is in constant flux – new projects, plan changes, and shifts in economic and political realities. Everything below is simply a good faith estimate. The basic reality is that San Francisco, after its recent 2008-2012 new-construction slump, is now experiencing a building boom. So far, however, it has not been able to keep up with population growth and rising buyer/renter demand.

Adjusting your screenview to zoom 150% will make the charts that much easier to read.

New-Construction_Authorized-Completed

New construction authorized typically will not show up as housing units completed until later years. And, of course, a developer can decide not to build after authorization if market circumstances change. The post-2008 drop in authorizations is clearly illustrated here.

“Some of the larger projects completed in 2013 include: 1190 Mission Street (355 market-rate units and 63 affordable units), Rincon Green (277 market rate units and 49 affordable units), Nema (279 market rate units and 38 afford­able units).”

“Very large projects (200 units or more) filed in 2013 and are under Planning Department review include: Mission Rock (1,500 units); 150 Van Ness Avenue (429 units); 41 Tehama Street (398 units); 1066 Market (330 units); 950 Market Street (316 units); and 1301 16th Street (276 units).”

Besides the above projects, rarely a week goes by in which new commercial property sales aren’t being announced – such as the Honda dealership lot and the KRON Building, both on Van Ness – with plans for large-scale residential development projects.

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New-Homes-Pipeline

A glance at the recent past, the present and the possible future of new housing construction in the city. New projects are continually entering and moving through the pipeline, and existing plans may be changed or even abandoned.

“There are currently 857 projects in the pipeline. Of these, 74 percent are exclusively residential and 17 percent are mixed-use projects with both residential and commercial components. Only 8 percent of projects are non-residential developments. A net total of 50,400 new housing units would be added to the city’s housing stock according to current data. Around 18 percent of all projects, representing 6,000 net added housing units and 2,750,000 sq. ft. of commercial space, are under construction. Around 20 percent of projects (with another 4,200 net units and 3,8 million sq. ft. of commercial space) have received building permit approvals. As of the time of writing, some may have moved to the construction phase.”

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New-Construction_by-Bedrooms

We haven’t found an easy place for construction data by unit size, so this chart is extrapolated from the last 7 years of SF MLS sales of condos built 2001 -2014. It may not apply perfectly to units built as apartment rentals or affordable housing.

Typically, the smaller the unit, the higher the dollar per square foot value on sale or rental, however in San Francisco, 3+ bedroom condos are often high-floor units with spectacular views that sell for extraordinary sums – but these would be outliers to the general rule. The city plan appears to have a bias for 2-bedroom units, which it designates as “family units” – this may be an anachronism considering that 38% of city residents live alone and that SF has the lowest percentage of children of any major U.S. city. Of course, many singles and couples like to have a guest bedroom or home office.

However, in 2012, the city agreed to allow the construction of 375 “micro-units,” apartments of 220 to 300 square feet, including kitchen and bath. A few dozen have been built – one article mentioned a rental rate of $1850/month – and another 160 are under construction in the mid-Market area. It will be interesting to see how this trend develops (or doesn’t) in both the rental and for-sale markets. It might be a good match for the relatively young (but well paid), non-driving, high-tech workers pouring into the city.

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New-Construction_by-SF-District

New construction has been concentrated in a few specific districts of the city, mostly where higher density housing projects are most viable. “The ‘hot spot’ for much of this development is Market Street at various sections of it.”

The ability to take under-utilized commercial property sites and turn them into multi-unit or even high-rise residential projects is particularly prized: “There are 50 projects in the current pipeline data­base proposing demolition or conversion of existing [commercial] build­ings to residential use.” “Nearly all units replacing office uses are in mid- to high-rise residential structures of 20 to 500 housing units in high density zoning districts. These projects are mostly concentrated in the eastern half of the city: Rincon Hill, East SoMa, Showplace Square & Potrero Hill, Transbay, Mission and Downtown.”

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New-Housing_Construction-Conversion

Three issues regarding new condo construction: the year in which a project is designated as “completed” in city reports can vary, depending on the department and the dating of events within the process (so this chart won’t perfectly tally with others). Secondly, some developers build and record the units as condos but then rent the units instead of selling them. Finally, new housing projects are now typically required to sell or rent about 15% of units under affordable-housing rules. All these factors affect how new condo construction impacts rental and sale markets.

“Single-family building construction made up a very small proportion of new con­struction in 2013 (1%).” Very few new houses are built in San Francisco, as developers prefer to build higher density housing projects on our limited supply of land. The houses that are built are typically big and expensive.

“Seventy-six percent of the condominium conver­sions in 2013 (279) were in buildings with two or three units.” The rules governing condo conversion in San Francisco are byzantine, politically-wrought and ever-changing, and the changes affect the ability to convert existing multi-unit properties and TICs into condominiums. Two-unit properties are much the easiest to convert into condos and accordingly enjoy a sale price premium.

————————————————– 
AvgDolSqFt_Condo-by-Era-Built

The first golden age of SF apartment buildings, many of which were later turned into condos, was in the period of 1920 – 1940: The units in these buildings are large, light, gracious and filled with elegant detail. Pacific Heights and Marina are filled with these buildings. Though there are beautiful condos built in other eras (Edwardian flats, Art Deco apartments), the second golden age really arrived with the latest burst of new-condo construction, built for an increasingly affluent population: These units are ultra-modern, high-tech and feature highest quality finishes and amenities. They are exemplified by the new, luxury high-rises of the greater South Beach-Yerba Buena area, though variations on this theme, in non-high-rise form, have been springing up all over the city.

The units in these newer buildings command a premium both when rented or, as seen in the chart above, when sold – now surpassing an average dollar per square foot value of $1000. This is the major motivator for developers today.

————————————————– 
Affordable-Housing_Construction

New housing typically conjures images of new condo developments, but it’s more complicated. Within new market-rate condo and apartment projects – rental housing construction has also been jumping with the recent large spikes in rents – typically 15% of units are required to be affordable housing: 220 of these “on-site” units were built in 2013. Add in social-project housing of one kind or another, and 36% of all new units built in 2013 were affordable housing. These units are allocated, rented and sold under rules and formulas pertaining to social and economic circumstances and housing cost.

“About 93% of the new affordable units are rentals affordable to very-low and low-income households.”

“Major affordable housing projects completed in 2013 include: 25 Essex Street (120 units); 701 Golden Gate Avenue (100 units); 474 Natoma Street (60 units); 1075 Le Conte Avenue (73 units); 60 West Point Road (54 units); and 61 West Point Road (13 units).”

————————————————– 
Housing-Units_Lost

There are not only new housing units being built, there are existing housing units being removed from the city’s inventory of housing stock – demolished, merged (2 or more legal units into 1) and abated (illegal units): one less the other equals the net housing unit increase.

There is currently proposed legislation to encourage the legalization of illegal housing units in San Francisco, estimated to exist in the tens of thousands. This is problematical because the reason most of these units are illegal to begin with is that they don’t conform to housing codes – ceiling height, light and ventilation, and fire safety issues are most common – and cannot easily, without substantial expense, be altered to comply.

————————————————– 
New-Home_Construction

This is another approximate snapshot of how general economic conditions affect new housing construction. When the financial markets crashed in 2008, new construction went into a tailspin due to demand and financing issues. As the economy has recovered, it has sprung back to life – as is clear by all the cranes stalking the city’s lots. Like most financial markets, real estate development has economic cycles – cycles that often include dramatic booms and crashes. This is exacerbated by the length of time between a developer’s initial plan and land purchase, and the completion of the project, which often runs to years. It can be difficult enough to predict what market conditions will be next month, much less in two, three or more years.

————————————————– 
Housing-Inventory_by_Property-Type

We created this chart in 2013 with data compiled from a variety to sources we deem reliable. All the numbers should be considered very approximate – and they are constantly changing – but the chart is generally representative of the existing housing breakdown in San Francisco.

————————————————– 
New-Construction_by-County

New home construction in the Bay Area is currently concentrated in 3 of the 4 hottest rental and/or purchase markets in the country: the greater Silicon Valley area, San Francisco and the East Bay. Of course, much of this is directly related to surging high-tech employment and wealth.

————————————————–

What ultimately underpins new housing construction is demand. Below are two charts illustrating the white hot rental and sale markets in San Francisco, which are motivating investors and developers to build new homes, and motivating the city and non-profits to accelerate the construction of affordable housing units as well (a very big political issue right now).

From 2010 to 2013, the city added approximately 32,000 residents and increased the number of employed residents by roughly 56,000, many of them in new, well-paying high-tech jobs. In that same period, about 4,200 new housing units were added, not remotely adequate to meeting demand. And it is currently projected that the city’s population will continue to grow in coming years. When demand soars and supply is inadequate, prices and rents go up (in the city’s recent case, feverishly), and builders start building again as quickly as they can, hoping to catch the wave at exactly the right time.

————————————————–

Below are image- links to the actual SF Planning Department Pipeline and Housing Inventory reports issued in February and April 2014, upon which many of the above charts were based. They contain huge amount of data, which we have attempted to represent accurately. As noted by their authors, who did an incredible job compiling the data, the original reports themselves are “compiled and consolidated from different data sources and subject to errors due to varying accuracy and currency of original sources.”
And this image-link goes to a flowchart of the Planning Department’s
review and approvals process: