Yesterday we began a discussion on Paragon’s San Francisco Neighborhood Appreciation Rates report. Let’s continue that discussion today to give a little bit more context to the appreciation rates.
The chart that accompanies this article should shed some light. It delineates actual 2014 year-to-date median home sales prices, showing that in the second half of this year appreciation generally flattened or even ticked down a little in the city’s more expensive areas following a frenzied spring market. However, appreciation continued to tick up in the more affordable areas. It’s good to keep in mind, though, that the pricier areas started to recover much earlier than the less affluent areas.
It’s also key to remember that dollars are more real than percentages. It’s certain to catch your attention when you hear that a home has jumped hundreds of thousands of dollars in value in a relatively short time. You won’t necessarily be caught that much by a statement of percentage. In the higher-priced neighborhoods, there are sometimes lower percentage appreciation rates than less expensive areas, but the dollar amounts are what grab you.
Take Pacific and Presidio Heights, where the theoretical median house now goes for more than $1.3 million more than just three years ago. That increase in Noe, Eureka and Cole Valley is more than $700,000. Got your attention?
The less affluent neighborhoods in the city saw much bigger bubbles – largely thanks to subprime lending – and subsequently much bigger crashes. In the Bayview, for example, there was an amazing 136 percent appreciation from 2000 to 2006, followed by a huge 50 percent drop from 2006 to 2010/2011. As I mentioned yesterday, on average the city’s home values have now gone up 40 to 50 percent over the past three years, with some neighborhoods stronger than that general range.
Happy Thanksgiving, everyone!
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 firstname.lastname@example.org. www.ceceblase.com