Apartment market, continued
Yesterday we discussed Paragon’s most recent Apartment Building Market report, which was recently released. Today we continue that discussion with a look at new home construction and so much more.
In the past year, approximately 3,100 residential units of all types (rental, sale and social project) were built, with almost 7,000 currently under construction and many more to come. The Paragon report quotes the analytics firm Reis on national trends: “The key issue in the near term will be new construction. The national vacancy rate has already ceased falling. With a large amount of new supply set to come online over the next few years, vacancy is headed higher … This does not mean, however, that demand will flag anytime soon. There are roughly 45 million people between the ages of 20 and 29 in the US, the overwhelming majority of which are renters.”
So what does this mean? Adding large amounts of new inventory should eventually affect the soaring appreciation for both sale and rental markets. That said, it’s not happening right now since population, employment, wealth and buyer demand are all outpacing supply, especially with large numbers of post-college adults moving back into San Francisco.
Full employment is being seen around the Bay Area more and more these days, and employment is also expanding in well-paid industries including high tech. San Francisco is already the second most densely populated in the city and is ballparking to become even more crowded.
In terms of property values, apartment buildings saw an increase in the third quarter of last year, with overall appreciation of dollar-per-square-foot values in both San Francisco and Alameda County at more than 60 percent since the market bottomed out from 2009 to 2011.
Want to know where you fit in in this picture? Give me a call.
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