Boom third-quarter times for San Francisco apartment market
The third quarter was strong for our city’s apartment market, as reported by Paragon’s November 2014 San Francisco Bay Area Apartment-Building Market Report. During this time, rents continued to increase, closed apartment building sales remained strong and average dollar-per-square-foot values increased.
Another interesting thing of note: during the third quarter, San Francisco suddenly experienced a major spike in inventory, bringing it to its highest level in years. This was boosted by a serious surge of new listings in the five weeks following Labor Day, and may also have been driven to some degree by seller concerns about Proposition G. However, Prop G – which was a proposed transfer-tax penalty on multi-unit property sales in the city – failed at the ballot box yesterday. We at Paragon surmise that the jump in listings could also have to do with sellers attempting to take advantage of record-high property values.
Whatever the reason, San Francisco buyers enjoyed the largest choice of listings available for purchase in a long time. However, on the minus side, buyers had their own legitimate fears about the future ramifications of Prop G on their investment decisions. Those fears have now been lifted.
For apartment building sales reported to MLS in the third quarter, property values continued to increase with overall appreciation of dollar-per-square-foot values in San Francisco as well as Alameda Counties hitting a 60 percent increase since the market hit bottom in 2009-2011. The third quarter also saw average asking rents tick up, with a 10 percent year-over-year increase bringing the average to a whopping $3400 per RealFacts. Analytics firm Reis finds that the Bay Area has three of the four hottest rental markets in the country as measured by rent increases, but there are tentative signs of slowing appreciation in the city.
Tomorrow we’ll continue our analysis of Paragon’s report.
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 email@example.com. www.ceceblase.com