How’s the San Francisco apartment market looking?
Paragon has released its January 2015 San Francisco Bay Area Apartment-Building Market report, and there’s some good stuff to be had there. Let’s check it out, shall we?
First off, dollar-per-square-foot values in San Francisco as well as across the bay in Alameda County are up more than 60 percent since the bottom of the market. Keep in mind, however, that the fact that Bay Area residential investment sales consist of an ever-changing bunch of very unique properties with a huge variety in quality, location, size and era. However, overall appreciation can be considered correct.
The appreciation comes on top of the white-hot market seen in the second quarter of 2014 … that is, before fears regarding Proposition G, the transfer-tax-penalty proposal, deeply affected the third quarter. The inventory of listings then jumped and buyer demand went down. Early November saw Prop G fail at the ballot box, causing sales activity to rebound in the fourth quarter.
And what about rents? For the last little while we’ve been noticing tentative signs of slowing rent rate appreciation – and in the fourth quarter of last year, San Francisco as well as San Jose and Oakland saw rents flattening, though everywhere in the Bay Area has seen a significant increase on a year-to-year basis. Our neighbor to the east, Oakland, was the star performer for rent appreciation in 2014, with its market given a boost by renters looking for more affordable alternatives to San Francisco.
Price premiums are still being seen in the older, northern prestige neighborhoods of San Francisco, though that’s narrowing as other areas of the city such as the greater Noe Valley district are surging in popularity with younger but still affluent renters seeking an easier Silicon Valley commute.
Tomorrow we’ll explore this further.
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