Part Three: Factors that underpin the San Francisco market

Today we conclude our look at the Paragon report titled 10 Factors Behind San Francisco’s Real Estate Market. Here are the last of those factors:

• Magnet effect. This small city of ours is also the heart of what the report says is “perhaps the fastest-growing, most lucrative, highest-prestige business segment.” In addition, San Francisco is also an amazingly beautiful, educated, tolerant and culturally rich metropolitan area, making it a magnet for awesome folks of all types who are willing to pay a major premium for living here.
• Limited supply. With nearly two-thirds of the city’s housing in rental units, much of which is under rent control, the number of homes suitable for owner-occupancy and available for purchase is relatively small – between 6,000 and 7,000 units. This makes the San Francisco homes market less than half the size of that is Alameda and Contra Costa counties.
• Tax benefits. While not counted as one of the 10 factors behind the current market due to the fact that the enormous benefits are always present whether boom or bust, they’re still a huge factor underlying the housing market. The ability to deduct interest costs and property taxes also allows homes to cost much more while also remaining affordable to buyers.

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