San Francisco’s real estate market – past, present, future
Today let’s turn our attention to Paragon’s 2015 San Francisco Real Estate Market Review, which includes “architecture, views, probates, penthouses, lofts, TICs, luxury homes, seasonality, mortgage rates, sales prices, dollar per square foot values, and everything else we could think of in a look back on 2015.” Comprehensive, huh? Definitely.
First let’s look at architecture. As the report notes, the city has seen three extended periods of home construction: the first running from the Gold Rush to the 1906 earthquake when 28,000 buildings were destroyed; the second from the post-quake rebuilding with construction of thousands of Edwardian homes and multi-unit buildings through the big World War II population surge; and the third focusing mostly on new-condo construction. This latter era kicked off around 1980, has seen ebbs and flows in line with the economy, and is once again in bloom.
As the Paragon report notes, San Francisco is a city of fantastic views. “For the simple reason of verticality, more condos have views and, generally speaking, more panoramic and spectacular views, than houses,” it reads. “Many other lovely views add to SF home value as well.” These include city, park and marina views as well as vistas of Alcatraz, Marin, Mt. Tamalpais, the East Bay and Mount Diablo in Contra Costa County.
Now let’s look at something that’s been in the news plenty: interest rates. “After being bludgeoned in 2015 by thousands of articles, predictions and warnings regarding interest rates, here is a look at how much they actually changed over the course of the year: approximately one seventh of one percent,” the report notes. “Per recent signals from the Fed, presumably mortgage rates will rise in 2016, but expectations over the last 6 years have been confounded far too often to be sure. Significant increases would certainly worsen the affordability equation for homebuyers financing their purchases.”
More in our next post.