Which neighborhoods have appreciated most?

Paragon has released its San Francisco Neighborhood Appreciation Rates report, which raises the question of which neighborhoods have seen the most appreciation and why that is the case.

Keep in mind that this analysis is based upon review of both median sales price as well as average dollar-per-squre-foot data. That said, there is no one city or neighborhood median or average home that can be used as an unchanging basis of comparison year after year, only differing collections of unique homes that are selling in different times and circumstances.

The chart that accompanies this article illustrates approximate home value appreciation from the bottom of the market (2010-2011) to present as illustrated by the dark gray bars as well as the overall appreciation or depreciation to date since the last market peak (2006-2008) as illustrated by the red numbers.

Over the past three years, San Francisco neighborhoods have seen typical appreciation ranging from 40 to 50 percent, with an overall increase of approximately 44 percent. So what are the three neighborhoods with the highest appreciation rates from bottom of the market to present?

  • Bayview: This neighborhood is up 75 percent from 2010-2011. However, it’s still down 12 percent from its market peak in 2006. Its bubble was huge thanks to subprime lending and its market crashed terribly when that bubble popped. Now that subprime lending has disappeared, Bayiew’s recovery has been equally dramatic.
  • Inner Mission: Here we’ve seen an increase of 63 percent from 2010-2011. That’s up 46 percent from the pre-crash peak of 2007. The huge change in buyer demographics over recent years explains its incredible appreciation rate as young, hip, affluent high-tech buyers are now flocking to the area, which is seeing expensive new condo projects aplenty.
  • Bernal Heights: Bernal is up 57 percent since the market bottomed out and up 24 percent from its previous market peak in 2007. It’s become extremely sought-after for buyers who love Noe Valley but have been priced out of there.

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