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San Francisco, CA: Real Estate Market & Trends 2016

The San Francisco real estate market has been unstoppable so far in the first-half of 2016. Home prices have quadrupled in comparison to the national average, and continue to grow relative to last year, as San Fran real estate ranks in the upper echelon of appreciation rates. As one of the top three real estate markets in the country (San Jose, CA, New York, NY), San Francisco real estate investments have paid off handsomely for homeowners and investors in 2016.

The drawback, however, has been in the form of home affordability. Rental prices for San Francisco real estate rank among the highest in the country, as homeowners, on average, pay nearly 25 percent of their income to mortgage payments. Despite weaker affordability, the local economy is strong and on an upward trend. In addition, new housing construction continues to outpace the national average, which could benefit affordability down the line. That said, the San Francisco real estate market is among the hottest in the country right now, with no signs of slowing down.

San Francisco, CA Real Estate Market Statistics:

San Francisco real estate investments

The real San Francisco treat for homeowners and investors in 2016 has been appreciation rates and total equity gains. One-year appreciation rates for San Fran real estate were 9.5 percent during the second quarter, compared to the national average of 4.9 percent. Three-year rates improved, soaring to 26.7 percent, compared to 17.8 percent achieved by the rest of the country. To top it off, gains in the last three years have surpassed the trend of positive price growth since the recession. For those considering San Francisco real estate investments, the following spotlights appreciation gains in previous years:

  • Homes purchased in the San Francisco, CA housing market one year ago have appreciated, on average, by $90,348. The national average was $14,963 over the same period.
  • Homes purchased in the San Francisco, CA housing market three years ago have appreciated, on average, by $223,658. The national average was $46,878 over the same period.
  • Homes purchased in the San Francisco, CA housing market five years ago have appreciated, on average, by $412,817. The national average was $82,353 over the same period.
  • Homes purchased in the San Francisco, CA housing market seven years ago have appreciated, on average, by $464,637. The national average was $77,054 over the same period.
  • Homes purchased in the San Francisco, CA housing market nine years ago have appreciated, on average, by $144,563. The national average was $31,126 over the same period.

The San Francisco real estate market has the hot hand in terms of total equity, as gains in the last nine years have vastly surpassed the national average. Homes purchased in the past year appreciated, on average, by $90,348 as opposed to $14,963. The most eye-popping gains occurred in year seven, when San Francisco real estate appreciated by $464,637, compared to the rest of the country which saw five digit gains of $77,054. Although price appreciation and principle payments in the last three years has boosted total equity growth since the recession, San Francisco real estate investments continue to prove their worth each and every year.

From an investor perspective, foreclosures remain an opportunity in the making. The San Francisco real estate market had 528 properties in some stage of foreclosure during the month of October, according to RealtyTrac. Despite being very low, foreclosures are actually 40 percent higher than the previous month and 17 percent higher than the same period last year. San Fran also saw the amount of REO properties grow in the month of October. Bank owned homes in San Francisco grew 16.9 percent higher than a month ago and 16.9 percent higher than a year ago. Surprisingly, even in the home price capital of the U.S., there are still deals to be had.

San Francisco, CA Real Estate Market Summary:

San Francisco real estate investing

  • Current Median Home Price: $209,500
  • 1-Year Appreciation Rate: 9.5%
  • 3-Year Appreciation Rate: 19.9%
  • Unemployment Rate: 6.5%
  • 1-Year Job Growth Rate: 2.2%
  • Population: 210,270
  • Median Household Income: $46,463

San Francisco, CA Real Estate Market (2016) — Q2 Updates:

San Francisco real estate investors

Home prices and appreciation rates for San Francisco real estate have become almost as iconic as the Golden Gate Bridge. The median home price was $885,600 during the second quarter, compared to the national average of $239,167, while one-year and three-year appreciation rates reached 9.5 and 26.7 percent respectively. In comparison to other real estate markets, San Fran continues to be a wonderland for both homeowners and investors.

Helping to support the growth of the San Francisco real estate market is the local economy. The city has become a mecca for many high-demand professions, helping to create a popular destination for work and play, combined with a diverse workforce. Furthermore, employment has held up and is on an upward trend, while unemployment remains below the national average. The second quarter saw an unemployment rate of 4.2 percent, compared to 4.9 percent, while new jobs grew at a rate of three percent versus the national average of 1.9 percent. Compared to other market, job growth in San Francisco was especially strong during the second quarter.

Behind the mouth-watering numbers lie a few undesirable traits for the San Francisco housing market, however. Homeowners paid 24.2 percent of their income to mortgage payments during the second quarters, whereas the rest of the country paid 15.8 percent. That number is better than its historical average of 26.6 percent, but still weaker than most markets. One aspect that should influence home affordability in the near future is new housing construction. The second quarter witnessed construction rates rise to 54.2 percent above the long-term average, while single-family housing permits reached 14.1 percent, compared to the national average of 10.6 percent. Furthermore, construction is on the rise relative to last year which suggest the local inventory has stabilized.

The dominant force that is the San Francisco real estate market doesn’t appear to be slowing down anytime soon. The National Association of Realtors (NAR) predicts higher price growth in the next 12 months, with home prices expected to grow by four percent compared to the national average of 3.6 percent.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.

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