San Francisco Leads Nation in Rising Home Prices
US home prices rose sharply in May, with San Francisco leading the way, according to new data from the S&P/Case-Shiller 20-city index.
Record gains in home prices were recorded throughout the nation in May, with the S&P/Case-Shiller index showing a 12.2 percent rise over last May’s prices. May’s gains come on the heels of a similar 12.1 percent increase over the year-ago figures in April.
With a 24.5 percent gain over year-ago figures, San Francisco leads the nation in the ongoing home price recovery. In May, the median home price in the City by the Bay topped $1 million, a 32 percent jump from the year before, according to the San Francisco Business Times.
“Shrinking inventory combined with low interest rates and motivated buyers has resulted in historically high sale prices,” said Christine Dwiggins, president of the San Francisco Association of Realtors.
Cities which took a severe beating when the US housing bubble burst last decade saw some of the nation’s steepest price increases in May. Right behind San Francisco were Las Vegas (up 23.3 percent) and Phoenix (up 20.6 percent).
Home prices in Dallas and Denver reached historic highs in May, surpassing levels seen during the heady last days of the real estate bubble in 2006 and 2007.
In San Francisco, homes are attracting more bids and selling faster than at any time since the market took a dive in 2008-2009. Single-family homes are sold in an average of 28 days, compared to 49 days last May. Condo sales are also very robust, with an average citywide selling price of $850,000.
Taking into account numerous factors, such as ratio of home price to median household income, the rate of home price increase and the speed of sale, some experts warn that San Francisco could be experiencing something of a bubble. But Glenn Kelman, CEO of real estate brokerage house Redfin, told the Huffington Post that San Francisco is unique among American cities when it comes to its real estate market.
“The normal laws of economics don’t apply to the Bay Area,” Kelman said in April. “You could have huge unemployment numbers here and home prices would still go up because [the supply is so constrained and] there are enough people with limitless amounts of money who want to live here.”
The Bay Area is the world’s leading center of technological innovation. Tech is booming. So is construction. The San Francisco skyline is once again dotted with towering construction cranes. Among the projects currently underway is the Transbay Transit Center, of which the 1,000-foot Transbay Tower, the tallest building west of the Mississippi, will be the centerpiece. Plenty of new residential towers, most full of pricey, high-end condos, are also going up.
All of this is good news for San Francisco homeowners who, like this reporter, got in when the getting was good. It’s not such good news for those who cannot afford the stratospheric price of entry into the nation’s hottest real estate market, folks who must choose between either being eternal renters (and even that’s something of a mission impossible when the median one-bedroom is going for more than $2,700 a month) or packing it up and crossing the bridge to less costly climes.
Tagged Christine Dwiggins, Glenn Kelman, home prices, house prices, real estate bubble, real estate market, Redfin, S&P/Case-Shiller, San Francisco, San Francisco Association of Realtors, San Francisco home prices, San Francisco medial home price, San Francisco real estate, Transbay Transit Center