San Francisco’s Building Boom…How Much Longer Will It Last?
Today many of our San Francisco real estate agents attended an informative panel of experts on the state of the San Francisco real estate building boom. The event was held at the Wells Fargo Penthouse on Montgomery Street. We were treated to the inside views of what is happening in this city, what challenges are being faced and the prospects for the future.
The speakers were Sara Jones, Environmental Review Officer at the San Francisco Planning Department, Alan Mark, President and Founding Partner of the Mark Company, Chris Foley, Partner at Polaris Pacific and Cory Weinberg, Real Estate Writer as the San Francisco Business Times. Their insight into what is happening in the local market was absorbed by more than 250 agents.
Over 250 agents attended this presentation on the Building Boom in San Francisco.
Here are several key takeaways
1, We are in the second inning of a very long game. The demand for housing will take a long time to be met by new development. One panelist believes the growth will last well into the next decade. The anticipation in the short run is that we should see an additional 20% appreciation in the condo market in the next three years.
2. Condos are no longer looked at as the stepchild but in fact the real estate of choice particularly with those in the tech industry.
3. There are 15 markets where condo developments work for developers and investors and San Francisco is one of them.
4. The housing problem is not a San Francisco problem, it’s a San Francisco Bay area problem. There are 10 new jobs created for every new unit built. The demand far exceeds supply. The anticipation is that there will be 800 condo units built this year, 1500 in 2016 and in 2017. Apartment construction will also increase but the number of people seeking to move into San Francisco is many multiples of this.
5. Although many complain that the prices in San Francisco are out of reach for many, San Francisco is actually cheap compared to New York, Tokyo and London for example. Many buyers from Asia also see value in owning here.
6. Developers are now beginning to target Oakland as a viable city for further development. With the cost of land acquisition reaching stretched levels in San Francisco, Oakland is looking like a real opportunity.
7. The San Francisco Planning Department is looking for ways to streamline the process for permit approval. This could speed up the approval process but don't expect big changes and the complicated San Francsico laws are a big hurdle.
What could derail this boom? Geopolitical events or natural disasters. One thing is for certain, the challenge San Francisco faces with housing will not abate for quite some time. Buyers should understand that if they plan on living in San Francisco, although they will pay a high price the forecast is that prices will continue to rise in the foreseeable future.
To learn more contact Frank Castaldini at: 415.846.1899
San Francisco's Leading Top Producing Realtor and Trusted Advisor
Comments(0)