Spotlight:

San Francisco And The Bay Area

San Francisco and the Bay Area
San Francisco And The Bay Area

18 April 2016, by Paul Tostevin

The prime residential markets in San Francisco and the Bay Area are experiencing record highs

The story of San Francisco’s real estate markets is the story of global city real estate. The attraction of the urban form has proved irresistible to residents and companies alike, attracting an influx of people that goes beyond urban renaissance. This means the city is once again a powerhouse of industry and commerce in the digital age.

Like so many burgeoning yet land-limited cities, San Francisco’s prime real estate markets are at record highs having not only recovered from the recessionary lows of 2011, but also long since exceeded their former peak.

 

The fundamental strengths of San Francisco’s markets are assisted by the even faster rise of rents than capital values. There is no investor-induced speculative bubble in San Francisco. At a time when many of the world’s core, prime city markets have seen yield compression due to investor demand, San Francisco’s residential yields have moved out due to rental growth.

This means that the affordability issues plaguing many a world city are writ large in San Francisco’s popular districts. Young people especially risk being priced out of the city. The likely outcome of this pressure is an ‘urban dispersal’: the colonization of new urban areas by creative millennials outside the city limits. Oakland is already benefiting from this.

We also anticipate the urbanization of suburbs and a rise in the popularity of small towns and cities in outlying but accessible districts. Authentic places with heritage and local character have been increasingly popular with ‘priced out’ millennials across the globe. The trend is still urban but the next genesis of real estate in the Bay Area is likely to be increasingly ‘small urban’.

 

 
Downtown San Francisco

▲ Downtown San Francisco

Articles from Spotlight: San Francisco and the Bay Area – 2016

San Francisco And The Bay Area At A Glance

San Francisco’s residential market was the strongest performer of major world cities in 2015

Prime Residential Markets

Prime property is found throughout the Bay Area, from urban addresses in San Francisco and Oakland, suburban communities in the Silicon Valley through to the wine country of Napa and Sonoma

Bay Area Residential Markets

Buyers seeking value in the Bay Area are turning to markets such as Oakland and Napa

Outlook

18 April 2016

Outlook

We anticipate further, but lower level, price growth in the near term

 
 

Key contacts

Paul Tostevin

Paul Tostevin

Associate Director
World Research

Savills Margaret Street

+44 (0) 20 7016 3883

 

Yolande Barnes

Yolande Barnes

Director
World Research

Savills Margaret Street

+44 (0) 20 7409 8899

 

Vlad Tikhnenko

Vlad Tikhnenko

Research Analyst
World Research

Savills Margaret Street

0207 299 3043

 

Hugo Thistlethwayte

Hugo Thistlethwayte

Head of
International Residential (Operations)

Savills Margaret Street

+44 (0) 20 7409 8876

 

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