San Francisco real estate ‘overvalued’ according to new report

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  • ca62c 171bright 1 San Francisco real estate overvalued according to new report


171 Bright: in just 16 days on the market, sold for 62.21 percent over asking. Photo: RMLS

Image 1 of 17 – Most overbid homes for January, 2016

171 Bright: in just 16 days on the market, sold for 62.21 percent over asking. Photo: RMLS

171 Bright: in just 16 days on the market, sold for 62.21 percent over…asking. Photo: RMLS

Street view of 171 Bright shows a rather depressing exterior and fire damage.

Image 2 of 17 – Most overbid homes for January, 2016

Street view of 171 Bright shows a rather depressing exterior and fire damage.

Street view of 171 Bright shows a rather depressing exterior and fire…damage.

1139 Green Street is a multi-family. Listed at $1,299,800 and sold for $1,710,00. Photo: RMLS

Image 3 of 17 – Most overbid homes for January, 2016

1139 Green Street is a multi-family. Listed at $1,299,800 and sold for $1,710,00. Photo: RMLS

1139 Green Street is a multi-family. Listed at $1,299,800 and sold for…$1,710,00. Photo: RMLS

Green sold for 31.56% over asking. Photo: RMLS

Image 4 of 17 – Most overbid homes for January, 2016

Green sold for 31.56% over asking. Photo: RMLS

Green sold for 31.56% over asking. Photo: RMLS

Inside Green. Photo: RMLS

Image 5 of 17 – Most overbid homes for January, 2016

Inside Green. Photo: RMLS

Inside Green. Photo: RMLS

Green kitchen. The property was only 12 days on the market. Photo: RMLS

Image 6 of 17 – Most overbid homes for January, 2016

Green kitchen. The property was only 12 days on the market. Photo: RMLS

Green kitchen. The property was only 12 days on the market. Photo:…RMLS

1161 York sold for 30 percent over asking. Photo: RMLS

Image 7 of 17 – Most overbid homes for January, 2016

1161 York sold for 30 percent over asking. Photo: RMLS

1161 York sold for 30 percent over asking. Photo: RMLS

York is also a multi-family property. Photo: RMLS

Image 8 of 17 – Most overbid homes for January, 2016

York is also a multi-family property. Photo: RMLS

York is also a multi-family property. Photo: RMLS

York: listed at $1.2 million, sold for $1.56 million.

Image 9 of 17 – Most overbid homes for January, 2016

York: listed at $1.2 million, sold for $1.56 million.

York: listed at $1.2 million, sold for $1.56 million.

1819 26th Ave: this Sunset home sold for 29.03 percent over asking. Photo: RMLS

Image 10 of 17 – Most overbid homes for January, 2016

1819 26th Ave: this Sunset home sold for 29.03 percent over asking. Photo: RMLS

1819 26th Ave: this Sunset home sold for 29.03 percent over asking….Photo: RMLS

Classic mid-Sunset home, 42 days on the market. Photo: RMLS

Image 11 of 17 – Most overbid homes for January, 2016

Classic mid-Sunset home, 42 days on the market. Photo: RMLS

Classic mid-Sunset home, 42 days on the market. Photo: RMLS

Retro kitchen, Home listed at $775K and sold for $1M. Photo: RMLS

Image 12 of 17 – Most overbid homes for January, 2016

Retro kitchen, Home listed at $775K and sold for $1M. Photo: RMLS

Retro kitchen, Home listed at $775K and sold for $1M. Photo: RMLS

Very typical Sunset -style bath, untouched, apparently, through the years. Photo: RMLS

Image 13 of 17 – Most overbid homes for January, 2016

Very typical Sunset -style bath, untouched, apparently, through the years. Photo: RMLS

Very typical Sunset -style bath, untouched, apparently, through the…years. Photo: RMLS

39 Bradford Street sold for 25.25 percent over asking. Photo: RMLS

Image 14 of 17 – Most overbid homes for January, 2016

39 Bradford Street sold for 25.25 percent over asking. Photo: RMLS

39 Bradford Street sold for 25.25 percent over asking. Photo: RMLS

Bradford is a two bed, one bath. Photo: RMLS

Image 15 of 17 – Most overbid homes for January, 2016

Bradford is a two bed, one bath. Photo: RMLS

Bradford is a two bed, one bath. Photo: RMLS

Bradford listed at $998,000 and sold for $1.25M. Photo: RMLS

Image 16 of 17 – Most overbid homes for January, 2016

Bradford listed at $998,000 and sold for $1.25M. Photo: RMLS

Bradford listed at $998,000 and sold for $1.25M. Photo: RMLS

Bradford was on the market 29 days. Photo: RMLS

Image 17 of 17 – Most overbid homes for January, 2016

Bradford was on the market 29 days. Photo: RMLS

Bradford was on the market 29 days. Photo: RMLS

As San Francisco home prices continue to rise, a new report is calling the local market “overvalued” by about 16 percent.

Prices continue to go up in many markets throughout the country, but home prices in the Bay Area have “risen to a level unsupportable by area income,” according to Fitch Ratings.

That’s news that should come as no surprise to anyone who has recently tried to buy a home here, where vastly over-asking sales prices are the norm and even badly damaged homes like the one leading off the gallery above sell for nearly 200K above asking.

But, San Francisco is not alone. Home price increases in some Florida and Texas markets are also rising faster than incomes. Nationally, the housing oversupply we saw just about five years ago is gone. “For-sale inventory has declined and the percentage of new homes sold prior to completion has normalized while new home construction spending continues to show strength,” according to the Fitch Ratings report.

The credit rating agency also found that San Francisco home prices “hit an all-time high in third-quarter 2015 and are now 62 percent above their post-recession low in early 2012.” With San Francisco home prices up over 10 percent in the past year alone, Fitch Managing Director Grant Bailey had no doubt that homes here were overvalued and pointed to a fairly recent run-up to describe the current market.

“The last time the Bay Area experienced this kind of home price growth was during the dot-com era from 1997-2000,’ said Bailey.

And we all know what happened to the market in 2001.

Emily Landes is a writer and editor who is obsessed with all things real estate.

Article source: http://blog.sfgate.com/ontheblock/2016/02/11/san-francisco-real-estate-overvalued-according-to-new-report/

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