Bay Area real estate: Everywhere you go, million-dollar homes



Pick a house, any house.

In San Francisco and Silicon Valley, there’s about a 50 percent chance that it’s worth $1 million or more. The odds are less in Alameda and Contra Costa counties, yet the share of million-dollar homes there has nearly quadrupled since 2012.

“Once a rarity, the million-dollar home is now fairly commonplace” in numerous U.S. markets, said Ralph McLaughlin, chief economist for Trulia. He has authored a new report showing that the San Francisco, San Jose and Oakland metro areas — in that order — have seen the nation’s most dramatic increases in the share of million-dollar houses.

Titled “Million Dollar Creep: Where Seven Figure Homes are the New Norm,” the report says that:

• In the San Francisco metro area (which includes San Francisco and San Mateo counties), the percentage of homes valued at $1 million or more has nearly tripled since 2012, from 19.6 percent to 57.4 percent.

• In the San Jose metro area (Santa Clara and San Benito counties), the share of million-dollar homes has risen almost as sharply, from 17.4 percent to 46.3 percent.

• In the Oakland metro area (Alameda and Contra Costa counties), the share has jumped from 5.2 percent to 19.7 percent.

Lagging behind are the Los Angeles, Honolulu, San Diego, New York and Seattle metro areas. Nationally, the share of million-dollar homes has modestly risen from 1.6 percent to 3 percent.

The price appreciation here reflects a Bay Area-wide problem: the lack of housing supply amid a robust tech economy that creates jobs — and the demand for more housing.

The cycle “is not sustainable,” said Matt Regan, senior vice president of public policy with the Bay Area Council, which recently conducted a poll showing massive frustration over housing prices among residents.

“My home has appreciated by double digits in the last four years,” said Regan, who grew up in Ireland and now lives in Pleasant Hill in Contra Costa County. “It’s nice to see all those euros added to my home value when I look at Trulia or Zillow. But at the end of the day, I am incredibly worried that our refusal to permit and build enough housing to accommodate our growing population will result in an economic downturn. “All that appreciation will evaporate very quickly in the next recession.”

These are the Contra Costa County municipalities where the share of million-dollar houses has risen the most, according to Trulia: Moraga (increasing from 21.6 percent to 70.8 percent), followed by Danville (from 22.2 percent to 69.9 percent) and Orinda (from 47.7 to 92.8 percent).

Trulia also has computed percentages for scores of neighborhoods in the 10 U.S. metro areas with the highest share of million-dollar houses.

In the Bay Area, the neighborhood with the steepest increase is Westwood Park, near St. Francis Wood in San Francisco. In 2012, only 2.9 percent of houses there were worth $1 million or more. Now, 96 percent are in the million-dollar club.

The other four of the top five Bay Area neighborhoods are in the city of San Mateo, including two in its Hillsdale section. All four are in proximity to the Caltrain station in San Mateo, as well as to Highway 101: Ease in getting to work clearly means something to homeowners and adds to the value of a house. The share of million-dollar homes has leapt from 4.9 percent to 85.4 percent in San Mateo’s Fiesta Gardens neighborhood.

The changes in San Mateo are “the epitome of what is happening in the Bay Area,” said Trulia’s McLaughlin. “Many of those are postwar homes that were built for middle-class families earning middle-class incomes. Those homes are no longer being occupied by your typical working or middle-class people.”

A few more examples from the report:

• In Oakland’s Rockridge neighborhood, the share of million-dollar homes increased from 16.7 percent to 84 percent.

• In Sunnyvale’s Raynor Park, the share jumped from 19 percent to 94.4 percent.

• In San Jose’s Almaden Valley, the share rose from 29.4 percent to 79.5 percent.

Some neighborhoods barely registered on the report: Their percentage change was minimal, because they already were so expensive in 2012. Take Palo Alto’s Professorville: Four years ago, 94.8 percent of its homes were worth $1 million or more. Its share today: 100 percent.

Article source: http://www.montereyherald.com/article/NF/20160519/BUSINESS/160519784

This entry was posted in SF Bay Area News and tagged . Bookmark the permalink.

Comments are closed.