San Francisco ranks near the bottom of U.S. metro areas in home value increases

By comparison, home values in the U.S. overall rose 11.6% over the past year. And in some regions, including Phoenix and Austin, Texas, home values soared by more than 20%.

The S.F. and San Jose metropolitan areas actually rank at the very bottom of all major metropolitan areas for home value appreciation, noted Jeff Tucker, a senior economist at Zillow.

But, he said, these trends look very different at the county level.

“The big takeaway that I’m seeing here is, the most expensive parts of the Bay and the most urban parts of the Bay have had the slowest growth rates,” Tucker said.

That’s for a number of reasons, but a big one is that people are leaving San Francisco for other parts of the Bay Area and California, lowering demand compared to previous years.

These ex-San Franciscans and San Joseans are contributing to price increases in the more “affordable” Bay Area counties located within the San Francisco metropolitan area, like Alameda and Contra Costa: In those counties, home values increased by 14% and 14.3%, respectively, this year, even more than the U.S. average. Meanwhile, in San Francisco proper, home values actually decreased by 2.8%.

Not that any county in these metropolitan areas comes close to what most Americans would consider “affordable.” In San Jose, median home values are up to $1.36 million, while the San Francisco metro area’s home value has cracked an all-time high of $1.23 million. (Again, the S.F. metropolitan area includes those relatively more affordable counties, like Alameda and Contra Costa.)

Supply may also have affected the differences between the Bay Area and the rest of the country. While the home inventory nationwide was down 30.3% this April compared to last year, both the San Francisco and San Jose metro areas saw their home inventories increase compared to the previous year — inventory was up by 32% in the S.F. metro area and by 37% in San Jose.


Part of why the bay saw such a dramatic increase in supply stems from its strict response to the pandemic: The region’s housing market essentially shut down last April, normally the best time for home sales. That shutdown deflated housing stock for last April, making this April’s supply increase look especially large.

The Bay Area’s April 2020 real estate market pause likely had an especially strong effect because the region had so little housing supply to begin with, Tucker said: “In San Francisco, the levels of inventory are kind of notoriously low; it’s just not a market that has a deep liquid pool of homes trading and available.”

Still, prospective home buyers should take heart from the inventory increase — it reflects a real trend toward equilibrium between buyers and sellers in the Bay, according to Tucker.

“The pandemic and remote work has given more people options,” he said. “Maybe (they) keep that Bay Area job without having to live in the Bay Area.”

Susie Neilson is a San Francisco Chronicle staff writer. Email: susie.neilson@sfchronicle.com Twitter: @susieneilson

Article source: https://www.sfchronicle.com/local/article/The-pandemic-housing-boom-affected-the-Bay-Area-16196568.php

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