Meg Spriggs of AvalonBay Communities said her firm sees continued demand for apartment development in San Francisco for at least a few years to come. 

Blanca Torres
Reporter- San Francisco Business Times

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San Francisco is expected to reign as the nation’s top real estate market for investment, development and homebuilding in 2013, according a recently released annual report from the Urban Land Institute.

The report, “Emerging Trends in Real Estate,” placed San Francisco above other markets such as New York (second), San Jose (third) and Austin, Texas, (fourth) for having the best real estate prospects in the year to come.

It may not be surprising that San Francisco and San Jose would make the top five, while Los Angeles ranked No. 16. Nonetheless, Bay Area experts and real estate leaders are wondering, how long will the good times last?

ULI presented the reports findings at an event Tuesday morning in San Francisco featuring a panel of local experts including Luis Belmonte of Seven Hills Properties, Mike Covarrubias of TMG Partners, Oz Erickson of the Emerald Fund, John McNellis of McNellis Partners and Meg Spriggs of AvalonBay Communities.

The panelists spent an hour debating whether we can call the current market a bear or a bull and sharing insights.

Some of the panelists pointed out the market’s strengths. Erickson said double-digit rent growth has made apartment development lucrative and even with thousands of units under construction, there will still be demand.

Spriggs presented data that showed the number of jobs in San Francisco has outpaced housing development in recent years, further emphasizing Erickson’s view. She also said renting is cheaper than buying in the Bay Area, which isn’t the case in other markets, like New York City.

McNellis said that economic conditions in China and Europe are important to keep an eye on, but are unlikely to derail the Bay Area’s growth.

Blanca Torres covers East Bay real estate for the San Francisco Business Times.

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Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2012/12/san-francisco-number-one-real-estate.html