From Richmond’s bayfront to Oakland’s hipster precincts, cash-rich refugees from San Francisco’s overheated housing industry are reshaping the East Bay’s real estate market.
Article source: http://www.sfchronicle.com/bayarea/article/S-F-workers-lured-eastward-as-home-prices-head-6764475.php
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This photo shows a Napa Valley Farmworker Housing Center. Picture credit: CA Human Development.org
Image 1 of 23 – A tale of two housing styles in Napa
This photo shows a Napa Valley Farmworker Housing Center. Picture credit: CA Human Development.org
This photo shows a Napa Valley Farmworker Housing Center. Picture…credit: CA Human Development.org
Entrance to a Center. Picture credit: CA Human Development.org
Image 2 of 23 – A tale of two housing styles in Napa
Entrance to a Center. Picture credit: CA Human Development.org
Entrance to a Center. Picture credit: CA Human Development.org
Dorm-style living. Picture credit: CA Human Development.org
Image 3 of 23 – A tale of two housing styles in Napa
Dorm-style living. Picture credit: CA Human Development.org
Dorm-style living. Picture credit: CA Human Development.org
Communal eating, living, Picture credit: CA Human Development.org
Image 4 of 23 – A tale of two housing styles in Napa
Communal eating, living, Picture credit: CA Human Development.org
Communal eating, living, Picture credit: CA Human Development.org
The Farmworker Centers address the fact that even a 2 bedroom home like this one in Napa is beyond the means of most agricultural workers. Photo: RMLS
Image 5 of 23 – A tale of two housing styles in Napa
The Farmworker Centers address the fact that even a 2 bedroom home like this one in Napa is beyond the means of most agricultural workers. Photo: RMLS
The Farmworker Centers address the fact that even a 2 bedroom home…like this one in Napa is beyond the means of most agricultural…workers. Photo: RMLS
349 S Jefferson in Napa lists for $690K. Photo: RMLS
Image 6 of 23 – A tale of two housing styles in Napa
349 S Jefferson in Napa lists for $690K. Photo: RMLS
349 S Jefferson in Napa lists for $690K. Photo: RMLS
The home is a typical one at this price. Photo: RMLS
Image 7 of 23 – A tale of two housing styles in Napa
The home is a typical one at this price. Photo: RMLS
The home is a typical one at this price. Photo: RMLS
Nothing fancy… Photo: RMLS
Image 8 of 23 – A tale of two housing styles in Napa
Nothing fancy… Photo: RMLS
Nothing fancy… Photo: RMLS
Kitchen. Photo: RMLS
Image 9 of 23 – A tale of two housing styles in Napa
Kitchen. Photo: RMLS
Kitchen. Photo: RMLS
Bath. Photo: RMLS
Image 10 of 23 – A tale of two housing styles in Napa
Bath. Photo: RMLS
Bath. Photo: RMLS
View of yard. Photo: RMLS
Image 11 of 23 – A tale of two housing styles in Napa
View of yard. Photo: RMLS
View of yard. Photo: RMLS
The home is a little over 2000 square feet including separate unit out back. Photo: RMLS
Image 12 of 23 – A tale of two housing styles in Napa
The home is a little over 2000 square feet including separate unit out back. Photo: RMLS
The home is a little over 2000 square feet including separate unit out…back. Photo: RMLS
Yard. Photo: RMLS
Image 13 of 23 – A tale of two housing styles in Napa
Yard. Photo: RMLS
Yard. Photo: RMLS
Looking back. Photo: RMLS
Image 14 of 23 – A tale of two housing styles in Napa
Looking back. Photo: RMLS
Looking back. Photo: RMLS
Separate unit. This would be the sort of thing a farmworker might rent…. but rents are too high. Photo: RMLS
Image 15 of 23 – A tale of two housing styles in Napa
Separate unit. This would be the sort of thing a farmworker might rent…. but rents are too high. Photo: RMLS
Separate unit. This would be the sort of thing a farmworker might rent…. but rents are too high. Photo: RMLS
St. Helena is also pricey. This 1 bedroom cottage, in need of upgrades, lists for $675K. Photo: RMLS
Image 16 of 23 – A tale of two housing styles in Napa
St. Helena is also pricey. This 1 bedroom cottage, in need of upgrades, lists for $675K. Photo: RMLS
St. Helena is also pricey. This 1 bedroom cottage, in need of…upgrades, lists for $675K. Photo: RMLS
1135 Church St. shows the median won’t buy much home in St. Helens. Photo: RMLS
Image 17 of 23 – A tale of two housing styles in Napa
1135 Church St. shows the median won’t buy much home in St. Helens. Photo: RMLS
1135 Church St. shows the median won’t buy much home in St. Helens….Photo: RMLS
Inside cottage. Photo: RMLS
Image 18 of 23 – A tale of two housing styles in Napa
Inside cottage. Photo: RMLS
Inside cottage. Photo: RMLS
There are 962 sq. feet. Photo: RMLS
Image 19 of 23 – A tale of two housing styles in Napa
There are 962 sq. feet. Photo: RMLS
There are 962 sq. feet. Photo: RMLS
Kitchen. Photo: RMLS
Image 20 of 23 – A tale of two housing styles in Napa
Kitchen. Photo: RMLS
Kitchen. Photo: RMLS
Needing a fixers touch… Photo: RMLS
Image 21 of 23 – A tale of two housing styles in Napa
Needing a fixers touch… Photo: RMLS
Needing a fixers touch… Photo: RMLS
One of two small bedrooms. Photo: RMLS
Image 22 of 23 – A tale of two housing styles in Napa
One of two small bedrooms. Photo: RMLS
One of two small bedrooms. Photo: RMLS
Exterior…. Photo: RMLS
Image 23 of 23 – A tale of two housing styles in Napa
Exterior…. Photo: RMLS
Exterior…. Photo: RMLS
Napa brings tourists from all over the world, an estimated 300 million visitors a year, to sample its wines, mud baths, and pastoral beauty. Real estate, correspondingly, is expensive. The median list prices in various cities within Napa County are daunting, even on the low end of the spectrum: Forbes reported this January that when large parcel listings are excluded, the average current listing price for three bedroom/two bathroom homes is:
Napa: $655,466
Yountville: $837,250
St. Helena: $1,164,775
Calistoga: $642,000
Redfin calculates the median list for all of Napa County at $795K with a list-to-sale price ratio of 98%, meaning that most listings sell for asking. The gallery above confirms those prices.
Home ownership out of reach
However, the average salary for agricultural workers ranges from $9 to $12 per hour, according to the Bureau of Labor. Skilled vineyard workers command more–“$11.76 to $24.91 per hour, according to the 2013/Q1 2014 Occupational Employment Statistics (OES) survey from the California Employment Development Department,” writes Forbes. But although “Napa County farmworkers have the second-highest median hourly and annual wages in the state, behind the greater Bay Area,” working a 40 hour week at $12 an hour is $480 a week, or $1,920 a month, pre-tax. That’s hardly enough money to cover the mortgage on a $700,000 home.
Rents don’t offer much relief. Realtor.com data show that for a one-bedroom unit, “the average rental rate in Napa County is $2,287.” For two-bedrooms, the average rental rate “is $3,108.”
Napa’s solution
The reality is that Napa County could not exist without farm workers. Vineyards require many hands, working long hours, to function. Housing these workers then is not just the concern of the workers, but of their employers as well. According to Wine Business.com, “Napa is the only county in the United States where growers assess themselves in order to fund farmworker housing centers, where individuals benefit from lodging, meals, laundry, and recreational amenities. In 2014 alone to date, the centers have provided over 51,493 bed stays for Napa vineyard workers.”
Forbes reports that
When you’re an agricultural worker in the Napa Valley, $13 a night gets you a bed at one of three Farmworker Housing Centers. One center is located in Calistoga; a second, the Mondavi center, is located along the Silverado Trail near Yountville; and a third, the River Ranch center, is located along the Napa River in St. Helena.
Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert
Article source: http://blog.sfgate.com/ontheblock/2016/01/15/with-napa-valley-real-estate-too-pricey-for-farm-workers-a-local-solution/
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Any investor that claims an industry is only going to continue growing today is quickly reminded of both the subprime mortgage crisis and the dot.com bubble of 10 years ago. So while the nation’s current top bubble candidate—the frothy technology sector—doesn’t seem to be cooling, office market specialists continue to view the San Francisco Bay area with caution.
Due to strong growth in the technology industry, San Francisco dominated the U.S. office market in 2015, with the city’s vacancy rate dropping to 8 percent and rents surging 129 percent in the past six years to more than $70 per sq. ft. The city is the major draw for venture capitalists looking for tech start-ups, and new firms, not able to get into the prime Silicon Valley locations, flocked to San Francisco’s downtown. Along the way, they contributed to the growth of a walkable, vibrant city that has attracted educated Millennials by the thousands. However, the market correction experienced during the most recent recession is still fresh on the commercial real estate industry’s mind.
That fear is making real estate professionals be on the lookout for certain signs of strain, according to a recent study of the San Francisco Bay area by the commercial real estate services firm CBRE. Tech firms are the major mover in the market, accounting for 36 percent of office stock and 60 percent of all leasing in 2015. The study also reports an alarming growth in the number of tech firms known as “unicorns,” which are firms valued at $1 billion or more that are preparing for initial public offerings. Of the 144 known unicorn firms in the U.S., 60 of are based in the Bay area, with 40 taking up almost 5 percent of the total office occupancy in San Francisco, according to the report. Even more alarming is the slowdown of IPO capital in the past two quarters—money the start-ups rely on to survive.
Still, even though the study shows an alarming reliance on start-up firms that need venture capital, there’s not much cause for concern right now, says Colin Yasukochi, CBRE’s director of research and analysis in the Bay area.
“Even if we lost all the unicorn firms, that would only be a 5 percent increase in vacancy, and the demand is such that it would be recovered rather quickly,” he notes. “It’s true that there can’t be a market that has no cycle, but technology has become so integrated with everything we do, that if a few firms fail, there will still be companies hiring here.”
The bubble talk is premature, according to Matt Hart, senior managing director at real estate services firm Savills Studley in San Francisco. There is demand from all sectors, not just technology firms, and even the latter companies are being more careful this time around, he notes. “I was here during the dot.com days, those days were pretty crazy,” he says. “The start-ups today are being more cautious with their real estate.”
The established tech companies are being more efficient with the space they take and and sub-lease the excess square footage, according to Hart. Not only does this provide an additional income stream for the firms, it also gives start-ups a foot in the door. The rents are about the same as those obtained through direct leases, but not having to pay the build-out costs in today’s market can be a game-changer, Hart says.
“It’s not the rent, it’s the capital costs of opening an office, the cost of construction has skyrocketed,” he notes. “The subleasing helps because then the start-up doesn’t have to put so much into the real estate. The only future problem is, will the demand still be there when the sublease term runs out, or will the main tech tenant be left holding the bag?”
Article source: http://nreionline.com/office/do-tech-unicorns-pose-threat-san-francisco-s-office-market
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