Resort owner Lynn Crescione and most of her neighbors are readier than ever for the whopper El Niño predicted to spread havoc along the Russian River in coming weeks. That preparation was learned the hard way, through years of pain.
Article source: http://www.sfchronicle.com/bayarea/article/Russian-River-towns-rise-from-past-disaster-to-6694580.php
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A: San Francisco and the Bay Area connect with the global economy more intensely every year. As technology expands, the world only becomes more intertwined.
More people working for international companies travel away from their home office. Thus, the complexity of economic factors challenges us to make predictions about the future of real estate.
The old philosophy of “highest and best use of land” is evident in the gentrification of once-modest neighborhoods.
Two single homes or an industrial building are being transformed into multiple-unit housing. This leads to more people sharing smaller spaces for a higher price.
Parents seeking highly rated public schools for their children will continue looking to buy in sought-after school districts. What remains unknown is if our public schools will reach a higher level of education in the coming years or if there will be a flight to the suburbs.
Transportation and commute times are elements becoming even more important in the property value equation. Will public transportation relieve it?
Healthier living and medical advancements will also increase demand for continuing care communities as people live longer.
When it’s all said and done, the demand continues to be housing, housing and more housing.
Susan Rowan,
Madison Co., (415) 342-7754, quince365@gmail.com
A: The Bay Area is renowned for its sunny climate and varied geography, as well as its diverse population and wealth of opportunities. This combination of assets makes the Bay Area one of the most desirable places to live.
Right now we find ourselves three years into one of the greatest real estate booms the Bay Area has ever seen. This upswing is fueled by multiple sources. People around the world are chasing high-paying jobs, international investors are seeking a safe harbor for their funds, and hedge funds continue to acquire large percentages of our rental housing. Oh, and did I mention we currently have the lowest interest rates in U.S. history?
During boom times, people tend to take greater risks, thinking that the party will never end. Whether that means acquiring assets at inflated values or taking on more debt, we must be cautious not to be excessive. While we have yet to see signs of a slowdown, if there is one thing my economics background has taught me, it is that periods of rapid growth and great optimism are often followed by a strong reversal.
No one knows what the future has in store. The Bay Area will very likely continue to be a great place to live. Times may be good now for Bay Area homeowners; however, we should not lose sight of the alternatives.
Devin Ratoosh,
Marvin Gardens Berkeley,
(510) 848-8888, devin@ratoosh.com
A:
The forecast for 2016 Bay Area real estate market continues to be strong. The Bay Area is ranked as one of the most desirable areas to call home in the country. The San Francisco Bay Area offers a rich, diverse culture and excellent job opportunities. Throw in the booming high-tech industry and the market shows no signs of slowing.
Predictions claim we will continue to see demand outweigh supply through 2016. Home prices are predicted to rise by 5 percent or more in that time.
All indications are that the Federal Reserve feels it is time to raise interest rates, and this will affect some buyers’ ability to purchase a home. No one knows for certain how much rates will rise or when, but predictions suggest that they could rise anywhere from a half or whole percent. If a homeowner has been on the fence about selling their home, now would be the time to decide.
Lisa Lange,
Coldwell Banker,
(415) 464-3318, lisalange@coldwellbanker.com;
Kathleen Daly,
Coldwell Banker,
(415) 925-3205,
kdaly@cbnorcal.com.
Article source: http://www.sfgate.com/realestate/article/Sound-Off-Laying-out-the-benefits-and-drawbacks-6692560.php
As 2015 winds down, deals continue to be made in the San Francisco Bay Area’s hot hospitality market, where hotel transactions surpassed 2014 levels before the mid-year mark. CBRE Strategic Partners U.S. Value 7 fund is the latest buyer, acquiring the Sofitel San Francisco Bay in Redwood City, Calif., from Prudential Real Estate Investors and Lodging Capital.
The fund, managed by Los Angeles-based CBRE Global Investors, did not release the sellers or the amount it paid for the 421-room, full-service hotel. The Silicon Valley Business Journal, citing public records, reported the price was $154.5 million, or about $367,000 per room. The business publication noted PREI and its joint venture partner, Lodging Capital, purchased the eight-story hotel for $92.5 million in 2012.
“San Francisco has been one of the best performing metro economies in the country in this recovery,” Vance Maddocks, president of CBRE Strategic Partners U.S., said in a prepared statement. “Furthermore, Bay Area hotels have performed well since the recession, and the Sofitel is a premier asset in a top-tier market that has a limited supply of full-service hotels in the area.”
Built in 1987, the AAA Four Diamond hotel is located at 223 Twin Dolphin Drive, adjacent to Highway 101. The hotel is within close proximity to employment hubs in Silicon Valley and San Francisco as well as San Francisco International Airport. It has over 20,000 square feet of meeting space that attract corporate business and weddings. Amenities include a full-service restaurant, fitness center, outdoor pool and event patio.
The previous owners reportedly invested at least $9 million in renovations but CBRE Strategic Partners U.S. is “exploring options to upgrade sleeping rooms as well as create additional meeting/event space and sleeping rooms,” according to a news release. The firm also plans to expand food and beverage service as part of its value-added strategy.
San Francisco is a focus market for the fund, according to Maddocks. This is the fund’s second hotel acquisition and third for the fund series. The fund was closed to new investors in July with more than $1.3 billion of equity. It is expected to have more than $3.3 billion in buying power, including leverage. The fund has already invested 75 percent, or $2.5 billion in office, hotel and multifamily assets.
The global real estate investment management firm had $86 billion in assets under management worldwide as of Sept. 30. Its Strategic Partners U.S. program has raised at least $7.2 billion in equity in ten funds in 15 years.
Other investors have also been active in the Bay Area’s hospitality market with several high-profile deals pushing the transaction volume past $1 billion early in the year, according to JLL’s San Francisco Lodging Market Snapshot from its Hotels Hospitality Group.
“Transaction volume through mid-May 2015 has been exceptional with over $1 billion in hotel acquisitions due to blockbuster deals such as the sale of the Mandarin Oriental San Francisco for $1 million per key. Transaction activity has already surpassed last year’s level of $900 million less than halfway through the year,” the report stated.
The JLL report also noted the lodging market had achieved double-digit RevPAR growth during each of the last four consecutive years and was on track to make it a fifth consecutive year.
Other key hotel deals this year included the November sale of the Fairmont San Francisco to Mirae Asset Global Investments for $450 million.
Article source: https://www.cpexecutive.com/post/cbre-global-investors-makes-sf-bay-area-buy/
A residential developer has walked away from an agreement to pay $165 million for a key Transbay high-rise site, money that is needed to finance the first phase of the $2.1 billion transit center at First and Mission streets.
Article source: http://www.sfchronicle.com/bayarea/article/Developer-pulls-out-of-165-million-Transbay-deal-6690319.php
Just in case you’ve forgotten during the recent go-go market, a housing bubble is when prices go up due to demand and speculation. At some point, demand decreases or stalls as supply increases due to the aforementioned speculators. At that point, the bubble bursts and prices drop.
Zillow Chief Economist Svenja Gudell told the SFBT: “A handful of markets—especially the Bay Area—are very hot right now, and it’s possible home values may actually begin to fall somewhat in these places as more residents are priced out amidst rising affordability concerns, especially when interest rates rise. Whether those local conditions constitute a ‘bubble’ is up for debate, even among economists.”
She tempered the news by adding that she thought that there was not real danger of a “severe crash.”
Just yesterday, we reported that the median home price in SF was holding steady at $1.3 million and condos had seen a recent rise in median price to $1.25.
· It’s official: San Francisco’s housing market is in a bubble [SFBT]
· Housing Bubble [Investopedia]
· San Francisco’s Median House Price Holds Strong at $1.3M [Official Site]
Article source: http://sf.curbed.com/archives/2015/12/09/sf_real_estate_forecast_bubble_bubble_toil_and_trouble.php
