San Francisco’s Million Dollar Homes Spur Condo Surge – Bloomberg 06-26-13

Salient to Investors:

California Association of Realtors says the median price for a single-family home sold in San Francisco was $947,260 in May, up 32 percent from a year earlier, and estimates this will surpass $1 million this year. Condo prices rose 27 percent in May from a year earlier to a median $881,020 and versus the peak in the previous cycle of $811,170 in March 2008. Leslie Appleton-Young says the county is the only one in California to set a new high.

Alan Mark at Mark Co. said there is an improved economy, consumer confidence and extreme lack of inventory, and buyers have been making down payments of 35 percent in a market awash in wealth from tech workers and overseas investors.

Bankrate says banks are offering jumbo mortgages at interest rates only marginally above those for conforming loans – 4.67 percent on average for a 30-yr fixed-rate jumbo versus 4.51 percent for a non-jumbo.

San Francisco is benefiting from a broad-based economic boom that has spurred job growth in technology, health-care and hospitality industries – area jobless rate was 5 percent in May versus 6.9 percent a year earlier.

San Francisco area had the biggest gain in home prices of 20 US cities in the S&P/Case-Shiller index. Single-family house prices in April jumped 24 percent from a year earlier, versus gains of 12 percent of the broader gauge.

Andrew LePage at DataQuick said condo projects account for as much as 80 percent of new home sales in the city, while other California cities have more land to build detached houses.

4,200 rental apartments are under construction in San Francisco, and RealFacts says apartment rents rose 7.6 percent in Q1 from a year earlier to a record $1,888 average in the metro area.

Debra Christoffers at Zephyr Real Estate said demand for San Francisco homes is equally as intense as at the previous peak, but there was more inventory back then.

The San Francisco Association of Realtors said more than half of city homes purchased in Q1 sold for at least 5 percent over list prices, and 117 went for 20 percent or more.

Read the full article at http://www.bloomberg.com/news/2013-06-26/san-francisco-s-million-dollar-homes-spur-condo-surge.html

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