Are We Wrong About San Francisco’s Lack of Housing?
San Francisco has always been different from every other city of its kind with its stunning beauty, bustling city lifestyle and vast amount of famous sightseeing spots such as Alcatraz and the Golden Gate Bridge. In recent years, the real estate market in the Bay Area has been hot with a technology boom and a wealth of foreign investors snatching up properties in the area. Because of this, many believe San Francisco now makes a name fAre We Wrong About San Francisco’s Lack of Housing?
or itself due to its lack of housing.
Home prices in San Francisco have increased by more than 100 percent in the last three years with the median property sales price hitting just over $1 million. For comparison, the median household income of those living in San Francisco is around $77,000 – not quite enough to keep up with the prices of homes.
Fewer than 10 percent of San Francisco’s households can afford to purchase a home in the area and the rest of the region is not too far behind in matching income to the prices of homes in the market, as approximately 20 percent of these households can hit the benchmark to afford these hefty mortgages. The rental market is steaming up as well – average rent reaches almost $4,000/month, which is nearly double the average rent in 2011.
San Francisco’s Lack of Housing
Typically lenders advise buyers to spend around 30 percent of their monthly income on their mortgage – homeowners in San Francisco are spending 42 percent of their monthly paychecks on just their rent alone. These numbers can all seem discouraging to those looking to purchase in the competitive San Francisco housing market, but the city is working on improving the housing shortage with new developments and affordable housing initiatives.
Many middle class families are moving past the city lines and into the suburban neighborhoods due to the rise in housing prices and the lack of housing. As technology investment that was once concentrated in Silicon Valley continues to grow in SF, the population in the area will continue to grow.
Many believe that city laws concerning housing development and construction do not meet the urgent need of the housing market today. The city plans to help this housing shortage issue with the Affordable Housing Bonus Program, which promises more relaxed limits on height and density restrictions as well as a requirement of 20 percent of new housing units to be marketed as affordable units.
It is crucial to the housing market in San Francisco that the city continues with increased developments to overcome the housing shortage. It is also important for citizens to be involved locally to determine how to reconcile plans with new construction and improving affordability.
A huge increase in development and construction is continuing to solve the housing shortage issue. Developments in the past few years have overseen dramatic transformations of neighborhoods like South Beach, Mission, SOMA and Mission Bay.
If you’re moving to the area, let our team of real estate professionals help you find the home that best suits your needs. With our finger on the pulse of the market, we can alert you to homes as they become available. Connect today to learn more.