California is a popular place to live in general, but within the state, there are a few cities worth highlighting like San Francisco. At the moment, people who love luxury and real estate agents who want to sell expensive homes see the Bay Area as a gold mine.
San Francisco Real Estate Market
There are many reasons why the price of San Francisco real estate market is so high, and this piece will point out some of those reasons:
* Good Jobs:
One reason the value of San Francisco real estate is high deals with the number of good jobs in the Bay Area. The reality is San Francisco is home to the world’s most sought after tech jobs, creating employment for thousands of highly skilled people.
The salaries of these individuals are very high, which means many residents of this city have money to burn. People who earn a good salary usually want a good home. They set their sights on a modestly sized house in a decent area and set about making improvements to it. These high earners invest heavily in their seemingly humble abode, ordering custom cabinets in San Francisco and hiring a contractor to update the facade. The result is an already pricy piece of property going further up in value.
When this process occurs in neighborhoods originally meant for middle-income families, those families eventually get priced out. This drives competition for the affordable properties that remain, which are few and far between.
* Controlled Housing:
People want to live here because there are good jobs, but that is not the only reason the real estate market is seeing such high prices. The other reason this is happening in the Bay Area is that residential zoning is tightly controlled. When new standalone housing gets built in San Francisco, it’s almost always luxury-grade and consequently only accessible to the very wealthy.
Flooding a particular area with houses to not only meet the demand but to surpass it would certainly make the housing market a little more competitive. Yet this is not happening in San Francisco. This allows prices of homes to go up because the demand is certainly not subsiding.
* Investing is Scary:
As many readers already know, the Great Recession happened around the time. Tech companies started to see some success in the Bay Area. Part of the reason many investors did not build new homes even though the demand. Because people were afraid of the housing market. This is an understandable fear at the time, but things have been getting better.
Still, investors are not really taking a chance on the area for other reasons. For one, the city has passed very strong tenant rights. Which puts landlords at a disadvantage with most disputes.
It should also be pointed out that renters in the city have a lot of protections. Which includes rent control to keep costs affordable. Investors sometimes lower prices because they rent to more people at cheaper prices. This can bring down the property value in a particular area. Which is something real estate agents do not want for San Francisco?
This does not mean you cannot become a real estate investor in this city The task is just a little more challenging, but a few investors have seen success. Hopefully, this information makes it easier for you to understand why the real estate market in San Francisco is booming and why people are flocking there.