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Rugby World Cup Sevens is Almost Here

San Francisco has hosted the America’s Cup, multiple World Series and the Super Bowl. This summer, the City by the Bay will be the first U.S. destination to host the Rugby World Cup Sevens.

Another Championship Event Comes to San Francisco

From July 20-22, 2018, the best rugby players from around the world will compete at iconic AT&T Park for their next global championship. Twenty-four men’s and 16 women’s teams will come to San Francisco to compete for the cup. New Zealand’s men and women will be defending their most recent titles against Olympic gold medalists from Australia and Fiji. And it might surprise you to know that both the American men’s and women’s teams are strong competitors.

Between rabid fanbases for local teams and a climate that almost demands that residents and visitors alike get active, San Francisco is, among many other things, a sporting city. The 2018 Rugby World Cup Sevens is just the next major sporting event to come to San Francisco–and it won’t be the last.

What Is Rugby?

Wildly popular worldwide, rugby sevens is a fast-paced game that more than compares with the speed, agility and teamwork of American football and soccer. Teams are made up of seven players playing seven-minute halves. It’s a fast, physical game that promises to thrill American sports fans as well as international visitors.

While not as uniquely American as baseball or popular as the NFL, rugby actually has strong Bay Area roots. Did you know the earliest organized rugby team in San Francisco was founded in 1872? Rugby tradition carries on at nearby universities, Stanford and Cal, where big matches attract thousands of spectators.

Start Planning Your Experience

Supporters can start planning their trip to San Francisco for the Rugby World Cup Sevens now. Three-day and single-day tickets and travel packages are on sale now. For more information, visit the new Rugby World Cup Sevens 2018 website. You can also register for their newsletter. Are you a Bay Area local looking to be right in the middle of the action? Volunteers are needed to help make this event run smoothly and to make sure our international visitors have a great time in San Francisco. Visit the World Cup website for more information.

Source: SFTravel.com

This Weekend: Jun 9 – Jun 10, 2018

This weekend offers many great things to do for free and on the cheap. From the Sonoma County Hot Air Balloon Classic, to the 1st Annual Ghirardelli Square Festival & Street Fair to the San Francisco Free Folk Festival in the Mission Dist. The events below will help you fill your calendar with fun!

See even more events here.

It’s Whale Watching Season in San Francisco

When a person thinks of San Francisco, a giant International Orange-colored bridgea park spanning more than 1,000 acres or a city where contemporary art and culture collide often come to mind. While these mainstays never lose their luster, the reasons to visit San Francisco are even more numerous. Where most visitors go while here might surprise you.

Based on data collected from visitors, here are the top 20 attractions:

  1. PIER 39: From amazing views and a sea of sea lions to chowder bread bowls and California wines, your visit to San Francisco starts at PIER 39. PIER 39—the most visited destination in San Francisco—offers two levels of dining, entertainment, shopping and attractions, all surrounded by unbeatable views of the city and the bay. Located along the historic San Francisco waterfront, PIER 39’s location provides the picture perfect backdrop for postcard views of the Golden Gate and Bay Bridges, Alcatraz, Angel Island and the famous city skyline. Aquarium of the Bay* at the entrance of The PIER, offers an astonishing view of life teeming under the surface of San Francisco Bay. Be treated to an unforgettable San Francisco experience and discover why a visit to San Francisco starts at The PIER. PIER 39 is located in San Francisco’s Fisherman’s Wharf, at Beach Street and The Embarcadero. Parking is conveniently available in the PIER 39 Garage located directly across from the Entrance Plaza.
  2. Golden Gate Bridge: Once called “the bridge that couldn’t be built,” today it is one the seven wonders of the modern world. This magnificent bridge, perhaps San Francisco’s most famous landmark, opened in 1937 after a four-year struggle against relentless winds, fog, rocks and treacherous tides. Spanning 1.7 miles from San Francisco to the Marin headlands, the bridge’s sidewalks are open during the day to pedestrians including wheelchair users and bicyclists.
  3. Golden Gate Park: One of the largest urban parks in the world, Golden Gate Park stretches for three miles on the western edge of San Francisco. There’s not a single “Keep Off the Grass” sign and its 1,017 acres are a tonic for mind and body. Two major museums, splendid gardens and facilities for more than 20 sports confirm that this is a playground in every sense of the word. Among the ever-evolving attractions located in the park are the California Academy of Sciences, the de Young Museum, the San Francisco Botanical Gardens, the Conservatory of Flowers and the Koret Children’s Quarter.
  4. Lombard Street: Often called the “crookedest” street in the world, this scenic road on Russian Hill features tight turns, fragrant gardens and beautiful views of the bay, Alcatraz, and Coit Tower.
  5. Alcatraz Island: Alcatraz was the site of the first lighthouse in the Western United States but became a federal penitentiary from 1934-1963, housing famous convicts such as Al Capone and George “Machine Gun” Kelly. Now, this once infamous prison island is part of the Bay Area’s 80,000-acre Golden Gate National Recreation Area. Located one-and-a-half miles from Fisherman’s Wharf, Alcatraz is one of the city’s most popular attractions. A visit to the island includes a tour of the cell house where visitors can see where the prisoners lived.
  6. California Academy of Sciences:* Home to an aquarium, planetarium, natural history museum, and world-class research and education programs, the California Academy of Sciences is one of San Francisco’s must-see destinations. From the splashing penguins in African Hall to the wildflowers on the roof, the building is bursting with life. A four-story living rainforest and awe-inspiring coral reef ecosystem will delight visitors of all ages, while immersive planetarium shows will transport audiences through space and time for a new perspective on our planet. Dynamic daily programs—from penguin feedings to coral reef dives – offer a wealth of opportunities to dive deeper. Available with San Francisco CityPASS.
  7. The de Young Museum: Located in San Francisco’s Golden Gate Park, the de Young showcases American art from the 17th through 21st centuries, modern and contemporary art, photography, international textiles and costumes, and art from Africa, Oceania, and the Americas. The ninth-floor Observation Level of the de Young’s Hamon Tower offers breathtaking 360-degree views of San Francisco and the Pacific Ocean.
  8. San Francisco Museum of Modern Art (SFMOMA)*: Founded in 1935 as the first West Coast museum dedicated to modern and contemporary art, a transformed SFMOMA reopened on May 14, 2016. The Snohetta-designed expansion includes 170,000 square feet of new and renovated galleries, enabling SFMOMA to display more than 32,000 modern and contemporary artworks and an entire floor dedicated solely to photography. Available with San Francisco CityPASS.
  9. The Presidio: Formerly a military post, the Presidio is now a national park site and recreational paradise featuring spectacular vistas, beautiful trails, and historic and architectural treasures. Come for a hike, a walking tour, a picnic, or to view an exhibit at the Walt Disney Family Museum, or take a stroll back in time.
  10. Yerba Buena Gardens: An award-winning public facility at the heart of San Francisco’s downtown cultural district, Yerba Buena Gardens features a children’s garden, public art, museums, a historic carousel, ice-skating and bowling centers.
  11. The Cable Car Museum: Located in the Washington-Mason powerhouse and car barn on Nob Hill, the Cable Car Museum overlooks the huge engines and winding wheels that pull the cables for San Francisco’s famous trams. It also features three antique cable cars from the 1870s, photographs, mechanical displays and a fun gift shop. Take our Cable Car 101 course.
  12. Crissy Field: This northern waterfront park in the Presidio offers spectacular views of the bay and the Golden Gate Bridge, as well as unparalleled recreational opportunities including BBQs, picnics, and beach sports. Enjoy long walks along its scenic marshes and catch glimpses of rare birds and native plants. Once housing the first air coast defense station on the West Coast, Crissy Field is also home to numerous historical buildings.
  13. Asian Art Museum: This museum is home to one of the most complete collections of Asian art in the world, with a collection spanning cultures from Turkey to India and China to the Philippines through 6,000 years. Through providing rich art experiences, the museum strives to spark connections across cultures and through time, while igniting curiosity, conversation, and creativity.
  14. The Exploratorium:* Newly renovated and now open on Pier 15 on the Embarcadero at the heart of the waterfront, the Exploratorium is a home-grown, hands-on museum igniting curiosity and inspiring creativity in people of all ages. Explore more than 600 hands-on exhibits, including 150 new experiences and enjoy breathtaking views of the city and bay in the spectacular glass-and-steel Bay Observatory.
  15. San Francisco Giants at AT&T Park: AT&T Park is the home of the 2010, 2012 and 2014 World Series Champion San Francisco Giants. Located on the city’s scenic waterfront, this classic urban ballpark is a short walk from downtown San Francisco and Moscone Center and is accessible by every means of public transit. Take a behind-the-scenes tour of AT&T Park and go places only the players and staff go including the Field, dugout, batting cage, Press Box, Suite Level and View Level! Families and people of all ages will enjoy this 90-minute excursion where one of baseball’s most historic franchises plays.
  16. Legion of Honor: Built to commemorate Californian soldiers who died in World War I, the Legion of Honor displays a collection of more than 4,000 years of ancient and European art and houses the Achenbach Foundation for Graphic Arts in a neoclassic building overlooking Lincoln Park and the Golden Gate Bridge. Multilingual tours available.
  17. Angel Island State Park: Often referred to as the “Ellis Island of the West,” the Immigration Station originally opened in 1910 and closed in 1940 as the result of a fire. During that time more than one million individuals were processed through the center. Ferry service to the island, the largest in San Francisco Bay, is available from Fisherman’s Wharf.
  18. Contemporary Jewish Museum: Located in downtown San Francisco, the Contemporary Jewish Museum presents dynamic exhibitions and educational programs, exploring contemporary perspectives on Jewish culture, history and ideas.
  19. San Francisco Symphony at Davies Symphony Hall: Founded as an orchestra for the people just five years after the 1906 earthquake, the San Francisco Symphony has offered innovative programs that provide a mix of classical and new music for more than 100 years. With performances over 200 days per year, from Mahler to pops, it’s easy to find a concert you’ll love that fits into your trip.
  20. San Francisco Zoo and Gardens: The San Francisco Zoo and Gardens is an historic treasure with 1,000 endangered and rescued animals representing 250 species on view in 100 acres of lovely, peaceful gardens nestled against the Pacific Ocean. Their mission is to connect visitors with wildlife, inspire caring for nature and advance conservation action. The Zoo offers a rich history for its guests, including educational programs, keeper talks, fun rides and exciting events for children of all ages.

Source: sftravel.com

Bay Area Market Survey: From Billionaires in Mansions to Flippers & Fixer-Uppers

The county and city appreciation percentages in the chart above were calculated by averaging changes in both median sales prices and average dollar per square foot values. We also incorporated S&P Case-Shiller SF metro area calculations based upon its algorithm breaking the market into thirds by price segment. Each city and county includes within itself a wide variety of individual real estate markets of different price segments and varying dynamics, so these percentages are broad generalities. It is impossible to know how they apply to any particular home without a specific comparative market analysis.

IMPORTANT NOTE: As with stock market (or bitcoin) performance, comparative appreciation rates in housing markets vary wildly depending on the exact start and end dates of the analysis.

Bay Area Home Value Appreciation Rates
since 2011 (the post-crash bottom of the market)

Bay Area Median Home Price Trends
since 1990

Major Factors in Bay Area Appreciation

The appreciation rate and market dynamics of each individual Bay Area market since 2011 has each been affected by a mix of different factors – to greater or lesser degrees:

1) Being at the center of the high-tech boom (San Francisco, San Mateo, Santa Clara); 2) proximity to the central counties, but with significantly lower housing costs (Alameda County and especially Oakland are prime examples): 3) being affected to an outsized degree by subprime financing and the 2008-2011 distressed-property price crash (Oakland and many outlying, less expensive areas); 4) relative affordability: in recent years, as home prices soared, the highest pressure of buyer demand moved to less costly markets within and between counties; 5) substantially increased supply due to new construction (SF condo market); 6) increases in the average size of homes sold (+13% in SF); and 6) the general national economic recovery: U.S. home prices have appreciated by about 49% since hitting bottom in 2011.

This chart illustrates the dynamics of the enormous appreciation rate in Oakland since 2011, following its drastic crash in prices during the market recession: Chart: Oakland median price changes. And this chart based on Case-Shiller data illuminates the vast differences in the magnitude of bubbles, crashes and recoveries of different home price tiers: Chart: Appreciation Trends by Price Segment.

Generally speaking, the most affluent neighborhoods, with the most expensive homes, have appreciated less on a percentage basis (but more on a dollar-increase basis) than more affordable neighborhoods – especially over the past 2-3 years. This dynamic also occurred in the latter period of the last housing boom.

There were sometimes specific local factors, such as the terrible fires in Sonoma, or the opening of the new Apple spaceship headquarters, which played roles in boosting home prices in their locales.

Bay Area Average Price per Square Foot Values

San Francisco County Median Price Trends
since 1993

Within SF, appreciation rates have diverged between houses
and condos due to classic supply and demand factors.

Many more analyses specific to San Francisco County and its neighborhood markets can be found here: San Francisco Market Report

Bay Area Median Condo Prices by County
Year-over-year changes

Condos are the distinctly more affordable home purchase option, though that is less true in San Francisco than in other counties. Indeed, overall in the city, condos sell at higher price per square foot values than houses, but, of course, average condo size is much less.

The high-tech boom has led to a considerable divergence between Bay Area and national home price appreciation rates, as illustrated in this graph based on Case-Shiller data: Long-Term Home Price Appreciation Trends

Fixer-Uppers: Median Sales Prices

Bay Area Luxury Home Markets

There are very expensive neighborhoods and enclaves throughout the Bay Area, but the fabulous creation new wealth has supercharged Silicon Valley high-end real estate sales above all others.

How much luxury home one gets for the money varies considerably between counties. On a dollar per square foot basis, the highest values are found in San Francisco luxury condos, often high-rise units with utterly spectacular views.

Bay Area Real Estate Market Dynamics

Sales by Price Segment

These next 2 charts break out house and condo sales in the 9-county Bay Area by price segment. (We roughly estimate another 10 to 12% of such home sales were not reported to MLS, and not included below.)

Respective Market Sizes

By unit sales volume, the Bay Area is utterly dominated
by Santa Clara, Alameda & Contra Costa Counties.

San Francisco & San Mateo close the gap in dollar
volume sales due to their high home prices.

The above chart tracks dollar volume sales for houses, duets, condos, co-ops, TICs and 2-4 unit residential buildings. If the sales of larger multi-unit residential buildings and commercial buildings were included, sales volumes would soar for some counties. For example, in San Francisco, 74% of all transfer taxes collected in 2017 related to property sales of $10m+, the vast majority of which were larger apartment buildings and commercial properties.

Home and Lot Sizes

As the economy recovered from the recession, people began to buy larger houses, which is one factor in increasing median home sales prices. The average size of houses sold in San Francisco increased 13% over the period, but is still far below those in Marin, and in Diablo Valley & Lamorinda in Central Contra Costa County.

Marin & Diablo Valley also have the largest median lot sizes.

Homeownership & Tenant-Occupancy Percentages

Of the 9 Bay Area counties, only San Francisco has a higher percentage of renters than of homeowners (though certain cities of other counties do as well).

On the issue of rent and eviction controls, people have a tendency to vote their own financial interests (and not according to their opinions on macro-economic housing-supply theory): Tenants for controls, and landlords and homeowners (potential landlords) generally against them. This is why strong rent control measures are typically found only in CA cities with majority tenant populations, such as SF, Oakland, Berkeley and Santa Monica. Upwardly spiraling rents, as illustrated in the below chart, has made this one of the most intense political issues of the day, to be voted on at the ballot in November.

Bay Area Rent Trends

The Bay Area has the highest rents of any metro area in the nation.

Supply, Demand & Market Seasonality

Most Bay Area markets will now start to transition from the more heated spring sales season to the less active summer season. Part of this dynamic is a marked increase in price reductions. Seasonal trends do vary by county: Sonoma, for example, has a strong second-home market which can peak in mid-summer. San Francisco and Marin typically see dramatic spikes in sales during the short autumn selling season. All markets head into big slowdowns for the mid-winter holidays, before waking up and beginning the cycle again in the new year.

Price Reductions

As the spring market ends, the major period
for listings reducing their asking prices begins.

Bay Area Population & Housing Statistics

Our report on local demographics is here: San Francisco & Bay Area Demographics. We guarantee you will learn surprising and interesting things you never knew before.

Bay Area Housing Statistics

In recent years, some counties have embraced growth in housing supply, and others have resisted it. For better or worse, no county has resisted growth more than Marin. Any way you slice it, housing supply has not come close to keeping pace with the surge in population, a major factor in our real estate markets.

According to a recent report by Turner & Townsend, San Francisco has the second highest construction costs in the world, behind only New York, and these costs continue to accelerate due to a number of factors: land and labor costs; the long planning, approval & permitting process; political opposition to growth; and affordable housing requirements.

Income, Poverty & Housing Affordability

According to the above calculations by the CA Association of Realtors, Bay Area median household income has increased by 23% since 2015, as compared to a 7% national increase (as calculated by Seeking Alpha). Among other factors, it has been reported that people moving into the Bay Area earn considerably more than those moving out.

The Bay Area high-tech boom has been one of the greatest new-wealth-creation machines in history, but many residents have not shared in its benefits, or, indeed, been negatively affected by its impact on housing costs. The Bay Area ranks third for its number of billionaires (after NYC and Hong Kong, according to Wealth-X), but, on the other hand, over a million local residents live in poverty (according to the Public Policy Institute of California). We have one of the great luxury home markets in the country, and one of the worst problems with homelessness.

Q1 2018 Housing Affordability Statistics
per the California Association of Realtors (CAR)

According to CAR, despite very significant increases in median home prices and interest rates, affordability rates ticked up a little year-over-year in most Bay Area counties due to increases in household incomes. This surprises us, but we have not been able to review all the underlying data employed in the CAR Index. CAR has not yet been able to incorporate the recent federal tax law changes into their calculations, which would presumably lower affordability rates due to new limits on the deductibility of state and local taxes (such as property taxes) and mortgage interest costs. Depending on specific financial circumstances, our, admittedly unqualified, back-of-the-envelope estimate is that this will probably mean the loss of tens of thousands of dollars in federal income tax deductions for someone, say, owning a San Francisco house at the current median sales price. (Get more qualified counsel from your accountant.)

According to National Association of Realtors calculations, the San Jose and San Francisco metro areas are the least affordable in the country, just a bit below Honolulu.

Mortgage Interest Rate Trends

Interest rates play a large role in ongoing housing costs (for those who do not pay all cash). They have risen appreciably in 2018, but so far that only seems to be motivating buyers to act more quickly before rates go higher. Still, at some point, if rates continue to rise, presumably there would be some negative impact on the market. Though considerably above the historic lows of recent years, rates are still very low by long-term standards.

Bay Area Employment Trends

One of the foundation stones of the current Bay Area economy and housing market has been the spectacular increase in employment over the last 7 years, often in extremely compensated jobs: It recently came out that the median salary at Facebook was $240,000. (On the other hand, Mark Zuckerberg made a salary of just one dollar in 2017: Hopefully, he has other sources of income.)

As with all economic trends, employment numbers can also decline suddenly and precipitately, as occurred after the dotcom bubble burst. Note: We are not making comparisons between the two high-tech booms.

Additional reading for those interested:

Report: Positive & Negative Factors in Bay Area Markets
Will the Last Person Leaving Please Turn Out the Lights
30+ Years of Bay Area Real Estate Cycles

All our reports and articles can be found here: Market Analysis & Trends

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in the Bay Area, each with its own unique dynamics. Median prices can be and often are affected by other factors besides changes in fair market value, and longer term trends are much more meaningful than short-term. It is impossible to know how median prices or general appreciation rates apply to any particular home without a specific comparative market analysis. All numbers in this report are to be considered approximate.

© 2018 Paragon Real Estate Group

San Francisco Places Locals Love in the Summertime

If you ask a San Franciscan about their favorite attractions in the city, you’d better get ready for a long conversation. There are so many to choose from. Here are just a few of our favorite places to see during your stay.

Outdoor Art

Art is all around in San Francisco, and not just in museums. Head to The Embarcadero for some of the city’s most engaging, including the 64-foot-high bow and arrow known as Cupid’s Span on the Rincon Park waterfront. Nearby artworks include a massive Richard Serra sculpture called Charlie Brown (located inside The Gap headquarters), the Vaillancourt Fountain at Embarcadero Plaza, and numerous sculptures and fountains at One Maritime Plaza. Get some fresh air at the Presidio and see Andy Goldsworthy’s nature-inspired works: SpireTree FallEarth Wall and Wood Line. And don’t think you’ve seen the best of San Francisco’s public art until you check out the multi-venue light art installations that make up Illuminate SF. Self-guided itineraries are available for download.

Stern Grove Festival

Experience San Francisco culture without spending a dime at the Stern Grove Festival, a seasonal series of outdoor concerts at Sigmund Stern Grove. Held on Sunday afternoons, the series includes a wide range of performers and genres. Past performers have included old-school pop heavyweights Kool & the Gang, the San Francisco Ballet and San Francisco Symphony, and Afro-beat stars Amadou & Mariam.

The Exploratorium

The words “quirky” and “inspiring” are often used to describe the Exploratorium, but they don’t do the place justice. The Exploratorium is just one of those places you have to experience to understand. You’ll find more than 650 hands-on exhibits geared towards fun and discovery, with highlights that include Leo Villareal’s Buckyball (two giant geodesic spheres with 4,500 lights that shine in more than 16 million colors), exhibits where kids and adults can make noise on homemade contraptions that would make Dr. Seuss jealous, and the adults-only After Dark Thursdays series.

Manufactory Food Hall

Manufactory Food Hall redefines “airport food.” Established at San Francisco International Airport (SFO), the 3,200-square-foot food hall is home to numerous renowned restaurants that make travelers feel as if they’ve taken an international voyage before even stepping onto a plane. Thai, Mexican and other global flavors can be found here.

Aquarium of the Bay and PIER 39

San Francisco’s relationship with the Pacific Ocean is a big part of what makes the city so remarkable. So it only makes sense that San Francisco would be home to a world-class aquarium. Aquarium of the Bay is home to more than 20,000 marine animals ranging from the familiar (sea lions) to the adorable (otters) to the otherworldly (jellyfish). It’s located at PIER 39, where you’ll find a huge variety of family-friendly attractions. Awaken your senses at the awe-inspiring theatrical 7D Experience and The Flyer – San Francisco, the world’s first and only flying theater attraction in 3D. Taking flight this summer, The Flyer creates an immersive experience, soaring over the biggest attractions and landmarks of San Francisco and the surrounding Bay Area. See the sea aboard the Blue & Gold FleetAdventure Cat and Bay Voyager; exercise your legs (and sense of adventure) with Blazing Saddles Bike Rentals & Tours, and have an a-maze-ing time at Magowan’s Infinite Mirror Maze.

The Presidio Trails

Twenty-four miles of trails wind through the landscape of the Presidio, perfect for a getaway in the heart of San Francisco. Embark on a self-guided hike through the hills, starting at the Tennessee Hollow Watershed Walk; guides are available for download. On the second Saturday of each month, you can take a three-mile docent-led tour to see nature sculptures made by revered installation artist Andy Goldsworthy. There’s also the Juan Bautista de Anza National Historic Trail, which commemorates the military commander who founded the Presidio and actually guides visitors along the same trail taken by de Anza and his men. After you’ve worked up an appetite hiking, take a rest on a blanket for the Presidio Picnic, an enormous public gathering of friends and families on the Main Parade Ground, featuring food and drink vendors, lawn games, live music and more. It takes place on Sundays from spring through fall.

Source: SFTravel.com

3 SF Neighborhoods You Must Visit this Summer

Each of San Francisco’s neighborhoods has its own distinct culture and charm. The diversity of the city can be experienced in the rich Italian heritage of North Beach, the delicious izakayas and festivals of Japantown, and San Francisco’s iconic Chinatown, the oldest and one of the largest in the United States. There are so many things to do, see and eat this summer that it can be difficult to narrow down where to go. Be sure not to miss these three neighborhoods.

The Castro

The liveliest time of year to visit the Castro is summer. One of the largest gay pride festivals in the world, San Francisco’s homegrown version explodes June 23-24 with rainbow flags, visiting revelers and fabulous events. Everyone is welcome to experience the two-day bash, featuring live music and a massive parade down Market Street. But even if it you can’t make it in June, the Castro and nearby Noe Valley offer plenty of attractions. Grab upscale tavern food and craft cocktails at Finn Town or hit up the delicious Indian buffet at Clay Oven. Starting on the Castro’s eponymous main drag, visit the Castro Theatre. Built in 1922, this ornate movie palace features a Mighty Wurlitzer-playing organist before every show. Continue on to pick up souvenirs and maybe a tiara or two at Cliff’s Variety. Founded in 1936 this emporium of all things wonderful has been dubbed “the best neighborhood store anywhere.” For more history and fun, consider Urban Hiker SFwhose Urban Jungles hike begins at the Castro Theatre and goes to Twin Peaks (and back) in three short hours, or a guided tour with Wild SF Walking Tours.

Golden Gate Park

Whether you want to stroll among spring blooms, enjoy a scenic summer picnic, play a round of golf or visit world-class museums, Golden Gate Park is a must-see. This green oasis in the heart of the city features the de Young Museum and the California Academy of Sciences, which includes a planetarium, aquarium, rainforest and more under one plant-covered roof. Flower lovers should head to the San Francisco Botanical Garden and the historic Conservatory of Flowers. The park’s far west is home to the Polo Field sporting green, where every August the hugely popular Outside Lands Festival (Aug. 10-12), featuring top performers, occurs.

The Mission

Named for the Mission Dolores built in 1776, San Francisco’s oldest neighborhood may also be its most of-the-moment. From diverse restaurants like Flour and WaterCentral KitchenLolinda and Lazy Bear to hot night spots such as Foreign CinemaThe Chapel and Urban Putt, you’ll definitely want to add the Mission District to your itinerary. Allow yourself plenty of time to walk up and down Valencia Street and 24th Street, two of the Mission’s busiest thoroughfares, to explore the neighborhood’s vibrant murals and local shops. On a hot summer day, stop at Humphry Slocombe for artisanal ice cream made with ultra-premium ingredients. For a unique cultural experience, exhibitions featuring local and world-renowned artists can be found at the Mission Cultural Center for Latino Arts.

For more things to do, see or eat in San Francisco neighborhoods, click here.

Source: SFTravel.com

Affordability & the Cost of Housing in the SF Bay Area

The California Association of Realtors recently released its Housing Affordability Index (HAI) for the 1st quarter of 2018, which measures the percentage of households that can afford to buy the median priced single family dwelling (house).

In this analysis, affordability is affected by 3 major factors: county median house price, mortgage interest rates, and the distribution of household incomes within the county. (Housing Affordability Index Methodology). The HAI uses house prices exclusively and if condos were included in the calculation, median home prices would decline, affordability would increase and income requirements and PITI costs would be reduced as well. (SF now has more condo sales than house sales, but that is not the case in other Bay Area counties.)

If the HAI Index incorporates changes to the federal tax code (effective 1/1/18) limiting the deductibility of interest expenses and property taxes, it will presumably have a negative effect on affordability percentages in 2018. However, as of Q1 2018, the CAR Index has not yet been able to adjust their calculations for these changes.

By definition, half the homes sold in any given county were at prices below the median sales price, i.e. there were numerous homes that were more affordable than the median prices used in this analysis. However, any way one slices it, the Bay Area has one of the most expensive – if not the most expensive – and least affordable housing markets in the country. That impacts our society and economy in a number of important ways.

Since the real significance of many of these charts is in the longer term trends, we’ve only updated some of the charts below in this report with Q1 2018 data: Q1 median home prices, income required to purchase a median priced house, PITI costs, and county affordability percentages.

Link to our Survey of Bay Area County Markets, Trends & Demographics
Positive & Negative Factors in SF Bay Area Real Estate
Link to our Main Reports Page

Long-term Bay Area Housing Affordability Trends

Affordability Percentage by Bay Area County

Note that extremely low affordability readings converged across Bay Area counties at the top of the bubble in 2006-2007. So far, there has not been a similar convergence in our current market, though affordability is generally dropping as prices increase.

Having dropped approximately 40% from 2007 to mid-2016, extremely low interest rates have subsidized increasing home prices to a large degree in recent years – but they’ve begun to rise significantly in 2018.

San Francisco is still above its all-time affordability low of 8%, last reached in Q3 2007 (even though its median house price has increased more than 50% during that period). Other Bay Area counties (except for Silicon Valley) have appreciably higher affordability percentages, for the time being. Generally speaking, as one moves farther away from the heart of the high-tech boom, San Francisco and Silicon Valley, affordability increases.

Monthly Ownership Cost at Median Sales Price

Minimum Qualifying Income to Buy Median Priced House
Assumes 20% down payment and including principal, interest,
property tax and insurance costs.

Bay Area Median House Prices

San Francisco-Only Median House Price Appreciation
by Quarter since 2012

Before the high-tech boom, Marin, a famously affluent county for long time, had the highest median house price. But the high-tech boom accelerated median home prices in San Francisco and San Mateo faster and higher.

Additional chart: Median condo sales prices by county

San Francisco has a much larger and more expensive condo market than other local counties, and is the only county with a very substantial luxury condo market – one that is growing significantly with recent new-condo project construction.

U.S. Metro Area Housing Affordability
by the National Association of Realtors

This national affordability chart above employs a different methodology than the CA county charts above: The graphed chart values (percentages) have totally different meanings. The two metro areas at the bottom of the rankings make up 7 counties around the Bay Area.

Mortgage Interest Rates since 1981

Short-Term Changes in Mortgage Interest Rates

Interest rates play an enormous role in affordability via ongoing monthly housing costs, and interest rates, after their recent post-election jump are about 35% lower than in 2007. To a large degree this has subsidized the increase in home prices for many home buyers. It is famously difficult to predict interest rate movements, though there is general agreement. Any substantial increase in interest rates would severely negatively impact already low housing affordability rates.

Income, Affluence & Poverty

Santa Clara, San Mateo and Marin Counties have the highest median household (HH) income in the Bay Area. Though the median HH income figures of these 3 counties are almost double the national figure, their median house prices are 4 to 5 times higher, an indication that income dollars can go a lot farther in other parts of the country than they do here. Indeed an income that in other places puts you close to the top of the local register of affluence, living grandly in a 6-bedroom mansion, in the Bay Area might qualify you as perhaps slightly-upper-middle class, living in an attractive but unostentatious, moderate-sized home that costs twice what the mansion did (though, this being the Bay Area, you are probably still driving a very expensive car).

On the other hand, you live in one of the most beautiful, highly educated, culturally rich, economically dynamic, and open-minded metropolitan areas in the world.

Behind median HH incomes, each county also has enclaves of both extreme wealth and poverty within its borders.

Very generally speaking, in the Bay Area counties, renters typically have a median household income about half that of homeowners. In San Francisco, where the majority of residents are in tenant households, that significantly reduces the overall median HH income figure. The picture of housing affordability for renters in the city is ameliorated or complicated by its strong rent control laws (which, however, don’t impact extremely high market rents for someone newly renting an apartment) .

Additional chart: Homeownership Rates by County

Additional chart: Population Demographics – Children & Residents Living Alone

San Francisco has the lowest percentage of residents under 18 of any major city in the U.S. (It is famously said that there are more dogs in the city than there are children.) It also has an extremely high percentage of residents who live in single-person households – 39% – which is a further factor depressing median household income below markets with similar housing costs.

The Bay Area has approximately 2.8 million households. Of those, approximately 124,000 households have incomes of $500,000 and above, which would generally be considered to place them in the top 1% in the country by annual income. At 7.5%, Marin has the highest percentage of top 1% households, followed by San Mateo at 6.2%. With approximately 38,000 top 1% households, Santa Clara, the Bay Area’s most populous county, has by far the largest number of these very affluent households, while San Francisco has about 22,000.

It should be noted that besides high incomes per se, another factor in the Bay Area housing boom of recent years has been the stupendous generation of trillions of dollars in brand new wealth from soaring high-tech stock market values, stock options and IPOs. Thousands of sudden new millionaires, as well as many more who didn’t quite hit that level, supercharged real estate markets (especially those in the heart of the high-tech boom) as these newly affluent residents looked to buy their first homes, perhaps with all cash, or upgrade from existing ones. That is something not seen in most other areas of the country, certainly not to the degree experienced locally, and is a dynamic outside typical affordability calculations. This increase in new wealth has slowed or even declined in the past 12 months as the high-tech boom has cooled (temporarily or not, as time will tell). Still, there are dozens of local private companies, usually start-ups, some of them very large – such as Uber, Airbnb and Palantir – which are considered to be in the possible-IPO pipeline. If the IPO climate improves and successful IPOs follow, a new surge of newly affluent home buyers may follow.

Additional chart: Bay Area Populations by County

A look at two very different income segments in the Bay Area, those households making less than $35,000 and those making more than $200,000. The $35,000 threshold is not an ironclad definition of poverty, especially since housing costs (by area, and whether market rate, subsidized or rent-controlled), household sizes and personal circumstances vary widely, though it is clearly difficult for most area families trying to live on that income. At over 25%, San Francisco has the highest percentage of households with incomes under $35,000 and, at 22%, Marin has the highest percentage making $200,000 and above.

Amid all the staggering affluence in the Bay Area, and huge amounts of new wealth generated by our recent high-tech boom, very significant percentages of the population still live in poverty, especially if our extremely high housing costs are factored into the calculation. (The above chart calculates poverty rates by different criteria, the higher one factoring in local costs of living.) The economic boom has helped them if it resulted in new, better paying jobs, unfortunately not as common a phenomenon as one would wish for the least affluent. It hurt them, sometimes harshly, if their housing costs escalated with the increase in market rates.

Longer-Term Trends in Prices and Rents
The same economic and demographic forces have been putting
pressure on both home prices and apartment rents.
 

Bay Area Median House Prices since 1990

If one looks at charts graphing affordability percentages, home prices, market rents, hiring/employment trends and to some degree even stock market trends, one sees how often major economic indicators move up or down in parallel.

Monthly Rental Housing Costs

The recent economic boom has added approximately 600,000 new jobs in the Bay Area over the past 6 years, with about 100,000 in San Francisco alone – with a corresponding surge in county populations. Most new arrivals look to rent before considering the possibility of buying. The affordability challenges for renters (unless ameliorated by rent control or subsidized rates) has probably been even greater than that for buyers, since renters don’t benefit from any significant tax benefits, from the extremely low, long-term interest rates, or by home-price appreciation trends increasing the value of their homes (and their net worth). In fact, housing-price appreciation usually only increases rents without any corresponding financial advantage to the tenant. Rents in the city have been plateauing in recent quarters and may even be beginning to decline as the hiring frenzy has slowed and an influx of new apartment buildings have come onto the market – but they are still the highest in the country.

Bay Area Rent Report

Affordable Housing Stock & Construction in San Francisco

Additional Chart: Affordable Housing Construction Trends in San Francisco

There may be no bigger political and social issue in San Francisco right now than the supply (or lack) of affordable housing: Battles are being fought, continuously and furiously, in the Board of Supervisors, at the ballot box and the Planning Department by a wide variety of highly-committed interests, from tenants’ rights and neighborhood groups to anti-growth factions and developers (to name a few). It is an extremely complicated and difficult-to-resolve issue, especially exacerbated by nimby-ism and the high cost of construction in the city. SPUR, a local non-profit dedicated to Bay Area civic planning policy, estimated in 2014 that the cost to build an 800 square foot, below-market-rate unit in a 100-unit project in San Francisco was $469,800 – and we have seen higher estimates as well.

This fascinating graphic above, based on SF Controller’s Office estimates from late 2013, breaks down SF housing supply by rental and ownership units, and further divides rental by those under rent control. All the units labeled supportive, deed restricted and public housing could be considered affordable housing to one degree or another, i.e. by their fundamental nature their residents are not paying and will never pay market-rate housing costs. (Units under rent control will typically go to market rate upon vacancy and re-rental, though rent increases will then be limited going forward.) Adjusted for recent construction, there are roughly 34,500 of these units out of the city total of about 382,500, or a little over 9% of housing stock. Section 8 subsidized housing would add another 9,000 units.

There are currently many thousands of affordable housing units, of all kinds, somewhere in the long-term SF Planning Department pipeline of new construction, though many of them are in giant projects like Treasure Island and Candlestick Park/Hunter’s Point, which may be decades in the building. But it is generally agreed that new supply will never come close to meeting the massive demand for affordable housing, further complicated by the question of what exactly affordable means in a city with a median home price 5 times the national median, typically well beyond the means of people such as teachers and members of the police force. One corollary of increasing affordable housing contribution requirements for developers and extremely high building costs is that developers are concentrating on building very expensive market-rate units – luxury and ultra-luxury condos and apartments – to make up the difference.

Other reports you might find interesting:

Survey of SF Bay Area Real Estate Markets

10 Factors behind the San Francisco Real Estate Market

30+ Years of San Francisco Bay Area Real Estate Cycles

San Francisco Neighborhood Affordability

All our analyses can be found here: Paragon Market Reports

These analyses were made in good faith with data from sources deemed reliable, but they may contain errors and are subject to revision. All numbers should be considered general estimates and approximations.

© 2018 Paragon Real Estate Group
 

Homeownership: “A Man Is Not a Complete Man, Unless He Owns a House”

The famous quote by Walt Whitman, “A man is not a whole and complete man, unless he owns a house and the ground it stands on,” can be used to describe homeownership in America today. The Census revealed that the percentage of homeowners in America has been steadily climbing back up since hitting a 50-year low in 2016. The homeownership rate in the first quarter of 2018 was 64.2%, higher than last year’s 63.6%.

Chief Economist, Dr. Ralph McLaughlin, in his VUE Blog gave these new homeownership numbers some context:

“The trend is clear: the homeownership rate has been ticking up for five consecutive quarters, and the number of new renter households has fallen for four consecutive quarters. Owner-occupied households grew by 1.345 million from a year ago, while the number of renters actually fell by 286,000 households.

The fact that we now have four consecutive quarters where owner households increased while renter households fell is a strong sign households are making a switch from renting to buying. This is a trend that multifamily builders, investors, and landlords should take note of.”

In a separate article comparing the rental population in America to the homeowner population, Realtor.com also concluded that the gap is now shrinking:

“The U.S. added 1.3 million owner households over the last year and lost 286,000 renter households, the fourth consecutive quarter in which the number of renter households declined from the same quarter a year earlier. That could pose challenges for apartment landlords, who are bracing this year for one of the largest infusions of new rental supply in three decades.”

America’s belief in homeownership was also evidenced in a survey conducted by Pew Research. They asked consumers “How important is homeownership to achieving the American Dream?”

The results:

  • 43% said homeownership was essential to the American Dream
  • 48% said homeownership was important to the American Dream
  • Only 9% said it was not important

Bottom Line

Homeownership has been, is, and always will be a crucial part of the American Dream.

Source: KCM.com

This Weekend: Jun 2 – Jun 3, 2018

This weekend has lots of great things to do for free and on the cheap. From the Union Street Music Festival, to the 109th Annual Cherry Festival & Parade in San Leandro to the San Francisco Housing Expo. The events below will help you fill your calendar with fun!

View even more events here.