As Silicon Valley churns out more millionaires San Francisco’s housing values rise even higher
As tech share sales mint millionaires in San Francisco and Silicon Valley, the San Jose metropolitan area is expected to be the hottest US housing market in 2018
Housing in America’s most expensive region is going to get even pricier.
For all the talk of the US tax overhaul hitting wealthy blue-state real estate, the San Francisco Bay area is set for more home-price gains. Its technology-fuelled economy and persistent housing shortage are sending values ever higher – and that may get even more pronounced as tech share sales mint millionaires in San Francisco and Silicon Valley.
“The scale of the wealth created here and the scale of the technology sector is going to outweigh the effect of the tax plan,” said Patrick Carlisle, chief market analyst with Paragon Real Estate Group in San Francisco. “The Bay Area is unique because we have companies that didn’t exist five years ago and that are now the biggest the world. There’s no place on Earth that has a similar dynamic.”
Even after a years-long boom that has already priced out many residents, the San Jose metropolitan area is expected to be the hottest US housing market in 2018, according to a report this month by Zillow that factors in home values, rents and jobs. San Francisco ranks as No 5.
The areas led Realtor.com’s list of the top US markets in January, based on listing views and the length of time homes were for sale.
The San Jose region – which includes Silicon Valley towns such as Palo Alto and Cupertino – saw the median home value soar 21 per cent last year to US$1.17 million, while inventory dropped 41 per cent to “crisis levels”, according to Zillow. In areas from Oakland to Marin County, the story is the same: too much demand and too little supply.
In San Francisco, low unemployment, at 2.2 per cent, and the expansion of large employers such as Dropbox, Facebook and Google is likely to ensure demand for housing will continue to outstrip supply