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 Home prices will keep rising as more start-ups go public or sell shares privately, generating cash for tech investors and workers, according to Carlisle. Dropbox, the San Francisco-based file-sharing company valued at US$10 billion, has filed confidentially for an initial public offering and aims to list in the first half of the year, according to people familiar with the matter. Investors led by SoftBank Group this month completed an US$8 billion purchase of stock from Uber Technologies shareholders, bringing a flush of money to early investors in the massive start-up. The Japanese conglomerate, meanwhile, is hungry for more deals. 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. The median house price in the city soared 11 per cent to a record US$1.5 million in the fourth quarter, while the average time it took to sell fell to two weeks from 22 days a year earlier, according to a Paragon report. The rapid speed of transactions came as a surprise to Tania Fowler, who in September sold the Edwardian three-storey house she grew up in. The Inner Sunset home, which sold for US$200,000 above the asking price in an all-cash deal, was on the market for two weeks. “From the time we accepted the offer to close of escrow was seven days,” Fowler said. “I used to sell real estate in the Sacramento area and had seen 20-day COEs at the height of the market bubble, but never seven days.” At the high end of the market, with prices above US$3.5 million, there’s already preparation for IPOs, said Gregg Lynn, an agent with Sotheby’s International Realty in San Francisco. Several executives with hi-tech companies have hired agents at his brokerage to locate homes for them in anticipation of “liquidity events” in the near future, he said. “They want properties ready to go,” Lynn said. Such demand is expected to outweigh the concerns that the US tax revamp will hit home prices. The new law limits deductions for state and local taxes, including property taxes, and also caps deductions on mortgage interest at loans up to US$750,000 – an amount that’s easily exceeded in the pricey Bay Area market.