This week, I had the privilege of listening to the indefatigable local San Francisco real estate expert, Carole Rodoni, give a talk on the state of the local San Francisco real estate market. Boy, is she sharp! The woman clearly has more experience and knowledge in her pinky finger than most of the Realtors in town! Just sayin…
Anyway, I wanted to share my favorite takeaway from her talk. Rodoni calls San Francisco an International Eco-Environment and as such, can only be compared to other comparable cities around the world. San Francisco is not Houston or even Chicago. It is New York, Beijing, London, Tokyo…
Her list of what makes a City an an International Eco-Environment reminds me of Richard Florida’s Super Star Cities prerequisites. Florida uses The Creativity Index to rank city and predict their economic success.
“The Creativity Index is a mix of four equally weighted factors: the creative class share of the workforce (column 2 shows the percentage; column 3 ranks cities accordingly); high-tech industry, using the Milken Institute’s widely accepted Tech Pole Index, which I refer to as the High-Tech Index (column 4); innovation, measured as patents per capita (column 5); and diversity, measured by the Gay Index, a reasonable proxy for an area’s openness to different kinds of people and ideas (column 6).”
Creative Class, Technology, Innovation, and Diversity are the keys to a Super Star City.
Okay, back to what makes an International Eco-Environment…Let’s see if San Francisco qualifies!
- The city must be known around the world. (I left my heart in…)
- Must have 2+ world-renowned institutions. (Cal, Stanford and UCSF Medicine, anyone?)
- Be tolerant and have cultural diversity. (Thank you for pointing this out time and again, Fox News!)
- Be a gateway to emerging economies. (Go [Far] East, young man.)
- Be within a 4-5 hours drive of recreation. (Napa, Sonoma, Carmel, Tahoe…)
- And have something unique! (Castro Nudists!)
This, my friends, is why our real estate downturn was so short and why home prices have already shot back up, in many cases, past the last peak. Case Shiller says US Home Prices are up 9.3% but San Francisco real estate is up 18.9%. Home Buyers – don’t worry. It’s the cost of money that should compel you to buy. Money is cheap, cheap, cheap. You should go borrow some and buy a home. 😉
Have a good weekend!