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Is SF Bay Area Real Estate Undervalued?

June 22, 2022

Hi friends,

Does this sound crazy?

Bay Area homes are undervalued. Maybe.

At least, that’s what big-time analysis firm CoreLogic says in this ominously titled Fortune article:

Keep an eye on these ‘overvalued’ housing markets as the housing boom implodes

It's an interesting look at which of America’s housing markets may be over- or undervalued, and where home prices could fall this year. On both counts, the picture painted of SF Bay Area real estate is relatively rosy: Undervalued, with a low chance of prices falling.

Another analysis—this one by Moody’s—reports SF-Berkeley-Oakland homes as overvalued by 6%. Less optimistic, but still downright quaint compared to ludicrously hot markets like Austin, TX (41% overvalued), or Boise, ID (73%).

Ultimately, it comes down to what homes cost vs. what folks are willing and able to pay. In the last year, national home price growth (+20.6%) has far outpaced income growth (+4.8%). That alone is not sustainable, to say nothing of significantly higher mortgage rates.

In the SF Bay Area, an abundance of wealth, good-paying jobs, and less “pandemic relocation / home buying mania” has helped to moderate the market, but we are seeing some cooling effects here too.

Realistically, some local real estate may be undervalued, and some may be overvalued. Generalizations like those in the articles above, even from two of the biggest research firms around, only go so far.

In this complicated market, experience and tenure matter. Over 20 plus years, we’ve navigated the undulating and sometimes rocking waves of SF real estate. It’s not our first rodeo as top San Francisco Realtors, and we are here to guide you.

As always, the best time to buy a home, or sell a home or both is when it makes sense for you. If you have a question, or if you or someone you know can benefit from trusted real estate advice, please don't hesitate to reach out.

We are happy and grateful to be of service!

Warmly,
The Vivre Real Estate team


OFF THE PRESSES

Bay Area Real Estate News & Culture

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SF Chronicle: Data shows home prices still skyrocketing in migration hotspots – but not in this CA city

NYT: A House With ‘Good Bones’? ‘Original Details’? It Could Be a Complete Wreck.


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