Guest Post By Hannah Goodman of Trulia
San Francisco— the beautiful, foggy city at the forefront of an economic and technological boom. Flocks of people move to the city every day for its access to an ever growing roster of tech companies. The influx of people has created a high demand for housing, raising rental and buying prices to a premium. So much so, that those considering a move to, or within, San Francisco should be prepared to pay an average of $4,025 dollars a month in rent, or an average of $1.1 million to purchase a home.
According to Trulia in their recent study, “In the City by the Bay, You’ll Pay a Million Bucks for a Home”, the number of million dollar homes in San Francisco has doubled since 2010. The study provides an in-depth breakdown of San Francisco’s neighborhoods, ranking them from 1-10 based on their share of San Francisco’s million dollar market and the percentage point change from 2010-2015.
At the top of the list are Bernal Heights, Central Sunset and Parkside. In 2010 the average price of a home in Bernal Heights was about $730,000. Currently the average price of a home in Bernal Heights is $1,191,259. The neighborhood’s share of million dollar homes rose from 1.15 percent to 5.46 percent over the five year span, a 4.3 percent change. Those numbers put Bernal Heights at the top of Trulia’s list as the neighborhood with the largest increase in share of million dollar homes.
Central Sunset ranked second with a total change of 3.65 percent. The area had a 0.71 percent share of San Francisco’s million dollar homes in 2010 and a 4.36 percent in 2015. In 2010 the average price of a home in Central Sunset was $817,000. That number jumped to $1,486,500 in 2015. Parkside came in third with a 3.46 percent change, and average prices of $581,000 in 2010 and $1,390,000 in 2015.
Five years ago, the neighborhoods with the highest share of million dollar homes were Pacific Heights, Noe Valley and Russian Hill. While those neighborhoods are still, by no means, inexpensive, Bernal Heights, Central Sunset and Parkside ranked higher because those areas have seen a more exponential growth trend over the last five years.
So why have those particular areas seen such large growth? Trulia economist, Ralph McLaughlin, credits the high demand for housing and proximity to inexpensive areas.
“In 2010, Bernal Heights didn’t have many $1 million dollar homes, but was in very close proximity to Noe Valley, Potrero Hill, and the Mission, which did. So, as demand increased from 2010-2015, million dollar homes spilled over into other “bargain” neighborhoods that were close by, such as Bernal Heights. A similar phenomenon occurred in the Central and Outer Sunset, which were in close proximity to other million dollar neighborhoods in 2010 (Forest Hill and West Portal).”
As one of the fastest growing and most expensive markets in the nation, San Francisco’s real estate values are skyrocketing. If the upwards trend continues at this rate, who knows where San Francisco housing prices will be in the next few years!