Real Estate Today
Where are we headed? The long-term view
Last month’s column showed our actual results for 2008 and 2009 fourth-quarter real estate sales. Now it’s time to look in the crystal ball and figure out where we’re going long term.
Although the present market is picking up, we have been in the doldrums for more than a little while. The long-term future looks great due to a combination of several things. If your goal is to make a killing in the market by buying today and selling in two years, you best stay on the sidelines for now. However, if you’re planning on living in your newly purchased home for 7 to 10-plus years, the time to buy is now!
Let’s take a look at some of the variables in play here.
Demand: San Francisco will continue to be a nationwide and international destination point. Recently, I’ve seen more than the usual amount of Bostonians and New Yorkers relocating here. I guess they’re tired of shoveling snow. Folks from Asia and Europe continue to move to San Francisco in droves. Some are simply wealthy individuals who want to have a second home here and others are relocating here for the long haul. The bulk of foreign nationals want to live in San Francisco. They prefer San Francisco to our surrounding counties.
Additionally, more baby boomers are considering downsizing, and with their empty nests in the suburbs, they are craving a return to the city life. If they didn’t start in San Francisco, they will now have the opportunity for a new and exciting adventure into the city. Twenty to thirty years of equity in their homes makes this transition relatively easy.
Also, the advent of Generation Y buyers is another key to continued demand. These children of the baby boom generation are entering the market and will be purchasing homes. If they can come up with a down payment for a mortgage, they buy. Parents, when able, are willing to assist their Gen Y kids financially. Down payment accumulation is key for these buyers, who also happen to be very socially conscious and green. We seem to be that way here in the San Francisco!
Lastly, San Francisco companies will be creating many jobs in the future. Biotechnology, health care, technology, and gaming software industries will continue to grow.
Supply: Throughout the city, new construction will remain slow for the next couple of years, at which point the construction of new residential high-rise buildings (whose developers opted to not break ground during the financial meltdown) in the South of Market and South Beach neighborhoods will once again flourish. Where are developers going to build in Cow Hollow and the Marina? We have very limited space here, and height restrictions will keep the potential pool of additional housing very low. This is very bullish for our neighborhoods. New supply will remain low, and the available housing stock will be primarily through the resale process. Population trends point to an ever-growing California, and the popularity of our neighborhoods will continue. The long-term outlook for the housing market in San Francisco, specifically Cow Hollow and the Marina, is very promising.
Although the present market is picking up, we have been in the doldrums for more than a little while. The long-term future looks great due to a combination of several things. If your goal is to make a killing in the market by buying today and selling in two years, you best stay on the sidelines for now. However, if you’re planning on living in your newly purchased home for 7 to 10-plus years, the time to buy is now!
Let’s take a look at some of the variables in play here.
Demand: San Francisco will continue to be a nationwide and international destination point. Recently, I’ve seen more than the usual amount of Bostonians and New Yorkers relocating here. I guess they’re tired of shoveling snow. Folks from Asia and Europe continue to move to San Francisco in droves. Some are simply wealthy individuals who want to have a second home here and others are relocating here for the long haul. The bulk of foreign nationals want to live in San Francisco. They prefer San Francisco to our surrounding counties.
Additionally, more baby boomers are considering downsizing, and with their empty nests in the suburbs, they are craving a return to the city life. If they didn’t start in San Francisco, they will now have the opportunity for a new and exciting adventure into the city. Twenty to thirty years of equity in their homes makes this transition relatively easy.
Also, the advent of Generation Y buyers is another key to continued demand. These children of the baby boom generation are entering the market and will be purchasing homes. If they can come up with a down payment for a mortgage, they buy. Parents, when able, are willing to assist their Gen Y kids financially. Down payment accumulation is key for these buyers, who also happen to be very socially conscious and green. We seem to be that way here in the San Francisco!
Lastly, San Francisco companies will be creating many jobs in the future. Biotechnology, health care, technology, and gaming software industries will continue to grow.
Supply: Throughout the city, new construction will remain slow for the next couple of years, at which point the construction of new residential high-rise buildings (whose developers opted to not break ground during the financial meltdown) in the South of Market and South Beach neighborhoods will once again flourish. Where are developers going to build in Cow Hollow and the Marina? We have very limited space here, and height restrictions will keep the potential pool of additional housing very low. This is very bullish for our neighborhoods. New supply will remain low, and the available housing stock will be primarily through the resale process. Population trends point to an ever-growing California, and the popularity of our neighborhoods will continue. The long-term outlook for the housing market in San Francisco, specifically Cow Hollow and the Marina, is very promising.
Jim O’Neil is a Realtor for Prudential California Realty at 2200 Union Street and has lived in Cow Hollow for the past 20 years. E-mail: [email protected]
