Real Estate

Home value updates

How housing and affordability are affected by grocery stores, Millennials, and — naturally — tech


Home values grow faster if they are nearer to a Trader Joe’s or Whole Foods grocery store, according to Zillow’s new book Zillow Talk: Rewriting the Rules of Real Estate (Grand Central Publishing, 2016).

The median home value within a mile of a location of a future Whole Foods appreciates more slowly than other homes in the same city before the store opens. But soon before it opens, “the trend reverses and flips, so that after the stores’ opening dates, homes near Whole Foods appreciate more quickly than other area homes,” according to Zillow. As for homes near future Trader Joe’s, their values are at about the same rate as other homes in the city, but after the opening date, Zillow says there is an impact: “Two years after a Trader Joe’s opened, the median home within a mile of the store had appreciated 10 percentage points more than homes in the city as a whole over the previous year.”

“Like Starbucks, the stores have become an amenity in their own right — a signal to the home-buying public that the neighborhood they’re located in is desirable, perhaps up-and-coming, and definitely improving,” said Stan Humphries, Zillow’s group chief economist. “Like a self-fulfilling prophecy, the stores may actually drive home prices. Even if they open in neighborhoods where home prices have lagged those in the wider city, they start to outperform the city overall once the stores arrive.”

If your home price rises significantly, you can take out an equity loan so that you can afford to shop at Whole Foods.


Home prices in San Francisco are “overheating,” according to a new quarterly report on sustainable home prices from Fitch Ratings. The report, released in early February, notes that “home prices in the Bay Area have risen to a level unsupportable by area income.” It notes that the booming technology industry has helped push San Francisco prices to an all-time high in the third quarter of 2016, and they are now 62 percent higher than their post-recession low, back in early 2012.

Home prices here have risen more than 10 percent in the past 12 months, and Fitch calculates that San Francisco’s housing is about 16 percent overvalued. “The last time the Bay Area experienced this kind of home price growth was during the dot-com era from 1997–2000,” according to Fitch Managing Director Grant Bailey.


San Francisco’s Small Sites Program has acquired and preserved five apartment buildings whose tenants had already been served Ellis Act eviction notices. The actions protected 19 units of rental housing.

“We are fighting evictions throughout the city to make sure long-time, diverse tenants stay in their homes,” said Mayor Ed Lee. “Even as we build more affordable housing throughout our city, we must continue to do more to preserve our precious housing stock and protect existing tenants through innovative programs like this one.”


Millennials today are less likely to own a home than previous generations, and that helps make them more likely to pay higher taxes — and in San Francisco, they really learn that lesson. According to a new report from SmartAsset, about 44 percent of adults under the age of 35 owned a home in 1980, but “today that rate is just 35 percent,” noting that Millennials “simply cannot afford to buy in many cities.”

It might look like lots of Millennials are lined up waiting for that commuter bus to take them to earn their six-figure salary in Silicon Valley, but that’s not the whole picture. Here in San Francisco, Millennials get higher than normal incomes but also higher than normal taxes. “San Francisco has some of the highest taxes in the United States,” SmartAsset continues. “Millennials in San Francisco have the second-highest median income in the country. For both those reasons, San Francisco Millennials pay higher taxes than those anywhere else in the U.S.”

Between paying off student loans and being unable to get the mortgage interest deduction if they don’t own (San Francisco is a mostly renter city), Millennials — though not exclusively Millennials, of course — are taking it on the chin at tax time in this city.


[W]e’ll see rents come down for both apartments and office buildings. Apartments especially. We’ve had double-digit growth for five years. It’s already slowing. Especially at the high end, it will come down.

— Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, quoted in the San Francisco Business Times

Send to a Friend Print
Real estate news tips? E-mail:[email protected]