Bay Area Home Prices Soar 16 Percent Year-over-Year
The San Francisco Bay Area is enjoying a much faster recovery than most other markets around the nation, according to a string of recent reports. San Diego-based housing data tracker DataQuick reported Wednesday that the median price for homes sold in the nine-county Bay Area in April was $610,000. That marks a 5.4 percent increase from March, and an impressive 16 percent gain from the prior April. That’s the highest the Bay Area median price has been since November 2007, just before the recession kicked in, and is just 8 percent below the the housing bubble peak of $665,000.
While rising prices and sales are always a good thing, some housing experts worry that San Francisco and the surrounding communities are weeding out the middle class. With prices soaring and inventory dissipating, affordability is on the decline as the majority of homes are only sold after bidding wars that end with the seller getting far more than he initially asked for. According to an affordability report from Trulia, households earning the Bay Area median income of just over $84,000 can only afford 14 percent of the homes on the market, by far the lowest among major markets across the country. For comparison’s sake, households earning the median in L.A. County can afford 25 percent of the homes listed.
One of the major reasons San Francisco’s housing market has recovered so well is its proximity to Silicon Valley, home to a number of major tech firms including Google, Apple and Yahoo. The growth of these and other companies has prompted a lot of hiring over the last few years, which has pumped up demand for housing in the area. Some locals have begun to voice concern, however, that a crash will undoubtedly hit the area once the companies’ hiring frenzy slows down. The question that has observers scrambling for now is when exactly that will happen.