June 2016

real estate boom would never end, but the tech go-go days may be slowing down, as home prices in the Bay Area have fallen for the first time in five years. In San Francisco County, the median price of a single family home has increased 55 percent since April 2006, ballooning from $900,442 to $1.4 million in April 2016, according to the California Association of Realtors (CAR). In Marin County, the median price has jumped from $985,072 to $1.2 million. And San Mateo County home prices have inflated from $798,387 in April 2006 to $1.3 million in April 2016. Statewide, only 34 percent of families can actually buy a home today in the Golden State, according to CAR‘s affordability index. It’s worse in San Francisco, where prices have risen so fast that only 12 percent can afford a home in Q1 2016. In Los Angeles, only 31 percent can afford to buy, while Orange County 22 percent can afford a home. Bay Area Homes Unaffordable

when San Francisco’s housing affordability index reached 8 percent. Shortly after that, prices tanked, plummeting from nearly $800,000 in May 2007 to nearly $300,000 two years later. But San Francisco incomes can’t keep pace with rising home prices. The median household income in San Francisco is $78,000, according to the Census Bureau. That means that the price-to-income ratio that historically nationwide has been 3:1 is more than 10:1 in San Francisco. To understand how tech money is transforming San Francisco’s rabid housing market, look no further than the super-charged real estate market. As technology companies have moved in — Apple, Google, Facebook, Twitter, to name a few— the influx of high-paying workers has pushed rents and home prices through the roof. Google minted 1,000 millionaires when it went public in 2004. In 2012, Facebook’s IPO created 1,000 millionaires too. Twitter added 1,600. But the San Francisco venture capitalists are starting to get nervous. Twitter is laying off people. Yahoo is for sale and

The last time affordability levels were this low was in Q3 2007,

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San Francisco Bay Area Home Prices (1990-2016)












SOURCE: California Association of Realtors


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