Bay Area Housing Market Stabilizing

LZamora30's picture

Bay Area Housing Market Stabilizing
 

Is the Bay Area really doing better than the rest of the United States in terms of housing prices? Do you think that the value of homes will rise, or is this rise as of now going to be short lived? Also, I noticed that around half of San Francisco's housing value did not change, or changed very slightly. Will San Francisco homes rise along with the rest of the Bay Area? Or is there another factor that's holding housing values in SF back?

mattgould's picture

2 things

Since this report collected data from the last year, the relatively small rise in SF homes just means there's less fluctuation going on. A very slow, steady growth is the healthiest kind of real estate market.

The other thing worth noting regarding the map shown in the article is that while a dark green signifies a 10% rise, the purple and orange signify a massive 20-30% drop. So some places (Oakland, Richmond, Stinson Beach) really got hit hard last year. This could be due to negative factors in the area, or mean that they held up relatively well until 2009 (or whenever this report began collecting data).

Let me know if I'm mistaken on any of this!

NKlein82's picture

Growth might not be so slow

According to Bloomberg Businessweek, the housing market is starting to stabilize as Matt Gould stated.  But with this rise in the housing market we have two things to look forward to: 1) hopefully an increase in economic activity as the real-estate market increases and perhaps new homes can start being constructed and increase jobs and 2) an increase in housing prices.  The Bloomberg Businessweek article stated that property prices have increased 5.9%.  There is a real question whether personal incomes will increase enough to deal with the corresponding increase in housing costs due to increased property prices.  I think I need to talk to an economist, but it seems that an increase in property prices of 5.9% seems extreme when the rest of the economy is so depressed.

mattgould's picture

Zillow

I'm surprised that Bloomberg used Zillow as their sole source of data in this article! Zillow collects data from clerk-recorders offices with info dating back years... not sure how reliable they are. Just look at what these people have to say:

http://www.trulia.com/voices/Tech_Tips/Do_you_think_zillow_com_is_a_reliable_source_to_as-12970

NKlein82's picture

Last time I implicitly trust Bloomberg

While I think I have a basic knowledge of finance, I am most definitely not educated in the field.  I have found Bloomberg to be a very good source so far, but then again as I said I don't read it that much.  Last time I trust Bloomberg.

mattgould's picture

Bloomberg

Ya they are usually great, that's why this article surprised me.

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