San Francisco went from a population of 776,733 in 2000 to an estimated 798,680 now. But only 1200 new condos and townhouses were built last year
well, leaving aside the fact that you are comparing seven years of population growth to one year of housing stock growth, i will cede you the point that SF is a very special place and housing will always be in high demand and expensive compared to most areas of the country. but the very slight rise in jobs and population over more than half a decade is not the reason prices rose. they rose because of a bubble.
if you look at the Bay Area as a whole, there has actually been an INCREASE in the amount of housing stock per capita this decade. e.g., for Santa Clara County:
"Supply is up, and the average family income fell 2.3% from 2001 to 2004, so prices are violating the most basic assumptions about supply and demand.
The www.census.gov site has data for Santa Clara County for the years 2000-2003 which shows that the number of housing units went up at the same time that the population decreased:
year units people
2000 580868 / 1686474 = 0.344 housing units per person
2001 587013 / 1692299 = 0.346
2002 592494 / 1677426 = 0.353
2003 596526 / 1678421 = 0.355
So housing supply in Santa Clara County increased 3% per person during those years. There is an oversupply compared to a few years ago, when prices were lower."
patrick.net
would love to see real estate in the SF Bay Area fall to 1994-95 levels I don't see it happening
i don't think bears expect a return to 94-95 levels, barring a catastrophe. they expect a return to early 2000s levels, in real terms. that would be a fall of what, 50-80% in real terms? i think prices will fall faster than the 1-3% you predict, although it is possible that they just continuously fall 1-3% for many, many years until inflation erodes their value. that is probably more than a decade of decline.
already sales volumes are off 25-30% from the bubble peaks, which is an ominous indication that even the great Bay Area was in a ridiculous bubble.
also, as i posted earlier, the Bay Area is quite a cyclical market. prices tend to rise or fall much more than the long term average rate of increase. historically much of the fall in real terms occurred due to inflation, but the insane levels of today's bubble suggests more dollars may come out of nominal prices this time. |
