Friday, August 31, 2007

Average Person vs Average House

People have been complaining about the prices of homes in San Francisco for as long as I can remember. I always answer them by saying, "It's such a wonderful city; everyone wants to be here and that drives the prices up!" While this is true, the fact is that not everyone can afford to be here, and certainly not everyone can afford to own property here. A study performed by the Center for Housing Policy shows that from 1997 to 2005 the median price of a single family residence shot up 86% while wages in that same period have only gone up 25%. You do the math. Any way you tweak those numbers they just don't add up. The median income in San Francisco is $73,804. That means that if you are a single income household, you can search for a home in the range of $450,000. You can pretty much forget about a single family home; the median home price in San Francisco is $825,000. There are currently three homes in the entire city listed under $450,000: one in Ingleside Heights, one in Bayview, and one in Bayview Heights. All three are contractor's specials.

There is good news for you average San Franciscans. I wasn't expecting this turn when I began writing, but as I was looking up how many condominiums and tenancy in commons are available for under $450,000 so that I could wish you a fair adieu as you head to the East Bay, I was blown away by a whopping 71 available units! As a matter of fact, we have a client who is currently getting ready to close on a wonderful unit on Dolores priced at only $359,000! It is a studio tenancy in common (tic) and it met all of our clients' needs, and more importantly it fit into her budget. Congratulations Erin! I suppose the moral of the story is don't be discouraged, there just may be something out there for you. It may not be what you were dreaming about, but just remember that your first home is never your dream home. If you are one of the many who is waiting for the market to bottom out, I should report to you that the National Association of Realtors just released their numbers for 2007's second quarter and a majority of the nation's markets showed appreciation with San Francisco's median house price going up 7.6%. They also predict a turnaround for the market overall in spring of 2008 at which time they expect prices nationwide to begin to show steady appreciation. That gives you a window of about nine months of down time. Get in while you can! Enjoy your Labor Day Weekend.

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