Accept

We use cookies in order to save your preferences so we can provide a feature-rich, personalized website experience. We also use functionality from third-party vendors who may add additional cookies of their own (e.g. Analytics, Maps, Chat, etc). Read more about cookies in our Privacy Policy and Terms of Service. If you do not accept our use of Cookies, please do not use the website.

San Francisco real estate ‘overvalued’ according to new report

February 12 2016
February 12 2016

By Emily Landes | SFGate

 

As San Francisco home prices continue to rise, a new report is calling the local market “overvalued” by about 16 percent.

Prices continue to go up in many markets throughout the country, but home prices in the Bay Area have “risen to a level unsupportable by area income,” according to Fitch Ratings.

That’s news that should come as no surprise to anyone who has recently tried to buy a home here, where vastly over-asking sales prices are the norm and even badly damaged homes like the one leading off the gallery above sell for nearly 200K above asking.

But, San Francisco is not alone. Home price increases in some Florida and Texas markets are also rising faster than incomes. Nationally, the housing oversupply we saw just about five years ago is gone. “For-sale inventory has declined and the percentage of new homes sold prior to completion has normalized while new home construction spending continues to show strength,” according to the Fitch Ratings report.

The credit rating agency also found that San Francisco home prices “hit an all-time high in third-quarter 2015 and are now 62 percent above their post-recession low in early 2012.” With San Francisco home prices up over 10 percent in the past year alone, Fitch Managing Director Grant Bailey had no doubt that homes here were overvalued and pointed to a fairly recent run-up to describe the current market.

“The last time the Bay Area experienced this kind of home price growth was during the dot-com era from 1997-2000,’ said Bailey.

And we all know what happened to the market in 2001.

For more information click here.


Comments:

Leave a Comment

Name*
Email Help Tip
Website
Comment*
Characters Remaining: 5000