Most Americans view owning as a wiser long-term strategy than paying rent, but specific markets pay off better than others. In recent times, few have rewarded their residents more handsomely than the San Francisco Metropolitan Area, comprised of San Francisco, Oakland, and Hayward.
San Francisco Metropolitan Area Statistics
According to a 2018 report by the National Association of Realtors, the preceding 30 years saw average equity gains of $944,920 on single-family homes in the San Francisco Metropolitan Area – nearly four times the national average. Unsurprisingly, area homes also perform better in terms of the sale price. Properties went for an average of $987,500, considerably higher than the national average of $261,600.
These numbers can partially be attributed to the desirability of being in San Francisco. The area boasts a moderate climate, an educated population, and plenty of high-paying jobs in growing industries such as tech. However, the same could be said for a city like Seattle, which has not had the same outsized boom in prices. Per the NAR, homes in the Seattle-Tacoma-Bellevue area sell for half what they do in San Francisco. Why?
San Francisco’s Manufactured Demand
Although the two areas have a lot in common, the way each handles the building approval process could not be more different. In Seattle, the process is streamlined to allow new construction to increase with demand. In San Francisco, development is subject to oversight by neighborhood groups, a city planning commission, and its board of supervisors. The bureaucracy impedes the building process. Between 2010 and 2016, San Francisco experienced less than half the new home construction of its smaller northern neighbor.
More Convenient to Buy Than to Build
San Francisco’s slow approval process may be an impediment to building new properties, but the shortage of housing options makes it an even more attractive place for long-term investment. The San Francisco area is desirable for many reasons, and it has long been easier to buy than to build.
Thankfully, Propy makes it easier than ever to buy a property in the San Francisco Metropolitan Area. In February 2019, Propy helped parties close a $917,000 real estate deal in nearby Daly City, with online document management tools and Ethereum smart contracts.