San Francisco is famous for its magnificent landmarks and attractions, from the Golden Gate Bridge to the Alcatraz. It is also the home of California's best cuisines and hills, from the top of which one can have a romantic view of the city. On the other hand, San Francisco is also popular for its rising and falling rents, steep real-estate prices, and booming tech companies. And this was what the city was before the Y2k scare which had a notable impact on its real estate.
According to Zillow, in San Francisco, the median value of homes has risen from $670,000 at the start of of 2012, to $1.1 million this November. That is an increase of more than 67 percent, and a return of 15 percent in the past year alone. Accordingly, prices are also expected to rise by 3.9 percent within the next year.
According to the John Burns Real Estate Consulting of Irvine, California and Pacific Union, judging by the area's venture capital deals and rent prices trend, it looks like the Bay Area real estate is entering into a similar frenzy that it faced during the dot-com bust of 2000. Market Watch quoted the company's CEO, John Burns, who said, "The San Francisco Bay Area is on our watch list for a correction."
According to Market Watch, Burns also noted that San Francisco has permanently become a place where the standard of living is high because of expensive housing, and also because it is the top spot for high-tech and Internet communities. And most recently, the rise in home prices and rents were driven by mere speculation. "Affluent older buyers, often for investment reasons, have identified San Francisco as a place they want to own or live [in] and have driven up prices dramatically," he said. He also believes that one-third of those who bought properties with cash, bought those properties for investment.
To check where correction must be done in San Francisco's real estate, Burns suggested that one must look into venture capital deals and rent prices.
