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San Francisco home prices see significant gains in 2014

16 Apr 2014 8:58 PM
San Francisco home prices see significant gains in 2014

Along with its sunny weather, coastal vistas and cosmopolitan architecture, the City by the Bay is often highly regarded for its expansive communities of luxury real estate. These high-end properties afford owners access to the finest features and amenities, all while enjoying a central location in the popular metropolitan area. While housing markets across California experienced somewhat of a seasonal slowdown during winter, spring has arrived, and heightened activity has pushed prices higher for upscale homes.

If you're considering the purchase of a vacation property or additional house in San Francisco, now may be the best time to pursue such an acquisition, as real estate values are expected to continue an upward trajectory in the coming months.

City has most million-dollar properties nationwide
San Francisco's residential sector has long populated by affluent homeowners, however, it seems that at no other time in history did the metropolitan area have such an extensive selection of expensive houses. Using data complied by the housing analytics firm Trulia, The Washington Post recently reported that 43.5 percent of the homes listed on the market in the City by the Bay are asking for offers of $1 million or more. In fact, prices are have increased so much within the area that the median size of these properties is just 1,774 square feet - second only to New York City.

The news source noted that the reason for such sizable upticks in prices is likely due to the demand for housing within the city, and the competition posed by high-wage earners. With successful technology companies and burgeoning startups alike setting up shop in San Francisco, the area has seen a substantial influx of wealthy industry professionals during recent years. And, because city officials have traditionally been careful not to approve too many construction permits - compared to other major metropolitan areas - the supply is disproportionate to the demand. 

Efforts to enhance inventory could see increased sales
While San Francisco has long dealt with a shortage of available luxury homes, the issue has become more apparent across the Golden State - leading many home builders to heighten their efforts to construct such properties. During February, the supply of homes priced at $1 million or higher rose 13 percent year-over-year, according to the California Association of Realtors. Accordingly, this could serve as a boon to the Bay Area, as well as other high-end real estate markets throughout the state. 

With the spring homebuying season now underway, local real estate professionals can expect business to pick up significantly in the coming weeks, as a slight dip in activity was observed in February. CAR reported that during the second month of 2014, finalized sales of existing single-family homes amounted to a seasonally adjusted annualized rate of 361,210 units, down 0.7 percent from January and 13.7 percent from February 2013.

CAR president Kevin Brown attributed the decrease in statewide housing activity to the seasonal slowdown, as well as some buyers being unable to afford the high-priced real estate found within California's most popular destinations. Meanwhile, Leslie Appleton-Young, vice president and chief economist of CAR, suggested sales figures will once again increase in the near future.

"Supply conditions in the housing market have shown some improvement since the end of last year," Appleton-Young said. "The improvement in these prime price ranges will benefit trade-up buyers who are expected to dominate the market in 2014, as many of them will be searching for homes in these price categories."