San Francisco home and condo values jumped in the first quarter of 2013 according to the latest S&P/Case-Shiller Home Price Index. According to the Index, single-family home prices in the San Francisco MSA rose 3.9% from February to March 2013. Up 22.2% year-over-year, the San Francisco Index remains 29.5% below a May 2006 peak.
For the broader 10-City composite (CSXR), home values gained 1.4% from February to March 2013, up 10.3% year-over-year, 28.6% below a June 2006 peak.

Phoenix again had the largest annual increase at 22.5% followed by San Francisco with 22.2% and Las Vegas with 20.6%. Miami and Tampa, the eastern end of the Sunbelt, were softer with annual gains of 10.7% and 11.8%. The weakest annual price gains were seen in New York (+2.6%), Cleveland (+4.8%) and Boston (+6.7%)…

Other housing market data reported in recent weeks confirm these strong trends: housing starts and permits, sales of new home and existing homes continue to trend higher. At the same time, the larger than usual share of multi-family housing, a large number of homes still in some stage of foreclosure and buying-to-rent by investors suggest that the housing recovery is not complete.

On a month-over-month basis, prices jumped across all three San Francisco price tiers.
S&P/Case-Shiller Index San Francisco Price Tiers: March 2013 (www.SocketSite.com)
The bottom third (under $397,383 at the time of acquisition) gained 2.6% from February to March (up 25.7% YOY); the middle third gained 4.6% from February to March (up 23.5% YOY); and the top third (over $697,398 at the time of acquisition) gained 3.5% from February to March, up 15.1% year-over-year versus up 12.9% in February.
According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA are back to March 2001 levels (51% below an August 2006 peak); the middle third is back to January 2004 levels (29% below a May 2006 peak); and the top third is back to just below October 2004 levels, 17% below an August 2007 peak.
Condo values in the San Francisco MSA jumped 4.5% from February to March 2013 and are up 28.5% year-over-year but remain 18.2% below a December 2005 peak.
S&P/Case-Shiller Condo Price Changes: March 2013 (www.SocketSite.com)
Our standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the “San Francisco” index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).
S&P/Case-Shiller: Home Prices See Strong Gains Q1 of 2013 [Standard & Poor’s]
San Francisco Single-Family Home Prices Tick Up, Condo Values Jump [SocketSite]
Housing Starts Slump But Permit Activity Jumps To June 2008 Levels [SocketSite]
San Francisco Home Sales Well Above Average In April [SocketSite]
San Francisco Foreclosure Activity: Falling As Forecast In 2013 [SocketSite]

56 thoughts on “San Francisco House And Condo Prices Soar In First Quarter”
  1. This city-by-city comparison graph is very instructive, but the 1/1/2000 crossing starting point undercounts SF’s RE strength compared with LA or NY.
    January 2K was almost the top of the dot-com bubble which had tremendous effects on SF RE. Much more than other MSAs.
    It the 100 crossing had been picked to be prior to the dot-com bubble on, say, Jan 1995, then SF would be at roughly 270, LA at 270 and NY at 280.

  2. 400 Avila #102 says Marina condo values are up 12% since 2006…. it just closed for $702k and its prior sale was 2006 for $625k. Granted, it is one apple, but Case Shiller is flat out wrong when it comes to the City. We’re at peak in most places in the City, and many are moving above

  3. Yeah, it definitely seems like many parts of SF are at or above the previous peak at this point, which is a little crazy, although I’m enjoying it since I seem to have bought right before everything took off. Pure luck, but I’m happy.
    Of course growth like this is totally unsustainable and makes me worry we are getting right back into another bubble.

  4. Socketsite very good at pointing out obvious. Where is “The stock market is up.” headline. Maybe tomorrow. End of world posts seem to have disappeared also, along with posters. Very curious.
    [Editor’s Note: It is pretty amazing how the “Facebook Effect” is driving the Phoenix market, isn’t it? And you find it curious that our tone is bullish when the fundamentals support the position, rather than simply being bullish or bearish all the time? That is very curious, indeed.]

  5. Socketsite is truly amazing the way it refuses to admit error regarding the obvious influence tech has had on SF. Socketsite took every conceivable opportunity to belittle what was obvious to those paying attention.
    [Editor’s Note: We’ve never turned a blind eye to, nor belittled, the impact of tech jobs nor overall employment trends on the market in San Francisco. Heck, we’ve even set the record straight in terms of the growth in the sector.]

  6. ^ and can’t let go of the “facebook effect” nonsense that they claim everyone was falling for despite the evidence.
    Meanwhile, as I’ve said repeatedly – follow the stock market and you’re more likely to see SF RE’s future. And right now that’s still up, up and away.
    Or, get today’s news 6 months from now from Case Shiller and brag that Facebook stock is still down from its IPO – which is even older “news”

  7. Yes, you did, vis a vis the “Facebook is nothing” meme enabling, which you still are doing. Not to mention turning a blind eye to the “Facebook = zynga = Geoupon = apple = google” thing that was farcically going on at this site.

  8. Great commentary this morning on Bloomberg on institutional investors distorting the market in real estate. Blackrock, for example, is one such direct investor, comprising (with other comparable institutions) 15% of the national market, more in impacted areas like Phoenix.
    Cheap money and investors continue to distort the real estate market. The reality is that on a national scale, employment, household income, and debt, have not recovered to support valuations.
    Slight variation of that same story on equities. Treasury yields are Pummeled. Money doesn’t have anywhere else to go, besides blue chips with good dividends.
    San Francisco and the greater bay area are somewhat insulated from that because of our robust local economy.
    Household income and local real estate supply and demand drives property valuations. Not equities.
    Despite what every desperate real estate agent would want us to believe.
    Because in six months when equities are probably down 5 to 10% from current levels San Francisco real estate will be unfazed.
    Let me reprise my role as a bear. I still believe that we are in the middle of both real estate and equity overvaluation as a result of mal investment.

  9. There maybe some revisionist history going on here.
    Facebook, Groupon, Zynga, and Apple are all down from prior highs.
    I’m still unclear on how that supports the correlation between market indices and San Francisco real estate.
    Then again I’m not interested in trying to convince someone that they will be priced out of the market.

  10. Great point from the editor about Phoenix beating the SF MSA. One issue though. Phoenix saw a 2/3 drop in valuation from 2006 to 2011 and became greatly oversold like may centers of the 2002-2006 bubble. Any return to median is bound to be dramatic.
    As I have said a few times last year, I do not think we see a direct Facebook or Apple or Google effect for the market in general. For a few flamboyant jumbo-sized successes, there are dozens of medium sized very decent successes. The overall good health of SF, and the almost stopping in development for 2-3 years is what has depleted the inventory. It’s mechanical and a mathematical beauty for those interested in numbers. It’s similar to the bear period in its purity.
    Now I think we’re reaching the limits of affordability in some areas while others still have much to catch up. We’ll see if banks are ready to let people over-reach. Again.

  11. “…all down from previous highs” misses the point. The point is that there are a great many employees who did do quite well, a great many, and they do not need the mark to be at a precious high in order to leverage for real estate. That’s point one, it is a fact, and it has roiled the market. Point two, as lol stated, there are a great many smaller companies and startups doing more specific things who have been acquired, will be acquired, are doing well, etc etc. If you don’t think that that’s what’s driving the market, you’re not paying attention and/or you don’t get it, arent in it, or don’t care. Yes, speculators are in the market in drives too … Because they know there’s a well funded market for their projects at exit.

  12. I will go on the record. “Facebook, Groupon, Zynga, and Apple are Google” as employers have had VERY little impact on SF RE. The entire West is way up. Is google also boosting AZ? Well it might be, but it has nothing to do with employment. Its the stock market that has been on a booming tear. IF you think real estate is doing well now, then look at the market. And its not just tech. The biotech index is up over 100% in the past 2 years. Most of big pharma is also at an alltime high. The RE market almost always follows the stock market. it is not BAY area specific. Despite what people may think, it is macro. OUr rebound in employment came faster than others which caused the RE market to stabiize faster, but in general, our market is not behaving differently than other urban markets in the west. Im glad i finally bought last year, but I can’t imagine my RE gains comparing to what my stock portfolio has been doing.

  13. OK, you’re on record for saying tech employers have very little to do with SFRE. How you might think you know that, or how you might possibly know wha typical offers in AZ look like compared to here is unknown. Or why you equivalate a market that fell further and has returned to lower than peak with one that fell less and is now past peak in many areas. But you are on record with that drivel.

  14. spencer,
    Yes the West is way up. But there are big differences between the last bubble’s overinflated areas (NV, AZ, CA’s non-coastal zones) and the Bay Area
    Per Zillow’s Home Value Index:
    Las Vegas went from 303K to 108K and is now at 134K
    Phoenix went from 252K to 95K and is now at 142K
    San Francisco went from 806K to 643K and is now at 809K
    LV and Phoenix lost 2/3 of their value. SF lost 20 to 25%. LV is still 55% under its peak. Phoenix is still 45% under its peak.
    The west was wildly oversold, with houses selling for way under replacement cost. Its catch-up is good news, but not as economically significant as SF’s current situation.

  15. I have a question for the experts like Joshua Penzar, Truth, and hangemhi: So are asset values truly rising this quickly, across the board, for what seems to be all assets everywhere? Are our economic fundamentals really this strong? Or is there just a massive global flood of the fiat currencies we all use to purchase real assets with? Too much fake liquidity chasing a limited amount of real product, with artificially easy/cheap lending standards?
    Also, since you accuse SocketSite of stating the obvious and deriding prescient posters like yourselves, can you please provide some links to all the illuminating observations you made during the previous bubble and ensuing crash? I just want to see how accurate all of your predictions have been historically.
    Thanks!

  16. SF is not back to peak. none of the aggregate data suggest that to date. Sure, the Noe Valley one offs might suggest that, and noe valley is probably driven by tech more than others, due to its easy commute to silicon valley. But SF as a whole is still not back to peak and probably at least 1-2 yrs away from getting back to 07 prices. the upper 3rd of the case schiller index is probably the most reliable as a proxy for the “real SF”.
    Tech has been strong and may have held our market up better, but it is not whats driving the market now. Now its all about the stock market.
    Another year of rising equities and the stock market will be back in a bubble, and subsequently a year after that, RE will be back in a bubble.
    it appears that we are in semi-permanent boom bust cycles

  17. Re: costal zones and Bay Area
    Look at how the lower tier in SF faired. Still 51% below peak. And the MSA is still down 29%. And most of tech employment isn’t in SF proper either. This is macro and about the performance of different price tiers, not tech.

  18. “Great commentary this morning on Bloomberg on institutional investors distorting the market in real estate. Blackrock, for example, is one such direct investor, comprising (with other comparable institutions) 15% of the national market, more in impacted areas like Phoenix. ”
    They’ll be the first to walk away when things go south, just like they did with Stuyvesant Town.
    I’ve been to open houses recently in various parts of the Bay Area, not just SF — are you guys seeing what I’m seeing?
    All I see are shite houses for overinflated prices because people can get cheap loans. Some of these at particular price points (e.g. below $1.5M in an expensive town) will go into contract quickly and then drop out because the appraisal isn’t being hit. The banks aren’t allowing all of these transactions to go through, like they were in 2005-2007.
    Unlike last year or the year before when I saw quality houses going for quality prices, I see people who are desperate to buy something because they’ve waited so long buying the crap available in a market with no inventory. It doesn’t really seem sustainable, and it seems like you’d have to go through a lot of contortions to say that it is. There are quality houses available, but most of them are $2.5-3M and up, and a large number of them are places like Hillsborough, where there is unbelievable inventory right now.
    Meanwhile, while investors are comprising too large a portion of the market, the move-up market is non-existent, because many people are still underwater or don’t have enough equity to move somewhere. I have more than a few friends who would move because their POS starter house is now too small for their family or because they’d get a different job with a shorter commute, but can’t because they are underwater or have zero equity because they bought too close to peak.
    It’ll be hard to see whether any of this is reality until a) the market has more organic and move-up sales as a normal market does, and b) loans are not ridiculously subsidized. Enjoy it while you can.

  19. “Now its all about the stock market.”
    To clarify, i know tech is included int he stock market obviuously, but my point is the the RE market is rising with the tides of the overall market.

  20. also looking at the case schiller condo price index above, both NY and LA were better places to invest in real estate from 2000 to 2013 than was SF on average. What do you think facebook and google had to do with that?

  21. Why are we talking about Groupon, by the way? They’re a Chicago company last I checked and their funny money accounting or business model hasn’t really stood the test of time.

  22. Legacy Dude,
    Where do you get the bizarre idea that lending standards for super jumbo loans, the loans necessary to purchase in SF by and large, are relaxed? Or that sellers wont opt for cash buyers over even fully approved borrowers? Those questions are sufficient to point out that everything you said originated from navel gazing.

  23. Truth-
    Thanks again for your expert view and keen insights! How about I do what you did, and answer your questions with questions:
    Where are mortgage rates today relative to their 30-year average, and how are those rates determined/set today vs. before? How about down payments as a % of price today vs. 20-30 years ago? Who is the largest mortgage lender in the country today vs. historically? Hint: you probably won’t find the answers to those questions in your own navel.
    And again, I cordially ask that you point us to some of the predictions you’ve made here over the past few years so we can see just how accurate you’ve been. Thanks again!

  24. Tech money is everywhere in SF’s RE. And as I said earlier it’s not all the big guys but also medium-sized companies.
    For instance, I have had 3 new neighbors this past year: they work for Adobe, Pinterest and AirBnb. 2 renters ($$$) and one buyer. All 3 recent transplants, 2 moved into town from out of state for their jobs. This is new tech money flowing in.

  25. “For instance, I have had 3 new neighbors this past year: they work for Adobe, Pinterest and AirBnb. 2 renters ($$$) and one buyer. All 3 recent transplants, 2 moved into town from out of state for their jobs. This is new tech money flowing in.”
    So, you’re suggesting that they are getting massive stock grants that vest immediately? And then in the cast of Pinterest and AirBnb, they sold these on the secondary market already?

  26. Mortgage rates are low, sure. That’s your sole point. Well doesnt encompass everything you think it does, especially here. My predictions were great with one noticeable blip over. 10 year timeline. You got nothing. And, you did nothing.

  27. “SF is not back to peak. none of the aggregate data suggest that to date”
    Not so sure, think median pricing is very close to or at peak – seen less data for median price per sq foot but again believe it to be around peak values.
    and inventory is I believe lower now than 07/08.
    what aggregate data have you seen that sugests we are still some way off peak?

  28. sfrenegade,
    That’s just silly. Ever heard of paychecks? As I said, 2 are renters. Therefore, it’s paycheck money. Tech money flows through several channels.

  29. Truth, to say that “mortgage rates are low” is kind of an understatement, don’t you think? Our government has made it explicit policy and borrowed/spent trillions of dollars to force home prices up over the past few years. Mortgages today are the cheapest they’ve ever been and are easier to get than at any time in our lives aside from the last bubble peak, when even pets and bums could qualify for them. But I bet you knew that.
    Although I agree that’s just one ingredient in the recipe. Tech boom, overseas investors, and low inventory are also important factors locally.
    But back to my original question, I’m still waiting for you and the other experts to highlight some of your previous predictions. Could you please do that? Would be a bummer if all the pundits turned out to be a bunch of petty trolls playing Monday morning quarterback…

  30. I consider myself one of the “other experts”, and I gave you an example. I have more if you want them. So I hope you are not lumping me in with the Monday morning quarterbacks

  31. “That’s just silly. Ever heard of paychecks? As I said, 2 are renters. Therefore, it’s paycheck money. Tech money flows through several channels.”
    Depending on the tech company, tech paychecks aren’t necessarily impressive, especially pre-IPO. Google pays good money for a paycheck, but not every company does, and even Google’s pay isn’t a huge amount better than other well-paying equivalent jobs, depending on what you do there.
    Paychecks aren’t “new money” in the same way that IPO money is new money and certainly aren’t on the same scale — most of it is the same recycled stuff. Paychecks also haven’t really changed that much over the last several years.
    In addition, many tech jobs mostly churn local talent, and the revolving door in tech is obvious to anyone who works in the sector.
    If you think Pinterest and Airbnb are good examples of new tech money flowing in, you’re just swallowing the talking points without thinking for yourself.

  32. Where did you get the idea that super jumbo loans are really easy to get in this lending environment? We’re talking about SF, right? As for my calls I made hundreds. Most of them right. at least one spur of the moment one about The Four Seasons, when i generally shied away from even talking condos other than to say they were the low hanging fruit, when i was glib + annoyed + argumentative wound up laughably wrong. But micro i nailed and in terms of the city. I was particulalry accurate regarding southward gentrification and why.

  33. Sfrenefade,
    Employment is way up. Tech employees feel more confident about their futures. Why are you challenging those well accepted facts? You’re parsing down to “everyone must pay as Google or else jt’s not wirth considering” now? just to argue seems like and it’s riinging false.

  34. fluj, I was quite clearly challenging what lol said and not the strawmen you’re talking about.
    Do you think rank and file employees of Pinterest and AirBnb are good examples of buckets of new tech money coming into the Bay Area market? If you do, you’re not thinking critically.

  35. Wow, I seem to agree with everything that Truth has to say today.
    sfrenegade,
    I gave the example of all my new neighbors not more than 2 doors down. There are many many more in real life.
    Simply look at the numbers, like the evolution of market rent these past 2 years (up) or unemployment (way down), the labor force (up) and median wage (up).
    All point to a very healthy environment in SF, with people coming in with good paying jobs, mostly tech. Numbers speak for themselves. Your talking points are so 2009.

  36. Sfrenegade, you’re the one who is presenting silly false choices and Internet arguing 101 type talk. I’d forgotten about your persona but now I remember. It isn’t interesting, what you do when you decide to go that route. Lol was clearly giving an anecdote …. i mean he even said it was just his neighbors. You seized on it and changed the direction trying to talk anout everyone leveraging options, then Google type pay or nothing, etc. This type of thing is boring and Internet only nowheresville. Clearly you don’t care about what’s going on in the market and just want to argue on the Internet.

  37. Oh man, fluj is back cheerleading? There is your key indicator – back in a bubble!
    This one is easy. ABSURDLY low and declining interest rates over the last year. Same reason prices leaped in SF as in Phoenix. Tech-schmeck. Rates are now drifting higher. Case Shiller is backward looking. A few more months of these highs, then we’ll see prices slow in SF, Phoenix, and everywhere else as interest rates creep up.

  38. anon, you’re denying the core of the reason behind SF’s healthy RE market: more people with good paying jobs and not much to satisfy them.
    The leftover inventory from the crash got churned through. The mechanical effect of affluent buyers and low inventory is higher prices. Interest rates are important, but just a factor.
    And the interest rate story is old news. We’ve been in the current territory for 2 years, and at less than 5% for 4+ years.

  39. Not cheer leading “mean anon”or tipster, merely talking about now when only disembodied voices say tech is nothing. Interest rates have drifted a tenth higher this week and are still near all time lows (seizing on that minutiae as a somehow relevant “ah ha” reveal makes me think that was Tipster for sure). anyway, the argument that prices move in lockstep with rates has been proven false dozens if times on here. But you’re consistent … You took pains to say that 2009 and earlier Facebook employees wouldn’t be getting large windfalls, despite ample charts and articles to the contrary. Now you’re saying tech is nothing even though people who even qualify for jumbo mortgages are getting beaten out left and right by cash offers. “Tech schmeck” — man, you guys are funny non-actors, aren’t you?

  40. Again, if fluj or lol think Pinterest and Airbnb are examples of massive amounts of new tech money flowing into the Bay Area, they are barking up the wrong tree.
    lol is again wrong by saying the interest rate story is old news. It’s not. Tell me that people will have the same appetite to buy crappy houses in a normal market where interest rates are closer to 7%, and I have a bridge to sell you. It has a few bolt problems, but they’ll be easy to fix.
    As I’ve said for the last few years, we won’t see how this plays out until we’re back at a normal real estate market with normal inventory where we have the right ratio of first-time buyers and move-up buyers. You can have upward and downward moves in the meantime, of course.
    By the way, it’s worth pointing out that the Prestige Index is up quite a bit from last quarter, although very similar to 2005:
    http://www.firstrepublic.com/resource/san-francisco-bay-area-home-values

  41. I never said anything about those companies. Funny how people who throw “straw man” around left and right are the first to go there, innit? Yawn. This is tiresome stuff. Been there done that. I like to talk SFRE. You lot don’t. You like to talk on circles on the Internet.

  42. yeah, it’s tipster or a clone. No wonder we’re getting the crazy talk. It’s hard to rationalize what has happened in the past 18 months using 2009 references.

  43. “Anyone who buys right now is a complete idiot”
    Tipster, 2011. Its the capitalization of ABSURDLY that really gives it away, btw. Good shibboleth.

  44. Wait, who are we trying to identify? You guys are funny. Anyone who thought the conspiracy theorist(s) were gone were fooling themselves. Welcome back. All of the people who you think left the site are still here. All of them. 🙂

  45. I think that ex-SFer is gone. Length of post would be a sure sign, plus he didn’t have any internet fisticuffs to leave over.

  46. Yeah, OK, it just MUST be that tech market in Phoenix and Las Vegas and Atlanta, uh, because any other explanation destroys my argument about the tech market driving SF prices. Tech is not “nothing” but it is relatively immaterial.
    Just do the math. It is really easy. Rates fell about 3/4 of a point from early 2011 to early 2012. That drops monthly borrowing costs by just about 10%. rates down = prices up all else being equal. This has not been the sole factor. The generally improving economy in SF and Phoenix and Las Vegas and Atlanta is also driving things as is the reduction in the foreclosure overhang, but the crash in rates has been a huge factor.
    Rates have jumped back up about 1/2 point in the last six weeks. This won’t show up in CSI data for several more months. Then watch the slowing pace.

  47. “yeah, it’s tipster or a clone. No wonder we’re getting the crazy talk. It’s hard to rationalize what has happened in the past 18 months using 2009 references.”
    Umm, I’ve been posting on this site for several years. fluj/anonn remembered me, as did eddy.
    fluj, ironically, you’re the one arguing internet circles. I responded to an ignorant post by lol about where “new tech money” is coming from, and then you jumped all over me for it and are still talking for some reason, despite not making germane comments.
    There are places that new tech money occasionally comes from with respect to rank and file employees, but Pinterest and AirBnb are not examples of them. Saying Pinterest and AirBnb are ensuring that your neighbors have “new tech money” is the crazy talk.
    If anyone thinks that the interest rate talk is a 2009 reference, they really don’t understand the Fed, finance, the mortgage market, or bond market, but that’s a common sin here for people not named ex-SFer. That guy made the comments section worth reading around here.

  48. “This has not been the sole factor. The generally improving economy in SF and Phoenix and Las Vegas and Atlanta is also driving things as is the reduction in the foreclosure overhang, but the crash in rates has been a huge factor.”
    The reduction in foreclosure overhang is definitely a factor in C-S because of how C-S uses paired sales. You can’t ignore the methodology. The economy here is also better than in certain other places, so that obviously helps too.
    However, desperate people buying crappy houses in a low inventory environment is driving some of the increase, along with the increased ability to buy these crappy houses due to low mortgage rates.
    Some of the houses I see listed now in SF and the rest of the 5-County Bay Area are in worse shape than some of the crappy short sale/foreclosures I saw in the last couple years. Outside of the $2-2.5M and higher bracket, there are lots of ramshackle additions, plenty of contortions to say that the house is 1 or 2 more bedrooms than it really is, and lots of unpermitted work. Even some of the houses with decent work done on them have quirks because they were often someone’s pet project.
    Particularly in the Peninsula/South Bay, I also see a lot of “grandma’s house” being sold — it’s obvious by the state of the house and its furnishings, but also when talking to the realtors, some of whom are quite forthcoming. Also, you’re seeing more town house construction in particular.
    The ratio of inventory above $2M on the Peninsula/South Bay vs. the inventory below $800K in the same area is astounding. It’s very different from the past few years of short sales/foreclosures dominating, but also very different from earlier years of a more normal market.
    It seems like a lot of the $3-5M spec places are selling decently — I spoke to two guys who have done a few of these. However, I’ve seen some realtors selling their own spec project that aren’t as successful in the $1.2-2M range — largely because they bought a house in the crappiest location in the neighborhood when it was cheap.

  49. anon, I gave an explanation and a few numbers for Phoenix RE’s bounce @ May 29, 2013 10:32 AM.
    Simply ask yourself the following questions:
    1 – How much does it cost to build a house in Phoenix, AZ that people can afford?
    2 – How much does a similar but used house sell for?
    Prices will almost always follow the formula:
    building cost + land value + depreciation + margin
    In the case of Phoenix or LV, median prices were at 100K, quite under building cost, making it a bargain.
    These cities are not being abandoned like Detroit, which means new houses will still be built in the coming future. And prices will follow the formula I described. The catch-up is very fast because it’s a very efficient market with little regulation, unlike SF.

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