While the Mark Company’s Pricing Index for new construction condominiums in San Francisco ticked up two (2) percent from February to March, it’s now flat on a year-over-year basis having steadily slipped from 20 percent higher in August (at which point we first reported a significant slowdown in sales).
In terms of inventory, there are now 600 or so new condominiums actively for sale in San Francisco, which is 6 percent lower versus last month. But a number of new sales offices are preparing to open by the end of the year and there are 8,700 net-new units of housing under construction in San Francisco with building permits for another 12,900 units either issued, approved, or in the works.
Take a look on Craigslist for rentals and search with the term “Lumina”. Stunning how many of these new units are investor-owned and now cannibalizing each other on rents.
Wow – good suggestion. Look out below.
I am surprised to hear many of the Lumina units have been bought by investors.
If true it is a bit puzzling.
IMO condo prices are not going to have a big bump north in the near/medium term. Plus, what kind of ROI’s are investors getting on this kind of RE investment?
I believe in RE investing, but not all RE investments pencil out and its hard to see how this one would.
Maybe many “wealthy” foreign buyers are not so wealthy at all and they actually like the $5000 rent for a $3M condo? Funny that some supervisors were worried that luxury condos are being bought by investors who only live there a couple months a year.
Dave, they’re usually brought by cash rich investors, often foreign, that want to park money in what they see as a safe investment. They value US market stability over their own country. Sometimes they just leave them vacant too.
Perhaps not as efficient as other types of investments, but it works for them.
Ive yet to see any quantification of % of buyers who are foreign without plans to live there. ALthough im sure its happening on the margin, I think its more of a myth than a real issue
“Roughly 15 percent of residential sales in the San Francisco region are to foreign buyers, and half of those are Chinese. Within the region, Chinese buyers take roughly 25 percent of purchases in the super-expensive Silicon Valley suburb of Palo Alto.”
It’s not clear where this specific datum came from in the article, but the article attributes other data to state or national realtor associations.
lifezette.com? I’m not familiar with that publication, but it’s edited by Laura Ingraham, so it’s probably best ignored.
And the article is unsourced. And it says “San Francisco region”, which could mean many different things.
genetic fallacy, moving the goal posts, and I’m sure
That article is garbage. The article is supposed to be about foreign buyers, but it uses examples of Americans of Chinese ethnic. Does he count the janitor at the Los Angeles airport as a foreigner?
‘For example, Osmundson said, she met a Chinese janitor at the Los Angeles airport who “had saved up enough money over the years to have owned three or four properties safe, free and clear.”
The janitor is “renting them out to different tenants, she’s very wealthy [and] pretty much sums up the Chinese people’s love for land,” Osmundson said.’
…I’m sure that the % of Chinese homebuyers would be much higher if the stats include the whole BA instead of just SF.
Ingraham is a whackjob, but how does that bear on the writer or the National Association of Realtors?
Weren’t the Japanese taking over in the 80s? Only to get slaughtered by the RE downturn? Isn’t this the same old story of people paying premium prices only to be gobsmacked by the effect that high prices have on increasing supply? Especially in suburban flatland area’s where land is plentiful and construction easier than in urban core areas? (Though there are plenty of cranes in SF these days)
Wait a minute. Are you saying nothing goes up forever? That the laws of supply and demand apply in San Francisco too?
Quick, someone call the Planning Department and block all those new condos going in!
That’s a pretty generic understanding of supply and demand. You’re talking about an old city, not comparing housing complexes.
This is a win-win. Housing costs are finally leveling off. Developers can still make money at the current price level (or even somewhat lower) and can keep building.
Vancouver shows the way: Condo prices rise until they are high enough to cover the cost of high rise construction, and then remain flat relative to inflation.