With new proposals having been submitted to the City for roughly the same number of units that finished construction in the fourth quarter of 2016, the overall pipeline of apartments and condos under development in San Francisco has slipped by a hundred: from a record 63,700 in the third quarter to 63,600 at the end of the year.
While that’s still 1,100 more units in the pipeline than at the same time last year, the quarter-over-quarter slip of 100 is compared to an increase of 3,500 in the fourth quarter of last year. The year-over-year gain is the smallest since the fourth quarter of 2014. And as we reported in December, newly proposed development in San Francisco has dropped to a four-year low.
In terms of the state of the current pipeline, there are now 6,200 units of housing under construction across the city which should be ready for occupancy within the next year or two. And there are 13,300 net-new units of housing for which building permits have either been issued, approved or requested, and another 30,700 units in projects that have already been approved but not yet permitted (which includes the majority of the 10,500 units by Candlestick, 7,800 units on Treasure Island and 5,680 units at Parkmerced, projects which have overall timelines measured in decades, not years).
And with proposals for another 13,430 units of housing under review by the City’s Planning Department, which is the fewest since the second quarter of 2015 and trending down, San Francisco’s Housing Pipeline now totals 63,600, including 9,000 new “affordable” units which are to be offered at below market rates, according to our accounting of Planning’s database.
At the same time, sales of new construction condos on the market in San Francisco were down 25 percent last year, at least one index suggests that new condo prices have dropped over 12 percent from peak, and rents in the city are down 8 percent.
This population growth thing will probably cool off commensurately.
[Editor’s Note: More importantly, however, is employment.]
Hopefully the population has peaked and will fall back to under 800K as it has historically been. I don’t/didn’t buy those projections that SF could hit 1 million. The city is too small to absorb more residents. Its not like we are Seattle which has double the area of SF. Or any number of other cities which have real room for growth.
The jump of almost 80K in the last decade coincides with a noticeable decline in the quality of life in SF. Try going to Lake Merced on a weekend. Better get there before 8AM or you can’t park – or sometimes even double park if that is your thing. The park is a sea of humanity, noise, debris. It was not that way 10 years ago.
The growth has caused already unaffordable prices even further north. No one knows how many of the 63K or so units in the pipeline will get built. Its probably a good bet developers will bail on many of them. Or, in the case of projects planned for the next 3 decades not build till years out.
ive lived here now for 21 yrs and find the quality of life to be the best since ive been here. Granted i do stay away from fidi, so cant speak for that area.
Why do you think the demographic trend of urbanization, which has continued relatively unabated for the last 4000 years, albeit with a minor blip around the 1960’s, will suddenly reverse?
If the prices are un-affordable, it’s because more people want to live here, not less.
Absurd as always. We should be measuring quality of life in SF by where Dave can personally find easy parking?
Of course someone’s personal feelings about growth projections in SF are more valid than the data from people who do growth projections for a living – using science and data.
Dave: What do you personally gain from your constant negative propagandizing about SF? Aren’t you a real estate person?
Pretty sure a lot of people without jobs hang around the city too and hang on to places to live for a long time. 100 year old woman recently evicted, for example.
[Editor’s Note: Great example with respect to existing (versus additional) demand. And while the 100 year old woman had been paying rent in an attempt to maintain a claim on the property, “the building owners say she has not been living at the unit and is instead living in Oakland with her niece.”]
This must be one of those Socketsite ways of calculating housing statisitics that I won’t ever really grasp. If the elderly woman was living in Oakland without ceding possession of her apartment in San Francisco, the apartment in SF was still occupied/rented/unavailable-to-others for any meaningful calculation of housing demand as far as I can see.
I still think the overall population living in San Francisco is a more important metric for calculating housing demand than the number of employed people. Everyone wants to have a place to sleep at night, employed or not.
And based on your example, not only has existing demand for housing in San Francisco just decreased, but supply has increased as well (by one).
While everyone does want – and should have – a place to sleep at night, that’s not the reality.
And in fact, despite an increase in population, rents, pricing and sales – which are measures of actual demand versus “want” or need – have been trending down in SF.
Spoke to a guy who works for a fintech startup last night. He said it’s only a matter of time before he needs to start looking for a new job. I asked why and he said “same as everybody else, the funding has run dry”.
If that one guys says so…..I suggest you sell your SF Real Estate, short all tech stocks and buy some gold…
Or I could listen to that guy who is dreaming that SF real estate will be his Golden Ticket because this time it’s different.
I won’t sell my real estate, because the long term debasement of our fiat is virtually guaranteed, but I will short stocks and long gold when the time comes. Just waiting for the usual “a-ha moment” like Pets.com or Lehman Brothers where everyone finally sees that the emperor wears no clothes.
You will “long” gold? I take back what I said before about you coming to your senses. Once again, you display ignorance and an insistence on simplistic generalizations about the tech business, painting with a broad brush and listenting to unrepresentative anecdotes like this one. Yes, some startups will certainly run out of money. Yes, there will certainly be job losses in the region.
But this poster I call Saddie talks as if we’re headed for a tech job crash. More like a ‘dip’ is coming, and it should result in a dip and flattening of prices. Will Saddie ever say how much he expects prices to decline? Nah, that would make him look dumb, and he gets off on coming off as an expert here.
Since your expert analysis calls for only a “dip” vs “crash” then why don’t you tell us precisely how much you expect prices to move?
I don’t pretend to know the future, but I do take new information into account, and I have a plan for either outcome. People like you prefer to dismiss any data that doesn’t fit your existing narrative.
I’m just curious, did you ever benchmark your ‘the crisis is just around the corner’ portfolio against a market tracking index? I’m sure the SF real estate investments did beautifully, but the rest?
Also, if, ‘the long term debasement of our fiat is virtually guaranteed’….how do you expect real estate to protect you from this? Do you think people will still be paying you 3-4k a month (per unit) in rent after the US dollar has crashed and burned? Do you think an illiquid market like real estate will be unaffected by that type of systemic financial crisis?
Bearish on fundamentals, bullish on technicals.
You are mixing deflation and inflation. Real assets protect against inflation because they have intrinsic value in use. Also the 30 year fixed mortgage magnifies the hedge effect. In a financial crisis, yes the asset will lose value. I bought in 2011, my rent can go back down around 40% and I’ll be fine. But they always seem to lever things back up with more debt.