The housing market in the San Francisco Bay Area has exploded in the past 30 years, with average sales prices in some areas rising more than 500% during that time, according to a Compass report on Wednesday.
Although prices in all counties in the area rose, San Francisco, Santa Clara, and San Mateo topped the list, the data showed. Average house prices in these counties rose 532%, 513% and 506%, respectively.
“The three counties that were most valued were the three counties that were at the very heart of the various high-tech booms … which is not surprising,” Patrick Carlisle, Compass chief market analyst in the area, told Mansion Global. These include the dot-com boom in the 1990s and the high-tech boom that’s been going on for most of the past decade.
Two of the counties make up the Silicon Valley. San Mateo is south of San Francisco while Santa Clara includes San Jose; Palo Alto, home of Stanford University; and Mountain View, where Google is headquartered.
Although some markets slumped when the dot-com bubble burst in 2001, some counties were not affected at all, the report said. The aftermath of the subprime mortgage crisis later that decade was far more severe, affecting the lower end of the market disproportionately. In San Francisco, for example, prices dropped between 20% and 45% depending on the neighborhood.
Since then, prices in the region have steadily recovered, fueled by the second high-tech boom. Between 2012 and 2020, average home sales prices in San Francisco, Santa Clara, and San Mateo more than doubled.
The Covid-19 pandemic has ushered in a new era and prices have skyrocketed across the region. Since spring 2020, median prices have increased 32% in San Mateo, 31% in Santa Clara, and 20% in San Francisco, according to the data.
“Even San Francisco, which comes in at the bottom… still [saw] an increase in the average home price of $ 200,000, “said Carlisle. “Some of the counties had appreciation rates of over 30%. These are astonishing revaluation rates in a relatively short time. “
Mr. Carlisle noted that the strength of the luxury market helped drive prices higher.
“Sales of luxury real estate have increased disproportionately since the pandemic,” he said. “And if you have a disproportionately large number of home sales at higher prices, this is of course a factor that pulls the average sales price up.”
