The tech-fueled economic strength of the San Francisco area shows little sign of relenting.
In March, home prices in San Francisco surged 10.3%, the highest year-on-year increase of the cities tracked by S&P’s Case-Shiller home price indexes. (A separate index that tracks condo prices rose an even-steeper 12.8% compared to the prior year.)
The reason is simple. San Francisco is flush with well-paying jobs. The unemployment rate hit 3.6% in March, the lowest since late 2000, not long after the peak of the dot-com boom.
Real estate also surged during the tech boom of that era. For instance, in May 2000, San Francisco condo and home prices surged 34% and 27% year-on-year, respectively. It’s worth remembering that a bust followed that boom.
But for the record, anyone who managed to ride out the volatility and hold onto their San Francisco real estate has made out pretty well. In real terms, home prices in the San Francisco-Oakland-Fremont area of California are up 45% since December 1999, according to data from the National Association of Realtors. And returns on property prices in San Francisco proper have likely been much higher.