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Is Bay Area Real Estate A Good Investment?

Despite high prices and tight inventories, the Bay Area remains a strong market for real estate investors. The Urban Land Institute ranked San Jose and San Francisco among the top 20 meters in real estate exploration, citing a growing local economy, a young workforce and a long-term sustainable market.

The San Francisco real estate market is one of the most competitive in the world. The City of the Bay is considered by many to be the perfect place for both conventional and Airbnb investments. The San Francisco real estate market has, for the most part, held its value in view of the scarcity of land. We 're going to explore options for investment properties in San Francisco, both traditional and Airbnb.

Until the late 1990s, real estate in the San Francisco Bay Area has become a goldmine to developers. Thanks to iconic companies such as Apple, Google , Facebook and more enormous businesses, the tec boom has generated millions of jobs and exorbitant wealth in the region.

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According to Senior Vice President Anita Kramer of the Urban Land Institute, the Bay Area scored better this year than in previous years, in part because home prices have leveled off from record highs.

The annual report, conducted by the PwC Institute and Consulting Company, surveyed more than 1,000 real estate professionals, investors, developers and bankers. The participants examined a wide variety of community features including local savings, property prices, population figures and growth and stagnation expectations.

According to the Survey, the world leader is Austin, Texas, Raleigh and Durham N.C., Nashville, Charlotte and Boston. Strong, growing economies, young workforces and renowned universities share some common themes with San Jose and San Francisco.

The housing market in the Bay Area rose after a record run between 2012 and the beginning of 2019. The median price of the existing Bay Area home was $928,000 in May 2018 and has since dropped to $875,000 in July, according to CoreLogic's real estate data firm.

Bay Area building permits have also stalled, falling by 16% in the last year. And this year's new home sales hit monthly lows not seen for at least two decades.

But signs of construction – fenced-off construction sites, closed roads, and high-rise cranes across city skylines – still abound throughout the region.

San Jose is expected to more than triple the number of new apartments last year, with investors opening around 6,000 units in 2019, according to Rent Cafe. This year, the real estate firm estimates that Oakland will add 1,850 units, Milpitas almost 1,700 units and San Francisco 1,200 apartments.

Overall, San Francisco property has held its value better than the rest of the nation in the last few years. Our strict planning / zoning process, combined with the fact that we are a peninsula with a limited amount of land, both contribute to the scarcity of real estate that differs from other areas in California. That said, high prices, rent-control, and strict tenancy rights laws make it difficult to be a landlord in San Francisco. If you buy an investment property, you must receive a significant down payment in order to make the cash flow positive immediately.

The quality of your investment will rely upon the type of house, the community and the place in the community if you think of the purchase for yourself. Even in this "down" market,  desirable homes are still getting multiple offers and going above asking prices.


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Sexton Group Real Estate Property Management in Berkeley, California is a boutique real estate company specializing in residential sales as well as property management services for properties throughout the San Francisco Bay Area. We have 2 offices to serve you, one in the heart of Berkeley and the other in the heart of Lafayette, California. The Sexton Group encompasses the essence of Berkeley’s charm and Lafayette’s family-oriented vibe all with a relaxed, down-to-earth nature. We are an amazing group of agents whose wealth of experience spans more than 25 years in the industry.  Looking to buy or sell a home in Contra Costa or Alameda County? Contact us today for your free consultation!