San Francisco Dominates Commercial Real Estate Growth

According to our friends at the San Francisco Real Estate Blog, San Francisco recently took first place as the city with the most projected commercial real estate growth. The office vacancy rate in SF is expected to drop by almost 2%, and rent is expected to rise about 7% by the end of the year.

On the one hand, this isn’t such a wonder – San Francisco’s commercial rent market has been bleak for quite some time now. Any trend in a positive direction looks pretty dramatic by comparison.

Still, the New York Observer admits “a twinge of jealousy” at seeing Manhattan conquered. And, as a Bay Area resident, I have to say that feels good.

Home Prices in SoCal are the Lowest in Years

As we all know, the housing market in California has been struggling for a while – particularly in Southern California, where a large portion ofthe local economy is driven by construction and real estate related activity.

But it seems that, according to the real estate section of the LA Times, SoCal home prices are the lowest they’ve been since 2009. The median price of a Southern California home is now $270,000.  The raw number of sales is down, too, dropping 5.9% compared to January 2010.

Of course this isn’t the end of the world,  and unusually bad winter weather can realistically explain quite a bit of the drop. 

“It is very hard to tell a trend from January, but I think we are experiencing a market that has not yet found its forward momentum,” said Edward Leamer, director of the UCLA Anderson Forecast. “You can’t have a healthy housing market without a healthy job market.”

 This, of course, makes perfect sense. But it’s still disappointing news for those who predicted that 2011 will be the year that the housing market picks itself up and dusts itself off.

Who isn’t disappointed? Well, homebuyers, obviously. This is the cheapest homes in Southern California have been in years. This might very well be the “double-dip”/”rock-bottom” that everyone’s been talking about. And given the upcoming changes in the mortgage industry, this might be the homebuyer’s magic moment.

Office-space: commercial rents begin to recover in the Bay Area

Things – by which we mean rent – are looking up in the Bay Area.

According to the Wall Street Journal, office space south of the City is beginning to fill up as gradual economic recovery makes growth and therefore relocation more feasible for many start-ups.  According to Bay Area real estate experts, the recovery is following a familiar pattern:

“Palo Alto always rebounds first, always demands the best rent, and then it just slides down from there—Mountain View, Sunnyvale, Santa Clara,” says David Buchholz, a San Jose-based senior vice president at brokerage Colliers International.

In Palo Alto, the forerunner in the Bay Area office rental recovery, vacancy is down 2.8% from last year.  San Jose hasn’t recuperated nearly so well, and parts of the city continue to struggle with vacancy rates of around 25%.  That’s staggering for the city that was once a major home-base of the dot-com boom.

The reason many dot-coms are relocating to Palo Alto is three-fold.  First, the neighbors: everyone wants to be near Google and Facebook.  Second, many progressive new companies take employee residence zip-codes into account when deciding on a new move, and Palo Alto happens to be a good mid-point for many.  Third, just about every Caltrain makes a stop at Palo Alto.

Those who are smart, of course, will snatch up a home in Palo Alto to match their glamorous Bay-Area job.

Bay Area Housing Becoming Too Expensive?

Is the Bay Area becoming too pricey to live in? The Wallstreet Journal reported that as housing prices continue to rise, employees of Bay Area companies are looking elsewhere to set up their home base—even outside of the state of California.

The WSJ article highlighted three former Bay Area residents who recently purchased homes at dramatically lower prices in Portland and Seattle, while maintaining their employment at Bay Area companies. It seems that the job market in the Bay Area is still thriving, but the cost of living can be crippling to those with families or dreams of more square footage. Each one of these thrifty homebuyers telecommutes regularly and travel by plane to their Bay Area job at least once a week, and all of them believe that the reduced housing cost is worth the continued inconvenience of travel.

What do you think—is the price of affordable housing worth the cost of relentless travel to you?

Property Watch in Saratoga

How much house are you getting for your buck? We used Movoto.com to research properties and chose the city of Saratoga to collect data points. Here’s what we found:

*Chart can be found on the Movoto Statistics page.

It seems that you are able to get a home for $29/sq. ft. cheaper in 2010 than in 2009. The median house size has also increased by 686 square feet. Why are you not seeing cheaper homes for sale? Because the homes are bigger! Here is a snapshot of the homes available today:

Cheapest Home For Sale in Saratoga:

Condo, 1bedroom/1bathroom, $395,000

Reasonably-priced Homes For Sale in Saratoga:

House, 5bedrooms/3bathrooms, $1,299,000

House, 4bedrooms, 3bathrooms, $1,499,000 

House, 5bedrooms, 3bathrooms, $1,410,000

Most expensive Home For Sale in Saratoga:

House, 6+bedrooms/4bathrooms, $19,500,000

For more homes in Saratoga, check out Movoto.com

Finding the Perfect Home – How Picky Are You?

Are you a dedicated homebuyer? The Wallstreet Journal found a California woman who practically made it a part-time job to view homes in Marin County, CA in order to find her dream home. Most of us don’t have that kind of time, but former United Press International reporter Lidia Pringle viewed over 298 homes in a two-year period before eventually deciding on a $5.9 million home in Tiburon.

On average, most homebuyers visit 10-12 homes before deciding on a home to purchase, according to the National Association of Realtors. The turning point in Pringle’s search was owed significantly to the instable housing market of early 2009 and the lower prices which resulted.

One must wonder though, could some of her trouble have been avoided with the help of a reliable and thorough realtor?