San Francisco housing is expensive. Super expensive. That's not news. What is news is that there may actually be a tipping point—when high prices finally hurt sales. The number of homes sold in February was the lowest for the month in seven years, and the median annual price gain was the smallest in nearly three years.
The median price paid for a home in the Bay Area was $565,000 in February 2015, down 1.2 percent month over month and up 4.6 percent year over year, according to CoreLogic. That is, however, nearly three times the national median home price.
"It is easy to see that supply is still constrained. It's also clear the mortgage market remains off-kilter. Home loans are readily available for those who have good credit, a W-2 income and who are applying for a government-backed mortgage, but it can still be challenging for others, such as the self-employed and retired, even for those with a high income or significant assets, or both," noted Andrew LePage, a CoreLogic DataQuick analyst.
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Lack of homes for sale and for rent continue to push pricing. It would take 44 percent of the area's median income to rent a home and 101 percent to buy a home with 10 percent down, according to a new analysis by RealtyTrac. San Francisco is also the second fastest selling housing market in the nation, second only to San Jose, according to Realtor.com.
It also boasts the highest rents, even higher than New York City. The average San Francisco rent reaching an all-time high of $3,460 for a 1-bedroom apartment, according to a report last month from Zumper, a rental listing and analytics company. San Francisco rents increased 1.5 percent from February to March and were up 3.3 percent over the last quarter.
The search for affordable rental housing has actually become comical—darkly so.
Investors are still heavily in the market though, despite high prices. These may, however, be foreign investors with sights set on future growth in the tech capital. Absentee buyers, largely investors, purchased nearly a quarter of all the homes sold in February, according to CoreLogic.