San Francisco Bay Area Economic & Housing Trends Defy National Malaise

Last Friday’s economic news put a damper on prospects for a robust national recovery. With lower-than-expected domestic job creation and a slight increase in unemployment, combined with equity market sell-offs and uncertainty in the eurozone, the national media immediately sounded broad-based alarms.

While the news from Washington may have seemed bleak, the truth is that the San Francisco Bay Area is thriving on its own regional economic drivers.

Our research at Pacific Union International suggests that, especially when it comes to the residential real estate industry, our markets continue to benefit from record-high demand and both seasonally and historically low inventory. Since February, we have been encouraging home sellers to join the party.

Here are positive economic indicators that drive our markets – and paint a fundamentally stronger picture of the real estate market.

  • More jobs fuel the economy’s engine. The Bay Area economy is improving significantly faster than the rest of the country. In April, San Francisco’s unemployment rate was 7.4 percent – down a significant 3.5 percentage points from the statewide average of 10.9 percent, and down 0.7 percentage point from the U.S. average of 8.1 percent. Marin County’s numbers were even better, with an unemployment rate of 6.4 percent – the lowest in California. The six Bay Area counties served by Pacific Union International’s real estate professionals consistently post stronger employment numbers than any other region in California. This drives consumer confidence and residential real estate demand.
  • Foreclosures are fewerForeclosure rates continue to drop around the Bay Area. In April, the last month for which data was available, default notices fell more than 9 percent from March in Santa Clara County, 24 percent in San Mateo County, 21 percent in Contra Costa County, and 25 percent in Alameda County.
  • And don’t forget Facebook. The IPO may not have lived up to the hype, but it will still mint plenty of millionaires. And Facebook will create huge boosts for the tech industry, the local economy, and of course, real estate. Silicon Valley is seeing soaring housing prices, and the trickle-up effect will benefit San Francisco and other Bay Area cities – not to mention the Sonoma and Napa County wine country and Lake Tahoe second-home and vacation-rental markets.

Here are a few positive internal indicators driving a vibrant outlook from Pacific Union International. Our view is that the Bay Area economic recovery is healthy and as a result, our local real estate markets are thriving.

We’re constantly reminded that real estate is local – and you can’t assume that national trends apply to our neighborhoods.