Wednesday, January 25, 2012
As confidence returns to the national economy, people are getting more comfortable about buying again and in knowledge-based economies like San Francisco, that shift looks like it will hit the real estate world hard and fast. A number of recent articles, from mainstream sources like yesterday's New York Times to self-interested sources like tons of articles within the real estate, development, and building sphere, all agree on one thing - people still think owning houses is important to their ideas of success (see article below), and to the strength of the national economy, so its just a matter of time until the attitude shifts and a lot of pent-up home-buying desire is released suddenly.
Yesterday's New York Times piece by a UC Berkeley Haas School of Business Professor stated, "By one recent estimate, the nation has about two million fewer households than under more normal conditions. Some of these potential buyers hesitate to take the risk of buying, even though their jobs and credit history may qualify them for mortgages. While near-record numbers of houses all over the country are empty, the sidelines are crowded with this huge 'shadow demand.”
The incredibly low prices and interest rates (which the Fed just promised to keep low through 2014) out there today are going to encourage people to jump back in, and its going to happen fast. In particular, as San Francisco continues to be able to only create a few hundred new housing units a year, but thousands of new high quality jobs a year thanks to CPMC expansion, the tech boom (especially SalesForce.com moving many thousands of employees to San Francisco and other Silicon Valley firms like Intel, Adobe, and Google moving more and more people to the City), and other job creation happening in the City, there simply will not be enough housing once people start buying again, and that is going to have an impact throughout the Bay Area. Places like PCL, which offer an easy commute to SF by car or transit are going to be the first place a lot of those new employees turn to buy their first homes. And smaller companies that can't find or afford San Francisco office space are also going to look to the likes of downtown Oakland, further increasing demand for convenient housing.
Poll Finds that Americans May Still Favor Homeownership
“Homeownership for these voters is more than bricks and mortar and a mortgage.” In fact, in regard to statements about homeownership, 79 percent of respondents say that homeownership provides a good place to raise a family (ranking this, on a scale of zero to 10, an eight or higher).
Other beliefs included:
- homeownership helps create strong communities (67 percent);
- homeownership is a key part of achieving the American dream (65 percent);
- homeownership provides a stable, long-term investment (64 percent);
- homeownership helps fund government services such as schools, roads and public safety (56 percent); and,
- homeownership is key to achieving economic security for your family (53 percent).
Housing demand is going to come back, and its going to happen fast. If you don't own, you would be wise to be ahead of the ball on this and pick up the great deals while they are still out there.