October 2015 San Francisco Real Estate Report
Home-Buying vs. Gold & Apple Stock – as an Investment, Median Home
Price Appreciation & Neighborhood Values& the City’s Most Expensive Condo Buildings
October 2015 Report, including 11 Custom Charts
Short-Term & Long-Term San Francisco Home Price Appreciation
2011 – 2015, by Quarter
1994 – 2015, by Year
Return on Cash Investment
Comparing Buying a Home in San Francisco to Inflation, Gold, the S&P 500 & Apple Stock
For the San Francisco Median House calculation, we used the 1994 median price ($265,000), with a 20% downpayment ($53,000) and paying 1.5% in buy-side closing costs ($3975) for a total cash investment of $56,975. Net proceeds were calculated using the 2015 YTD median sales price ($1,250,000), deducting 6% in sell-side closing costs ($75,000) and the original 80% mortgage balance ($212,000), which equals $963,000. This equals an annual compound return on investment of 14.4% over the 21-year period.
All of us should have put every penny we had into Apple stock in 1994, but barring that, purchasing a home in San Francisco would have been a decent alternative – particularly if you’d bought in Noe Valley or the Mission. Three factors not included in the above analysis further increase the financial benefits of home purchase over the other investments graphed: 1) the $250,000/$500,000 capital gains tax exclusion on the sale of a primary residence (potentially saving up to $75,000 in taxes), 2) the “forced savings” effect of gradually paying off one’s mortgage (if one resists refinancing out growing home equity), which has a substantial wealth-building effect, and 3) over time, the ongoing cost of housing with a fixed rate loan, strategically refinanced when rates go significantly lower, will usually fall well below rental costs that continue to rise with inflation.
With financial assets subject to market cycles, changing the buy or sell dates in this analysis can dramatically affect the return. We picked 1994, because of the availability of MLS median price data going back to then.
Median Sales Prices by Neighborhood
2-Bedroom Condos in San Francisco
3-Bedroom Houses in San Francisco
Sales Price to List Price Percentages & Average Days on Market
Seasonality, Luxury and Non-Luxury Homes
Condo Average-Dollar-per-Square-Foot Values by Era of Construction
The Most Expensive Condo Buildings in San Francisco
3rd Quarter Market Snapshot
These analyses were made in good faith with data from sources deemed reliable, but they may contain errors and are subject to revision. Statistics are generalities and all numbers should be considered approximate. How any median or average statistic applies to a particular home is unknown without a specific comparative market analysis. We are not qualified to render legal or tax advice of any kind. Sales statistics of one month generally reflect offers negotiated 4 – 6 weeks earlier.