By 2011, home values fell 26% nationwide and an even worse 40% in the Bay Area. The financial crisis of 2007-2008 taught us many new terms like “subprime lending” and “too big to fail.” It also showed us the error of wanton deregulation. (He transforms into a credit default swap.) It turned out that all the people buying homes above their means could not, in fact, have it all. To everyone but those “ Big Short ” guys, things were looking pretty great.Įnter Subtimus Prime, the Decepticons’ unscrupulous mortgage lender. In spite of the Dotcom crash, San Francisco real estate appreciated 166% in the same period. San Francisco actually fared even better. Through thick and thin, nationwide home appreciation just kept rising, growing a total of 142% between 1991-2006. In fact, not even 9/11 made a significant dent in national home prices. It barely caught a whiff of the stink let off by the Dotcom bubble burst. Decidedly Not PrimeĬontrary to the Bay Area, the national real estate market was resilient. The Dotcom crash wiped out some of the SF home price gains from previous years, but not much: only 6%. When the bubble inevitably burst, that meteoric rise turned to meteoric failure (with some extra help from gravity). Silicon Valley’s Sand Hill Road had the most coveted office space in the world. From 1996-2001, San Francisco home values doubled. The age of AOL created millionaires overnight. When the Dotcom boom hit, wealth in the Bay Area-and its home values-boomed as well. Don Hoefler coined the term “Silicon Valley” in 1971, and by the eighties Apple was a household name. The Bay Area had long been a cradle of innovation, starting in the 19th century with a semaphore atop Telegraph Hill which broadcast the contents of inbound ships. The mid-90s were a turning point for San Francisco real estate values. In total, San Francisco home price appreciation dropped 11% between 19. Due in large part to the 1989 San Francisco earthquake, which killed 67 and caused over $5 billion in damages, San Francisco real estate continued to slide for years. San Francisco, on the other hand, was much slower to recover. Fortunately for most of the country, the slump didn’t last long. From 1990-1991, national home values slipped 2%. The good times didn’t last, however, and a mild recession hit in 1990. Just in the years of 1987-1990, Bay Area real estate appreciated a whopping 60%. By the early eighties, Silicon Valley already had the highest concentration of venture capital firms in the world. Home values around the country boomed between 1980-1990, gaining a total of 67% per the CoreLogic S&P Case-Shiller National Home Price Index. Graphs courtesy of COMPASS | Data per CoreLogic S&P Case-Shiller National Home Price Index Quaken, And Stirredįollowing a recession in ‘81 and ‘82, the country bounced back strong. National Home Price Appreciation, 1975-2019īay Area Home Price Appreciation, 1987-2019 From the 1989 earthquake to the rapid rise of Bay Area tech, we have seen higher highs and lower lows relative to the rest of the country. For the last 30+ years, San Francisco real estate values have been impacted by a number of unique factors. We can’t predict the future, but we can look to history for clues. With a California stay-at-home order in effect, the economic impact of the pandemic is already wide-ranging. Local government responded with drastic countermeasures. The Bay Area was among the earliest US regions to document cases of the novel coronavirus. Other times, we are affected more-for better or worse. At times, we are insulated from the national economy’s ups and downs. Yet, history shows that our city is often an exception to the greater macroeconomic rule. Like all local markets, broader trends affect San Francisco real estate.
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