October 3, 2006
Go South, Young Househunter
The U.S. Census Bureau released some new housing data for the years 2000-2005, and there was some semi-good news for two Bay Area cities. San Jose boosted its total housing units by 6.3% to 299,650, while San Francisco's housing stock rose 2.4% to 354,963 units. Yay! More housing is good, what with housing prices affected by "supply" and "demand," right?
However, those housing stock gains were totally puny when compared to how dramatically the median home values for those cities jumped. From 2000 to 2005, the median value of a San Jose house shot up 47% to $625,400 and the median value of a San Francisco place surged 51.7% to $726,700. It's no wonder that San Francisco has the second-lowest rate of owner occupancy among the nation's 15 biggest cities (New York has the lowest), but we're totally intrigued by San Jose's hefty 61% rate of owner occupancy, as that makes them No. 3 in the big-cities group.
Some renters made out slightly better -- San Francisco median rents rose 6.3% to $1118. However, San Jose rents actually dropped by 9% to a median of $1153. So, cheaper rents, higher rates of owner occupancy ... would-be landed gentry (or the landed poor) might have done well to scope out the commute on the 280 or 101.
(Image of I-280 in San Jose by by Sean O'Flaherty, via
Wikipedia.)
SFist Lisa S. contributing
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It's lovely to think that the mere "supply and demand" rule will somehow cure housing ills, but here's a witty rejoinder:
How do you build cheaper housing on expensive dirt? If the land is always skyrocketing in value, even a crackhouse becomes valueable at some point.
Which means all housing becomes pricey if every piece of dirt is that wanted. Sad to say, even crap-tacular crap-houses become valuable in this town. Build all you want. Build beehive crappy housing. If the dirt is valuable, IT becomes a commodity!
Wow, one throwaway quip on supply and demand, and look what happens!
Your point on the land being the real value-driver is well-taken. San Jose is in the enviable position of having more land than SF, which would explain why it can add to its housing stock.
However, I would like to say that the real point here was not how supply and demand affected housing prices, but how the housing prices rose like crazy compared to the rent. And that there's got to be an explanation for why SJ's rate of owner occupancy is so high, both regionally and nationally speaking.