Confirming what you may already know, the Union Bank of Switzerland published a report saying that San Francisco is "the most overvalued US urban housing market" out of all regions included in a study, and faces the greatest risk of a burst housing bubble out of all American cities.
Specifically, the report said that the city's "real house prices have soared 65% since 2012," with little to no abatement as of late. Despite having slowed just a little bit, San Francisco's price growth "remains 6% above the national average." Worse, the report also found that the average income in San Francisco has only gone up 10%, not nearly enough to keep pace with the price growth in the housing market.
The San Francisco Business Times points out that San Francisco faces the greatest "bubble risk" out of all cities in America, meaning that if San Francisco's real estate bubble were to burst, the fallout would be drastic. Still, apparently that risk is somewhat limited, as CNBC said that elsewhere in the report, SF's risk is minimized due to "its strong economic fundamentals amid the astonishing boom of tech companies."
All said, this represents something of a decline for San Francisco vis a vis the global index ranking. In last year's edition of the report, the city was just shy of being placed into the "bubble" category.
Other American cities included in the study are Los Angeles, Boston, New York, and Chicago, with L.A. being the only other city that comes close to San Francisco's index. That being said, in terms of value, San Francisco is the only one to be considered "overvalued," with L.A., Boston, and New York hovering around "fair value." Chicago is the only American city to be considered "undervalued."
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