In a nutshell, the story of today’s market in San Francisco is about an incredible lack of supply relative to demand. Here’s one of my favorite charts from Patrick’s data.
Now the question is whether, in such a market, it is “too late” to buy in? I’ve argued elsewhere that viewed strictly as an “investment,” there are probably better places to put your money than your home. People want to own their home because, IMO, we have a deep — even primal – need for a cave we can call our own.
At the same time, no one wants to feel that they are grossly “overpaying” or at risk of losing a significant chunk of their equity in the event of a market correction. Patrick’s analysis takes a long-term view of SF real estate cycles to argue that we are probably just at the beginning of an improving market and that there is therefore plenty of “upside” left. Finally, he makes the case that buying a house still makes sense given skyrocketing rents.
If you’ve got time for nothing else, take a quick look at the charts to get a quick sense of the imbalance between demand and supply right now.
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Thanks!
Misha