San Francisco and San Jose Markets Showing Signs of a Slowdown
February 27, 2018, WALTHAM, Mass. — This month’s Pro Teck Valuation Services Home Value Forecast examines whether two typically hot housing markets — San Francisco and San Jose — are beginning to experience a slowdown.
For the first time in almost a year, both San Francisco and San Jose fell out of Pro Teck’s list of Top Ten housing markets. But both CBSAs are still top two in the country when looking at highest average selling price.
Pro Teck’s analysis shows that the average home price in San Francisco was at $1.35 million, an increase of 59% from its pre-crash high, and San Jose at $1.1 million, an increase of 41%. Wages have remained mostly on the same trajectory — average household income in San Francisco is up 49.5% from Q1 2007 ($76,319) to Q1 2018 ($114,063), while average household income in San Jose is up 41.5%.
“So, while these metros have fallen out of our Top Ten, it doesn’t mean they are not ‘hot’ markets,” said Tom O’Grady, CEO of Pro Teck.
But a closer look at affordability, as well as the potential impacts of a shifting tax policy and rising interest rates, shows both housing markets could be headed further south in the rankings.
“Interest rate hikes, combined with limits on state and property tax deductions, are reasons both San Francisco and San Jose could see a further slowdown in the coming months,” said O’Grady.
Click here to read the entire forecast, including data and graphs that further highlight market trends discussed in this release.
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