I’ll let you decide if this is a good thing or a bad thing. Or it may just be a force of nature. But if our friends at Curbed SF are right, some parts of The City may soon experience a new tech-fueled real estate boom:
It’s a bit of deja-vu for those of us who remember the Dot.com boom of yester-decade: Reuters reports that IPO-driven real estate prices are becoming more common with companies like Zynga and Yelp poised to enter IPO status. And when these companies offer employees the chance to cash out before the company goes public, even the rumor of impending IPO is enough to spur optimistic homebuyers, and with them, home prices in sought after neighborhoods. Competitive bidding in these ‘hoods has driven prices up 15 percent from last year. The increase correlates with local start-up activity as more successful tech companies are finally setting up shop in the city, rather than Silicon Valley.
Some employees already working for comanies recently made public feel compelled to buy now, before the fresh crop of Zynga/Yelp millionaires enter the competition. Seems these young folks basically all want the same house, in the same place.
Potrero Hill and Noe Valley are cited some of those places, but the original Reuters article describes the new tech-wealth dream home as…
… a modern, open-plan home in the southern part of town that’s convenient to the city’s tech hub south of Market Street and also close to the freeways, trains and employee shuttle-bus stops that whisk commuters to Silicon Valley.
That sounds like a pretty good description of North Bernal, and particularly the Greater Precitaville Administrative Zone, along the Cesar Chavez corridor. And it may help explain why a 3BR house on Precita Park recently sold for almost $1.3 million.
Likewise, I’ve heard from realtor sources that this corridor is already attracting interest from these kinds of buyers, precisely because it too offers convenient access to freeways, public transit, and the arterial routes for those Wi-Fi-equipped, private commuter busses operated by the likes of Apple, Google, Yahoo, etc.
Take all that for whatever you will…
PHOTO: Telstar Logistics
Bernalwood 
Um, yes, absolutely. We are already experiencing the impact. Yesterday, I heard Ken Rosen of the Fisher Center for Real Estate at the Haas Business School speak. http://groups.haas.berkeley.edu/realestate/
He says that SF and Silicon Valley have the best housing and job markets in the country because of social and tech.
There was a great op-ed by Tom Friedman as well. I recently blogged about it: http://daniellelazier.com/blog/welcome-to-hollywood-or-make-that-silicon-valley/.
I can unfortunately corroborate this from our personal experience as house hunters who have now lost nine times as the 2nd place offer to people who are just willing to pay 10-15% more than comp market value.
My comment in meant more as an observation than a criticism, so bear with me: As Catherine notes, as a house hunter, she has now “lost” 9 times as second place buyers to others who offered more for the same property.
Not sure if they truly “lost” or not. Perhaps she needs to UP her budget, or quite frankly, find a cheaper neighborhood. Bernal is getting hot and will probably get hotter, just at Noe did in the last tech boom.
Not everyone can afford Noe or Bernal and that’s just part of the system.
Unfortunately, rich folks & booming real estate don’t make for good neighborhoods. I love Bernal because it is diverse (culturally, economically, etc.)
So let me get this right: Poor folks and sagging real estate makes for a good neighborhood? Seriously?
Then go out to Hunters Point and Bayview. See how “good” those neighborhoods are.
Your logic astounds me.
Okay, I can’t help myself. And I’m guessing/ballparking the numbers here. A person or family who can only afford $750k ish (afford means you can’t pay more and in this context it means you are already pretty much priced out of Bernal) would be the low-income person/family that Almostnative feels no sympathy for and is completely okay with having them priced out and lost to the future richness of Bernal Height’s diversity. (I won’t even get into the pretty amazing, smart, interesting, community-minded people who make a paltry $50-$80k a year but will NEVER afford buying in Bernal.) And, anything short of obscene housing prices made worse by an artificial, unsustainable economic bubble that will burst (again) is a sluggish economy. It used to be that people purchased houses to live in, not to increase their net worth. The fact that the value of one’s investment–over a lifetime, not a few years–increased quite a bit helped keep up with inflation and gave you more of an asset to pass on to the next generation. Now only a very rarified group of people–investers, speculators, and the make-a-quick-buck residential buyer with a lot of money and/or a high tolerance for huge debt–can dream of passing on something to their kids. The fact that there are so many of them in Bernal, should not lull us into a sense that everyone is doing so well and therefore life is good for the majority and the rest can go live in West Oakland or Hercules. I do not begrudge people of wealth who can come live here as good neighbors. They are also part of our diversity. I do wish more of them would recognize the impact we all have on the economy and therefore the neighbors we enjoy. Almostnative: I’m really sure that you are a wonderful Bernal person and that the limitations of commenting on a blog have simply pushed a button for me and I wanted to comment with the same frankness you offered. Have a great day!
Of course, I love Bernal for its’ diversity and local culture and small town feel. I never said I didn’t.
I also love Noe Valley, where I live. (Don’t hate me, I’m just a homeowner there). But there are rich people and a booming real estate market in both neighborhoods. That’s reality. That’s an essential component of San Francisco today. And both Bernal and and Noe are great neighborhoods, with those “rich people”.
The fact is that “some” families/individuals cannot afford to buy in either neighborhood. However, a sizable portion can. I wouldn’t begrudge them for their efforts and success. Remember: Bernal and Noe are both “desirable”. And desirability is one of the key elements that makes real estate rise in value. And desirability is also what makes a neighborhood great. I neither feel “sympathy” for those who can’t afford these areas, nor do I begrudge those who can.
I would say for those those who can’t afford to live and/or buy in Bernal to not give up. Perhaps take their energy and enthusiasm for urban neighborhoods to a slightly more south and affordable neighborhood and also make it a great place to live. They can also create desire and culture and diversity in other areas, which will continue to uplift our great city.
Agreed, SF is blessed with many great neighborhoods and some that are on their way to becoming great. Please don’t think I dislike wealthy home owners. That’s not my point at all. I think we disagree on two major things.
First, we both like Bernal because (among many reasons) the mix of people. But, if current trends continue and the non-wealthy (forgive the simplified labeling) are pushed out because home and rental prices are uniformly high, then that neighborhood is going to change and, IMO, not for the better. You seem to think if a neighborhood is left with only wealthy people, it will still be the same place interesting place to live. Community is so much more complex than that.
Second, the real estate market is not simply a product of unregulated capitalism that we have no influence over. LIke many systems, we can as citizens decide we want to control for or lessen some impacts that are not good for society as a whole. Imperfect as it all is, that’s why there is zoning. That’s why new housing complexes are required to deal with things like parking supply or providing a certain number of affordable units. That’s why the feds subsidized special mortgages for first time home buyers, etc. (That is, when banks still lent money. Oh the good old days…) So, I guess what I’m saying is that we can actually try to have a voice in what our neighborhood turns into if we are willing. And given the lessons of the financial crisis, I’m personally really concerned that the latest bubble is going to go the same way.
Anyway, it’s been interesting exchanging opinions. I’m sure we’ll bump into each other again on Bernalwood soon.
Well, some of your comments are very lofty ambitions. I really don’t know how “having a voice” in our neighborhoods will affect real estate and rental prices. I’m baffled by that one. Zoning really has nothing to do with housing costs. Zoning is put in place to regulate the type and size of a particular business or residential building in a particular area or street or locale.
Pining for the “good old days” does little to address the present and the future. I have been a resident and homeowner in Noe Valley now for 26 years, and love it. But when we first bought there, NV was not as safe, nor clean, nor graffiti free as it is now. Many new residents like myself worked hard to improve our neighborhood, planting trees, cleaning off graffiti (constantly) and being very vigilant in keeping “watch” over the safety of our streets. There weren’t very many good places to eat or shop back then. Noe, like Bernal keeps evolving and changing. That’s good for a city.
Bernal will undoubtedly keeping getting more expensive, because new younger and older people DESIRE the area and are willing to pay for the enjoyment of living there. Should that be stopped or changed? Probably not.
I wish others luck and good fortune to be able to live in Noe, Bernal or other great areas of our city. Living here really is a privilege; it’s not a right.
Pingback: Tech Shuttle Transit Map Reveals Hidden Logic of Bernal Heights Real Estate | Bernalwood