Bay Area Housing Still Competitive

Although the housing market in the Bay Area has cooled a bit since last year it is still one of the most competitive areas in the country. According to Redfin, Contra Costa Centre (a transit community near Walnut Creek), San Lorenzo, Alameda, San Leandro, Pleasant Hill, and Albany ranked at least 92 out of 100 in the “Competitive Index.”

Analysts say that employment in the nine-county Bay Area remains very strong with over 5,000 new jobs being added in July alone.

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Bay Area housing in perspective

According to a new study by Clever Real Estate, home prices have increased four times as fast as incomes since 1960. This ever-widening gap between housing costs and wage growth means the typical family in San Jose and San Francisco spends at least nine times their annual household income to buy a home. This is the highest ratio in the country.

While housing prices have leveled off this year after hitting a peak of $928,000 in May 2018 – according to real estate data firm CoreLogic – home sales have also declined even though more units have come on the market.

An often unseen consequence of the high real estate prices is that many service providers – restaurants, barbers, dry cleaners, and others – have to raise their prices as rents go up.

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Bay Area Housing Crisis Getting Worse?

While the general home-buying news is good – existing home sales are up significantly with more first-time buyers taking the plunge (see ), the San Jose Mercury News reports that the housing crisis in the Bay Area has reached the point where 67 percent of local residents believe it is now tougher to find a place to live and 50 percent would actually welcome higher-density housing in their neighborhoods as a way to help alleviate the problem.

In fact, a full 76 percent of residents want lawmakers and developers to direct their efforts toward the creation of low- and middle-income housing.

As the region continues to grow with a strong economy, the lack of affordable housing – along with the drought – are seen as potential stumbling blocks.

It’s reached the point where 65 percent of residents say they support reductions in fees and regulations for new housing, up from 61 percent a year ago.

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