SF East Bay Investment Property Market

San Francisco - East Bay Investment Property Market Overview

The investment property market in San Francisco and the East Bay area, the 5-county region which includes SF and extends approximately 60 miles to the east, has been one of the fastest-growing real estate markets in the country with home prices increasing nearly 70% since 20111. While historical growth has been staggering, the East Bay Area and San Francisco investment property market is still experiencing strong fundamentals that are expected to support continued growth in real estate values and rents.

Improving Gross Yields and Strong Market Fundamentals

From a Single-Family Rental (SFR) investment standpoint, one of our favorite data points about this market is that rent growth is expected to keep pace with home price growth, which is a unique factor vs. most other markets. Rents are expected to increase 6% in the next year while home values are expected to increase over 7%2. This results in better gross yields and gives investors pricing power when it comes to rent increases.

Furthermore, when it comes to underlying fundamentals that drive SFR investment returns (job growth, household growth and housing supply), the SF East Bay market continues to be one of the leading economic regions in the country.
  • House price appreciation (HPA) and rent growth: Some of the strongest home price and rent growth forecasts in the nation
  • Affordability: More consumers driven to rent as home prices have rapidly increased
  • Economic tailwinds: Continued market strength as more people move to the region, fueling job and household growth
  • Supply constraints: Limited supply of inventory (new and existing homes) in one of the most densely populated regions in the country
  • Large industry concentration to Silicon Valley / technology jobs
  • Natural disaster risk
  • The East Bay is the home of the the largest regional park district in the United States
  • Denim jeans were invented in San Francisco for the Gold Rush miners who needed tough, comfortable clothing
  • 1 Zillow Data, February 2016
  • 2 John Burns Real Estate Consulting, March 2016

Real Estate Investment Insights

Investment Style: High Appreciation Inventory:
Home Value *
$933,300
$210,200
National Avg
Home Value Growth (YoY)
10.4%
7.6%
National Avg
Rent **
$3,412
$1,445
National Avg
Source: Financial data from Zillow includes single family, condo & cooperative homes, updated on 02/28/2018
Job Growth (YoY)
2.2%
1.6%
National Avg
Household Growth (YoY)
1.6%
1.0%
National Avg
Estimated Months of Resale Supply
0.9%
3.4%
National Avg
Household Income
$94,600
$61,313
National Avg
Supply, Demand & Affordability data includes single family homes only, updated on 04/12/2018
  • Arrows indicate the directional change since the last update. No arrow indicates that there was no change in the data or no previous data is available.
  • * Home Value: includes all types of housing, including primary resident, condos, investment properties, etc.
  • ** Rent: includes all rental properties, including Single-Family Homes, multi family units, etc.