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Bay Area home prices set new high-water marks

  • ​Median home prices in California continue to climb driven by demand amid a persistent housing shortage. While California is just now closing in on peak pre-recession prices, San Francisco and the SF Peninsula have long since rebounded and surpassed their 2007 highs by 67% and 71%, respectively.
  • California is unlikely to develop enough homes in the short-term to make a meaningful impact on values – it is estimated that a modest 10% price reduction in the market would require 20% more inventory – an increase that is projected to take over 15 years at today’s development rate.
  • With prices likely to continue to increase, the region can only work to slow the growth rate to maintain sustainability. Otherwise, it will become increasingly difficult for the Bay Area’s workforce to afford homes near employment hubs.
Source: JLL Research

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