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http://www.sfgate.com/realestate/article/Bay-Area-home-prices-projected-to-surge-4288392.php

Almost every corner of the Bay Area is poised for robust home-price appreciation this year in a surge that will outpace projected national growth, according to a forecast from real-estate information site Zillow.com.

Looking at 245 Bay Area ZIP codes, Zillow projects that 244 will see home values ratchet up by significant margins in 2013, with 27 ZIPs seeing double-digit appreciation. Only one of the ZIPs analyzed - 94515 in Calistoga - is forecast to see values recede, by a modest 1.4 percent.

"The forces of supply and demand seem to be exacerbated here right now," said Svenja Gudell, senior economist with Zillow in Seattle. "We're happily surprised by how well (the market) is doing and how much it's picking up steam."

Strikingly, some of the strongest percentage increases are likely to happen in both the cheapest and the priciest areas in the nine-county region, Zillow predicts. Low-end Solano County markets such as Vacaville, Fairfield, Dixon and Suisun City, where values plunged during the real-estate downturn and are still half off their peaks, should see values bump up by more than 14 percent - admittedly easier to do off a low base.

At the same time, Portola Valley, Atherton and Palo Alto - with million-dollar-plus median values that now exceed their boom-time heights - should see appreciation above 12 percent, Zillow said.

Popular San Francisco neighborhoods such as Noe Valley, the Castro, Twin Peaks, the Mission and Bernal Heights are poised for double-digit appreciation, along with Menlo Park, Larkspur, Palo Alto, Alameda and North Berkeley, Zillow predicts.

Regaining value

One major way that the low-cost and high-end markets diverge is in where values are now relative to their peak. Zillow shows 25 ZIP codes where values have regained all the value lost during the downturn and then some. All are in pricey Silicon Valley or San Francisco neighborhoods where the median price is around $1 million. Meanwhile, about 100 ZIP codes are still 30 percent or more below their peaks - all in hard-hit, lower-end communities in Solano, Alameda and Contra Costa counties.

For the San Francisco metropolitan area (the counties of San Francisco, San Mateo, Marin, Alameda and Contra Costa), Zillow projects that that values will rise 7.3 percent this year, more than double its predicted 3.3 percent national increase. The San Jose metro area (Santa Clara and San Benito counties) should rise 6.6 percent, it said.

"That is a really great number in the San Francisco metro," Gudell said. "It is rather special compared to the U.S. as a whole."

Zillow's projections take into account both long-term historical trends back to 1997, as well as current data on how markets have behaved in recent months. It also factors in information on employment, income and other economic factors to predict what housing values might do, she said.

Can't meet demand

Every market around the Bay Area - whether low-end, high-end or somewhere in the middle - now has one outstanding characteristic that is driving up prices: too few homes for sale to meet buyer appetite.

"There is no place where we see a steeper decline in listed homes (for sale) than the Bay Area," said Lanny Baker, CEO of ZipRealty in Emeryville, which has agents throughout the Bay Area and the country. "This time last year there were 13,000 homes listed here. Today we see about 5,000 homes - a 60 percent reduction."

Moreover, the mix of homes being sold has changed dramatically, something that particularly affects lower-end markets such as Solano County. Far fewer bargain-priced, bank-owned foreclosures are on the market.

In the low-cost markets, investors waving fistfuls of cash are snapping up properties, usually to keep as rentals, sometimes to flip. In the high-end markets, it's tech millionaires - armed with far bigger wads of cash - who are jostling to live in homes in Silicon Valley or San Francisco.

"As soon as something new hits the market, it's snapped up," said Sandy Rainsbarger, an agent with ZipRealty in Vacaville. That town's 95688 ZIP, where the median value is now $287,900, is projected by Zillow to see values rise 17.1 percent this year - the biggest price appreciation in the Bay Area. "There are multiple offers on every single property."

Buyers pushed aside

Meanwhile, "regular" buyers, especially first-time home buyers who are relying on Federal Housing Administration mortgages, are finding themselves shoved aside time after time in frenzied bidding wars.

"The Bay Area is one of the fastest-moving markets in the country," Baker said. "We see houses sell on average in 26 days here. One statistic we look at is what percentage of homes sell in just seven days; that's like a red alert. If it gets to 15 percent, we know we're in a zany market. In the Bay Area, it's at 13 percent. In Sacramento, 25 percent of homes sell in less than seven days.

"I think throughout this year, we'll see Bay Area markets continue to be very, very strong," Baker said. "On the lower end, the specter of foreclosures and 'Gosh, nobody's ever going to want to live this far out' has washed away, and there is more confidence in values recovering.

"On the high end, we've got Silicon Valley and the tech economy doing really well."

 

[Guevara]

It's amazing how employees of new technology companies still have to live near, and commute to, the office everyday. Facebook, etc: why can't I work remotely from Kansas?

 

[AstroLad]

Whoo, only modest increases on most of the peninsula, where I am buying in the next year or two.

 

[MiniBossBattle]

A place in my neighborhood is trying to sell for 780,000. There were a bunch of people that actually went to the open house. Another one actually sold for 740K (was listed at 790k).

 

[AgentP]

7-10% for me, yay!

We just bought in mid 2012 and got a deal.

 

[Marty Chinn]

This doesn't surprise me. I've been casually looking and it's crazy how fast and how much over the list the house will go. Going to an Open House and most of them are swamped with people. It's crazy.

 

[gcubed]

Fuck, add another year to renting to save

 

[BaltimoreLarry]

As someone who may be selling this year.....AWESOME!!!!

 

[Slayven]

Is there a point where shit gets too expensive for blue collar to even work there?

 

[SouthernDragon]

Please, Bay Area, fucking stop it with the housing market. I want to actually work here.

 

[Gully State]

I guess I won't be moving back home any time soon...sigh..

 

[Mairu]

Anybody got any tips for moving out of the bay area without enough experience to get a job that pays for relocation?

Thanks!

 

[Boogie9IGN]

4-7% here yayuhhh

 

[Sanky Panky]

Thank you Bernanke and banks.

Holding back foreclosures and REO inventories to inflate prises has dumb investor money chasing for real estate again.

 

[kingocfs]

It's amazing how employees of new technology companies still have to live near, and commute to, the office everyday. Facebook, etc: why can't I work remotely from Kansas?

But if you do that you can't take advantage of dumbass perks, like play in the company ball pit.

 

[Vilam]

Ugh, kill me now.

 

[xxracerxx]

Happy that my mom and step-dad got in before this rise. They took a massive hit on their home they bought in Rhode Island in 2006.

 

[voodoojohn]

This is why I'm moving... the bay is a great place to be a young adult, but not to start a family.

 

[speculawyer]

Well, the big gains are in the Wine Country and that area was decimated with massive drops in property value. So it is nice to see them recover a little.

Portal Valley also had some big gains . . . . that is the Facebook IPO.

Other than that, it is pretty tepid.

 

[Devolution]

Not surprised about those parts of Contra Costa. They've really been expanding and that's where the good schools are. EC high is decent too. Other parts of CC are SOL though, Richmond, El Sob, Pinole.

 

[EleventhDoctor]

This really fucking sucks. I'm all for moving away but my wife is a government employee for the county and will retire in only like another 12-13 years or so. If we move, she'd have to start it all over again.

 

[Marty Chinn]

This really fucking sucks. I'm all for moving away but my wife is a government employee for the county and will retire in only like another 12-13 years or so. If we move, she'd have to start it all over again.

Do you own a house? It would seem to me, you sit this out, wait until your wife retires and then move away and reap the benefits of selling your home then.

 

[EleventhDoctor]

Do you own a house? It would seem to me, you sit this out, wait until your wife retires and then move away and reap the benefits of selling your home then.

That's the plan yes. But in the meantime, we are what is called "house poor". We own a house but we basically put everything into the house. Working now on refinancing options.

 

[GK86]

Why isn't there any high rise buildings in SF?

 

[Yamauchi]

Some Silicon Valley headhunters have been pursuing me, then I look at the prices for renting/buying in the area. I know it's not a trade off a lot of people would make, but having a wife and kid (and planning to have more), I think I'll go for the 4 bed 3 bath in flyover country. That's just me.

 

[Guevara]

Why isn't there any high rise buildings in SF?

NIMBYs block everything -> reduced supply of housing -> NIMBY's homes/rental properties are worth more.

 

[EleventhDoctor]

NIMBYs block everything -> reduced supply of housing -> NIMBY's homes/rental properties are worth more.

plus rent control. Fuck those guys.