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Is San Francisco still an investment hotspot?

by on 22 Feb 2017

San Francisco has long been a strong market for real estate investment, but in recent times it’s been seriously heating up. We caught up with John Luedemann, Director of Sales for Lennar’s Bay Area Urban Division to ask why San Francisco is an attractive location for Canadian investors.

“San Francisco is experiencing a very hot and expensive rental market, along with larger businesses moving in,” Luedemann says.  “We are seeing both international and domestic buyers that want to live in the city, which makes it a great long term-investment.”

Employment in San Francisco is at an all-time high, with professionals from around the world flocking to the region in search of opportunities at established companies and ambitious start-ups. “Many high tech and bio tech industries are moving into the city, and we are only 40 minutes away from Silicon Valley,” Luedemann says. “There’s a high demand for rental space. Inventory has risen a bit for residential, but it’s still a sellers’ market. Prices are still on the rise, maybe not as high as last year, but home prices are still on the rise.”

As well as being home to some of the most prestigious universities in the country; Stanford, UC Berkeley and UCSF Medical, the Greater Bay Area has the most active venture capital market in the United States.  “With Silicon Valley nearby and all the new industry coming into the city, the job market is continuing to strengthen, which will in turn only create more demand for housing,” Luedemann says. “San Francisco is one of - if not the - most iconic cities in the world, so no one could ever go wrong purchasing real estate with a San Francisco address.”

San Francisco’s condo market has stabilized over the past year and values are no longer seeing double digit increases every quarter. Luedemann advises potential investors to conduct pricing comparisons on condominiums, flats and townhomes in the city. “San Francisco condominiums averages around $1,200 per sq. ft. (which would dictate $3,900 per month in rent) and the Shipyard averages around $850 per sq. ft.,” he says.  “Do the research and you will find that there is fantastic value.”

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