S.F. starter home prices more than double in only five years
The prices for a San Francisco starter home have more than doubled in the last five years, according to Zillow research, which shows a 103.3 percent increase during that time period in the least-expensive segment of the market.
For the report, Zillow divided housing stock in large cities across the nation into equal thirds based on value and then found the median price of the most and least valuable homes. The least-valuable homes in S.F. have a median value of $530,900. The most-valuable segment, which has risen 70.4 percent in the last five years, had a median of $1,559,400.
This trend of less-expensive home growth outpacing most-expensive home growth was seen across the country in the last five years. “Owners of starter homes across the country are gaining equity faster than other homeowners because demand for entry-level homes continues to grow faster than supply,” Zillow explains.
In many places, the difference was very dramatic. In Miami-Fort Lauderdale, for example, home prices for the least expensive homes are up 102.2 percent, while the most expensive third of the market is up less than 40 percent.
And it appears that, nationwide at least, this trend is only accelerating. Even in areas where the upper and lower tier growth was about even in the last five years, data for the past year shows that starter home growth certainly appears to be pulling ahead. In St. Louis, for example, entry-level home prices are up 20 percent over the last five years, while the most expensive homes are up over 17 percent. But in the last year alone, lower-priced homes—which have a median of under $80,000— have risen 6.5 percent, while upper-tier homes with a median price near $280,000 are actually down almost 2 percent.
But in three markets—San Francisco, San Jose and Seattle—the most expensive homes have actually gained value faster than the least expensive homes over the last year. In San Francisco, for example, the least-expensive segment is up 9.5 percent in the last year, while the most-expensive third is up 11.6 percent.