Tuesday, April 1, 2014

Condo Prices Go Crazy in San Francisco and NYC

New York City and San Francisco, because of their connections to the financial markets, are two areas that see an overwhelming amount of newly printed  Federal reserve money, before other parts of the country, and it shows.

WSJ posts this chart on the median sales price for condos and co-ops in Manhattan.

The San Francisco Chronicle reports:
S.F. condo market passes precrash peak

If that sounds reminiscent of late 2007, when buyers lined up outside One Rincon Hill until the wee hours, it is. Median condo prices in San Francisco are now above $830,000, about 8.2 percent higher than the peak reached right before the economic crash in early 2008. The latest Standard & Poor's/Case-Shilling home sales price index shows that San Francisco prices have jumped 23 percent in the past year...

Units that seemed terminally underwater are now high and dry. At One Rincon Hill, a unit sold recently for $815,000, a 15 percent profit over its early 2008 purchase price. The seller's broker, Leslie Bauer of Sotheby's International, said, "Even a year ago it would have sold for about $650,000."

Another One Rincon Hill unit traded in February for $1.14 million - 31 percent over its 2011 price of $870,000.

The frothiness is being whipped up by a combination of the robust tech economy, low interest rates and a supply of new condos that is at an all-time low...

"There is a lot of cash in the Bay Area," [said said Jason Chapin, a retail sales supervisor for Wells Fargo Home Mortgage] "The IPOs in tech and biotech are back. We see a lot of young people with more liquidity than we have seen in the past."

1 comment:

  1. The fools are quickly parted with their money...