Glen’s SF East Bay Real Estate Market Update
November 30, 2016
What’s in store for the San Francisco Housing market in 2017? Here are a few “snippets” from some of the articles listed below under “Recent News.”
“Job growth in San Francisco and the East Bay is slowing from the heated pace of recent years as the region’s high cost of living takes a toll,” Beacon Economics said Monday.
- Mortgage rates are likely to continue to increase throughout 2017.
- There will not be any easing in inventory, and affordability will still be a challenge in big markets.
- The potential is there for a large number of first-time buyers to enter the buying market, but they will face new challenges.
“In general, home values will slow their climb next year,” said Gudell, (Trulia’s Chief Economist). “Currently we’re looking at 6-percent-ish annual appreciation; next year it’ll probably be half that, so a little bit of relaxation there, which will also feed into being more of a buyer’s market by the time we reached 2018.”
“Cities will focus on denser development of smaller homes close to public transit and urban centers.”
Here are some highlights for the 38 East Bay Cities that I track:
- Inventory decreased 23.6% in the last 30 days but is still about 1.38 times more than what it was at the beginning of the year. Inventory is slightly greater than where we were last year at this time. Our monthly supply is now 30 days. As a reminder of what we mean by “months supply;” If no more homes come onto the market, and homes continue to sell at the same pace as they have been over the last 12 months, then the “months supply,” (in this case 30 days), tells us that’s how many days it would take to sell the remaining number of homes we currently have available for sale in any given market.
- The number of pendings, (homes that are in contract), has decreased 10% over the last 30 days and is less than what we experienced during this time last year by 11.8%. The pending active ratio increased to 1.44. This supply and demand ratio signals whether we’re in a sellers or buyers market. Typically, a number well above 1, (more inventory with less pending) favors sellers. A number below 1 favors buyers. This is at a lower level than we saw last year at this time, (1.75), and this may be an indication of moving towards a more “normal” or balanced market combined with the typical late fall/winter slowdown.
- The percentage of homes “sitting” has increased from last month. 57% of the homes listed now remain active for 30 days or longer, while 32% stayed on the market for 60 days or longer. This may be due more to a shortage of “fresh” new inventory coming onto the market. This is identical to where we were last year at this time.
- The “distressed” market, (foreclosures and short sales) are no longer much of a factor representing only .6% of the active listings and 1.6% of sales over the past 4 months.
- Median Price recovery on a city by city is beginning to see a slight increase. This is typical as we approach Winter. 17 out of the 33 East Bay cities tracked are now at or above their median price “peak” levels with another 13 cities within 20%. That means that only 3 cities are still well below their peaks, falling into the 20% to 30% range. The Median Price for the East Bay has decreased from $650,000 to $620,000 over the last 4 months, also typical for this time of year.
- The month’s supply for the combined 38 city area remains at 30 days. Historically, a 2 to 3 months supply is considered normal in the San Francisco East Bay Area.
- Our inventory for the East Bay (the 38 cities tracked) decreased to 2,028 homes actively for sale. This is still well above the December 2012 low of 1,086 and slightly greater than last year at this time of 1,887. We’re used to seeing between 3,000 and 6,000 homes in a “normal” market in the San Francisco East Bay Area. Pending sales decreased to 2,911, slightly lower than where we were last year at this time of 3,300.
- Our Pending/Active Ratio is 1.44. Last year at this time it was 1.75. This is moving towards a more balanced or “normal.” (a ratio of 1 with an equal number of listings and pending sales).
- Sales have decreased from the last (4 month period) now at 8,836 for the 38 cities tracked. This is up 3.4% from what we saw last year at this time.
- Sales over the last 4 months, on average, are 2.8% over the asking price for this area down slightly from last year’s 3.4%. This has come down over the past 4 months from 4.0%
Historical Median Price City by City Recovery
How much has the real estate market in your city recovered from their previous Peaks. The graph shows our recovery from each cities peak. As you can see, the most sought after cities have led the way. However, this is a slow process and as buyers become priced out of some of these markets, their interest spills over to the surrounding cities. They too begin to follow the trend up towards recovering.
By Mark Calvey, SF Business News, December 5, 2016
Job growth in San Francisco and the East Bay is slowing from the heated pace of recent years as the region’s high cost of living takes a toll, Beacon Economics said Monday.
Beacon said it anticipates job growth in San Francisco to expand in the 1 percent to 1.3 percent range over the next year.
Job growth in the East Bay is also expected to slow to between 1 percent and 1.5 percent over the next year, down from 2.7 percent growth between October 2015 and October 2016.
Beacon’s economists blame the slowing job growth on a familiar culprit — higher housing costs.
The firm sees housing costs slowing the pace of people moving into the region. Plus, the East Bay is approaching full employment at a jobless rate of 4.4 percent, Beacon said. San Francisco is already there.
The East Bay is expected to still be a magnet for existing residents and businesses looking for lower-cost alternatives to pricier Bay Area communities such as San Francisco.
“The influx of highly educated professionals has been a primary driver of growth, but as the rising cost of living in the area chips away at wage advantages, net migration is expected to dramatically decline over the next few years,” Beacon Economics said.
That spells bad news for residential real estate.
Beacon said the San Francisco area rental market “appears to be approaching the end of frenzied growth.” The firm expects multifamily permitting activity will fall by 18 to 24 percent in 2017, as compared to 2016, as “demand for apartments in the region’s pricier submarkets continues to cool.”
Beacon anticipates rising mortgage rates will keep San Francisco area single-family home price appreciation on track for more modest gains of 3 percent to 4.5 percent over the next year.
But in the East Bay, Beacon expects median single-family home prices will gain steam, with appreciation over the next year coming in at 5.6 percent to 6.2 percent.
Beacon Economics said its overall outlook for East Bay real estate is “optimistic,” with residential construction expected to continue at similar levels next year as this year. The firm sees single-family permitting activity actually increasing over the next year.
8 experts predict what the 2017 housing market has in store, What will happen to mortgage rates, affordability, inventory and more
BYAMBER TAUFEN, Inman News, December 6, 2016
- Mortgage rates are likely to continue to increase throughout 2017.
- There will not be any easing in inventory, and affordability will still be a challenge in big markets.
- The potential is there for a large number of first-time buyers to enter the buying market, but they will face new challenges.
What will the 12 months encompassing 2017 hold in store for housing?
Inman asked eight different experts to give their take:
- Steve Cook, editor of Real Estate Economy Watch
- Doug Duncan, senior vice president and chief economist at Fannie Mae
- Mark Fleming, chief economist at First American
- Matthew Gardner, chief economist at Windermere
- Svenja Gudell, chief economist at Zillow
- Ralph McLaughlin, chief economist at Trulia
- Rodney Ramcharan, director of research at University of Southern California’s Lusk for Real Estate
- Jonathan Smoke, chief economist at realtor.com
Here’s what they told us.
We’ve been spoiled with historically low interest rates, which haven’t risen despite threats to do just that over the past few years. No more. “The kind of rates we were getting earlier this year, down to 3.5 percent — those days are over,” said Cook.
“I think in December we’ll see the Fed raising rates and we’ll see more Fed hikes in 2017, and with that, I wouldn’t be surprised if the 30-year fixed mortgage rate hits 4.75 percent,” said Gudell.
“I don’t believe we’ll see any pullback until after the inauguration, but even the best-case scenario suggests that the historically low rates that have been in place for the last few years are firmly in the rear-view mirror,” said Gardner. “My forecast is for the 30-year fixed rate to rise above 4.5 percent by year’s end, and worst case scenario, knock on the door of 5 percent.”
“If income growth picks up, then the rise in interest rates will affect refinancing, but not the home purchase activity. If incomes start to grow more strongly, it probably won’t affect buying as much as refinancing,” Duncan said.
“Just looking at the pricing data in terms of interest rates, the spike in interest rates should definitely slow things down,” said Ramcharan.
Fleming said that if mortgage rates get closer to 5 percent by the end of 2017, he would expect home sales to decline by about 4 percent from First American’s original projection — or by about 200,000 sales.
At what point would rising mortgage rates start to significantly dampen buyer demand?
“When I’ve looked at this topic historically in the past, what you tended to see was an absolute level that the market reacted to, and in years past that absolute level was closer to 6.5 and 7 percent,” said Smoke.
“But there are plenty of people who believe that because we’ve had a decade of historically low rates that the new threshold for that might be in the mid 5’s or even as low as 5 percent. So if we see them jump more than we’re anticipating, getting into the 5s, then we start to run into that issue.”
Housing inventory — or the lack thereof — was a big deal in 2016, and it will continue to be a problem next year, experts believe.
“Historically, you’d want to be much closer to a million homes built or sold, and we’re roughly at half of that, so I don’t think builders are going to have an easy time magically ramping up,” said Gudell.
Inventory will likely fluctuate by market and price point, too. “For people at high ends and expensive properties you may very well see a surge, and the expectation is that tax cuts will come,” said Ramcharan. “Prior to Trump being President-elect, there was a slowdown at the top end.”
How mortgage rates will influence inventory
Because most housing inventory comes from the existing market (as opposed to new construction), what potential sellers decide do in 2017 will have an impact on the market as a whole — and rising mortgage rates might not be great for sales.
Consequently, existing homeowners with low mortgage interest rates might not be able to afford to move into a bigger house if it also comes with a higher rate.
“How do we address the fact that the existing homeowner, the largest single source of housing supply, has a built-in financial disincentive to make that supply move?” asked Fleming. “You’re making that decision to supply as a function of what you can afford to buy, but all else held equal, because you lose that low rate and have to get a new mortgage at a higher rate, you might not be able to buy your own home back from yourself without an increased monthly payment.”
Where’s the entry-level housing?
“The thing that’s missing is entry-level housing available for sale, but also, all of the apartment-building that is going on is all class A properties, which is the most expensive — no one is building class C properties,” said Duncan.
Sellers unwilling to budge
“Household psychology has affected people; they’re willing to take less risk than they were in the past,” said Duncan. “You can see that in the remodeling data. People are staying in place and remodeling their existing homes with a higher probability than in the past.”
“The median tenure in homes is at an all-time high,” noted Jonathan Smoke. “Part of [that] is … the reasons people are purchasing tie into life events.
“Where this can be particularly important is with retiring baby boomers,” he added. “There’s a cohort of baby boomers who might think it’s in their best interest to stay put and make improvements so they can age in place.”
A basic economics lesson: When inventory (supply) is thin on the ground, and demand is unchanged, you can expect prices to go up.
“Home construction is at full tilt and it’s still not filling the bill, particularly affordable housing,” noted Cook. “The average price of a new home is increasing still; we’re not serving the mid to lower-tier market with new home construction. So you’re not going to see much relief in affordability.”
“If you’re located in San Francisco, Los Angeles, Seattle, New York or Miami, rising mortgage rates might very well have an impact on you because you’re already stretching your budget as it is to get into a home that you can barely afford at historically low mortgage rates,” Gudell added. “In these places where affordability is already an issue, seeing these small bumps will already have a slight dampening effect, and we’ll see that effect not on all buyers but specifically first-time homebuyers or lower income folks.
The big picture
“We still think affordability is going to be a challenge in some of the largest markets in the U.S. — L.A., the San Francisco Bay Area, the Pacific Northwest — but that said, the U.S. is still a very affordable place to buy a home,” said McLaughlin.
“In general, home values will slow their climb next year,” said Gudell. “Currently we’re looking at 6-percent-ish annual appreciation; next year it’ll probably be half that, so a little bit of relaxation there, which will also feed into being more of a buyer’s market by the time we reached 2018.”
Millennial and first-time buyer trends
The biggest pool of potential homebuyers didn’t make huge strides toward homeownership in 2016 — so what will millennials be doing in 2017?
“Our surveys of the prime first-time homebuying age people suggests a very high, 90 percent-plus, want to eventually own a home,” said Duncan.
“What has tended to be the case is that they’re saying ‘just not right now,’ and that’s driven by the fact that their incomes haven’t risen as far as they need to and they’ve delayed getting married and having a baby relative to prior groups at this age point.”
By Kathleen Pender, SF Chronicle, November 30, 2016
Bay Area home sales fell and prices rose a bit in October, but overall it was a quiet month, new figures show.
Bay Area home sales fell and prices rose a bit in October, but overall it was a quiet month, new figures show. However, it was just before Donald Trump was elected president, and mortgage rates jumped half a percentage point.
Anecdotally, real estate agents say some buyers have exited the market since the election because their loan got too expensive, they became unsure of their immigration status or just got cold feet. But so far, no data suggest that the election is having an impact on the local real estate market.
The median price paid for all homes sold in the nine-county Bay Area in October was $675,000, according to a CoreLogic report released Wednesday. That was up 3.8 percent from the previous month and up 6.1 percent year over year. The data include new and existing homes and condos that closed in October.
Year over year, the median price has risen for 55 consecutive months — since April 2012, CoreLogic said. October’s median, however, was 4.9 percent below the Bay Area’s all-time high of $710,000 set in June.
The number of Bay Area homes sold in October fell to 7,505, down 5.4 percent from the previous month and down 1.5 percent year over year. October sales were the lowest in five years and about 11 percent below the historical average for October.
Median prices can go up because of appreciation, a shift in the mix of homes sold toward higher-priced ones, or some combination thereof. In October, there was a definite shift to high-end homes in most parts of the Bay Area, said CoreLogic research analyst Andrew LePage.
This was especially true in San Francisco, where the median price jumped almost 20 percent since September to $1,225,000 in October. The city’s all-time high was $1.3 million, set in April.
This time last year, the market was so hot that some people might have put their homes on the market just to see what they could get. Today, agents “are telling clients to be a little more cautious. Make sure you have your price right,” said Jay Cheng, a spokesman for the San Francisco Association of Realtors. People who list their homes “are convinced they really want to sell.” That makes for fewer listings, and fewer withdrawals.
By Kendall Baer, DSNews, November 30, 2016
A spike in mortgage rates is expected to decrease affordability for the coming year, according to Freddie Mac’s November 2016 Outlook  released on Wednesday.
Sean Becketti, Chief Economist with Freddie Mac, reflected on previous years and described the components that will be affected by increasing mortgage rates.
“Much like in 2013, we expect housing markets to respond negatively to higher mortgage rates—they will drive down homebuyer affordability, dampen demand and weaken home sales, soften house price growth, and slow the growth in new home construction,” he said. “Mortgage market activity will be significantly reduced by higher mortgage rates, especially refinance originations, which are likely to be cut in half.”
Home sales are slated to decline more than 200,000 units from 2016 to 2017. Although new home sales are increasing, it will not be enough to neutralize declines with existing home sales. Potential homebuyers will be forced to deal with high interest rates and increasing home prices.
“Prospective homebuyers, including many millennial first-timers are going to face increased challenges in 2017,” Kiefer said. “Higher mortgage interest rates and higher home prices are putting the squeeze on homebuyer affordability. One positive for millennials is that the robust pace of home price appreciation has lifted many current homeowners out of negative equity. As house price appreciation continues, more and more homeowners may opt to list their home, if they can find a suitable new home. This should help to provide some additional supply of for-sale homes for first-timers.
By Kendall Baer, DSNews, November 29, 2016
Zillow’s October 2016 Market Report  and Redfin’s October 2016 Market Report  analyze and compare a medley of findings and trends that will impact housing in the near future. Industry experts are also predicting a “pendulum shift” in the coming years, according to Zillow.
A shortage of home inventory has resulted in low homeowner morale over the past few months. The Redfin Housing Demand Index decreased by 3.5 percent due to fewer homebuyers touring properties and making offers. The number of homebuyers using Redfin to request tours decreased by 3.7 percent from September, and the number of customers who were making offers on homes declined by 5.9 percent.
Zillow’s October 2016 Market Report predicts that the housing market will veer from the current seller’s market to a buyer’s market by 2018 or 2019. Aaron Terrazas, Senior Economist at Zillow, attributes steady rent growth, building regulations, negative equity, and job growth to this forthcoming adjustment.
“Slower rent growth means that some renters will feel less urgency to buy and easing building regulations, both at the federal level and by local governments, should boost new construction making the supply of homes for sale more plentiful,” he told DS News. “Negative equity will continue to recede allowing the relatively small number of owners still trapped in their underwater homes to move. As job growth shifts away from the pricey coasts toward suburban communities and interior metros, demand will shift toward less supply constrained communities.”
Millennials, home prices, interest rates
BY Brena Swanson, Housing Wire, November 30, 2016
Next year doesn’t look like it will be too different, according to the realtor.com 2017 housing forecast.
The report predicts the 2017 housing market will be a year of slowing, yet moderate growth.
As a result, realtor.com said next year’s predicted slowing price and sales growth, increasing interest rates and changing buyer demographics are setting the stage for these five key housing trends:
- Millennials and boomers will dominate the market
Although increasing interest rates have prompted realtor.com to lower its prediction of Millennial market share to 33% of the buyer pool; Millennials and Baby Boomers will still comprise the majority of the market. Baby boomers are expected to make up 30% of buyers in 2017 and given they’re less dependent on financing, they are anticipated to be more successful when it comes to closing.
- Midwestern cities will continue to be hotbeds for Millennials
Midwestern cities are anticipated to continue to beat the national average in Millennial purchase market share in 2017 with Madison, Wisconsin; Columbus, Ohio; Omaha, Nebraska.; Des Moines, Iowa; and Minneapolis, leading the pack. This year, average millennial market share in these markets is 42%, far higher than the U.S. average of 38%. With strong affordability in 15 of the 19 largest Midwestern markets, realtor.com expects this trend to continue in 2017 even as interest rates increase.
- Slowing price appreciation
Nationally, home prices are forecast to slow to 3.9% growth year over year, from an estimated 4.9% in 2016. Of the top 100 largest metros in the country, 26 markets are expected to see price acceleration of 1% point or more.
- Fewer homes on the market and fast moving markets
Inventory is currently down an average of 11% in the top 100 metros in the U.S. The conditions that are limiting home supply are not expected to change in 2017. Median age of inventory is currently 68 days in the top 100 metros, which is 14%– or 11 days – faster than U.S. overall.
- Western cities will continue to lead the nation in prices and sales
Western metros in the U.S. are forecast to see a price increase of 5.8% and sales increase of 4.7%, much higher than the U.S. overall. These markets also dominate the ranking of the realtor.com 2017 top housing markets.
The company speculates that the construction labor workforce may constrict given the President-elect’s immigration stances
BY CAROLINE FEENEY, Inman News, November 22, 2016
- Zillow predicts 2017 will mark a new stage of the post-recession housing recovery and the company expects recent trends to reverse course next year.
- New-home buyers could face increased building costs if President-elect Trump follows through on his tougher immigration policies, which may worsen the construction industry labor shortage, according to the company.
- Zillow also anticipates continued but slowed home price growth (3.6 percent over the year), decelerated rent prices, homeowners seeking affordable housing further from urban centers, and an increased homeownership rate driven by millennial buyers.
Zillow’s 2017 predictions
- “Cities will focus on denser development of smaller homes close to public transit and urban centers.”
- “Moremillennials will become homeowners, driving up the homeownership rate. Millennials are also more racially diverse, so more homeowners will be people of color, reflecting the changing demographics of the United States.”
- “Rental affordability will improve as incomes rise and growth in rents slows.”
- “Buyers of new homes will have to spend more as builders cover the cost of rising construction wages, driven even higher in 2017 by continued labor shortages, which could be worsened by tougher immigration policies under President-elect Trump.”
- “The percentage of people who drive to work will rise for the first time in a decade as homeowners move further into the suburbs seeking affordable housing — putting them further from adequate public transit options.”
- “Home values will grow 3.6 percent in 2017, according to more than 100 economic and housing experts surveyed in the latest Zillow Home Price Expectations Survey. National home values have risen 4.8 percent so far in 2016.”
As conventional wisdom would predict, spring was the best time to list a home, but just barely. Spring offered the highest likelihood of selling above list price and of selling within 30 days, but winter, the supposed slow season for real estate, was a close second.
Among spring listings, 18.7 percent of homes fetched above asking, with winter listings not far behind at 17.5 percent. While 48.0 percent of homes listed in spring sold within 30 days, 46.2 percent of homes in winter did the same.
While winter can get a bad rap, it’s not a bad time to list a home. “You may have fewer people looking to buy, but those who are looking are serious,” said Michelle Leader, a Redfin real estate agent in Oklahoma City. “Buyers that time of year often need to move, so they’re much less likely to make a lowball offer and they’ll often want to close quickly — two things that can make the sale much smoother.”
The other benefit of listing in the winter is less competition from other sellers. While spring can see a rush of homes coming on the market, homes that list in the winter are much more likely to stand out, said Leader.
Among homes listed in summer and fall, the key goals of selling quickly and for above list price were achieved notably less often. Forty-one percent of autumn listings sold in 30 days or less, and just 14.7 percent sold above list price.
“Autumn is a tricky time,” said Chicago Redfin real estate agent Michael Linden. “Buyers with kids often want to get settled in their new home before the school year starts, so they’ve already closed in spring or summer. And right after you list, the holiday season begins, which can delay the time it takes to close, and causes many buyers to pause their search. The last quarter of the year is just not an ideal time to put a home on the market, particularly if you want full price or a quick closing.”
But, as the numbers indicate, listing at the start of the new year can work to a seller’s advantage. Typically, sellers assume snow and inclement weather in January and February are major barriers to winter home shopping. However, while winter storms can cause a delay or two, most cities known for snow also have effective plowing systems and residents who are comfortable tromping around in winter boots.
In fact, weather seems to have little to do with the seasonality. When broken down by metro, winter and spring maintained their top spots consistently, even across markets with weather as varied as Los Angeles, Boston and Atlanta.
Redfin examined more than 7 million homes listed across 23 metro areas from 2012 through August 2016 to see how many of them went under contract within 30 days and how often they sold for more than their list price. We then grouped the performance of each listing by the season that the home was first listed on the market. We used the astronomical seasons (Winter: Dec. 21 – Mar. 20; Spring: Mar. 21 – June 20; Summer: June 21 – Sept 21; Autumn: Sept 21 – Dec. 20).
By Cicely Wedgeworth | Nov 23, 2016
As usual, California markets dominated the list, taking up 11 slots, including San Francisco at No. 1, but eight other states were represented: Texas, Colorado, Indiana, Ohio, Michigan, Massachusetts, Tennessee, and Montana.
Check out the full list:
|20 Hottest Markets||Rank
|1||San Francisco, CA||1||0|
|5||San Jose, CA||7||2|
|6||San Diego, CA||6||0|
|8||Fort Wayne, IN||5||-3|
|13||Santa Rosa, CA||13||0|
|18||Los Angeles, CA||22||4|
|20||Colorado Springs, CO||16||-4|
By Ralph McLaughlin, Trulia, Nov 22, 2016
- While home sales slowly recover to their pre-recession average, tight inventory continues to plague buyers and hold back growth. We encourage President-Elect Trump to focus on policies that encourage existing owners to sell and homebuilders to build, rather than fixating on policies that boost demand.
- If home sales are to drive up to their pre-recession levels, we’ll need to see inventory continue to pick up, not fall. October’s 10.4% fall in inventory over last year is yet another reminder that the housing market still faces headwinds towards a full recovery.
- President-Elect Trump could help boost inventory by implementing policies that would encourage investors to sell homes they bought during the foreclosure crisis, many of which are suitable for starter home buyers. Such policies could include a reduction in capital gains taxes for homes sold by investors to owner-occupiers, an increase in tax rates on rental income, or both.
Following a dip in home sales in 2016, California’s housing market will post a nominal increase in 2017, as supply shortages and affordability constraints hamper market activity, according to the “2017 California Housing Market Forecast,”
“Next year, California’s housing market will be driven by tight housing supplies and the lowest housing affordability in six years,” said C.A.R. President Pat “Ziggy” Zicarelli. “The market will experience regional differences, with more affordable areas, such as the Inland Empire and Central Valley, outperforming the urban coastal centers, where high home prices and a limited availability of homes on the market will hamper sales. As a result, the Southern California and Central Valley regions will see moderate sales increases, while the San Francisco Bay Area will experience a decline as home buyers migrate to peripheral cities with more affordable options.”
“With the California economy continuing to outperform the nation, the demand for housing will remain robust even with supply and affordability constraints still very much in evidence. The net result will be California’s housing market posting a modest increase in 2017,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “The underlying fundamentals continue to support overall home sales growth, but headwinds, such as global economic uncertainty and deteriorating housing affordability, will temper stronger sales activity.”
By Kevin Truong, SF Business News, November 18, 2016
The Bay Area is going to need housing to accommodate more than 800,000 additional households in the 30 years to 2040, says the latest update to Plan Bay Area, the controversial regional forecasting document that is used to assign housing targets to cities and counties.
The draft update was approved by a joint committee of the Association of Bay Area Governments and the Metropolitan Transportation Commission Thursday, sketching out the blueprint for transportation and housing growth in the Bay Area over the next quarter century.
The proposed plan calls for 3.4 million households in the region by 2040, representing about a 30 percent jump from 2010 numbers which translates to approximately 820,000 new households. It also represents a 100,000 increase from Plan Bay Area’s 2013 projections.
The plan centers a large portion of the housing growth — around 46 percent — in the Big 3 Bay Area Cities: San Francisco, Oakland and San Jose.
Oakland especially, is expected to see major housing growth, with 241,500 households by 2040, a 57 percent increase from 2010 levels. According to the proposed plan, San Francisco is expected to see 483,700 households by that year, an increase of about 138,000 households.
The majority of new housing, 77 percent, is expected to come in so-called “Priority-Development Areas,” adjacent to transit and job centers.
Major employment growth is also projected in the region, with the number of jobs expected to rise to 4.7 million by 2040 — a 300,000 increase from the 2013 forecast.
Various suburbs in Marin County and the East Bay have chafed at the housing targets assigned to them under Plan Bay Area. They say decisions on how much housing to build should be controlled at a local level in each city, not assigned based on regional needs.
upporters of the plan admitted its shortfalls when it comes to solving the issue of affordable housing availability.
“Housing affordability has been a major point of conversation and the plan bends the curve away from business as usual,” Matt Vander Sluis with the Greenbelt Alliance said.