Alexander Clark Real Estate

‘The Front Steps’: No, Home Prices Have Not Really Tripled In SF

The news this week is that San Francisco is one of the cities where housing prices more than tripled over the past 20 years, revealing that runaway housing costs are not a recent trend but the product of a long cycle over several generations.

That’s the takeaway from outlets like KRON4, based on recently published analyses of US housing data; San Jose, Sacramento, and LA joined SF in the top ten.

The truth is, though, they’ve got this (almost) all wrong: The KRON4 headline says “home prices have more than tripled,” but the data reported is actually about home values–which is a totally different things.

Values, for one thing, tend to drag in California, lingering well behind market prices. For example, the figure being reported (scraped from Zillow) is that in the year 2000, the median SF home value was around $356,800; by comparison, we can tell you after spending just a few minutes looking at MLS history that 22 year ago, the median home in SF sold for $520,000.

As you can see, that’s not an insignificant difference, particularly if you’re the one who was buying.

The widely reported appreciation since 2000 is just under 290 percent, from $356K back then to about $1.39 million in 2022.

However, it doesn’t really make sense to try to calculate a median value for 2022, a year that isn’t even a third of the way over yet; last year’s overall median is probably still a better point of reference.

So across SF, the price (not value) of a home went from around $520K in 2000 to $1.42 million last year, a hike of “only” 173 percent; which is still nuts, of course, but a difference of 120 percent is, again, not exactly a write-off.

And even this is overstated, because you can’t just ignore the important of inflation: $520,000 in 2000 was more like $818,000 today, in terms of purchasing power.

The larger point about housing’s ever-upward trajectory–and the singularity of SF’s market in particular–is still true, so these other stories are perhaps fundamentally right. But the number you’re seeing across various outlets are, well, a bit foggy.

Now, we know what you’re thinking: What about the Richmond? Well, as usual, homes out here are at a particular premium relative to the rest of the city: Back in 2000, Richmond homes sold for $650,000 on average.

Whereas by last year, that figure had grown to $1.8M–again, inflation is not being factored in here, but at the same time, yowza.

You’d think this would be closer to that 290 percent figure, and technically you would be correct. But only a hair, because that’s actually a spike of just under 177 percent.

So no, the cost of housing in SF has not really tripled or quadrupled since the beginning of the century; but it has skyrocketed even so. Parse that however you like, but our number at least are solid.

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