San Francisco real estate looking like it did before dot-com crash in 2000
By DANIEL GOLDSTEIN : marketwatch – excerpt
urging rents, skyrocketing real-estate prices and booming tech companies. Sounds like San Francisco in 2015, right? It also describes the city just before the tech bust of 2000, according to a recent report.
John Burns Real Estate Consulting of Irvine, Calif., and Pacific Union, a San Francisco real-estate brokerage, say that based on the appreciation (and apparent correlation) of venture capital deals and rent prices, the rise in the Bay Area’s rapid real estate and rent price appreciation today is looking more like a repeat of the dot-com bust of 2000.
“The San Francisco Bay Area is on our watch list for a correction,” said John Burns, his company’s chief executive, in an interview. He said that while San Francisco has become a permanently more expensive place to live and should be one of the most expensive places to live in the world because of its status as the center of the high-tech and Internet economy, the recent increases in home prices and rents have been fueled mainly by speculation.
“Affluent older buyers, often for investment reasons, have identified San Francisco as a place they want to own or live and have driven up prices dramatically,” he said. About a third of all-cash buyers in the Bay Area are purchasing property only as an investment, he said.
Sounds like a correction some people are praying for could be coming soon.