Let’s continue our discussion of new construction in our fair city – specifically, housing construction. Paragon’s latest Housing Development Report finds that almost all of the projects in today’s pipeline have at least a partial residential component, with only 8 percent specifically non-residential developments.
And the beat continues rolling on. In the second week of May, Van Ness denizens Honda and KRON were reported to be on the chopping block in favor of large-scale residential projects. Looking at the last seven years of MLS sales of condos built between 2001 and 2014, we find that the smaller the unit, the higher the dollar per square foot value on sale or rental. That said, in San Francisco, three-plus bedroom condos are often high-floor units with extraordinary views that sell for equally extraordinary amounts. However, these are exceptions to the general rule.
It seems as though the city plan has a bias for two-bedroom units. It designates these as “family units” – but Paragon wonders if this isn’t a bit of an anachronism since nearly 40 percent of city residents live on their own and San Francisco has the lowest percentage of children in any major American city.
Things started changing in 2012, though, when they city consented to allow the construction of 375 micro-units, which are apartments of 220 to 300 square feet, including kitchen and bath. It will be intriguing to keep tabs on this trend to see if it takes off – or not – in both rental and for-sale markets.
We’re seeing most construction on or near Market Street, where many young high-tech residents are congregating, but will that change? Stay tuned.
Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email firstname.lastname@example.org. www.ceceblase.com