As the planet becomes more and more populated, the future is in more “green” living. And the greenest possible way to house the largest number of people is in high-rises. With San Francisco being the high-rise capital of the West Coast, it becomes more of a magnet as the world’s population becomes ever-more urban rather than rural. And the importance of “green” building continues to rise.
In the last century, we saw a shift out of cities and into the suburbs and the country as people dreamed of a quiet retirement. Today, with people living longer healthier lives and staying vibrant into their 80’s and 90’s and beyond, many are choosing to remain to stay in cities to be close to cultural dinging and entertainment attractions, as well as top-notch medical care, thereby creating even further demand for housing in San Francisco.
A very interesting example of this occurred when the SOMA Grand, one of the large new highrises South of Market, opened in 2008 and there was a big article (I believe in the Chronicle) about the fact that one of the larger penthouses was bought by a couple in their 60’s from the East Bay retiring INTO the City. and as more of the full-service, hotel-like highrises are built, it provides many people (including a lot of our friends, LoL!) very attractive options for staying in town.
THE CHINA EFFECT
Much as New York has a huge Euro effect and Miami is a huge magnet for South American buyers, San Francisco is one of the world’s top epicenters for Chinese investment in international real estate.
Long a gateway for China and the entire Far East, the City and surrounding greater Bay Area has deep political, economic, cultural and educational ties to China. When Ed Lee and Jean Quan became mayors in both San Francisco and Oakland, it was a huge media sensation in China and had the effect of further strengthening those ties.
With a large import-export exchange of technology and other industries, one of the largest Chinese populations in the United States and some of the world’s best universities attracting generations of Chinese families, the past few years has seen an explosion in Chinese investment in US real estate.
The National Association of Realtors estimates that international buyers spent $92 billion on US real estate over the past year of which $22 Billion was from Chinese buyers. California is the most popular destination and it’s reported that an astounding 76% of these transactions are all-cash.
Some of the largest examples in San Francisco include:
-ChinaVanke’s, China’s largest real estate developer, $615,000,000 investment in LUMINA, San Francisco’s largest condominium developments ever
-The purchase of the historic 225 Bush Street, originally the Standard Oil building, a 583,000 square foot office tower in the Financial District to an undisclosed Chinese buyer
-The sale of the 17,000 square foot St. Regis penthouse to a Hong Kong family for $28,000,0000
And some economists are predicting this is just the beginning!
SAN FRANCISCO UNDERPRICED COMPARED TO OTHER MAJOR INTERNATIONAL CITIES
While we think our real estate is expensive, we are actually a bargain compared to some other major international cities!
Our luxury real estate is currently averaging in the $1,300- $1,600 per square foot range and our super-luxury properties in the $1,900- $2,500 per square foot range- with a few rare instances over $3,000 per square foot such as the off-market sale of a Presidio Heights home for over $3,5000 per square foot.
But when buyers com here from Hong Kong, the most expensive City in the world according to Forbes Magazine, where the AVERAGE price square foot is $11,000, they think we’re having a last call sale at Neiman Marcus. At those price a 1,000 square foot apartment would be $11,000,000! Coming in at #2 is Tokyo at $7,600, London #3 at $5,300 and Paris #4 at $4,400. The only US city to make the list is New York at #6, averaging $4,100 per square foot.
Considering the incredible quality of life in the Bay area, as well as the world-class cultural, entertainment, sporting dining and business attractions of the City, this certainly bodes well for the future.
THE NATIONAL AND INTERNATIONAL MEDIA EFFECT
As San Francisco and Silicon Valley continue to be the world leaders in innovation and technology, the world’s fascination without City continues to grow as evidenced by the increased national and international media coverage.
From articles in the New York Times, to my recent interviews in Reuters and Wall Street Journal Asia, the Wall Street Journal’s article calling our wonderful historic Jackson Square area “The New Sand Hill Road”, as well as Vanity Fair’s famous article about Pacific Heights’ Gold Coast Mansions (I know a lot of you are VERY familiar with those!), the international media focus on the City and it’s beautiful real estate has never been more intense. And a very popular TV real estate show coming to San Francisco will only add to that scrutiny- stay tuned for more news on that!
What all this means is that for international home collectors (those who own 10+ luxury homes around the world), San Francisco is much higher on their radar screen, along with the traditional areas such as London, Paris, New York, South of France, etc..
With all of these amazing things happening, our beloved City is certainly going through some dramatic and exciting changes which bode well for the future- so fasten your seat belts, it should be an interesting ride!
And the good news is that while we see a whole new San Francisco taking shape before our eyes, all the historic neighborhoods are being preserved, leading to an incredibly dynamic combination of classic with modern. One thing we can all agree on- whether real estate prices go up or down, this is one of the most beautiful and exciting places in the world!