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January 11, 2017

SF homes earned more than stock in Google, Apple, Facebook

Last week the real estate group Paragon released a report on San Francisco’s housing fortunes over the past five years.

And Paragon data honcho Patrick Carlisle says that 20 percent down payment on a home in the city yielded better return between 2011 and 2016 than stock in Google, Facebook, and Apple.

For context, Facebook stock rose 205 percent in that period, from $38/share after its May 2012 IPO to $116 a pop at the end of 2016. Google/Alphabet shares went from $312/share to nearly $783, an increase of 150 percent over the same period. And Apple jumped 93 percent, from $60 to nearly $116.

(Note that Paragon’s figures vary from Nasdaq’s for these stocks, although not to any degree that turns out to matter.)

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But the purchase of a home in San Francisco appreciated 339 percent in the same period, according to Paragon. A down payment of $150,000 in 2011 would be worth $658,500 today.

Is it true? Well, the median sale price in the city at the end of 2011/beginning of 2012 was about $665,000. These days, depending on who you ask, it’s around $1.1-$1.3 million.

Obviously, that’s not quite as explosive as you might expect based on those Google and Facebook comparisons—an increase of 80 to 90 percent.

 Asif Islam/Shutterstock

But that’s because we’re comparing two different things here: Carlisle looked at how much a buyer would have put down on a home in 2011, then crunched how much the home would sell for now minus monthly payments in the meantime and expenses of the new sale.

Either way, the number is pretty dramatic.

This accounts for the other big takeaway from the Paragon report: The company now prices the average “fixer-upper” in the city at about $920,000

Since the city isn’t building new single-family homes anymore, and since buyers tend to favor single family homes, demand even on battered properties can’t help but rise.

 Nick Fox/Shutterstock

Right now, that sum buys a three-bedroom house in Crocker Amazon, the Outer Mission, Ingleside, Bernal Heights, and the Outer Richmond.

(One house apiece in those neighborhoods.)

Note, of course, that the five year period examined here was one of remarkable, unprecedented, downright terrifying growth in the value and price of a home in the city that we’re still feeling now.

But even with all of the (well founded) talk of a slowdown in the market throughout 2016, home prices overall still finished the year up.

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