- In the year 2000, the average number of units (in 000s) was 1,100, while San Fran was 14% lower than the average. This stat clearly speaks to the inventory / supply issues that real estate professionals, home-buyers and owners constantly reference.
- More revealing is that, in the same year, the average price of a home in SF was double that of the average: $465K versus $224.25K. In terms of statistical significance: that is three standard deviations away. (465-224.25) / 81.4 = 2.95. Wow, that bell curve is as flat as Lady Gaga’s abs! Cheekiness aside, simple economics are clearly present here: lack of supply = increase in demand.
Begging to rant, the C-S is a weighted index that gives more emphasis to cities such as SF. Think of the S&P 500—it is cap weighted, where the biggest companies get larger weightings. Removing San Francisco from the national index, as a mere exercise, would result in the national housing average to drop by nearly 7%. I think it is safe to conclude that San Francisco is a strong and resilient market (to say the least).