When you’re thinking about buying a house, it’s crucial to consider the local economic factors that could influence the value of your home. You can’t control things like interest rates or government policies, but you can understand the local economy.
For instance, I’m currently house hunting in the west side of San Francisco, and I’ve noticed several local economic factors that could boost the value of homes in this area.
Firstly, new companies moving into the area, like OpenAI, can increase demand for housing. Similarly, existing local companies expanding their workforce, new convenience stores and pharmacies opening, and new schools being established or existing ones expanding can all drive up home prices.
Demographic changes can also play a role. For example, if people start moving to your neighborhood because of changes in another neighborhood or due to international factors, this can increase demand for housing.
Before buying a house, try to identify at least three local economic factors that could potentially increase its value.
I started buying property in the Golden Gate Heights neighborhood of San Francisco in 2014 because I noticed that homes with ocean views were selling for less than the median price per square foot in the city. This seemed like a pricing anomaly to me, so I started buying.
Since then, the price gap has narrowed, but I still think there’s a lot of potential for growth, which is why I plan to hold onto my properties for the next 20 years.
Before the pandemic, I also noticed that many San Francisco residents were looking for more affordable housing with more space and peace and quiet. I got this impression from giving over 500 Uber rides and noticing that many people with flexible schedules lived on or traveled to the west side of the city.
Once the pandemic hit, demand for homes on the west side surged due to lower costs, more space, and the ability to work from home.
Now, I’m looking to upgrade to a more expensive home on the west side, and I’ve identified several local economic factors that could support its price and future growth.
For example, a school is relocating to the west side, which could attract families who want to live closer to the school. The UCSF Hospital at Parnassus Avenue is undergoing a $4.3 billion remodel, which will increase its capacity and create 1,400 new jobs.
San Francisco’s west side is also being upzoned for more residences, which could bring in new businesses, services, and residents, and drive up real estate prices.
Additionally, Carl Larsen Park is being developed, which could attract more people to the area. And finally, convenience stores and malls are expanding, which is a sign of growth in the surrounding area.
So, before you buy a house, make sure to do your research and understand the local economic factors that could affect its value. This will help you make a more informed decision and potentially get ahead of the demand curve.
