Lafayette and the broader Lamorinda area may still be a bargain on a relative basis, compared to other parts of the San Francisco Bay Area. A recent article published on 24/7 Wall Street, showed that two Bay Area cities are in the Top 5 most expensive places to live in the U.S. — San Francisco and San Jose. In fact, San Francisco was listed as the most expensive housing market in the US at a median price of approximately $612,000 for a single family home — or $422 per square foot. By comparison, the Lamorinda market average home price sat at $371 per square foot as of April 1st this year.
With the benefit of technology enabling mobile work environments and the highly diversified economy for our area, I believe we will see more migration to Lamorinda from San Francisco and potentially from the SF penninsula/Silicon Valley. In fact, this was reinforced during a lengthy discussion I had with the head of residential lending and private banking for a Bay Area-based bank that targets higher net worth clients. With a broad view of what is transpiring in the SF and penninsula/Silicon Valley markets, she believes that buyers across the continuum are getting priced out of the market due to the enormous amount of wealth that is being created in the technology sector. Furthermore, with rental prices escalating at a phenomenal pace, renters will look closely at buying — eventually jumping into the market. On a relative basis, our home prices are a “bargain” compared to other comparable markets in the south bay, peninsula, Marin, or SF. This will feed all segments of our market, and due to Lamorinda’s geographically constrained supply of homes, market dynamics of supply and demand should push prices up.
Additionally, Lamorinda is one of the most commute-friendly suburban areas in the Bay Area, with ready access to San Francisco via car or BART. San Francisco is undergoing a tech explosion in the south of Market area that is pushing further south past the ballpark. For a city that has not been particularly hospitable to business, it is encouraging to see the transformation taking place. Unlike the previous “dot.com” tech boom, this one seems to have “legs” and is underpinned by a foundation based upon real market needs and revenue growth. We will all benefit from the prosperity of this powerful new growth in San Francisco, and I believe it will result in even a higher demand for housing in our beautiful community.