Bay Area homes are undervalued: Fortune Magazine (2024)

FAQs

What cities are the most undervalued real estate markets? ›

The most undervalued markets to rent a home are also concentrated in the Midwest, led by Omaha, St. Louis, Indianapolis, Cleveland and Oklahoma City. You'll save the most buying versus renting a home in Detroit, Philadelphia, Cleveland, Chicago and Columbia, South Carolina.

The Bay Area housing market is one of the most expensive and competitive in the country, but in 2023, the frenzy settled down a bit. As interest rates hit their highest levels in 23 years and tech layoffs rippled through the region, buyers retreated and home prices saw declines.

Reasons for Higher Prices

In addition, state and local governments impose strict urban growth boundaries and land controls, which also contribute to the lack of housing elasticity in the area. Likewise, the Bay Area has many appealing amenities to offer its residents, which also keeps property values in higher ranges.

San Jose, CA. As the most overvalued housing market in the United States, San Jose's appreciation rate maybe attributed to soaring job growth in the tech sector. Similarly, low inventory rates for this particular region have contributed to a 15 percent year-over-year price gain.

California's real estate market is one of the most expensive in the country and some markets in the state continue to be “extremely overpriced,” according to an analysis of housing market data.

Existing, single-family home sales are forecast to total 327,100 units in 2024, an increase of 22.9 percent from 2023's projected pace of 266,200. California's median home price is forecast to climb 6.2 percent to $860,300 in 2024, following a projected 1.5 percent decrease to $810,000 in 2023 from 2022's $822,300.

RenoFi also looked into the projected 2030 home prices for every state and some major cities in the U.S. It projects that San Francisco will have the highest average home value in the country at a staggering $2,612,484. Following it will be two other California cities, San Jose at $2,251,703 and Oakland at $1,713,554.

The revised California median home price forecast is for a rise 0f 6.2% to $860,300 in 2024, a -1.5% drop this year to $810,000 from $822,300 in 2022. A persistent housing shortage and a competitive housing market will continue to put upward pressure on home prices next year.

You'll need to earn triple a $100,000 salary to live well in San Francisco. This tech-focused California city has a median household income nearly double the national average. Living expenses cost 82.8% more than the national average, making it a pricey place to live.

What is the cheapest city to buy a house in the Bay Area? ›

Atherton's median sales price was around $8.3 million during 2023, holding on to its top spot for another year. Highly sought-after spots like this usually defy general market trends, so this isn't surprising to any local realtors. In 2022 and 2023, Atherton was also the most expensive zip code in the US.

Here Are the 5 Worst Housing Markets in the US

Flint, Monroe, and Detroit-Dearborn-Livonia are among them. Over the last 25 years, the house price index has averaged an annualized growth of 2.62 percent or less in all three locations.

State with Best Housing Market and Growth Forecast

Idaho has the best housing market right now with a 1-year growth forecast of +6.81% based on an analysis of 894 U.S. cities across 50 states.

Austin, Texas is the slowest-selling U.S. metro area

Austin, Texas ranked as the slowest-selling metro, according to a recent Creditnews Research study. The average home price in Austin has steadily increased since 1998, according to a 2023 SmartAsset study. Home values have soared 354% over the past 25 years.