san francisco center for economic development

September 2013


California's unemployment rate increased slightly during August to 8.9 percent, up from 8.7 percent in July. Unemployment nationwide, by comparison, was 7.3 percent. A survey of U.S. households estimated that the number of Californians holding jobs in August was 16.9 million, a decrease of 53,000 from July. This was an increase of 381,000 over California's employment total in August 2012.

Unemployment in San Francisco fell to 5.6 percent in August from 6 percent in July. Statewide, San Francisco, Marin, and San Mateo continue to hold the lowest unemployment rates. Marin County has posted a new low of 5 percent. Among Bay Area counties, Solano reported the highest unemployment, at 8.2 percent.

Notable unemployment rates outside of the Bay Area: Imperial (26.3 percent), Monterey (7.8 percent), Sacramento (8.9 percent) and Los Angeles (10.2 percent).

Bay Area Unadjusted Unemployment Rates, June-August 2013

*Lowest in state. Source: CA-EDD

Historical Unemployment: San Francisco County - August 2005-2013

Source: EDD, Monthly


Home sales in the Bay Area leveled off during August as prices underwent a modest late-summer decrease. A total of 8,616 new and resale houses and condos were sold in the nine-county Bay Area—down 7.7 percent from 9,339 in July and down 0.6 percent from 8,670 in August last year.

The median price paid for a home in the Bay Area last month was $540,000—down 3.9 percent from $562,000 in July, and up 31.7 percent from $410,000 in August a year ago. Due to seasonal shifts in sales patterns, the Bay Area median price almost always declines from July to August.

According to DataQuick, however, there are still imbalances in the sales mix and purchase patterns, indications are that the market continues to normalize.

Bay Area Home Sales: Volume and Median Price

Source: DataQuick,


According to The Bureau of Economic Analysis, San Francisco’s GDP in 2012 (with a total of $360 billion) grew by 7.4 percent—exceeding the nationwide average of 2.5 percent. This growth significantly exceeds that of competitive cities such as Houston (5.3 percent) and Dallas (4.3 percent). A substantial part of this gain can be attributed to the region’s leading professional services and information technology sectors.

Bay Area Foreclosures Continue to Drop

While up from the first quarter, the number of Bay Area homeowners entering the foreclosure process was at its second-lowest level in seven years last quarter, largely the result of a steep rise in home values, according to DataQuick.

Bay Area Foreclosures

Source: DataQuick

Commercial Real Estate

Asking rents in the Central Business District rose for the twelfth consecutive quarter, while direct vacancy has remained consistent at 7.3 percent for the last three quarters. After a long period of growth fueled by the tech industry, activity is now increasinlgy coming from more traditional business sectors. The average tech deal target size is currently in the 20,000 – 40,000 square foot range, and analysists expect that strong growth in demand from the technology sector will continue.

commercial real estate

Source: CushmanWakefield

Retail & Hospitality

San Francisco tallied a total of 16.5 million visitors during 2012, spending $8.9 billion. In Q2 2013, San Francisco boasted the highest lodging occupancy rates in the nation, at 87 percent, and steady improvements in rates. Hotel investment volume continued its healthy pace, totaling $406 million in sales.

During Q2 2013, the city's overall retail vacancy rate stood at 2.2 percent; in Union Square it was 1.6 percent. Restaurants and cafes continue to dominate leasing activity, while a number of retailers continue to invest in physical improvements.

Due to limited construction, developers are increasingly choosing to redevelop infill locations. The redevelopment of 935-956 Market Street, for instance, will create an additional 250,000 square feet of retail space.

retail and hospitality

Venture Capital

Forty percent of all US venture capital during the first half of 2013 went to California companies. Of this, 82 percent was invested in the Bay Area, 54 percent of which went to early-stage companies.

During 2012, a total of $11 billion in venture capital was invested in the Bay Area.

Enterprise Zones Ending

State Assembly Bill 93, passed by the legislature and signed into law by the Governor, eliminates the incentive Enterprise Zone Program at the end of 2013. However, it is not too late to file and take advantage of the credit, and the legislation states clearly that employees hired prior to the end of 2013 may qualify.

It is less clear whether voucher applications will be processed after the end of this year, and organizations planning on hiring a new employee are encouraged to submit the application before the end of 2013.

The Enterprise Zone Program entitles businesses within Zone boundaries to certain tax credits, which can include up to $37,500 in state income tax credits for each qualified employee hired over a five year period. For additional Enterprise Zone information, visit Filing information is available at via the "Business" tab.


San Francisco International Airport continues to be a vital economic engine for the Bay Area. In 2012, the gateway achieved a new milestone of 44.7 million passengers, and over the past year directly accounted for $5.4 billion in business activity, and indirectly for $31.2 billion in business and 153,000 jobs across the Bay Area. In addition, more than 36,000 new jobs are expected to be created with the completion of a new 10-Year Capital Improvement Plan announced in May of 2013.

Total passengers on international flights from SFO in July totaled 956,659; passengers on domestic flights totaled 3,215,162.

World's Most Competitive Cities

IBM-PLI and Site Selection Magazine have listed San Francisco as one of the Top 100 cities around the world based on competitiveness for attracting international (greenfield) investment projects from multiple sectors. Other U.S. cities named are: Atlanta, Charlotte, Chicago, Dallas, Detroit, Houston, Los Angeles, Miami, New York, Philadelphia and Washington D.C.

The United States' Best Cities for Tech Startups

retail and hospitality

Brazil Chooses San Francisco

The SFCED and the San Francisco Chamber of Commerce joined Brazilian government officials last month for the opening of Apex-Brazil—the agency promoting Brazilian products and services and coordinating action related to foreign direct investment (FDI).

Chamber Foundation partner SFCED attracted the new office to San Francisco and will continue to work with Brazilian government officials to expand trade and investment opportunities for San Francisco and Brazilian businesses. The group also announced the opening of Startup Brazil, a new accelerator office to help Brazilian IT companies make connections and grow business in the Bay Area.

Top States for Doing Business

After eight years of absence from Site Selection Magazine's "Top States for Doing Business," California has again been named to the list, ranking number 10 in the magazine's 3rd quarter edition.

What changed? Categories where California scored the highest are: Access to Capital & Project Funding, Availability of Skilled Labor, and Most Diverse Labor Pool. Additionally California added jobs at the fastest year-over-year pace in more than 10 years; has been named the number-one state for foreign direct investment by Ernst & Young; exported more the $162 billion in annual sales of goods and services; and offers a new tax incentive program that will create a statewide sales tax exemption on manufacturing, biotech and R&D equipment, as well as a hiring credit for businesses in existing challenged areas on wages.

Quickfacts is produced by the San Francisco Center for Economic Development (SFCED).
For more information, please contact:

Dennis Conaghan
Executive Director

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