;

January 2013

 

Unemployment

Unemployment in California remained relatively flat towards the end of 2012, with state unemployment rising .1 percentage points to 9.7 percent in December. Most Bay Area counties showed a slight decrease, and the lowest unemployment rates in California proved to be Marin, San Mateo and San Francisco, which reported unemployment of 6.5 percent (down from 6.7 percent in November).

The Bureau of Labor Statistics posted the addition of 155,000 jobs during the month of December on a nationwide level. The pace of job creation has been remarkably steady for two years, and job gains averaged 153,000 per month in both 2011 and 2012. This rate of job creation has lowered the national unemployment rate, which was unchanged at 7.8 percent in December and has now been below 8 percent for four months.

 

 

Bay Area Unemployment Rates

 

County

Dec-12

Nov-12

Dec-11

Alameda

8.2%

8.5%

9.3%

Contra Costa

8.2%

8.4%

9.3%

Marin*

5.5%

5.8%

6.4%

Napa

7.9%

7.5%

8.8%

San Francisco

6.5%

6.7%

7.7%

San Mateo

6.0%

6.3%

7.1%

Santa Clara

7.5%

7.7%

8.6%

Solano

9.3%

9.3%

10.4%

Sonoma

7.7%

7.7%

9.0%
*Lowest in state. Source: CA-EDD
 

 

Historical Unemployment Rates: San Francisco, California, U.S.

Source: Bureau of Labor Statistics

 

Housing

The recovery of the Bay Area’s real estate market accelerated at the end of 2012 as sales increased for the 18th month in a row. According to DataQuick, the median price for homes in the region rose at its fastest rate in more than 25 years to $442,750 in December 2012. That was up 1.1 percent from $438,000 in November, and up 32.0 percent from $335,500 in December 2011.

Real estate analysts recorded a change in the market mix, with sales shifting away from low-cost distressed homes towards more mid-market and move-up homes. At the median price's current rate of increase, this spring it will have recovered about half of its losses since its summer 2007 peak. Prices are considered to be in the midst of bouncing off the bottom. Last month distressed property sales made up 34.2 percent of the resale market, which was down from 35.5 percent in November and from 52.4 percent a year ago.

Indicators of market distress are continuing to decline, and though foreclosure activity remains high by historical standards, it is well below peak levels reached three years ago.

Read more at DQNews.com

 

 

Bay Area Home Sales: Volume and Median Price

 

  All homes

Sales Volume

Median Price

Oct-11

Oct-12

%Chng

Oct-11

Oct-12

%Chng

Alameda

1,584

1,623

2.5%

$328,000

$410,000

25.0%

Contra Costa   

1,534

1,530

-0.3%

$259,000

$333,500

28.8%

Marin          

280

291

3.9%

$517,818

$660,750

27.6%

Napa            

132

129

-2.3%

$317,500

$350,000

10.2%

Santa Clara     

1,611

1,822

13.1%

$440,000

$544,500

23.8%

San Francisco

499

646

29.5%

$594,000

$720,000

21.1%

San Mateo       

602

626

4.0%

$500,000

$600,000

20.0%

Solano         

714

610

-14.6%

$182,250

$218,000

19.6%

Sonoma          

538

555

3.2%

$279,500

$345,000

23.4%

Bay Area       

7,494

7,832

4.5%

$335,500

$442,750

32.0%

Source: DataQuick, www.DQNews.com

 

 

Commercial Real Estate

2012 has been a great year for the San Francisco office market. Fueled by the strong demand of the high-tech sector, prices rose as vacancy declined, and some new developments were launched, such as Foundry Square III in the South of Market district—the first speculative ground-up office project since the real estate bust in 2007. San Francisco’s 36.4 percent cost increase for prime office space during 2012 ranked 1st globally, according to CBRE’s Prime Office Occupancy Cost Report.

This fast-paced growth will likely slow in 2013, which is still predicted to be a year characterized by high demand, reduced supply and further rent growth, though the market performance of 2011-2012 will be difficult to match. Leasing activity and large transactions will cool, along with sales volume, as lack of supply and higher pricing grips the market.

Leasing activity during the fourth quarter jumped on six large transactions (defined as being 100,000 square feet or greater). Market-wide average asking rents increased 5.9 percent to $48.83, according to CBRE. The gap in asking rents between Class B and C products closed sharply as occupiers desired more creative space. Twitter’s move to the Mid-Market district was probably the most spectacular transaction proving this trend.


 

Venture Capital Investment 2012

While Software investment remained a highlight, relatively weak investment in biotech and cleantech pushed the total amount of venture capital in 2012 down 10 percent, according to PWC’s MoneyTree Report. This is the first decrease in three years.

However, software investment was at its highest level since 2001, rising 10 percent over 2011 to $8.3 billion. On the down side, there were double-digit decreases in investment dollars across the majority of sectors, with only retailing and distribution joining software to see increases. 

Biotechnology investment declined 15 percent in 2012 to $4.1 billion, channeling into a total of 466 deals. This placed it as the second largest investment sector for the year in terms of dollars and deals. Cleantech saw a 28 percent decrease in dollars and a 23 percent decline in deal volume, bringing the year's total to $3.3 billion in 267 deals.

Overall, fourth quarter investment dropped only 3 percent over the prior year, with $6.4 billion going into 968 companies, while the number of deals actually rose 5 percent. The report revealed an interesting trend as investors moved away from startups toward early-stage companies that were further along in their development.

Learn more at San Francisco Business Times

 

Yamer in Mid-Marker

Yammer, the social network for businesses, officially moved into its new headquarters to join Twitter in their Market Square Building. San Francisco’s Mid-Market neighborhood is constantly transforming as tech companies pour into the area and spark a significant economic renaissance. Yammer has 330 employees in San Francisco and 445 globally. The firm’s new space occupies 80,000 square feet, taking the entire third floor at 1355 Market St, an 11-story, 1937 Art Deco edifice.

Learn more at San Francisco Business Times

 

Smartest Cities

In a study conducted by the E-Governance Institute at Rutgers University, San Francisco is listed as the second-smartest city in North America behind Boston. The editor, Boyd Cohen, used  the following criteria to explain the rankings:

  • Smart economy
  • Environment
  • Government
  • Living
  • Mobility
  • People
San Francisco is described as a vibrant city with a high quality of life and a thriving entrepreneurial economy, and is commended in particular for its environmental leadership. Behind San Francisco, Seattle comes in at 3rd, Vancouver 4th and New York is 5th.
 

 

QuickFacts is produced by the San Francisco Center for Economic Development (www.sfced.org). For more information please contact:

Dennis Conaghan
Executive Director
415.352.8819
Email: dconaghan@sfced.org

SFCED Facebook  Find Us on Facebook!
  Become a fan of our page to receive daily news updates. Just visit our home page at http://sfced.org and click the Facebook icon.  

If you would like to opt out of QuickFacts, please click info@sfced.org and request to be removed from our mailing list.