San Francisco achieved another remarkable year of overall growth and job creation in 2014, fueled by the booming technology sector. The City has fully recovered to pre-recession employment levels, and all major industries are growing at rates that outperform the rest of California and the U.S. Below is a snapshot of relevent Bay Area data and comparisons compiled by the San Francisco Center for Economic Development.
Unemployment at Record Lows
The unemployment rate in California dropped to 6.7 percent in December, down from 7.9 percent during the same period last year. Unemployment in the Bay Area remained consistently low during the last quarter, and the lowest unemployment rates statewide were once again in the Bay Area counties of Marin, San Mateo and San Francisco.
Elsewhere in California, notable county unemployment rates included Orange (5.0 percent), San Diego (5.8 percent), Los Angeles (7.9 percent) and Sacramento (6.8 percent).
Bay Area Unadjusted Unemployment Rates, October-December 2014
*Lowest in State. Source: CAL-EDD
Historical Unemployment: California, San Francisco, USA
Source: EDD, Monthly
Housing Continues its Trajectory
According to CoreLogic DataQuick, home buying in the Bay Area picked up momentum late in 2014, with December posting strong month-over-month and year-over-year sales gains. Price appreciation remained lower than it had been earlier in 2014, but the median sale price was still nearly 10 percent higher than it was the same time a year ago.
A total of 7,456 new and resale houses and condos sold in the nine-county Bay Area in December 2014.
The median price paid for a home in the Bay Area was $603,000 in December 2014. That was up month-over-month by 0.3 percent from $601,000 in November 2014 and an increase year-over-year of 9.9 percent, from $548,500 in December 2013. The Bay Area median sale price peaked at $665,000 in June and July 2007 and dropped to a post-boom low of $290,000 in March 2009.
“The Bay Area’s residential real estate market ended 2014 on a cautiously optimistic note, with moderate year-over-year increases in both median price and sales counts,” said John Karevoll, CoreLogic DataQuick analyst. “Supply continues to be constrained, and the mortgage market remains difficult. As long-term trends, cash sales and investor purchases are declining slowly, but they are still significant market factors. We know that there is a significant amount of pent-up demand lying in wait, and there is a good chance the market could see a surge this spring and summer as more homes are put up for sale.”
Bay Area Home Sales: Volume and Median Price
Source: DataQuick, www.DQNews.com
San Francisco Residential Median Prices
Source: MLS 1-1-15
Bay Area-wide Notice of Default (NoDs) for the third quarter 2014 were the lowest since 2005, when 15,337 NoDs were recorded.
Bay Area Foreclosures
Source: MLS 1-1-15
Commercial Real Estate Market Remains Strong
The San Francisco office market ended Q4 2014 with year-to-date overall net absorption of more than 3.3 million square feet (msf). The City is led by strong leasing activity in the technology sector, with the largest deals in the South of Market (SOMA) area. Citywide overall vacancy is down to 7.4 percent, with the lowest vacancy rate in Mission Bay (0 percent) and the highest in Civic Center/Mid-Market (13.1 percent). There are currently 3.87 msf under construction throughout the City.
Overall rental rates for office space continue to rise, with a citywide average of $60.87/sf.
Source: Cushman & Wakefield MarketBeat Office
Bay Area VC Investment Nearly Doubles in 2014
Venture Capital investment in Bay Area companies continued at a rapid pace in 2014, with a total of 1,409 deals representing $23.4 billion in investment coming to the Bay Area, nearly double the amount raised by start-ups in the previous year. The quarterly MoneyTree™ Reports by PricewaterhouseCoopers and the National Venture Capital Association track deals in Internet-specific, Cleantech and Life Sciences sectors.
Bay Area Venture Capital Investment 2013-2014
Source: PwC/NVCA MoneyTree™ Report, Data: Thomson Reuters
SFO Continues Growth
San Francisco International Airport continues its expansion with a $4.1 billion capital improvement program. The long-term infrastructure plan provides funding for terminal improvements, facility enhancements, and the creation of an on-site luxury hotel, pending environmental approval. The plan is expected to create more than 36,000 jobs over the next 10 years.
In other SFO news, China Southern Airlines has launched three weekly non-stop flights to Wuhan, with connections to Guangzhou. Virgin Atlantic and British Airways are increasing service to London, with five and seven additional flights, respectively; and Air France is adding an additional seven direct flights per week to Paris.
San Francisco Leads Metro Rankings
The Milken Institute ranks U.S. metropolitan areas by how well they create, sustain and support jobs and economic growth. Metrics include job, wages and salary, and technology growth. San Francisco again leads the top five metro areas in the nation:
- San Francisco, CA
- Austin, TX
- Provo-Orem, UT
- San Jose, CA
- Raleigh, NC
Bay Area Tops in Employee Satisfaction Survey
San Francisco-based Glassdoor.com ranks San Jose and San Francisco #1 and #2 for employee job satisfaction, in a 2014 report of the 50 largest U.S. metro areas based on a minimum of 500 reviews for each area over a 12-month period. Seattle, Salt Lake City and Washington, D.C., rounded out the top five. Los Angeles placed 26th, Chicago 40th, and New York 44th. Glassdoor cites San Jose and San Francisco as "both recognized as global tech hubs and regions for innovation."
Bloomberg LP to Test VC Waters in San Francisco
Bloomberg LP is expected to launch a $75 million venture capital fund that will provide the financial information outlet with a window to the fast growing world of Bay Area start-ups. Bloomberg Beta will operate as a separate legal entity from Bloomberg LP and will be based in San Francisco.
Bloomberg Beta will invest in early stage start-ups (Series A), as well as providing seed investment. It will focus on start-ups that are "producing insights from data" and "making the experience of work better," fund representatives said in a news release.
According to VentureBeat, the fund has already invested in start-ups Newsle, Nodejitsu, Codecademy, Errplane, and ProsperWorks.
In Other News...
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