SAN FRANCISCO (CBS SF) – Housing prices in the Bay Area have reached levels “unsupportable” by the area’s income, according to a financial research company.
Fitch Ratings announced this week that the Bay Area housing market is roughly 14 percent overvalued, after reaching an all-time high in the third quarter of last year. Prices are up more than 10 percent in the past year and more than 60 percent above their post-recession low in 2012.
The company cited the booming tech sector as the driving force behind the huge gains in home prices.
“The last time the Bay Area experienced this kind of home price growth was during the dot-com era from 1997-2000,” Fitch managing director Grant Bailey said in a statement.
A Coldwell Banker report released last year found four out of the five most expensive cities to buy a four bedroom, two bath home in the United States are in Silicon Valley. The average price of such a home in Palo Alto is $2.067 million, second only to Newport Beach in Orange County. Saratoga, Cupertino and Los Gatos rounded out the top five, all with average prices above $1.5 million.
San Francisco had the 11th highest average price for a four bed, two bath home in the country, at $1.36 million.