SF losing homebuyers to cities building more housing, says report

Real estate site Redfin published its new migration report Wednesday, surveying which cities have the most potential homebuyers browsing listings in other metro areas.

And once again the site says that San Francisco has more wandering eyes than any other city.

According to Redfin, 18.2 percent of San Francisco browsers appeared to be hunting for a home in another metro area, down one percent since late April.

The Bay Area’s “total outflow”—the net potential loss of locals over the number of those from other cities hunting for a home here—was nearly 16,000, the highest of any city surveyed and up from six months ago.

Acccording to Redfin’s Alina Ptaszynski, “Among people leaving the Bay Area, 22.7 percent searched in Sacramento and 9.1 percent searched in Seattle.”

Again, that’s more or less unchanged from the spring, and not necessarily surprising. (The average home price in Sacramento this summer was $348,000, according to the California Association of Realtors, contrasted with SF’s median of $1.35 million.)

Where things get interesting is when Ptaszynski stops to examine construction and development trends among the various cities.

Those with net “inflow” are usually also cities building a lot of housing stock per capita. While those suffering “outflow” are building the least, at least as Ptaszynski reckons it.

Here are Redfin’s construction figures for the city’s with the most home seekers seeking elsewhere:

• San Francisco : 1,624 permitted units, 8.5/10,000 residents
• New York City: 6,784 permitted units, 7.3/10,000 residents
• LA: 5,755 permitted units, 5.7/10,000 residents
• Washington DC: 6,754 permitted units, 11/10,000 residents
• Chicago: 4,809 permitted units, 5.6/10,000 residents

And here are the site’s figures for the cities with the highest “inflow”:

• San Diego: 3,645 units, 10.9/10,000 residents
• Sacramento: 2,446 units, 10.5/10,000 residents
• Las Vegas: 3,631 units, 16.5/10,000 residents
• Phoenix: 7,765 units, 16.3/10,000 residents
• Atlanta: 7,684 units, 13.1/10,000 units

Pretty damning. The catch is, if you take a longer view, cities like San Francisco build more than Redfin gives credit.

The migration report says SF has only 1,624 new “permitted units” over an unspecified period. However, the U.S. Census estimates that the city added about 2,600 new units between 2015 and 2016, and more than 3,150 units the year before.

(Note also that Redfin’s figures for “San Francisco” also include other cities in the larger metro area, whereas the census focuses on just San Francisco County itself.)

Between 2011 and 2015 the city built 8,757 new homes, one per every 4.8 new residents who moved here in the same period.

In the same time span, New York City averaged one new home per 4.5 new resident. LA added 4.9, and Washington DC 6.8. But Chicago actually lost housing units almost every year, for a yield of -2.8 homes per new Chicagoan since 2011.

The same statistic for the Redfin’s more popular destinations are 8.5 in San Diego, 20.2 in Sacramento, 4.5 for Vegas, 4.8 for Phoenix, and 12.8 for Atlanta.

So, those cities might be big builders right now. And SF’s housing output is indeed slowing down. But taking in a little more context means Redfin’s biggest losers look much more competitive in the building game—except for Chicago, which is getting bad news on every front relative to growth.

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• Migration Report, Q3 [Redfin]
• SF Exodus To Sacramento [Curbed SF]
• County Sales Activity [CAR]
• SF Wealthier Than Ever [Curbed SF]