2021 and beyond is a golden opportunity to buy real estate in San Francisco and other international, superstar cities. Incomes are rising, people have gotten super rich off the stock market and mortgage rates have stayed low. This article will discuss the best San Francisco neighborhoods to buy property for price appreciation.
In fact, mortgage rates are close to all-time lows in 2021+ because bonds have rocketed higher due to a flight to safety. Housing affordability has increased and money is flowing into real estate because it is more defensive.
Names such as Uber, Lyft, Airbnb, Palantir, Slack, and Pinterest all went public, thereby flooding the streets with tremendous liquidity. I’ve spoken to many people at these companies who all want to buy property. It is only logical that some of the billions of liquid dollars will find its way to San Francisco Bay Area real estate.
The key question everyone has is: Which are the best neighborhoods in San Francisco to buy property for maximum price appreciation?
As someone who has lived in San Francisco since 2001 and owns multiple properties in the city as well, let me share with you my opinion and why.
Best San Francisco Neighborhoods To Buy Property
The best San Francisco neighborhoods to buy property in San Francisco are Golden Gate Heights, St. Francis Wood, Parkside, Sunset, and Richmond.
Here are the reasons why:
1) Up and coming neighborhood that’s safe.
“Up and coming” is usually a euphemism for a not so great neighborhood. But GGH is basically an undiscovered gem with wonderful single family homes in a central location.
I surveyed ~200 people over six months and only about 10% of them have ever heard of Golden Gate Heights. Yet 95% of them know the location of top-notch UCSF Medical and the hot Inner Sunset. Of the 200 or so people who have never heard of Golden Gate Heights, 50 of them included real estate agents, which was absolutely baffling since that’s their job.
2) Tremendous competitive advantage.
GGH is a wonderful neighborhood because it has many homes with ocean view properties. The greater the ocean view, the greater the value. Homes in every major city in the world trade at massive premiums when they have ocean views. Because GGH has not really been discovered yet in SF as of 2019, GGH homes do not yet trade at massive premiums.
3) Good local schools.
Some of the best public schools in SF are near Golden Gate Heights and the Inner Sunset because there are more families on the western side of SF. Schools such as Clarendon, Alice Fong Yu, Stepping Stone Preschool, Lincoln HS, Sunset Elementary School are some of the best. Further, you are close to private schools such as St. Ignatius HS, Urban HS, SF Day School, Chinese American International School (2023 Mercy High Campus), Lycée Francais.
4) Undiscovered neighborhoods.
There are areas in each city where plenty of people have never heard of. Once everybody has heard of the area, it’s too late because you’ll be trying to outbid every Dick and Nancy when that unique property that comes up. Take a realtor map and circle some neighborhoods that look nice, but you’ve never visited before.
Too often real estate buyers congregate around a certain set of areas. In San Francisco, they are: Pacific Heights, Cow Hollow, Marina, Cole Valley, Presidio Heights, Lower Haight, Hayes Valley, SOMA, and Noe Valley. If one can look outside of these neighborhoods (there are 50+ neighborhoods in SF), one will be amazed at how much more they can get.
5) Peaceful and quiet neighborhood.
Practically all the properties in Golden Gate Heights consists of single family homes instead of condos. As a result, the neighborhood is family friendly and much less dense than other areas of San Francisco if you like more peace and quiet. Single family homes hold their value much better during a downturn and appreciate much quicker during an upturn.
The streets in Golden Gate Heights are very clean as you have fewer vagrants who are willing to trek up the hill to cause a ruckus, tag public utilities, or break into homes. Many homes are fully detached compared to homes that share walls in many other areas of San Francisco.
At the same time, Golden Gate Heights is just a 10 minute walk away from all the restaurants, bars, and shops in the red hot Inner Sunset on 10th/9th and Irving St. There are over 50 restaurants within that five block circle.
If you have a family, you want to be in these neighborhoods that are less dense.
6) Good local transportation.
Transportation is convenient with the 6 Bus, 66 Bus or N-Judah train both going downtown. There is also the 91 bus the brings residents along 19th avenue, through the Presidio north, along Fisherman’s Wharf, and back into downtown for one big circle.
Golden Gate Heights, Parkside, West Portal, Ingleside Heights, Merced Heights and other neighborhoods close by are going to become highly coveted areas because they can easily shoot down Highway 1 to 280 to get to all the tech/internet companies down south.
Further, the invention of ridesharing by Uber and Lyft have made transportation extremely inexpensive. It used to cost $25 – $30 to take a tax from GGH to downtown San Francisco. Now, you can hop in an UberPool for just $5. They even have express pools now for even cheaper.
7) Relatively inexpensive.
The best San Francisco neighborhoods to buy property are less expensive. Got to love that!
At an average price per square foot of $850 – $980 Golden Gate Heights is an absolute steal compared to other neighborhoods in San Francisco. There is no major international city I can think of where one can buy a single family home with ocean views for under $1,000/sft.
I have researched properties in Hong Kong, Singapore, New York City, London, and Mumbai and everything is way over $1,000/sqft. We’re talking $1,500 – $2,000/sqft. The housing market won’t crash any time soon with U.S. property so cheap.
8) Much less dense.
Golden Gate Heights and the other neighborhoods mainly hav single family homes. As a result, the neighborhood is much less dense. There’s less traffic and less people walking around, which is great in a post COVID-19 era.
I have lived in San Francisco since 2001 and I just discovered Golden Gate Heights in 2014 because I decided to expand my search and really do some deep due diligence.
I just assumed it was financially impossible to get a home with ocean views so I never looked. It’s kind of like never asking out a super model because you think you have no chance…. until you do.
The majority of prime real estate in San Francisco is closer to $1,200-$1,500 per square foot. But even at $1,500/sqft, that’s still cheaper than the $2,000 – $3,000 per square foot in places like Hong Kong, London, and Manhattan.
San Francisco is turning into a major international city before our eyes as tech powers profits, jobs, and all aspects of the SF Bay Area economy.
I see the average Golden Gate Heights view home reaching over $1,500/sqft by 2030, if not much sooner. The neighborhood has not yet been discovered. But once international money finds GGH, it’s game over.
Let’s just hope local residences discover Golden Gate Heights before foreign buyers do. From what I know and hear, Chinese and Russian buyers are buying prime properties around the nation in droves, sight unseen.
Other Great Neighborhoods To Buy In SF
* Inner Parkside, Parkside
* Inner Sunset, Outer Sunset
* Inner Richmond, Outer Richmond
* Diamond Heights
* Any property with ocean views, especially panoramic ocean views
All of these neighborhoods are safe, relatively inexpensive, and offer single family homes for working class people in the SF Bay Area. Single family homes are defensive during downturns and tend to outperform during upturns.
Although these neighborhoods are slightly farther from downtown, ridesharing has made transportation super convenient and affordable now. Once self-driving cars come, demand for SF real estate will continue to reach farther and farther out from downtown.
At the same time, all these neighborhoods offer easy access to the South Bay where a large amount of companies are currently headquartered. The time to buy big city real estate is now as the pandemic winds down. And now you know where the best San Francisco neighborhoods to buy today are.
Explore real estate crowdsourcing opportunities. If you don’t have the downpayment to buy a property, don’t want to deal with the hassle of managing real estate, or don’t want to tie up your liquidity in physical real estate, take a look at Fundrise, one of the largest real estate crowdsourcing companies today.
Real estate is a key component of a diversified portfolio. Real estate crowdsourcing allows you to be more flexible in your real estate investments by investing beyond just where you live for the best returns possible. For example, cap rates are around 3% in San Francisco and New York City, but over 10% in the Midwest if you’re looking for strictly investing income returns.
Sign up and take a look at all the residential and commercial investment opportunities around the country Fundrise has to offer. It’s free to look. I’ve personally invested $810,000 in real estate crowdfunding to earn income 100% passively.
Shop around for a lower mortgage rate. Check the latest mortgage rates online through Credible. They’ve got one of the largest networks of lenders that compete for your business. Your goal should be to get as many written offers as possible and then use the offers as leverage to get the lowest interest rate possible from them or your existing bank. Credible allows you to compare multiple real quotes, all in one place for free. When banks compete, you win.