First, a cautionary note: Bay Area homeowners who spend countless hours and thousands of dollars on home improvements and upkeep may be a bit miffed by the data uncovered recently by the Lincoln Institute of Land Policy. But the facts, as they say, are facts.
To wit: Your home, for which you have worked so hard to maintain and beautify, is worth far less than the dirt underneath it.
In the Oakland metro area, the average home accounted for just 29 percent of the total value of the property in the first quarter of 2016 (the latest quarter with available data), while the land itself was worth 71 percent of the total amount. It was even worse in the San Jose metro area, where the average home accounted for a tiny 23 percent of the total value. The land: 77 percent.
And it will come as no surprise, really, that in the San Francisco metro area it was even worse: The average home here, including all those Victorian beauties, accounted for just 19 cents of every dollar the property was worth. The land underneath: 81 cents on the dollar.
San Francisco had the greatest gap between home and land values among 46 metro areas studied by the independent, nonpartisan Lincoln Institute of Land Policy. San Jose was second on that list, and Oakland was fourth.
That’s not to say that Bay Area homeowners are house-poor, of course. In San Francisco, the average total property value (home and land) in the first quarter of 2016 was $1,346,489, a record high. In San Jose it totaled $1,212,272, and in Oakland it reached $870,322, both also record highs.
And the gap between home and land values was even greater a decade earlier, just before the housing crash. In the fourth quarter of 2005 and the first quarter of 2006 the average home in San Francisco accounted for just 11.1 percent of the total property value. In San Jose, it fell to 16 percent in the third quarter of 2005, and in Oakland it fell to 19.1 percent in the same quarter.
(Image: Flickr/Nikhil Katkoriya)
Source: Pacific Union Bay Area Real Estate Blog
In the Bay Area, Land Is More Valuable Than the Homes That Sit on It