Bay Area Economic Profile Report

While we often monitor the output of real estate markets with average price and price per square foot metrics it is also useful to monitor the health of the Bay Area economy to better predict future performance. The Bay Area Council Economic Institute and McKinsey & Company just released the 10th edition of their Bay Area Economic Profile. The report findings are important to understanding the health of our Lamorinda real estate market and its long-term health. While the report touches on many areas, the long-term health of our community and real estate market has always been and will continue to be the quality and health of our schools and children as they will ultimately be the fuel that powers future innovations and communities that will support our real estate market for generations to come.

Key report findings include:

  • Even though these economic success trajectories have been almost unprecedented, the Bay Area economy is still currently on the upswing
  • The Bay Area leads in GDP per capita and has significantly outperformed its peer regions in terms of GDP per capita growth over the last three years
  • Ten disruptive Bay Area startups have valuations close to or greater than $4 billion, with 2017 or 2018 funding rounds closing at $425 million on average. Nine of ten of these companies are headquartered in San Francisco or the East Bay
  • In 2017, 45 percent of US venture capital investments were made in the Bay Area
  • Over the years, the Bay Area has failed to build enough housing to keep up with population growth

In summary, while real estate values move in cycles and are subject to correction as cycles come and go, the Bay Area, and especially Lamorinda, are well positioned for growth for decades to come. Lamorinda will benefit from the trend of new-tech companies breaking away from traditional Silicon Valley boundaries and locating in San Francisco and the East Bay, making Lamorinda a viable commute option. In addition, the continued lack of inventory will put upward pressure on prices as buyers will outnumber sellers for years to come.

For a more detailed summary and the full report visit the Market Update section of our website. We look forward to hearing from you. Erin: 925.951.3817, Darrick: 925.900.8218