Home Prices Are Relaxing in Silicon Valley’s Most Expensive Pockets

Although Silicon Valley still ranks among the country’s most expensive places to buy a home, prices in the region are leveling off, with Atherton losing its title as the priciest ZIP code in the U.S.

That’s according to Forbes’ latest annual rankings of America’s most expensive real estate markets, which places two Silicon Valley ZIP codes — one in Atherton and one in Los Altos Hills — among the country’s 10 priciest. The study includes both single-family homes and condominiums using a rolling average for the 90-day period ending Nov. 18. ZIP codes with fewer than 10 homes for sale were not included, which the report says eliminated some expensive Northern California enclaves.

Atherton’s 94027, which had ranked as the country’s most expensive ZIP code for the past three years, fell to the No. 3 spot, with a median list price of $7.2 million. With homes listing for $6.08 million, Los Altos Hills‘ 94022 is America’s eighth most expensive ZIP code, up three spots from last year’s list.

Prices have cooled significantly in Atherton, where homes listed for $10.56 million last year. Pacific Union Silicon Valley real estate professional Carol MacCorkle told Forbes that fewer homes at the highest end of the Atherton market — those priced in excess of $20 million — have sold this year when compared with last year. At the lower end of the market, properties in the affluent town are no longer the subject of bidding wars and are staying on the market longer.

Hillsborough‘s 94010 ZIP code ranks No. 16, with a median list price of $5.08 million. With homes listing for $4.78 million, 94062 in Woodside places No. 20. Last year, Forbes ranked both of those ZIP codes in the top 10.

Relaxing prices are evident in other parts of Silicon Valley and the Bay Area, with local ZIP codes slipping down this year’s list from 2015. Palo Alto‘s 94301 dropped from No. 36 in 2015 to No. 48, with a median list price of $3.59 million. After finishing at No. 13 last year, Belvedere‘s 94920 fell to the No. 54 spot. ZIP codes in San Francisco, Tiburon, Los Altos, Kentfield, Saratoga, and Los Gatos also ranked lower on this year’s list than last year’s.

A recent analysis by Pacific Union Chief Economist Selma Hepp illustrates the slowdown that some Silicon Valley markets have seen, with Palo Alto, Menlo Park, Los Altos, Belmont, and Saratoga all seeing annual home price declines. At the same time, more affordable cities — including East Palo Alto — have seen home price appreciation in excess of 15 percent.

Article and images sourced from http://blog.pacificunion.com/home-prices-are-relaxing-in-silicon-valleys-most-expensive-pockets/

Pacific Union’s October 2016 Real Estate Update

The first month of the fourth quarter was a typically busy time for Bay Area real estate markets, with the months’ supply of inventory (MSI) declining or holding steady from September across the majority of Pacific Union’s regions. The exceptions were the Mid-Peninsula and Napa County, where the number of single-family homes for sale increased slightly, and the Lake Tahoe/Truckee region, where more sellers listed their properties in advance of the upcoming ski season.

Click on the image accompanying each of our regions below for an expanded look at local real estate activity in October.

MARIN COUNTY

The number of homes for sale in Marin County declined on both a monthly and yearly basis, ending October with a 1.4-month supply of inventory. At $1,249,000, the median sales price wasn’t far off from the preceding eight months.
Homes sold in an average of 49 days, one day longer than in August and September, and buyers paid 98.2 percent of original prices.
Defining Marin County: Our real estate markets in Marin County include the cities of Belvedere, Corte Madera, Fairfax, Greenbrae, Kentfield, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito, and Tiburon. Sales data in the adjoining chart includes single-family homes in these communities.

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SAN FRANCISCO – SINGLE-FAMILY HOMES

The median sales price for a single-family home in San Francisco hit a yearly high in October, closing out the month at $1,410,000. Sellers took home 103.6 percent of original prices, a bit less than in September.
At an average 28 days on the market, homes sold almost two weeks faster than they did in the preceding month, while the MSI fell to 1.7.

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SAN FRANCISCO – CONDOMINIUMS

The median sales price for a San Francisco condominium has stabilized over the past year and finished October at $1,164,000. Properties have been commanding premiums for the past year and that trend continued in September, with condominiums selling for 102.2 percent of asking prices.
Month over month, the MSI inched down to 2.7 but was up from October 2015. The pace of sales quickened for the second month in a row, with units taking 37 days to leave the market.

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SILICON VALLEY

Although Silicon Valley is still the Bay Area’s most expensive real estate market, the median price relaxed on both a monthly and annual basis to $2,610,000. The MSI declined to 1.6, down on a monthly and yearly basis.
Homes sold in an average of 39 days, more than double the amount of time from one year earlier. Buyers paid 96.9 percent of original prices, the seventh consecutive month that homes have sold for less than 100 percent.
Defining Silicon Valley: Our real estate markets in the Silicon Valley region include the cities and towns of Atherton, Los Altos (excluding county area), Los Altos Hills, Menlo Park (excluding east of U.S. 101), Palo Alto, Portola Valley, and Woodside. Sales data in the adjoining chart includes all single-family homes in these communities.
Mid-Peninsula Subregion
With a 1.4-month supply of inventory in October, the number of homes for sale in our Mid-Peninsula subregion was consistent with levels recorded for most of 2016. Although the pace of sales has been slowing somewhat, homes still found a buyer in exactly four weeks.
The median sales price increased modestly from September to $1,662,500. Buyers paid 96.1 percent of asking prices, the first month in at least a year with no average premium.
Defining the Mid-Peninsula: Our real estate markets in the Mid-Peninsula subregion include the cities of Burlingame (excluding Ingold Millsdale Industrial Center), Hillsborough, and San Mateo (excluding the North Shoreview/Dore Cavanaugh area). Sales data in the adjoining chart includes all single-family homes in these communities.


Article and images sourced from http://blog.pacificunion.com/pacific-unions-october-2016-real-estate-update/

Real Estate Roundup: U.S. Annual Income Growth Climbs to 50-Year High

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious.

HOUSEHOLD INCOME GROWTH SEES SIGNIFICANT ANNUAL GAIN
The average American worker got a much-needed monetary boost last year, though incomes have not yet returned to their prerecession highs.

Citing data from the U.S. Census Bureau, The Wall Street Journal reports that the median household income increased by 5.2 percent from 2014 to 2015 to $56,516. That’s the largest annual gain since 1967 but still 2.4 percent below the record high U.S. incomes of 1999. Incomes are 1.6 percent below their precession levels of 2007 and may surpass them next year at the current growth rate.

The news comes on the heels of an analysis by CNBC, which found that incomes in Silicon Valley grew by more than 20 percent from 2009 to 2014. The Bay Area is home to most of the highest-paying companies in the nation, with the overwhelming majority in the technology sector.

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SAN FRANCISCO NEW HOMES SHRINKING OVER THE PAST CENTURY
Although the average U.S. new home size is much larger than it was 100 years ago, square footage in San Francisco has become more scarce.

In a recent analysis, PropertyShark.com found that homes and condominums built with in the past six years are 74 percent larger than those built in the 1910s. The average new U.S. home is now 2,430 square feet, with the majority of large metro areas seeing double-digit-percent size gains from a century earlier.

San Francisco is one of four U.S. markets where new homes today are smaller than they were way back then. Since the 1910s, home sizes have shrunk by 28 percent in the City by the Bay, the largest declines in the country. The average new home in San Francisco is 1,150 square feet, second only to Boston for smallest in the nation.

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HOW HAPPY ARE BAY AREA RENTERS?
Satisfaction levels among Bay Area renters vary widely, although its most expensive city earns high marks from tenants.

That’s according to Apartment List’s annual renter confidence study, which polled 30,000 tenants nationwide and graded cities based on 10 different criteria, including affordability, access to public transportation, and job opportunities. Although San Francisco is the nation’s most expensive rental market, tenants there are pretty content, with the city earning an overall grade of A-minus. Other Bay Area rental markets with an A rating include Berkeley, Daly City, and Sunnyvale.

Renters in other parts of Silicon Valley are more lukewarm about their situations, with Santa Clara and San Jose receiving a C and a C-minus, respectively. Renters in three Bay Area cities are downright disgruntled; Oakland, Richmond, and Concord all come away with an F.

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MILLENNIAL HOMEOWNERSHIP RATE WILL KEEP FALLING
Much has been written about low homeownership rates among the youngest generation of homebuyers, and one respected real estate analyst sees that trend continuing for the next decade.

CNBC reports that homeownership rates for those under the age of 35 has dropped by 21.2 percent since 2004, the biggest decline of any demographic. John Burns of John Burns Real Estate Consulting told CNBC that he expects homeownership among millennials to continue declining until 2025.

Burns also predicts a nationwide decrease in homeownership across all demographics over the next decade. By 2025, about 60 percent of the population will own homes, the lowest level since the 1950s.

(Image: Flickr/FutUndBeidl)

Article and images sourced from http://blog.pacificunion.com/real-estate-roundup-u-s-annual-income-growth-climbs-to-50-year-high/

Pacific Union August 2016 Real Estate Update

Although annual home price appreciation continued to moderate throughout much of the Bay Area as summer drew to a close, two of our second-home markets - Sonoma Valley and Lake Tahoe/Truckee - enjoyed gains of more than 20 percent. Our two most expensive markets, Silicon Valley and the Mid-Peninsula, saw prices move in the opposite direction, with the median sales price down from August 2015. Click on the image accompanying each of our regions below for an expanded look at local real estate activity in August.

SAN FRANCISCO - SINGLE-FAMILY HOMES   The median sales price for a single-family home in San Francisco dropped to $1,281,500 in August, the lowest since January. Homes took an average of 34 days to find a buyer, a slight increase from the two preceding months. The MSI ended August at 1.6, with sellers netting 107.6 percent of asking prices.     SAN FRANCISCO - CONDOMINIUMS   Condominium sales in San Francisco slowed as summer wound down, with homes selling in an average of 50 days, the longest time on the market in the past year. The median sales price was $1,099,118, virtually unchanged from July. Even as the pace of sales slowed, supply conditions tightened, with the MSI dropping to 1.8. Sellers took home an average of 100.7 percent of original prices, the smallest premiums recorded over the past 12 months.     MARIN COUNTY   August's median sales price in Marin County was nearly unchanged from July at $1,187,500. The MSI ended the month at 1.8, also almost identical to July. Homes sold in an average of 47 days, and buyers paid 96.4 percent of original prices.     Defining Marin County: Our real estate markets in Marin County include the cities of Belvedere, Corte Madera, Fairfax, Greenbrae, Kentfield, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito, and Tiburon. Sales statistics in the chart above include single-family homes in these communities.     SILICON VALLEY

 

Summer's end also found the pace of sales slowing in our Silicon Valley region, with homes taking an average of 44 days to leave the market. The MSI stood at 1.9, down slightly from July. At $2,500,000, the median sales price declined 9 percent from August 2015, tying its one-year low. Buyers also enjoyed the biggest discounts of 2016, with homes selling for an average of 96.6 percent of original prices.     Defining Silicon Valley: Our real estate markets in the Silicon Valley region include the cities and towns of Atherton, Los Altos (excluding county area), Los Altos Hills, Menlo Park (excluding east of U.S. 101), Palo Alto, Portola Valley, and Woodside. Sales statistics in the chart above include all single-family homes in these communities.   MID-PENINSULA SUBREGION   The median sales price in our Mid-Peninsula subregion was down on both a monthly and yearly basis, closing out August at $1,475,000. The pace of sales remained brisk, with homes finding a buyer in an average of 22 days. The MSI dipped slightly from July to 1.3, and sellers received 101.1 percent of original prices.     Defining the Mid-Peninsula: Our real estate markets in the Mid-Peninsula subregion include the cities of Burlingame (excluding Ingold Millsdale Industrial Center), Hillsborough, and San Mateo (excluding the North Shoreview/Dore Cavanaugh area). Sales statistics in the chart above include all single-family homes in these communities. Article and images sourced from http://blog.pacificunion.com/pacific-unions-august-2016-real-estate-update/

Closed Home Loan Activity Is Among Nation’s Lowest for Bay Area Millennials

Sky-high real estate prices are keeping the vast majority of young buyers on the sidelines of the Bay Area housing market in 2016, with the San Francisco metro area posting one of the smallest percentages of closed home loans for that demographic.

Mortgage-processing company Ellie Mae’s Millennial Tracker tool, which compiles data on closed home loans for buyers born between 1980 and 1999, says that 17 percent of applicants for mortgages in the San Francisco-Oakland-Hayward metro area were millennials between January and August of 2016. The numbers dovetail with recent data from San Francisco-based lender Earnest, which found that less than 10 percent of under-35 residents in the Bay Area’s two largest metro areas own homes.

The analysis again illustrates the importance of having an above-average credit score for Bay Area homebuyers, regardless of their age. It also shows how dual incomes affect young buyers in the region, with roughly two-thirds of successful applicants classified as married across all local regions.

The following is Ellie Mae’s breakdown of closed loans so far this year in Bay Area metropolitan statistical areas (the company lacks data for Napa County):

San Francisco-Oakland Hayward: Millennials accounted for 17 percent of closed loan applications in the San Francisco metro area so far this year, the second lowest rate among the country’s 25 most populous cities and only slightly higher than Los Angeles. The average young buyer borrowed $464,392 to purchase a home appraised at $672,438. The average FICO score stands at 751, and 59 percent are married.

San Jose-Santa-Clara-Sunnyvale: Silicon Valley’s income growth has given millennials slightly more buying power, with a 19 percent closed-loan rate so far this year. San Jose millennials require the best credit score in the Bay Area in order to finalize a loan — 754 — and 63 percent are married. The average successful lender borrowed $527,704 to buy the average home appraised at $814,469.

Santa-Cruz-Watsonville: There have been even fewer millennial borrowers in Santa Cruz than in the Bay Area proper this year, with that demographic accounting for just 12 percent of activity. Those who were successful have FICO scores of 754, identical to their Silicon Valley neighbors. Sixty-six percent are married, and the average loaner borrowed $460,393 to buy a $626,053 home.

Santa Rosa: Through August, millennial buyers have represented 15 percent of closed home loans in Sonoma County in 2016, with 57 percent classified as married. The average FICO score is 740, with lenders typically issuing a $374,089 loan to purchase a home appraised at $494,200.

Vallejo-Fairfield: Millennials have accounted for 22 percent of all successful 2016 loan applicants in the Solano County suburbs, more than anywhere else in the Bay Area, and also seal the deal with lower average FICO scores of 727. The Vallejo-Fairfield area has the region’s least expensive homes — appraised at an average of $375,913 — which translates to an average loan of $300,482. Fifty-seven percent of young buyers in Solano County are married.

(Photo: Flickr/Lucas)

Article and images sourced from http://blog.pacificunion.com/closed-home-loan-rates-among-nations-lowest-for-bay-area-millennials/

Pacific Union’s July 2016 Real Estate Update

Normalizing annual home price growth was evident across parts of the Bay Area in July, with the median single-family home price in Contra Costa County, the East Bay, San Francisco, Silicon Valley, and Sonoma County rising by single-digit percentage points from one year earlier. Only single-family home prices in the Lake Tahoe region and Marin County posted double-digit percent annual appreciation. Price growth was flat in Napa County, while prices fell year over year in our Mid-Peninsula and Sonoma Valley regions.

Click on the chart accompanying each of our regions below for an expanded look at local real estate activity in July.

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MARIN COUNTY

The pace of sales in Marin County slowed in July, with homes taking 46 days to sell, more than a week longer than in the previous month. The median sales price softened slightly from June to $1,186,000 but was up by 12 percent from July 2015.

The MSI closed July at 1.6, and buyers paid 98.3 percent of original prices.

Defining Marin County: Our real estate markets in Marin County include the cities of Belvedere, Corte Madera, Fairfax, Greenbrae, Kentfield, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito, and Tiburon. Sales data in the adjoining chart includes single-family homes in these communities.

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SAN FRANCISCO – SINGLE-FAMILY HOMES

The median single-family home price in San Francisco ended July at $1,370,000, in the same general range as it has been since February. Homes continue to fetch premiums, selling for 105.9 percent of original prices, although overbids are substantially smaller than they were last summer.

Homes sold in an average of 32 days, nearly identical to June’s pace of sales. The MSI finished July at 1.8, with a few more homes on the market than in the previous month.

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SAN FRANCISCO – CONDOMINIUMS

San Francisco’s median condominium price cooled slightly on both an annual and monthly basis, dropping to $1,080,000 in July. Buyers paid 102.7 percent of original prices, a bit less of a premium than they did last summer.

Both the average days on market and the MSI remained unchanged from June, at 36 and 2.1, respectively.

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SILICON VALLEY

The median sales price in our Silicon Valley region has been gradually dropping since April, but at $2.8 million it remains the most expensive region in which Pacific Union operates. Still, buyers netted slight discounts for the fourth consecutive month, with the average home selling for 98.8 percent of original price.

The MSI rose to 2.0, its highest level since March, and homes sold in an average of 26 days.

Defining Silicon Valley: Our real estate markets in the Silicon Valley region include the cities and towns of Atherton, Los Altos (excluding county area), Los Altos Hills, Menlo Park (excluding east ofU.S. 101), Palo Alto, Portola Valley, and Woodside. Sales data in the adjoining chart includes all single-family homes in these communities.

Mid-Peninsula Subregion

After dropping significantly in June, the median sales price in our Mid-Peninsula subregion rebounded in July to $1,640,000, although it was down on an annual basis. Sellers received 103.7 percent of asking prices, not dramatically different from the previous three months.

Homes took an average of 19 days to find a buyer — identical to June — while the MSI rose modestly to 1.4.

Defining the Mid-Peninsula: Our real estate markets in the Mid-Peninsula subregion include the cities of Burlingame (excluding Ingold Millsdale Industrial Center), Hillsborough, and San Mateo (excluding the North Shoreview/Dore Cavanaugh area). Sales data in the adjoining chart includes all single-family homes in these communities.

Article and images sourced from http://blog.pacificunion.com/pacific-unions-july-2016-real-estate-update/

Positive Trends in Venture-Capital Activity to Impact Bay Area’s Tech Employment

Executive Summary

• Despite the drop in venture-capital (VC) activity and IPOs in the last quarter of 2015 and into the first quarter this year, confidence among professional venture capitalists improved at the end of 2015.
• During the first quarter of 2016, VC firms raised $13 billion, which is the largest total since the dot-com boom in 2000.
• The pause in VC deal and investment activity in Q1 2016 is due to the same reasons as the volatility in stock markets, China’s slowing economy, oil prices, an anticipated increase in interest rates, and the upcoming U.S. presidential election.
• VC activity outlook is still very encouraging, but investors are scrutinizing their deals more closely.
• Technology employment in the Bay Area is still extremely healthy. There were a total of 118,000 jobs created over the last year, and with more VC activity in the upcoming quarters, tech employment growth will pick up as well.

A recent article in The Wall Street Journal on sales of ping-pong tables to tech companies hinted that slower sales are due to troubles in the Bay Area’s high-tech sector. Admittedly, it is an interesting approach to assessing the economy, but while everyone is looking for the slightest signs of what’s on the horizon, ping-pong tables are hardly a reliable indicator. There are many possible reasons for slowing ping-pong table sales, including that it is a durable item that is rarely replaced.

Nevertheless, there are more reliable indicators on which we should gauge VC activity and how it will impact the Bay Area’s tech employment and housing markets. For example, the quarterly Silicon Valley Venture Capital Confidence Index (Figure 1) measures and reports the sentiment of 30 professional venture capitalists on the funding environment in the Bay Area over the next six to 18 months. The index reached 3.59 on a 5-point scale (with 5 equaling high confidence and 1 equaling low confidence) in the first quarter of 2016, up from 3.39 in the previous quarter. The index increased at the end of 2015 following three quarters of declines, suggesting that optimism is rising among venture capitalists.

Figure 1:

Still, with no technology IPOs in Q1 2016 and a drop from 35 overall IPOs in Q4 2015 to 10 IPOs in Q1 2016, — along with lower valuations of some unicorns — a lot of conversations have been brewing about slowing VC activity. Numbers pertaining to deals and investments have been particularly alarming. After promising to be the best year since the dot-com collapse, the last quarter of 2015 was characterized by a notable drop in VC activity, which bled into the first quarter of 2016. The deal count for both quarters remained at the lowest level seen in over three years. Figure 2 highlights California’s VC-backed investment activity in the first quarter and where the top deals happened.

Figure 2:

At the same time, VC firms raised $13 billion during the first quarter of 2016, which is the largest total since the dot-com boom in 2000. Robust growth in fundraising is not surprising given the amount of liquidity in global markets. However, the question is why has the investment and deal activity slowed so much? According to the Venture Pulse Q1 2016 report by CB Insights and KPMG, the factors leading to the pause are similar to the jitters that slowed the stock market, including an economic slowdown in China, a drop in oil prices, an anticipated interest-rate increase, and an approaching U.S. presidential election. Also at work are general developments across the globe, not the least of which is the U.K.’s possible exist from the European Union.

Clearly, the VC funds raised will be dispersed over the coming quarters, but investors’ expectations and concerns have changed. Funders are looking for greater transparency — companies with solid balance sheets and business models that can demonstrate profitability, and more importantly, manage their expenses (like those aforementioned ping-pong tables). Unlike the times when investments were based on pure potential, venture capitalists are now scrutinizing start-ups to a greater degree, and funders will become more engaged in companies’ decision-making and spending processes.

Furthermore, the underperformance of some high-profile companies has brought existing and potential unicorns under scrutiny, and investors are recognizing that some valuations are too high. The company that best exemplified the trouble among IPO valuations was Square, which earned a $6 billion valuation in December 2014 but managed only a $4.2 billion valuation in its IPO on November 19, 2015. Today the company’s market cap is at $3.39 billion. And while experts argue that comparing these numbers is like comparing apples and oranges, Square’s high-profile IPO brought attention to the objective valuation of unicorns.

Since then, the recognition that high market valuations may not be warranted is leading to a greater focus on creating revenue and positive growth margins, controlling expenses, and setting a clearer path to profitability. Falling valuations are similarly leading investors to change investment instruments that give them protection and guarantees tied to potential IPOs. For example, Spotify raised funds using convertible debt, which came with strict investor guarantees tied to an anticipated IPO. Also, with unrealized valuations, there has been greater corporate participation and merger-and-acquisition activity instead of IPOs. This trend is likely to continue, as corporations look for new technologies and innovations that they can leverage within their own businesses.

Generally, investors are looking for new opportunities and focusing their attention on technologies that are at the beginning of the innovation cycle. Thus, unlike previous fascinations with consumer Internet companies (Uber and Airbnb, for example), much of the funds raised in the first quarter of 2016 went to the health-care industry. In fact, all 10 IPOS in Q1 2016 were in the health-care sector. Because of two large health-care deals in New York, the industry was the only one in the U.S. that actually saw an uptick in VC activity from the end of 2015. And if the Technology Hype Cycle (Figure 3) developed by research firm Gartner is any indicator of up-and-coming technologies, we may see more investment going into cybersecurity and artificial- intelligence firms.

Figure 3:

Source: Gartner

All things considered, while VC market strategies may be shifting, returns in 2015 for the 10-year period were almost twice as high as the Standard & Poor’s (S&P) returns. With the U.S. economy and the S&P market recovering from jitters and a continued strong job market, long-term VC activity still looks encouraging. And as fundraising activity for the beginning of 2016 suggests, there is no shortage of buying interest.

What Does This Mean for Jobs, and Particularly Technology Jobs in the Bay Area?

San Francisco Bay Area job growth has outperformed California’s and the nation’s job growth since the recovery started. While the state’s unemployment rate reached 5.4 percent in March, the lowest level since 2007, most Bay Area regions have unemployment rates well below the state mark, generally ranging between 3 and 4 percent. The latest monthly employment gains came in lower than expected, but the numbers are expected to be revised up based on the number of total employed people.

Overall, the region gained about 118,000 jobs between March 2015 and March 2016. Unsurprisingly, the major employment centers, such as San Francisco and San Jose, accounted for most of those gains, but the composition of the job growth is encouraging.

Source: California Employment Development Department. San Francisco includes San Francisco and  San Mateo counties; Oakland includes Alameda and Contra Costa counties; San Jose includes San Benito and Santa Clara counties. Technology jobs are sum of Professional, Scientific & Technical Services and Information jobs.

In San Francisco, relatively large industries are growing jobs at the fastest clip — 13 to 16 percent over the last year — including jobs in computer-systems design and related services; construction, especially specialty trade contractors; and nondepository financial services (loan officers, for example). Fast growing, but relatively smaller in numbers, were jobs in higher education, performing arts, and food services.

About 8,300 jobs created between the first quarter of last year and the first quarter of this year were in computer-systems design and related services. While tracking technology jobs can be tricky, as they span across a number of industries, a solid annual gain of 13 percent in computer-systems design suggests that the technology sector in San Francisco is still healthy and strong. Also, it is natural that the pace of job growth moderates as the economy reaches full employment, and with the unemployment rate in San Francisco well below that, some softer numbers may not signal weakening of the local economy.

In Silicon Valley, job growth was relatively more broad-based, but among large industries, electronic computer manufacturing gained jobs at a faster rate than other industries. Again, similar to San Francisco, specialty trade contractors were in high demand and added a considerable number to overall new jobs. Faster job growth was also seen in administrative and support services and publishing, which includes software publishing.

In the greater Oakland region, trends follow the same patterns seen in other parts of the Bay Area. The fastest growth is again among specialty trade contractors, but trending close are jobs in computer-systems design and related services, publishing, and arts and entertainment.

The North Bay saw solid job growth in line with the region’s core competencies, including positions in tourism and food and beverage services. While there may be some growth in tech-related industries, it is still a relatively small number that may not point to any trends yet.

Clear growth in construction jobs across the entire region is welcome, as it points to greater housing construction. Generally, construction jobs have been growing at a relatively speedy pace over the last year. As a share of total employment, the construction sector contributes a much smaller share of jobs than it did during the mid-2000s housing boom.

Taken together, the trends outlined above suggest that technology employment is still robust and that job growth will continue. Another indicator that supports future tech employment growth is the number of job openings. According to an analysis of employment website Indeed.com, the San Jose metro area has the highest number of job openings per capita in the country. What is proving more difficult is finding the appropriate skill set and the right candidate for those open positions. Lastly, the anticipated increase in VC activity will help boost tech employment in general and possibly spur another round of ping-pong table sales.

Selma Hepp is Pacific Union’s Vice President of Business Intelligence. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors and economist, and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.

Article and images sourced from http://blog.pacificunion.com/positive-trends-in-venture-capital-activity-to-impact-bay-areas-tech-employment/