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Hot Demand for New Luxury Condos is Reshaping San Francisco

High-end condos will remain a major market trend for the Bay Area city

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The 42-story, 656-unit Lumina condominium project in San Francisco.

Tishman Speyer Properties
The 42-story, 656-unit Lumina condominium project in San Francisco.
Tishman Speyer Properties

San Francisco's demand for new luxury condos remains strong and is a major market trend that is expected to continue. Fueled by the Bay Area's thriving high-tech economy, this new construction is changing the landscape of the city. Nearly 2,700 for-sale condominiums have recently been completed, are under construction or are in the planning pipeline in San Francisco. Who are the buyers for these new condos? To a large extent they are millennials and GenXers who have the income and desire to live in a vibrant world-class city — most are associated with the high-tech industry. Then add in the empty nesters who want to get closer to the urban core. And finally, there are foreign buyers who view San Francisco as a good investment, premier location and find the asset class safer than other alternatives. They are all vying for these new luxury condos and the buzz of urban living. San Francisco (and the Bay Area in general) present a rare combination of job creation driven by high-tech giants, a growing population of young, well-educated and affluent people and limited raw land available for housing.

San Francisco is a world-class city. People want to live here because of its vitality, the weather and the easy access to everything. It is located within a few hours' drive to skiing, the beach, the wine country, and the Monterey/Carmel coast. Close by there are professional sport teams, museums, symphonies, renowned universities, modern public transit and an international airport. In other words, San Francisco has it all! One of the largest luxury condo developments is the 42-story, 656-unit Lumina project by Tishman Speyer Properties to be completed next year. The September 2015 Mark Company Co. report indicates more than 50% of its units are already sold. Designed by Peruvian architect Bernardo Fort-Brescia, this project is setting new standards for design, finishes and amenities. The Lumina will meet the demand for 24/7 living with a full complement of amenities according to Carl Shannon, the company's senior managing director for the West Coast. Current prices range from just over $1 million to $49 million. (Pictures for the Lumina are provided in this article) Other large condo developments are the 21-story, 350-unit Mission Bay Block 1 project scheduled for a 2017 opening, and the 40-story, 350-unit Transbay Block 1 tower planned by Tishman Speyer that will open by 2018 at the earliest. Rising demand and record shortages of new condo listings are driving up prices. The inventory of new condos on the market in San Francisco last month was at the lowest number since March 2015. The sale price for new condos reached $1,294 per square foot in San Francisco this year, up 15% over the same time last year based on the September 2015 pricing index report from the Mark Company. It is easy to understand why San Francisco's demand for new Luxury condos remains strong. San Francisco is a world-class city with an effervescent personality that is one-of-kind. After all, living in San Francisco, the city by the bay, is not just about buying a home — it's about a lifestyle that's hard to beat and is easy to understand. This article originally appeared in MarketWatch.