Home / Daily Dose / In San Francisco, $1 Million Buys an ‘Earthquake Shack’
Print This Post Print This Post

In San Francisco, $1 Million Buys an ‘Earthquake Shack’

Hands of family together holding house in green parkIt’s no secret that California is home to some of the priciest housing markets in the United States. According to a recent study by the Paragon Real Estate Group (using data provided by the California Association of Realtors’ Housing Affordability Index), the household income required to put down a 20 percent down payment on an average home in San Francisco is now $303,000—and the city’s median sale price last quarter was a whopping $1.5 million. Needless to say, demand in the city by the bay is outstripping both supply and the limits of most potential homeowners’ bank accounts. But high prices never stop homes from selling, and San Francisco homebuyers are proving willing to pay a lot—for a little.

As reported by SFGate, San Francisco is recently seeing a spike in demand for so-called “earthquake shacks.” It’s a colorful name with an equally colorful history, with the colloquial name “earthquake shack” used to describe small cottages constructed in the aftermath of 1906’s earthquakes and fires. Those paired natural disasters left 500 city blocks obliterated and nearly half of San Francisco’s population homeless. Needless to say, the city needed housing, lots of it, and it needed it quickly.

The solution was “earthquake shacks,” some 5,000 small homes constructed around the city in order to put a roof over the heads of the city’s displaced residents. At the time, none of the people moving into them would likely have described the earthquake shacks as the lap of luxury, but things have changed a lot in the past 100 years. In 2018, these quaint little huts are selling for upwards of a million dollars apiece.

While that’s a very San Francisco kind of story, the origins of the earthquake shacks also echo very modern problems faced by California. Last year’s widespread wildfires caused over $5 billion in damages to the state, burning through some of the most expensive real estate in the country and aggravating an already dire housing inventory shortage.

Other parts of the country are currently experimenting with communities of tiny homes as a way to combat homelessness, a problem that’s only being exacerbated by skyrocketing home prices and rents, nationwide inventory shortages, and construction that hasn’t been keeping pace with demand. That might work in California too—so long as they don’t get slapped with a million-dollar price tag.

About Author: David Wharton

x

Check Also

Risk Management Solution Provided by Oversight Platform

Vendorly, a vendor oversight platform for financial institutions, is providing NTFN with a third-party risk ...

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.