As recovery winter melds into growth spring, we're anticipating that construction of multi-family rental housing structures will be an important contributor to growth. One key variable here, however, is whether the highest-rent, highest-demand municipalities will facilitate this process by issuing permits or whether regulatory choke-points will put a damper on things. San Francisco, while by no means having transformed itself into a lax permitting jurisdiction, seems to be doing its part:
Largely in response to the city's growing technology sector, 22,000 residential units are in various stages of approval and construction. In a few years, residents could be signing leases for new addresses in South Beach, South of Market, Central Market and Mission Bay. [...] Since 2008, only about 1,710 units were built each year, compared with an average of 2,220 each year between 2004 and 2008, according to the department.
Keep in mind that on the merits San Francisco, San Jose, and San Mateo County in between them ought to be undergoing a ridiculous construction/population boom unrelated to cyclical trends. These are the No. 1 and No. 4 highest-wage metro areas in the country and they have great weather. So this construction that is happening is taking place against a Rent Is Too Damn High backdrop. New York, Minneapolis, and Portland (Oregon) currently have the lowest vacancy rates in the country, so if you happen to have several million dollars you'd like to invest in multi-family rental housing you should probably look to those spots.
By the way, the construction recovery doesn't mean your single-family home is going to regain its bubble-era value. Sorry.