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Patrick Barber Comments on Supply and Demand in Pacific Heights

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Pacific Heights, the 1990 film starring Michael Keaton and Melanie Griffith, tells the story of a middle class couple who renovate and rent out their dream house in one of San Francisco’s nicest neighbourhoods. Unfortunately, their chosen tenant is a psychopath who destroys the house and tries to kill them.

The good news is that, 26 years on, such a scenario is more unlikely than ever. Prices in Pacific Heights have risen so much — up 50 per cent in four years, according to Zillow — that if you are wealthy enough to buy there, you won’t need to bring in any lodgers.

The median price of a home in the district now stands at $1.6m, according to real estate
website Trulia, but homes along the so called “Billionaires’ Row” stretch of Broadway can sell for well above $15m. These days the neighbourhood is home to some of California’s wealthiest and most prominent citizens. PayPal cofounder Peter Thiel has a house there, as do Apple designer Jony Ive and Oracle founder Larry Ellison.

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