Cities by the BayTurn on any movie or television show that takes place in San Francisco and, like death and taxes, you’re assured of a scene on the Golden Gate Bridge — very often with traffic going the wrong way. You do not need to cross the bridge to get to the airport… unless you’re coming from Sausalito. Or you’re in the movies.

The so-called Bay Area comprises nine counties and over seven million residents, with San Francisco the jewel in the crown. And a packed area it is: dozens of post-secondary colleges and universities, among them Stanford and UC Berkeley, six major league sports franchises, a slew of major multinationals like Gap and Del Monte, the beating heart of California’s wine industry up the road and a little neighbourhood called Silicon Valley are all concentrated in the Bay Area. It could also be a called a hotbed of hipsterism, but we won’t hold that against it.

San Francisco sits on the tip of a peninsula and is connects to tony Marin County and Sausalito via Golden Gate Bridge, the Oakland Bay Bridge to Oakland, Alameda and Berkeley, and, farther to the south, the San Mateo to San Jose. It’s a diverse location, popular with professionals, international students, and investors. Despite recent blips, San Francisco’s property market has proved resilient because of that. Prices (according to property portal Trulia) were averaging approximately US$560 (HK$4,300) per square foot through the second quarter 2012, up 4.9 percent. Stalwart districts of Noe Valley, Castro and Pacific Heights led the way, with average home prices above US$1.2 million. “San Francisco is probably about 15 percent off its peak. But it’s an international city and a lot of what’s driving the market is the international purchaser,” notes Patrick ONeill, CEO of ONEILL Group Hong Kong. “San Francisco has with deep historical ties [to Hong Kong] and a very large Chinese population. The banking in the Bay Area is one of the largest in the US and its easily accessible. And it’s really cool.”

Cool and expensive. San Francisco is striking distance from a dozen other viable markets. It begs the question of whether a dual-city dynamic, like Manhattan and Jersey City’s, exists in the west. Do Oakland (US$187 per square foot), San Jose (US$299) and Sausalito (US$450) provide that feeder “suburb” that has led to a mini-boom in New Jersey? “I think Oakland has tried to be the Hoboken of the West Coast but it hasn’t happened,” theorises Jim Jacobson, president of San Francisco-based California West Partners. Foreign investors know very little about Oakland, other than perhaps what they see on television, and that’s often not flattering. “Oakland gets a lot of bad press. It’s got high crime, it’s in a bad place as a city financially, it doesn’t have great infrastructure. So it never took off the way some developers thought it would.” For the non-risk averse, there are developments aching to move product in Oakland, but as Jacobson cautions, “They’re trying to get rid of them because no one wants them. Then you can’t get a tenant. Then you try and resell it. There’s no appreciation or rental yield.” San Francisco always has both.

It doesn’t happen matters that investors looking for performance or families buying homes for students and frequent business travel fall back on the familiar. “We find that everyone who purchases in the United States right now already has some sort of connection to the country,” echoes ONeill. “And if [we talk with] someone who’s unsure as to where to invest they ask about New York, Los Angeles, San Francisco. It’s a starting point; a jumping-off point as a first tier city.” And Oakland, unlike parts of New Jersey, doesn’t have enough industry to reach feeder status. “Children’s Hospital is there, which is a phenomenal facility, and there are some high tech companies in the area that do very well, and that seems to fulfil the Oakland demographic. But if you work in San Francisco, you’re probably going to find a place in San Francisco. And there’s enough of an inventory swing as far as pricing goes [to meet demand].” Pacific Heights may be the ideal location, but Ingleside, the Outer Mission and Bayview districts boast home prices below US$500,000.

So Oakland may not be an option, but there are scores of other cities in the area. “Places like Atherton and Palo Alto, in between San Francisco and San Jose, are super expensive,” explains Jacobson. “Those property values are untouchable. So people that work in the valley tend to gravitate towards the mid-market in Belmont and San Carlos, or closer to San Jose.” Likewise, the San Francisco-style, full-service properties transplanted to San Jose in the past never caught on (“It’s cool. But it’s not as cool as San Francisco.”), and though scads of professionals commute from high end Marin County, the premium prices there can preclude impressive rental yields and appreciation values.

Ultimately San Francisco remains the jewel in the Bay Area crown for classic supply and demand reasons. “As an investment opportunity San Francisco can’t grow out anymore. Los Angeles, for example, just continues to grow outward,” says Jacobson. “But San Francisco hit the edge, and now they can only build up. So that’s the beauty of investment. There’s not enough to go around.” And though real estate fundamentals will drive the market, they get driven for a reason. As Jacobson summarises, “People in San Francisco want to be in San Francisco. It’s a very special place.”