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Happy Tax Day!

7/15/2020

Is that like the biggest oxymoron or what? But we are in strange times, so let's just roll with it. Between a global pandemic, a collapsing economy, political and racial unrest, a mind-numbing mask-wearing debate, the second wave of coronavirus, the re-shutting down of businesses, not to mention this is all happening during an election year where Kanye West is apparently running for president (seriously, what. is. happening!), June/July has been one crazy year.

Yet, despite the chaos, the real estate market is making a dramatic recovery. Mortgage applications are at an all-time high, interest rates are dropping to record lows for the third week in a row, and I have been really really busy (probably not a good data point but you get the idea).

How Weed is Pushing Out Oakland Artists

7/13/2020

Before the legalization of recreational marijuana, industrial warehouse properties in Oakland were largely being used by artists to curate and host events or create large scale projects. But once 2016 hit and weed became legal, cannabis businesses began filling these industrial properties instead. Rents have shot up and many artists have sadly been priced out altogether.

When Oakland announced permits for marijuana dispensaries in 2018, 116 businesses applied for only eight available spots. Between May 2017 and August last year, 124 businesses approached the city to open indoor growing operations. Rents for industrial properties rose 70% in 2017 alone. And while Alameda County made around $12 million in cannabis sales tax last year, none of that went towards arts or culture programs.

This isn't just specific to Oakland though. This is happening in states like Washington, Nevada, Illinois, Michigan, and even in Canada, which legalized cannabis as a whole country. While many artists supported the legalization of marijuana, they did not foresee the consequences of workspace rent hikes, which have unfortunately put a lot of them out of a place to work and live.

Bart's New Plan

7/11/2020

BART has now approved a development project at the West Oakland Station that will include 762 housing units (!!!) with more than 30% of units being marked specifically for affordable housing. The development will also include more than 50,000 square feet of retail space and 300,000 square feet of office space, along with additional crosswalks and wide sidewalks for pedestrian access, perfect for getting those Fitbit steps in. The hope is that this project will be transformative for West Oakland, providing much needed housing that is more easily accessible to neighborhood amenities and resources.

High End Buyers Bolster Market

7/7/2020

Apparently June was the ideal time for buying a luxury home in San Francisco. Last month, more than 30 luxury single-family homes ($3 million and up) were sold, the highest in 2 years, causing average home values in the city to reach a record high of $1.8 million. WOW, right? Even in the middle of a pandemic, buyers with $$$ remain the least affected by financial hardship due to coronavirus.

Meanwhile, median condo prices saw about a 4% dip in values. Condos, in high supply due to recent new construction, are typically bought by younger and less affluent buyers than single-family homes, and as such, may have been hit harder by the increase in unemployment.

More Renters Becoming Second-Home Owners

7/3/2020

COVID-19 has caused a lot of folks to rethink their living arrangements. The logic seems to be, if nearly everyone is working from home now, why not move out of the city and into a home in the 'burbs where you can get more bang for your buck? For some, that means buying a second home while continuing to rent in big cities like New York and San Francisco. The appeal? Cheaper prices, more space, closer to nature, and being able to raise a family comfortably, while still getting the occasional city fix. It's the best of both worlds!

PG&E is Moving In

6/30/2020

After 115 years of having its headquarters in downtown SF, PG&E announced that it will be selling off their SF buildings and making the move to Oakland in order to save on real estate costs. (Hm, sounds familiar...) Their new office at 300 Lakeside Drive (right on Lake Merritt and a few blocks from 19th Street Bart) will be completed in 2023.

House the market, you ask?

6/22/2020

After a brutal couple months (which equates to 250937 days in corona years), stats show that the housing market could actually be leading the economy's recovery. Mortgage applications rose to an 11-year high. Interest rates are at all-time lows. Average home prices across the country hit a record high of $365k. Buyers are like, what pandemic?

Americans' home-spending habits aren't changing as drastically as they have during past recessions, showing that people are confident that this too shall pass and the economy will get back on track. 8.5 out of 10 experts agree: the economy will begin to recover in the second half of 2020. Which is pretty much like, right now.

Why is everyone betting on the strength of the housing market?

Mortgage rates are at historic lows, again. In case you've been living under a real estate rock and haven't yet heard, borrowing money has never been cheaper.
Also low: the supply of available homes. Older folks are staying put, thus not selling. Fewer homes are being built. And foreclosures are on a temporary hold.
Buyers are confident that prices will rise. Consumer confidence is lifting asset prices--houses, stocks, you name it. And during a worldwide shelter-in-place, it turns out that shelter (aka housing) has proven to be kind of important.

Over the past few months, most homes have been sold to individual buyers who intend to live in them, as opposed to investors. Maybe there will be fewer cash offers to compete with now? Many buyers are trading up, leaving their rentals, and seeking more space and solitude. Generally, mid- and lower-priced properties are moving quickly, but luxury homes are taking a hit with lower demand and higher supply.

While this data might be comforting to some, others are concerned about rising home prices and the widening gap in affordable housing. Home prices have gone up faster than most people's incomes, and the pandemic is only accelerating that trend. It remains to be seen what will happen long term (mostly because the crystal ball everyone pretends to have doesn't exist), but for now, it looks like our economy is slowly but surely on its way to recovery.

To stay in the city, or not to stay in the city?

5/29/2020

With big companies like Facebook, Twitter, and Shopify setting the trend for employees to work from home forever-ish, potential home buyers are wondering why they're living in a pricey city to be close to work when work is actually just their dining table most days anyway.

This may explain why the Oakland market is recovering much faster than in San Francisco or San Jose. Move-in ready homes in Oakland are selling in 5-10 days with multiple offers. There are fewer homes on the market, but almost as many people searching as there were pre-pandemic.

The more suburban cities like Berkeley or Walnut Creek will likely see an increase in buyers too as remote work becomes the norm. I mean hey, if your money could get you a bigger house with an actual yard and your only trade-off is having a longer commute where you cry in the car two days out of the week instead of five, then I say why not?

Sales Go Down But Home Searches Go Up

4/30/2020

New home listings and sales have dramatically dropped since the pandemic hit, but traffic to real estate sites has actually gone up. Why is that, you ask?

Well! According to data from Zillow, there are now more buyers actively looking for homes compared to a year ago. More people looking to buy property? In the middle of a global health crisis??

Yep! There's still a ton of interest among buyers (probably more so now as they're stuck inside their less-than-ideal homes). San Francisco, among other major cities, saw a huge drop in listing views right after the pandemic hit, but has since bounced back to much higher levels than this time last year.

So what? This is significant because demand for housing is still there—it's just a matter of waiting for the supply to return to the market. With more buyers starting their search again and listings slowly trickling into the market, there's signs of pent-up demand and a backlog of listings bubbling beneath the surface just waiting to pop.

Housing Crisis? Nah.

4/29/2020

With our currently vulnerable economy, many are worried that the housing market could be in trouble just like during the last great recession. And that's a totally reasonable concern, right? Wellll, not really because here’s some relieving news you guys—this is NOT like the crash in 2008. And here's why:

Housing appreciation in 2008 was wildly inflated which is what eventually led to a monumental fall. Yes, home prices have appreciated in the last 6 years, but definitely not at the rate they were climbing right before the last recession.
Mortgage lending standards are much tighter now. Unlike the old days when anyone with at least a mildly beating heart could get a loan, those who are buying now can actually afford it.
And housing supply? In 2008, there was an OVERSUPPLY of homes. So many homes. All the homes. But those days are long gone. Today, we’re working with a very limited supply of inventory, not nearly enough homes on the market for everyone who wants to buy them. In the East Bay, we have about one month supply of homes available. For context, 3-6 months of inventory is typical for a neutral market, and we're still a loong way off from that.
Home equity is being used much more cautiously, even though most homeowners are sitting on much more equity now than ever before. Back then, people were using cash-out refinances to fund their lifestyles (think vacations, cars, boats, all the unnecessary things to give the illusion of an influencer lifestyle). These days, not so much.

So yes, it’s a scary and uncertain time right now. But that’s because we’re in the middle of a global health crisis, not a housing crisis. Which is kinda sorta comforting....right?

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