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Demand for housing has continued to rapidly grow throughout 2020, and it is only expected to surge even further as economies reopen in 2021. Zillow predicts that annual home sales will reach their highest since the 1980s, forecasting nearly 22% growth.
They also believe that city living will make a comeback next year, especially as the vaccine becomes more widely available to the general public. While a lot of young adults moved back in with their parents this year to save money, it is likely that once the economy bounces back, they will be moving back into big urban areas in droves. (Does that mean the sad SF condo market will finally make a comeback??) Zillow also expects that buyers will continue having a hard time affording homes, particularly if mortgage rates start to increase in 2021 and housing prices remain high. At the same time, if rates are indeed predicted to rise later in the year, this may cause an even bigger buyer frenzy for those looking to lock in low rates ASAP. Sadly there seems to be no end in sight for bidding wars. :( In an effort to build a cleaner and healthier city, Oakland City Council just banned natural gas in all new buildings. Berkeley, San Jose, and San Francisco have also followed suit and said "We're not passing gas either!"
But seriously, eliminating natural gas use in buildings will lower the risk of fire after an earthquake (important when you live in earthquake territory!) and improve overall indoor air quality. Studies have shown that children are 42% MORE likely to have asthma in a home that uses natural gas while cooking. I know, right? Who knew?? Amidst a tough year in terms of the pandemic, widespread economic shutdowns, business furloughs, and record high unemployment rates, one of the silver linings in the train wreck that is 2020 has been the boost in the real estate market. As more people began to work from home and interest rates dropped, the demand for homes surged which created a rush to purchase property.
But this may be creating somewhat of a false sense of security for the overall economy, as the booming housing market doesn’t necessarily reflect the portion of the population that remains unemployed and counting on mortgage forbearance benefits. There is definitely promising data that the economy is slowly healing, but with continued small business failures and corporate company bankruptcies, we should probably proceed with caution. Halloween is coming up, and there's nothing scarier these days than navigating the real estate market in a pandemic world. Inventory is low and demand for Zoom rooms and outdoor space is so high that not even a highly contagious virus, ravaging wildfires, a volatile political climate, or a crucial election that will decide the fate of the world (PLEASE GO VOTE!) will stop a determined buyer from the house of their Covid dreams.
Given the craziness of the market, business has been bananas lately. In the last three months, I've sold 15 homes with 3 more in contract and 6 listings ready to go, while still showing and writing offers for eager and excited buyers who just want a place to live. The market is moving so fast that my days are starting to blur together and suddenly months have passed without sending out a single newsletter and now you know why even though you didn't ask. Needless to say, it's been a bit of a whirlwind lately, but I'm super thankful for it and wouldn't have it any other way. :)  We know that real estate is booming, but not all homes are created equal. Which ones are flying off the shelves and which are getting stale from sitting out for so long? In Santa Clara County, single-family homes continue to be a hot commodity while condos and townhomes lag behind. Many sellers are having to drop their prices to attract buyers to their units. In SF, some agents are even offering free cars and roundtrip flights to Paris to incentivize condo buyers. So what’s the deal?
Condos are usually in high demand among middle income households, but with the pandemic-induced hit on the economy, these households are being forced to put their real estate plans on hold. Meanwhile, higher income earners have largely remained unaffected. Combine that with lower interest rates and the demand for extra space and yards being at an all time high, and it’s pretty clear why single family homes are getting multiple bids and going pending in less than a week. The bright side? You can probably get a pretty good deal on a condo or townhouse right now. And maybe even a free car on the side?  Among all of the crazy things that 2020 will be remembered for, a record-breaking year for real estate will definitely be one of its more surprising outcomes. Since the pandemic hit, about 2.9 million U.S. homes have been put on the market. That’s almost 400,000 fewer homes than the same time in 2019. What gives?
Sellers these days are more reluctant to list their homes due to financial uncertainty, while buyers (particularly first-timers) can't wait to take advantage of low mortgage rates. All of this creates the perfect storm of low housing inventory. With this pandemic still in full force and the Fed promising to keep rates low for a few more years, even the CEO of Redfin expects this "absolutely insane" housing demand to last into 2021...at least! (And in the same breath, he also doesn't see how this can possibly last forever.) The housing market is one of the few sectors to experience a true V-shaped recovery following the initial hit from the pandemic. But without enough houses for sale, the newfound demand is unfortunately driving an affordability crisis, where in many cases, higher home prices strip away the benefit of lower interest rates. COVID-19 has completely changed the real estate game for buyers and renters alike. These days, buyers are seeking homes outside of urban areas and big cities now that working from home is the new norm, while renters are seeing prices declining. Housing that requires people to be in close contact with strangers is now at a disadvantage. Buildings with elevators are somewhat of a no-no for folks. Who wants to share a small enclosed space with strangers at a time like this, right?
But it likely won’t be this way forever. The prediction is that as a coronavirus vaccine becomes available, some of these changes will shift and the desire for urban housing will go up again. Until then, you can expect single-family homes and multifamily units out in the ‘burbs to remain in high demand.  Under a new measure approved by Governor Gavin Newsom, local governments, affordable housing groups, and tenants will get first dibs in buying foreclosed homes. The bill was written to prevent large corporations from buying up houses and letting some of them remain untouched for years as they did during the Great Recession. Simply put: this measure is meant to give people who want to buy a home a fair chance at doing so, which we are all for!
Newsom also signed several other bills which included increased subsidies for affordable housing projects, allowance of school districts to use tax credits to build affordable housing for teachers and staff, and the expansion of a bill that allows victims of crime to break their leases without penalty. Zoom Town? Never heard of her—until now. This term has popped up recently to describe locations where real estate is booming due to the uptick of remote work during this pandemic. Prime example? Truckee, an outdoorsy person’s dream town just northwest of Lake Tahoe. Skiing, hiking, mountains, lakes, great restaurants, an emerging art scene, all at 1/2 of the price of a home in San Francisco?? No wonder so many people are snatching up homes out there. But of course this isn’t happening in Truckee alone. National home prices are up 8% from this time last year, proving that there is still a huge demand for homes all over the country.
What has become abundantly clear is that at this point there are “two Americas”: a booming side filled with folks who remain gainfully employed and have the opportunity to take advantage of low interest rates, and a gloomy side, where nearly 3 million adults have moved back in with their parents and almost 30 million Americans are on unemployment benefits.  AC Transit’s new rapid transit project named “Tempo” has officially started service! It takes riders from Oakland’s Uptown to the San Leandro BART station, driving through most of the 9.5-mile route in dedicated bus lanes for quick and easy transportation between locations.
Tempo will function more like a light rail line due to its frequent service and lack of car traffic, saving riders valuable time. Buses will arrive every 10 minutes between 6 a.m. and 7 p.m., and every 15 minutes from 7pm to midnight. Early morning service on the 24-hour line will run every 30 minutes on weekends, and hourly on weekdays. To celebrate the start of the line and make up for construction delays, AC Transit won’t charge fares to ride the new buses until November 8th. So bring your mask and get those free joy rides in while you can! |
MICHAELA TO
510.266.2802
mto@MichaelaTo.com
6211 La Salle Ave. Oakland, CA 94611
DRE# 01883913
510.266.2802
mto@MichaelaTo.com
6211 La Salle Ave. Oakland, CA 94611
DRE# 01883913
Copyright 2020. All rights reserved.