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.
For the first time since 2011, the number of homes for sale in San Francisco reached levels similar to that of our last recession with 50% more single family homes on the market than this time last year, and 130% more condos. Could this be the start of a buyer’s market emerging in the city? SF sellers are having to decrease asking prices to stay competitive as more people are working remotely and choosing to seek new homes outside the city.
At the same time, single-family home sales in the greater Bay Area have jumped up by 70% in June alone, highlighting the exodus of people from bigger cities to smaller surrounding suburbs. And with the stock market performing strongly and interest rates reaching record lows, people are more eager beaver than ever to buy a home.
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.
All things real estate.