If you've ever driven along the El Camino Real from San Francisco to San Jose, you’ve probably noticed the seemingly endless stretch of parking lots and strip malls that line the entire route. Well, get this—apparently there’s room for an estimated 250,000 new apartments along this road. Developers are trying to figure out how to make this happen as an attempt to alleviate the housing shortage.
Now let's be real, everyone loves a good strip mall. Where else can you do your grocery shopping, get a haircut, and pick up a burrito for lunch all in the same afternoon? So the goal here wouldn’t be to tear down every strip mall completely. Instead they suggest creating mixed-use buildings that would keep retail space on the ground level while adding apartments on top.
California reportedly needs to build millions of new housing units to meet current demand. Governor Newsom pledged to build 3.5 million homes by 2025, but so far only around 100,000 homes are being built each year. Strip mall development might be a solid solution.
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??
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?
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.
Inquiring minds want to know. To answer our burning questions, Estately mapped out the relative cost of living near BART, compiling the average sale price per square foot for all the houses, townhouses and condos that have sold within a one-mile radius of each BART station over the past six months.
(If squinting at the blurry numbers on the map is hurting your eyes too, click here for a larger view.)
Here are the ten “most expensive stops” and relative commute times to Downtown San Francisco (defined as Embarcadero station):
1. Embarcadero – $1,191 per square foot (0 minutes)
2. Montgomery Street – $1,149 (2 min)
3. Powell Street – $1,099 (4 min)
4. 24th Street/Mission – $1,001 (9 min)
5. 16th Street/Mission – $998 (7 min)
6. Civic Center – $994 (6 min)
7. Millbrae – $854 (25 min)
8. Glen Park – $817 (11 min)
9. SFO – $735 (32 min)
10. Rockridge $704 (20 min)
And the ten least expensive:
1. Pittsburg/Bay Point – $219 per square foot (62 minutes from Downtown San Francisco)
2. Richmond – $258 (35 min)
3. Coliseum – $270 (20 min)
4. North Concord/Martinez – $306 (56 min)
5. Concord – $317 (43 min)
6. Hayward – $347 (32 min)
7. South Hayward – $356 (36 min)
8. San Leandro – $366 (24 min)
9. Bay Fair – $376 (28 min)
10. Castro Valley – $406 (32 min)
BART is also extending from Fremont into Silicon Valley, where new housing, commercial and retail developments are already being planned around the future South Bay BART stations. Home values nearby will probably increase, along with the number of commuters crammed into a sardine can of a BART train.
To help remedy the housing shortage, a rush of proposals for new Oakland towers have been submitted. It will potentially add over 3,000 residential units to downtown, becoming one of the largest building booms in the city's history. The projects would transform lowrise buildings and parking lots into a fancy glass, steel and concrete skyline.
When asked about her hopes and dreams for Oakland, Mayor Libby Schaaf said, "I like tall buildings, especially near transit." In other words, she supports denser housing downtown and hopes to see 17,000 units of new housing built in Oakland within the next 8 years.
See map below for the downtown highrise pipeline:
All things real estate.