To say that the pandemic has tested everyone’s resilience is clearly an understatement. From illnesses to job cuts, there’s a plethora of things to deal with. Finance and investment have not been spared from these challenges, as business stoppages for some and closures for others have greatly affected the overall economy.
Despite all this, real estate has continued to thrive. San Francisco homes for sale, for example, jumped to record levels last fall as most counties saw median prices of single family homes top $1 million.
Taking advantage of historically low interest rates and bidding up prices, property seekers bought up the limited inventory of single family homes in the region. According to DQNews and CoreLogic, the increase in demand raised the region’s year over year median sale price nearly 15 percent to $982,000 by last October. This was a 20 percent increase in comparison to the same month in 2019.
Home offices driving demand for more space
For many, the need to make a living from home was among the big changes brought about by the pandemic. Granted, the pandemic has pushed unemployment to double-digit levels but the ability to do remote work has left incomes of tech professionals largely untouched. Experts say these professionals are now building more savings because they are–for now–seeing less travel, leisure and commuting expenses.
What they are seeing more of is the demand for additional space, be it for home offices, video conferencing rooms or backyards. This has effectively elevated real estate prices in the suburbs as tech professionals continue to buy.
According to CoreLogic and DQNews, prices in places like Contra Costa County shot up 17 percent to about $750,000, while Santa Clara County and San Mateo County saw 16.5 ($1.3 million) and 12 ($1.57 million) percent increases in prices respectively.
San Francisco itself, on the other hand, saw mixed results with lower prices and sales growth than the rest of the region. Although single-family home prices in the city grew by 1 percent to about $1.57 million, condo prices dipped 2 percent to around $1.2 million. According to the previously referenced CoreLogic data, condo sales in the city actually even fell by a quarter from the prior October.
The increase in demand is unlikely to let up soon
Although the desire of home buyers to acquire more spaces seems to be driven by having to stay at home because of the pandemic, the demand might actually be longer lasting than the current health problem.
Having to remain at home has shown that some jobs can be fulfilled at home for its entirety, and working remotely is being projected to be one of the actual ‘new normals’ that can be expected in the near future.
Buyers have thus continued looking to dramatically increase their space, choosing larger homes over those that are smaller but located in the city, resulting in continued sales in suburban communities like Pleasanton, Walnut Creek and San Ramon.
So while some may assume that prices will plateau after the pandemic, chances are the demand that exists long after will sustain their increase. This means that now is the ideal time to buy for those interested in buying a California home.
Ready to jump into the San Francisco real estate market? Connect with a trusted Bay Area Realtor to help you find the most advantageous deal. Contact me, Amir Hardy, at 415.602.0570 or send an email to amir(dotted)hardy(at)compass(dotted)com.