The onset of the COVID-19 pandemic brought many sectors to their knees — the real estate industry included. But among all sectors, this one quickly adjusted its processes and made the grand shift to 99.9% digital.
So, while this global health crisis unceasingly makes an impact on residential and commercial real estate, these markets are likely to continue creating unique opportunities for different types of investors in 2021.
Predictions for residential real estate markets in 2021
At the start of the pandemic, typically hot urban markets like San Francisco and New York saw a drop in transactions and property values, particularly for condos. This so-called tech exodus only affected the San Francisco market during the early months of the pandemic. However, toward the end of 2020, home buying surged in the area. Sales volume soared by 60% year-on-year in January.
In 2021, suburban growth is likely to continue but this doesn’t mean city living is over. With the rollout of vaccines, demand for condos and urban housing is expected to rise as companies anticipate employees’ return to the workplace.
There are other developments that make investing in San Francisco residential real estate an attractive prospect for 2021. Renting in the city is still cheaper than buying, and people are most likely to keep renting in the coming years. If you’re looking to invest in San Francisco real estate, look into rental property ownership.
The high home prices in the city may be a deterrent to buying, but on the flip side, they can also mean a bigger return on your investment. In fact, in the third quarter of 2020, San Francisco home flippers registered the fifth-highest raw profits in the country.
Moreover, as the city – and the country in general – still grapples with the economic impact of the pandemic, it’s predicted that foreclosures will increase in 2021. That said, savvy investors could bank on these newly opened opportunities. In addition, interest rates are predicted to remain low this year, making home buying more affordable to more people.
Predictions for the commercial real estate market in 2021
As remote work and restrictions on in-person activities continue, the demand for commercial space is seen to remain low throughout 2021. While some commercial real estate owners may consider this as bad news, wiser investors may take advantage of the incredible opportunities created by the situation and decide to build a strong commercial property portfolio.
The CRE sector offers a variety of opportunities to sharp investors and bargain hunters this year. The pandemic has shown that everyday living essentials are highly resilient commodities, so we can continue to expect a high demand for industrial and medical space.
Stable CRE sectors like e-commerce warehouses, self-storage facilities, grocery stores, and medical spaces are expected to continue enjoying gains even after the pandemic.
Invest in San Francisco real estate today
If you are eager to learn more about the opportunities in San Francisco real estate, get in touch with me — Amir Hardy — today. As one of the leading San Francisco real estate agents for investment properties, I can provide you with the guidance you need. Call 415.602.0570 or email amir(dotted)hardy(at)compass(dotted)com to get started.