Hello Ascend Family,
Season’s Greetings! The silver lining of this year has been mortgage interest rates, which continued to hit new lows in recent weeks. Combining that with the Stay-in-Place order has meant that the robust Fall housing market, which started early this year in May, is stretching through the normally sleepy holiday season. At this point, I want to apologize for missing the monthly market update in November.
Suburbs are Hotter
Nationally, demand is far out-stripping supply to an extent we haven’t seen in years; but this activity is playing out unevenly in our local housing markets. Single-family homes in Marin, East Bay, and rural or 2nd home destinations (i.e., Lake Tahoe, Sonoma) are trading at record price levels while inventories are extremely low. Job centers like San Francisco show the opposite trends of above-average supply levels and decreasing home prices, although all areas are seeing healthy sales volumes, especially in recent months.
Bay Area’s suburban markets are being spurred on by remote workers leaving the urban centers, both temporarily or permanently, to find larger and more affordable homes. A lot of it is also fueled by homeowners’ interest in vacation properties that are within driving distances. And so, we are seeing multiple offers, quick cash sales, and consequently huge price appreciation within the last six months. Some suburban homeowners are also taking this chance to cash out and relocating elsewhere in California or even in other states.
Conversely, we are seeing in San Francisco these trends play out differently:
- Investors selling previously rented properties as many renters are moving away or relocating to cheaper rentals within the city
- Owners moving out of the city and selling their San Francisco homes
- Owner trading into bigger properties within the city to accommodate working- and schooling-from-home lifestyle
- Renters seeing their first opportunity in a decade to get into the SF market in a more buyer-friendly environment
We haven’t yet seen too many investors return to this Pandemic market, even while multi-unit properties are trading at a notable discount versus prices from just last year. We are beginning to see some bargains being scooped up though, so it’s possible that prices may soon stabilize.
For the first time in memory, homebuyers barely took a break from their search during Thanksgiving. The volumes of pending and sold transactions are quite high this September, October, and November. Anecdotally this is the busiest December that I could ever recall, and I am hearing the same thing from my colleagues. Though available home inventory remains at near-record highs in SF, I believe Buyers will continue to work their way through it during the winter months.
For Buyers, this year’s holiday season may be as good of a time as any to be in the housing market. It is a great time to look at properties that are sitting on the market or listings that have recently expired or been withdrawn from the market. Most of those remain available to buy but might not be actively marketed until the Spring. Contact me for access to off-market listings. Also, interest rates may start heading up as the pandemic eases and the economy improves in 2021, so now is a great time to lock in a fabulous rate.
For Sellers, I think coming on the market in early January is not a bad strategy as motivated Buyers, most of whom aren’t traveling, will be ready to pounce on new inventory. The recent IPOs and the distribution of vaccines are motivating factors for many buyers.
I want to wish you a safe, happy, and healthy Holiday Season. As always, I am happy to connect with you regarding the real estate market.
Lots of love,