The demand for real estate is unexpectedly high in wealthy regions outside of San Francisco.
The demand for real estate is unexpectedly high in wealthy regions…
Amid the depths of a global pandemic and financial downturn, the demand for real estate is unexpectedly rocketing in wealthy regions outside San Francisco, reports Bloomberg. Agents say that demand is soaring in affluent areas around the Bay Area such as Napa, Marin and further afield in Carmel, as people who have the means look to get away from the city. Meanwhile, the market in San Francisco and Alameda County is still well below where it was last year.
Elsewhere, Lake Tahoe has also seen a surge in real estate interest. The prospect of living out of the city on an alpine lake while maintaining a career is appealing for a new generation of young buyers, as many tech companies have signaled that remote work may be the new norm for a long time.
“I’ve never seen the demand higher for Marin County real estate than when COVID-19 hit,” Sotheby’s Josh Burns told Bloomberg this week, as real estate agents see a surprising uptick in wealthy buyers leaving San Francisco.
Agent Katrina Kehl of Compass warned her sellers not to expect much interest in their recent Mill Valley listing, as the country moves through an economic crisis. To their surprise, the couple received 13 bids and the home went over the $1.7 million asking price by “a lot,” Kehl told Bloomberg. Sotheby’s agent Ginger Martin added that “there’s a mad rush to get out of the city.”
Meanwhile, the rental market in San Francisco has dropped significantly, with rates for one-bedroom apartments in the city dropping by 9.2% since June 2019, and hitting a three-year low.
However, buying a new home in an isolated haven in a nearby bucolic county is not an option for lower-income San Francisco residents, and some believe the trend is only exacerbating the wealth divide.
“This is an example of another way the most advantaged, the most affluent have isolated themselves from this latest crisis,” Patrick Sharkey, a sociology professor at Princeton University, told Bloomberg. “It’s a very small segment of the population that has another home that they can go take off to.”
Whether this change in demand away from San Francisco and into the suburbs is a short-lived reaction to the pandemic, or a more permanent change, remains to be seen.
For the full Bloomberg story, read more here.
Andrew Chamings is a digital editor at SFGATE. Email: Andrew.Chamings@sfgate.com | Twitter: @AndrewChamings