With remote work more popular than ever — amid companies like Google and Facebook now saying employees can work from home well into 2021 — people are leaving SF in throngs. A new Zillow report further supports that idea, showing a 96 percent year-over-year increase in local inventory listings.
Nowadays, it’s somewhat common to spot sub-$1K Craigslist ads for single-room rentals in areas like the Lower Haight, Inner Sunset, and The Castro — all neighborhoods where you would be hard-pressed to find anything remotely close to that price before, pre-pandemic. For the first time in over a decade: San Francisco’s now home to both a renter’s and buyer’s market, with home prices steadily on the decline as the Bay Area’s real estate market continues reeling from lackluster business.
There definitely is a suburban craze happening with mainly mutlifamily homes in San Francisco are getting left in the dust.
Oakland and Berkeley (Inner East Bay) hasn’t changed much at all and people are still buying single-family homes in San Francisco. pic.twitter.com/tkW8temvpv
— ???????????????????????????? ???? ???????????????????? (@IDoTheThinking) August 14, 2020
The recent (and widely publicized) exodus event in San Francisco was highlighted in the “2020 Urban-Suburban Market Report” by Zillow, an online real estate company, showing that their real estate inventory for the city had a 96 percent year-over-year spike as unoccupied SF homes went on to the market in huge numbers, unlike any other metropolitan area mentioned in the study.
However, it’s also worth noting that for-sale housing inventory has always been low in San Francisco this time of year for at least the past decade… not to mention that the city is predominantly populated by a renting cohort. Being that the current median price for a house in the city is $1.4M and given most financial advisors recommend you put a 15 percent down payment on the home you wish to purchase — which, if you do the math right, would make for $210K fee in this scenario — it’s little wonder why thousands of locals opt to rent instead of own.
The reasons for the huge influx in new listings? They are as varied as they are similar. But, by and large — and what we’ve also found in our own reports on San Francisco’s “pandemic pricing” and mass leavings — is that people are seeking more “comfortable lives” elsewhere.
People are moving to more affordable cities (like Chattanooga, Tennessee) to “take back their time”; former San Franciscans are sponging up the sunshine and lower living costs of Palm Springs and Lake Tahoe; Austin’s startup culture, nestled inside the Texas Hill Country, is now growing even more enticing for twenty- and thirty-somethings.
And with city inhabitants increasingly working for major tech companies that now, essentially, have introduced near-permanent remote working structures, it’s understandable why people are fleeing the Bay Area’s notoriously high cost of living.
Though theorizing that the recent San Francisco exodus is solely related to an uptick in remote working lifestyles isn’t as straightforward as one might think, according to SFGATE.
“It may be tempting to credit the city of San Francisco’s inventory boom to the advent of remote work that came with the pandemic, but one only has to look at to San Jose to question that narrative,” said Josh Clark, an economist at Zillow, to SFGATE’s Andrew Chamings. “The San Jose metro, which like the city of SF is dominated by tech workers, has not seen a similar rise. Two things that could drive the difference are San Francisco’s density and its smaller share of family households.”
And… well: the cost of living. Per PayScale, a website that compares and contrasts the costs of living in cities across the country, San Jose’s cost of living is some 17 percent lower than San Francisco’s — with housing a whopping 25 percent cheaper.
In the report, the 96 percent year-over-year increase in new listings for the San Francisco metro area is noted as a “significantly larger jump than the surrounding suburbs,” the report states; other metropolitans in the state, like Los Angeles, and across the country — Miami, Boston, Seattle, and others — are actually showing a decline or at least flattening of their overall listings.
You can read the entire Zillow report, here. And for a bit of property porn binging, check out these two $25M properties (one overlooking Marina Green, the other in Pacific Heights) that recently went on the market.
Image: Aldric RIVAT