The Covid-19 pandemic has caused buyers in California’s Bay Area to choose bigger, more expensive homes outside the city, causing significant price increases in the San Francisco suburbs, according to a report Thursday from Compass in San Francisco.
Take Marin County, just over the Golden Gate Bridge. There, the median home price was $1.55 million in the third quarter of 2020, compared to $1.28 million in the same time period last year, according to the report—a 21% year-over-year increase. Or Santa Clara County, where data showed the median price for a single-family home in the third quarter was $1.4 million, up from $1.24 million in 2019.
Sales of luxury homes are also up dramatically, the report found.
For example, the number of homes priced at more than $2.5 million sold in Marin County jumped to 185 in the third quarter, more than double the 83 recorded during the same period last year. In Santa Clara County, there were 304 sales of homes over $3 million, compared to 180 in 2019.
“The affluent and the super affluent are constituting a much greater percentage of demand in the last three months than they did typically,” said Patrick Carlisle, chief market analyst at Compass. “And they are buying big, expensive homes.”
In fact, the average size of homes being purchased has gone up between 5% and 10% in counties across the Bay Area, he added.
Meanwhile, the city saw only modest gains. The median home price in San Francisco rose from $1.58 million to $1.66 million in the third quarter, a 5.1% rise compared to the same time period in 2019, the report found.
“The markets in San Francisco, and to some degree, Oakland and San Mateo…have been incredibly strong basically for the last eight years,” Mr. Carlisle said. “But now they are the softer markets within the Bay Area as people have either moved or bought second homes in areas that aren’t so densely populated.”
The city’s condo market “has been hit very hard,” he explained. “Inventory has gone through the roof to its highest level in at least 15 years and probably forever.”
Median condo prices in San Francisco dipped 1.9% year-over-year in the third quarter, from $1.28 million to $1.25 million, the data showed.
Those who are in the market for a condo are also going for more space, he added.
“A whole lot more two-bedroom condos have been selling than one-bedroom condos,” Mr. Carlisle said. “Even in the condo market, people are buying bigger condos than they did last year.”
Mr. Carlisle also noted that the economic shutdown due to the coronavirus pandemic shifted the area’s seasonal market, which is typically very busy in the spring and not so in the summer.
“This year, the spring season got pushed to the summer season, so these year-over-year comparisons are a little bit out of whack,” he said. “We’re comparing it to what is usually the slow season for luxury homes.”