Not everyone is leaving San Francisco, as home sales soar

5fc34 24027181 web1 210127 SFE Rosen header 1 Not everyone is leaving San Francisco, as home sales soar

Funny thing about the latest New York Time article detailing the exodus from San Francisco; everyone they interviewed seems to be essentially the same person. This is not unique. If you read closely, every article about people leaving San Francisco features the same demographic: tech people in their 30s.

Some of them are single; some are married and have young children. Almost all have jobs with a tech company you’ve never heard of, or founded a tech company you’ve never heard of.

All of the artists, who’ve been bugging out since the ‘90s, are apparently already gone. The blue-collar workers got priced out years ago, and the old people?

They’re hiding in their houses, waiting for the all-clear, I suppose.

I’m not here to deny that droves of people in their 30s are leaving San Francisco; I’m here to deny that it’s anything new.

If you’ve lived in San Francisco for awhile, you know the story: Groups of friends move here after college, get jobs, go out every night and for a few years are the most dedicated San Franciscans on earth. But then, you know, it starts to wear a person down. By their mid-30s they’ve been working 60-hour weeks for way too long, overpaying for a place in SoMa and their high school friends keep posting pictures of their huge suburban houses. It’s time to get married, settle down, maybe have kids. It’s really hard to do that in San Francisco and everything looks so… effortless… in those posts.

And thus, they go; they go to Austin, Texas, or Phoenix, or Nashville. They’ve always done it, just minus the numbers and the narrative they’re doing it this year. San Francisco was fun and they always wanted to live here, but come on. They’d honestly never planned to live here forever, anyway. And now all the restaurants are closed.

So it’s a souped-up version of a phenomena known well by anyone who’s decided to stay, made easier by the “new way to work and live” and perhaps a bit unsettling for a city whose brand is that it’s obviously the most special place in the world but whose reality has always been that everybody comes but not everybody stays.

Someone is staying, though, and the evidence to support that might blow your mind. There’s another story, hidden beneath reams of data showing an imperiled, inventory-flooded San Francisco housing market: over the past six months of 2020, starting in July and lasting through December, sales of San Francisco homes priced at $3 million and above have increased by 35 percent compared to same stretch of 2019. Someone — a whole lot of someones, in fact — is not only not leaving San Francisco, they’re trading up.

They’re buying single-family homes, not condos. Condo sales have been static. For years we assumed that the Bay Area market was driven by an inventory shortage. There’s plenty of inventory now, but that inventory is selling. In December for example, the percentage of listings that had received at least one offer rose 104 percent year-over-year. It’s not a mad rush, but buyers are historically active — at the top end of the market. They’re taking advantage of historically low interest rates — and staying in The City. Or they’re coming to The City. Either way, they’re not leaving.

All over the Bay Area, the high-high-end is booming. Down in Burlingame, sales of $3 million-plus homes increased by 89 percent in 2020. In Hillsborough, sales at $5 million-plus increased 45 percent from 2019. During the second half of 2020, sales in both exclusive towns were almost double what they’d been in the first half. But this is what we’ve been told: People — wealthy people, in this case — are fleeing cities for the suburbs.

Not all of them.

In the most basic sense, it’s uplifting to realize that despite all of its challenges and despite the all of the apocalyptic hype, people are still eager to live in San Francisco, and that they still see local real estate as a sound investment. On the other hand, these are people of means. Real estate isn’t booming at all price points.

The bad news is that artists’ utopia you’d been hoping for after all the rich people leave? I don’t think it’s coming. The rich people aren’t leaving. Instead, it looks like we’re getting a COVID-fueled boost to the middle-class drain that started with teachers and firefighters and continues to work its way up the salary scale. COVID didn’t invent that, but it seems to be doing its part to accelerate the process.

Larry Rosen is a San Francisco-based writer, editor, podcaster and recovering former Realtor. He is a guest columnist and his viewpoint is not necessarily that of the Examiner. The Market Musings real estate column appears every other week.

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