Virtual Real Estate Roundtable – The Exodus Is Ending

As we pull out of the pandemic, our real estate panel takes the pulse of the Bay Area market — and finds thriving signs of life.

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As open space and pools continue to top client wish lists, this Los Altos Hills property, sold by Michael Repka in May, delivers on both.

We all know what the last year and a half has been like, with just about every industry impacted by change and challenge. As the Nob Hill Gazette’s virtual real estate roundtable confirmed last year, even midpandemic the Bay Area’s residential real estate demonstrated unicorn resilience and record sales. For our reprised virtual event, presented in partnership with The San Francisco Examiner on May 18, the Gazette’s Janet Reilly moderated a discussion with seven real estate all-stars to follow up on what’s trending and topical in our current market.

The consensus? The convenience of Zoom is here to stay, but with a promising vaccination rate and schools and offices reopening, it’s clear we are also seeing a return to the office — and notably, to the City itself. “So many people are coming back from Sonoma and Tahoe,” says panelist Michelle Pender of Engel Völkers, who has seen a recent spike in condo sales along with the steady demand for single-family homes from her mostly millennial clients. “A lot of the first-time buyers are your kind of unconventional first-time buyers,” she says. “These are folks that were ‘anti’ residential real esJoel
Goodrichtate, more into the stock market focus. But with some instability there and with cryptocurrency being kind of unknown, a lot of people are investing in residential luxury real estate because they know it’s a surefire way to have a safe investment.”

Millennial purchasing power is also an indicator to Pender that the market is strong. With an eye on investment, Alicia Hergenroeder, who recently launched her architecture firm Placeholder Studio, bought her first home with her husband in Potrero Hill. “Anything could be an opportunity because we were so openminded,” says Hergenroeder, who looked at houses and condos in and outside the City.

While the young couple ultimately opted for a single-family home, another of Pender’s firsttime home buyers, Breanne Eder, a researcher who works in biopharma in South San Francisco, took advantage of greater inventory in the condo market (a brief window that panelist Joel Goodrich of Coldwell Banker Global Luxury notes is already reverting back to normal). “The condo market was perfect for me,” says Eder, who settled on Nob Hill. “It gave me the location. It gave me the space. It gave me quintessential needs, but then also the neighborhoods gave me the social and cultural aspects that I was trying to fill.” A transplant from Ann Arbor, Michigan, Eder is eager to find her tribe in a city that continues to be a draw, according to our panelists.

No matter the goals of today’s buyers looking in the City, down the Peninsula, or up in Marin, it’s clear their values have changed this past year, too, with more focused wish lists and expectations of home.

Our Panelists

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Joshua Deitch

Joshua Deitch

Compass (Marin)

With 13 years of real estate experience and dozens of successful and profitable personal real estate transactions in southern Marin, Deitch has developed a well-rounded sensibility of the southern Marin market, especially when it comes to finding premarket and off-market properties.



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Michael Dreyfus

Michael Dreyfus

Golden Gate Sotheby’s (Peninsula and Silicon Valley)

Dreyfus’ successful career spans more than 30 years in residential real estate. He is regularly on The Wall Street Journal/RealTrends list of America’s Top 250 Agents, and the Bay Area’s top 10, and his recent successes have included some of the highest sales recorded in Palo Alto, Woodside, Portola Valley and Atherton.



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Joel Goodrich

Joel Goodrich

Coldwell Banker Global Luxury

Goodrich is one of the Bay Area’s most prominent luxury real estate agents, with more than 25 years of experience and over $1.1 billion in sales. He has listed some of the most expensive homes in America, including a number of high-profile celebrity estates, and many of the properties he represents have been featured in Architectural Digest and other design and lifestyle publications.



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Michelle Pender

Michelle Pender

Engel Völkers

Pender is a native San Franciscan and knows her way around the hills and microclimates of the City’s neighborhoods, as well as the intricacies of our often-complex real estate marketplace. Hardworking, direct and dedicated, Pender stands out for her commitment to excellence, marketing expertise and negotiating prowess.



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Michael Repka

Michael Repka

DeLeon Realty (Peninsula and Silicon Valley)

Repka is the CEO, managing broker and general counsel of DeLeon Realty and head of the DeLeon Listing Team. Prior to joining DeLeon Realty, he was a practicing real estate and estate-planning attorney. Repka’s enhanced knowledge and legal experience provide a level of understanding that is consistently beneficial to his clients.



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Neal Ward

Neal Ward


For nearly three decades, Ward has been guiding clients on the buying and selling of the Bay Area’s finest homes. Ward was a founding member of Compass in San Francisco, and three years later, Compass is now the largest brokerage in the Bay Area. Ward has a deep knowledge of the marketplace, an unwillingness to compromise on quality and a commitment to the highest level of discretion.



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Helena Zaludova

Helena Zaludova


Ranked as one of San Francisco’s top 10 agents and 150 agents nationwide by The Wall Street Journal, Zaludova’s sales are now approaching the billion-dollar milestone. Her focus is on San Francisco’s 7×7 square miles, and she is known for her attention to every minute detail of a transaction.



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From the high-end luxury market are Michael Dreyfus’ recent $23 million sale in Woodside

Nothing in the last year has been predictable, not the stock market, the broken global supply chain, the work-from-home phenomenon, or the real estate market. Can you give us a snapshot of the strength of the market today and where we are?

Helena Zaludova: What the pandemic has really brought into focus is that having a home has never been more important. So I feel like the focus on your shelter, and having a place in the world to call yours, it’s just fueled the demand.

Joel Goodrich: In 2020, in the depths of the pandemic, we saw more $10 and $20 million sales in San Francisco than there were in 2019. And so far, 2021 is on pace to even break that record. So it’s very interesting to see that while we’ve had a huge exit, as I’ve had clients moving around the country and around the world in the last year, we’ve certainly had an influx in our local buyers who are committed to the area.

Michael Dreyfus: Not on the Peninsula. We’re seeing a lot of local strength. People that are here are buying more, buying bigger houses, buying more land. And we’re seeing the locals that are outside of the prime areas start to move in, which is unusual for us, where you usually have a very strong relocation market. So it’s interesting to see it be very, very local and still be very, very strong.

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From the high-end luxury market, Neal Ward’s $46 million listing in Cow Hollow.

What kind of buyers are you currently seeing entering the market and has that profile changed in the last year?

Michael Repka: We’ve definitely seen a change. The pandemic has made people rethink where they’re living. They’re looking for more space. They’re looking for larger lots. We have had a considerable number of people moving out of the Bay Area, and they’re actually looking for smaller places that are lower in maintenance. So essentially the shuffling of homes has really created a lot of demand in many different ways.

Joshua Deitch: In southern Marin, we’re seeing a lot of people, mainly in their mid-30s, who probably had a longer time horizon of leaving San Francisco. And I think the pandemic really accelerated their thoughts about making the move over the bridge and experiencing more space, bigger houses, as everyone has said, and the bigger life experience. Tech, I would say, is the biggest category of buyers that I’ve seen aggressively come on over the bridge.

Michelle Pender: [I’m] seeing a lot of millennials, especially those who have done really well with cryptocurrency. And with the instability of cryptocurrency, people know that luxury real estate is really a sound investment, right? It’s a smart investment. It’s always going to be a great place to plant your money. So a lot of these millennials who’ve done really well are the ones who are entering the markets and buying homes.

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5,500-square-foot Mill Valley property (sold in May by Joshua Deitch)

Most of our homes were forced to double over the last year as offices and classrooms and gyms, and which may have led to new expectations when looking for a home. Are your clients expecting their homes to meet all of these needs? Or are you seeing streamlined or a traditional wish list now that people are beginning to return, albeit pretty slowly, to their offices?

Neal Ward: I feel that there’s no question that buyers are looking to houses to fulfill many, many more needs than in the past. Gyms were a nice-to-have amenity, whereas now it is much more important. Home offices were almost a thing of the past and not needed. You took your laptop and sat on the sofa or the kitchen table or counter and that’s where you did your work. Now people need a closed environment in order to conduct business throughout the day.

Joel Goodrich: I think that we’re going to see a huge comeback into the office … and also the whole theory behind cities and high rises is you live, work and play within 15 minutes. We have the biggest tech capital in the world south of Market, 15 minutes away [from] the most beautiful parks and beaches in the world. So I do believe there’ll be a big resurgence back into cities and into offices. At the same time, people are enjoying that flexibility of having that space at home.

Helena Zaludova: A big premium is now being put on the accessibility to outdoor space. So it’s not just the demand for interior square footage, but it’s just having a place to just get out and feel the grass and breathe fresh air has really put a premium, especially in San Francisco, on other spaces that in the past were completely underutilized. So besides the gyms and besides the offices that buyers are looking for, it’s the yards and the decks that now are driving buyer demand.

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a Potrero Hill condo (listed by Michelle Pender)

In the past year, people in the Bay Area have retreated to second homes or they’ve rented homes for extended periods of time due to the ability and sometimes the necessity to work remotely. Where are some of the places that people are looking to buy?

Michael Repka: The clear leader for around here is probably the Nevada side of Lake Tahoe: areas like Incline Village, Glenbrook. We’re getting a number of people that are moving to Reno and some of the communities that are around that area, probably because of proximity and also because of not having a state income tax. But we’ve seen a number of people moving to Scottsdale, Arizona; Jackson Hole, Wyoming.

Joshua Deitch: At first, during the pandemic, it seemed like everybody [was] buying second homes in Hawaii. And it’s still happening, but now I definitely see a huge amount of people wanting to acquire homes in Sonoma, Healdsburg, Napa, [to] enjoy the wine country, have their big pool and their big yard and their big farmhouse, and have big gatherings for their family.

Michelle Pender: I’m seeing the same thing: Tahoe, Napa, Sonoma, even outside of California, where families have planted their kids in different places and done homeschooling. Now that schools are opening, now that businesses are opening up again, their second homes in Tahoe or Sonoma will remain their second house[s].

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a 4-bedroom/4-bath in Pacific Heights (listed by Helena Zaludova)

According to the Zillow home value index, every major Bay Area city has seen home values go up in the pandemic except one. And that one is San Francisco. Is the exodus from San Francisco real? And if so, do you think that this may be just temporary, or do you think this phenomenon may be a little bit more lasting?

Joel Goodrich: I think we have a couple of things going on. Last year, we saw record amounts of inventory. To take one submarket, let’s say condos on Russian Hill, $2 to $6 million, usually there’s three or four available. At one point last year, there were 30 — 10 times the normal inventory. That inventory is now back to normal. So that’s a huge indicator. At the same time, let’s take another submarket: home sales over $10 million. The average dollar per square foot in 2019 was about $2,300. Now it’s about $2,000. So if you just take that one parameter, that hasn’t quite gotten back to prepandemic levels — but we have a lot more sales. So I think things are definitely trending toward recovery both in terms of pricing and activity.

Neal Ward: I was very concerned throughout 2020 as to what our market was going to be, if the higher net worth individuals were going to stay in the Bay Area. Many of them left for their second homes with their children and were completely distracted. That has changed dramatically. I feel like I am in one of the most aggressive, strongest real estate markets that I’ve ever seen in my entire career. San Francisco is back, it’s strong and everything that made this incredible city beautiful is still here. Everything that made Silicon Valley is still there. There was a huge amount of money made last year. And it’s being spent on people’s homes here in the Bay Area. No question.

Helena Zaludova: My impression is that we’re in the midst of one of the strongest rebounds all across the San Francisco market. That being District 5: Noe Valley, luxury homes in Pacific Heights. We are setting new records in the Marina. Also there were a few pockets like Joel mentioned in the condo market. New construction in SoMa is still a bit slow. High rises in SoMa are definitely one of the weaker spots. But single-family homes, luxury homes in residential neighborhoods are seeing unprecedented demand. You asked about people moving to different areas. I have had a personal experience with several of my high-net-worth clients moving to Florida, but I also have a handful of clients who have made an absolute unwavering commitment to stay in San Francisco.

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1940 Broadway, in Pacific Heights (recently sold by Joel Goodrich)

How does the 2020 decade look for the Bay Area housing market in your crystal ball?

Michael Dreyfus: A decade. Wow, that’s a big question. I think our housing scarcity continues and the inability to provide listings for qualified buyers is going to get worse and worse. It’s going to end up in a crisis, and I’m not sure how that crisis is going to come out. It could come out in the proposals of zoning laws being completely revamped, but I don’t see any way — given the forwardness of the employment market and the money being made in this area and the lack of the ability to build houses — that it doesn’t somehow end badly, which means real estate continues to go up in value.

Michael Repka: I think there’s no doubt that this is an incredible place to live: the economic environment, the weather, the culture, everything’s a big draw. Now, I’m a little more pessimistic than I think some people on the panel. It has gotten incredibly expensive to live here. Unless you have radical changes to zoning, you’re going to see continued increases in prices, but there’s going to be a point, kind of a breaking point as businesses start to see it being more and more expensive to bring people in, there’ll be a desire to relocate offices.

Helena Zaludova: I think the one topic that we haven’t touched on is the rising building costs. It’s happening in real time and it’s here. It’s here to stay. It’s inflationary, and combined with restrictive zoning and rising building costs, that’s going to constrict some of the supply. I don’t know how that’s going to play out in the future, but I work with several very well-known developers, and the new project starts are lagging. So that means two to three years from now, inventory of new turnkey homes is going to be a lot thinner than it was over the past couple of years.

Michelle Pender: To echo Helena, I have a couple of different clients as well who are tired of San Francisco. Things are taking too long through the City and they’re looking at other markets to build beautiful homes. So there certainly is that element, and looking forward in a few years, there will be a lack of inventory right in the luxury market. However, I feel like the luxury market is here to stay. San Francisco is an exceptional city with beautiful culture, and you could do a thousand different things every week. So I think that being said, despite all of this economic forecasting and what’s going to happen with technology and this and that, I think there’s always going to be a population of people who absolutely want to be in this gorgeous city because it’s San Francisco.

Joshua Deitch: I used to develop some really high-end houses, and you could virtually give me a piece of land to build on and I probably won’t do it because the cost of construction, the time it takes and the hoops you have to jump through are enormous. Therefore, I think we’re going to see a continued high level of demand for high-level houses that have great qualities and what have you. I think the liquidity that’s out there right now seems to me to be real. It’s not just like [what] it was a few years ago, where it’s on paper and that one day their options are going to vest and one day they’re going to be wealthy. It just seems like there’s a lot of very wealthy liquid people out there in all ages and price ranges. And it’s pushing all sorts of different levels of unpredictability in the market.

Neal Ward: I’m bullish. Here in San Francisco, we have a teeny tiny piece of geography on the north side or south side [for] single-family homes. And there’s virtually no more land. We have fixed supply. And just as Josh related to: [There’s a] tremendous amount of liquidity, tremendous amount of wealth out there — which creates demand for a fixed supply that has not left the way it seemed that it had.

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