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TRACY (KPIX) — Anyone wondering where some of the residents who fled from the Bay Area during the COVID-19 pandemic should just look to the east.

In late 2008, in the middle of the financial crisis, the zip codes of Mountain House were the most underwater in the country. 90% of the homeowners owed more than their property was worth, by an average of $122,000.

Since the start of the pandemic, that has changed dramatically.

“Mountain House was not even on the map for a long time in the Bay Area,” said resident Girish Mohan. “Anyone I talked to who I said, ‘We bought a house in Mountain House,’ it was always like, ‘What? Mountain what?’”

Talk to those who have lived here for a while, and they’ll tell you Mountain House was slowly gaining appeal until disaster struck.

“The pandemic just sped up the whole process,” Mohan says. “Everybody wants a big backyard, working from home, [you] don’t have to commute over Altamont Pass. All that kind of added benefits to Mountain House.”

The result has been a rapid increase in home prices. Some home value estimates have jumped nearly 20%, in barely six months.

“Prices have really hit the roof,” said longtime resident Nadia Abushi.

Abushi told KPIX she can see her community changing, by the day, at her pandemic-inspired front yard market.

“Just Sunday alone. I met six new families that just moved from the Bay Area,” Abushi said. “And said that they paid over $50,000 to $100,000 over asking price for the home.”

No longer a fallback for buyers priced out of other parts of the Bay Area, Mountain House is now a target for families willing to spend on space and schools.

“What we have here in Mountain House perfectly fits the bill for everyone,” said real estate agent Mahendra Damodra of the demand. “It’s completely changed now. It’s for people who want everything, not just for the affordability’s sake.”

It is a dramatic change of fortune for a community that has already seen several of them. No one here is taking anything for granted.

“It’s a seller’s market,” Mohan said of his recent home sale. “I want to be one of the first, or first few, to make the big chunk and see how the market takes its shape.”

“Interesting times,” Abushi said. “It’s interesting, scary, all at the same time. It’s kind of unpredictable, to be honest with you.”

Article source: https://sanfrancisco.cbslocal.com/2021/03/09/covid-east-bay-town-of-mountain-house-sees-pandemic-real-estate-boom/

Competitive prices, historically low interest rates and the arrival of COVID-19 vaccinations likely all play a role in a reported spike in interest in the purchase of Bay Area condominiums, experts say.

Real estate developer ZL Properties and its sales and marketing partner Compass Development Marketing Group are reporting an uptick in buyer interest and sales activity in three of its properties located in hotspot areas of San Francisco since the start of 2021.

ZL achieved a new sales record at its Fulton 555 property in Hayes Valley, closing eight units since the start of the year with more than a dozen additional units currently under contract. Per the company, the rapid sales pace is nearly four times that of the same period last year, which saw only two sales in early 2020. Fulton 555, nestled in a vibrant neighborhood nearby many cultural amenities, offers 139 two-bedroom floor plans with outdoor space and parking from the high $900,000s and one-bedroom residences with floor-to-ceiling windows listed in the $700,000s. It began moving residents in during March 2020.

Over at ZL’s OneEleven property in San Francisco’s bustling SoMa district, the company has had eight sales since the start of the year. Move-ins began Feb. 1 at the 39-unit property, which features a boutique collection of modern and bright one- and two-bedroom condominiums, some of which offer a home office/den, private terrace or parking. At this time, pricing starts at $599,000 for a one-bedroom and $1,039,000 for a two bedroom, two bath with parking.

While ZL’s collection of 109 luxury condominiums at The Oak located in The Hub—a convergence of Hayes Valley, SoMa, Mid Market and other neighborhoods—has not kicked off sales or announced pricing, Eaton reports that Compass is “receiving very strong early interest…and with the recent overall increase in market activity, we’re looking forward to a robust year.”

“New prospective buyers have been inundating the sales team with requests to preview the homes,” said Sandra Eaton, West Coast regional director for Compass Development Marketing Group, a division of Compass. She attributes the buying frenzy to a sense among buyers that “prices have bottomed out.”

“We’re seeing similar trends at many of the properties we represent,” said Eaton. “With mortgage rates as low as they’ve ever been, the vaccine now offering a light at the end of the tunnel and today’s competitive prices, those who have been waiting for their chance to buy in the city finally see their opportunity.”

ZL’s perspective is echoed by experts at the California Association of Realtors (C.A.R.), which says the strong start to the housing market in 2021 has been a statewide trend.

“The statewide median price hit $699,890 in January 2021, down from $717,930 in December 2020, but up 21.7 percent from January 2020 [pre-pandemic],” according to C.A.R.’s report last week. “Home sales in January were up 22.5 percent from a year prior, driven by strong growth in California’s core housing markets, in particular the San Francisco Bay Area.”

C.A.R. also suggests low interest rates by historical standards play a role, and that “although inventory remains tight, buyer demand remains strong.” The number of realtors that reported having a client hold back from selling their home declined to 40.7 percent, which “represents an improvement from January, when more than half of respondents to our weekly survey of California agents had sellers who had gotten cold feet.” Last spring, nearly 90 percent of realtors surveyed reported having at least one seller hold back from selling due to the pandemic.

Top photo: Interior of Fulton 555, courtesy of ZL Properties

Article source: https://climaterwc.com/2021/03/03/san-francisco-bay-area-condo-market-showing-signs-of-rebound/

The pandemic-driven desire for more living space, coupled with the freedoms afforded by corporate work-from-home rules, is luring thousands of Bay Area families over the Altamont Pass to planned communities where homes are often bigger, and 50% cheaper, than they are in Dublin or Fremont or San Leandro.

Nowhere is the trend more pronounced than River Islands, a 5,000-acre development on the San Joaquin River in Lathrop that includes 13 man-made lakes and miles of riverfront trails. Schools, ball fields, parks and fire stations make up a community that will eventually include 11,000 single-family homes and another 4,000 apartments and condos clustered around a new town center.

After selling 371 homes in 2019, River Islands saw a 57% increase in 2020, with 641 sales. And the number of buyers relocating from the Bay Area jumped from 55% to 76%. About 2,300 families have moved in so far and there are 1,500 kids — a number expected to eventually reach 9,000, according to the developer.

“Our builders have so much demand they have waiting lists,” said River Islands Development President Susan Dell’Osso. “They are basically doing custom builds for every home buyer.”

Data from the United States Postal Service backs up the claim that the out migration from the Bay Area to San Joaquin County is picking up. Between March and November of 2020, at least 6,320 households moved to ZIP codes in San Joaquin County from one of these Bay Area counties: Alameda, Contra Costa, San Mateo, Santa Clara, San Francisco and Marin. That’s a 22% percent increase over 2019.

Sales are also exceeding expectations at Tracy Hills, a 5,000-home development west of Lathrop, according to John Stanek, a partner with Integral Communities, the master developer there. Tracy Hills sold 400 homes in 2020. The project opened in the late spring of 2019, so there is nothing to compare the sales to, but the pace easily exceeded expectations.

The out migration to the Central Valley is being driven by the Bay Area’s astronomical home prices and the fact that builders have failed to create enough housing to satisfy demand. Neighborhood opposition to development is widespread and Bay Area developers often spend years bogged down in lawsuits before winning approvals. Homes at River Island average about $225 a square foot, compared to $375 in Hercules, $506 in Livermore, $533 in San Leandro or $711 in Fremont.

While many of the new residents are currently able to work from home, the danger is that remote employment may not last and that the Central Valley influx will worsen the environmental issues the Bay Area has been grappling with for years — clogged freeways, marathon commutes and cars pumping even more carbon dioxide into the air, according to David Garcia, policy director for the Terner Center For Housing Innovation. A 2019 study by the Bay Area Economic Institute found 80,000 commuters drive between the northern end of San Joaquin County and the Bay Area, an average of 120 miles, 75% of them alone in a car.

“Traffic was very bad before COVID, and may be worse after COVID,” said Garcia, who was raised in Stockton and used to make the two-and-half-hour commute to Berkeley. “Having the Central Valley be the Bay Area’s affordable housing option is not an optimal outcome.”

Virgra Banaag, who goes by the name Bing, said that she was not really in the market for a new home when she checked out River Island while visiting her sister nearby. Her family of four — her husband is an electrician and her kids are 7 and 13 — had been living in Hercules and had expected to stay there. When she toured an open house in River Islands, “the house called to me.” They decided to move.

“I had never even heard of River Islands before and now everybody wants to live here,” she said. “It’s the talk of my friends right now.”

Leslie and Chad Bourdon moved to River Islands with their two kids just a few months before the pandemic hit. They had previously lived for 13 years in San Francisco and four years in Marin. Chad Bourdon is a co-owner of 25 Lusk, the fine-dining establishment in downtown San Francisco.

Leslie Bourdon said they had been looking for a year for a house that had good schools and enough living space. Having grown up on Cape Cod in Massachusetts, she was drawn to the waterfront. The family put in a pool and have a private dock where they keep paddle boards and kayaks, and a pedal boat.

She said her Bay Area friends were surprised by the move. “You say ‘Lathrop,’ and people say, ‘Where is that?’ You say ‘Central Valley’ and people from the Bay Area cringe, thinking ‘yikes.’ ”

Paul Jorge Dizon, a nurse who works at Kaiser Permanente, was paying $3,100 a month for his apartment in Hayward. He set out looking to buy something and quickly determined that on his budget, between $500,000 and $600,000, he could not afford anything in the Bay Area. In Tracy Hills he found a 2,500-square-foot house for $570,000. “You are away from the hustle and bustle of the Bay Area, but not too far,” he said.

Dean Wehrli, Northern California principal for John Burns Real Estate Consulting, said that River Islands is the best-selling planned community in the state. Wehrli said the influx has been driven by Silicon Valley workers who are more likely to be able to continue to work from home at least some of the time.

“In the back of their mind they are thinking that if they are called back into the office two or three days a week it’s a terrible but doable commute,” he said. “Whereas Fresno or Reno or Boise are not.”

Newark-based mover Jose Martinez said about 20% of his business is now Central Valley relocations, up from 10% a year ago. “Every time it’s always the same story,” he said. “Prices in the Bay Area are skyrocketing and people find it easier these days to live in a home with bigger dimensions.”

He is even considering making a move himself. “I definitely have my eye on Manteca.”

Chronicle staff writer Susie Neilson contributed to this report.

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen

The deal would eclipse all previous transactions aside from Boston Property’s $1.2 billion purchase in 1998 of Embarcadero Center, which is about four times the size of the Exchange. It is expected to close at the end of this month.

Kilroy Realty declined to name the buyer. A source with knowledge of the deal who wasn’t authorized to speak publicly said it was KKR, the private equity giant. KKR didn’t immediately respond to a request for comment.

The coronavirus pandemic has disrupted San Francisco’s real estate boom, with almost no major leases signed last year and numerous companies including Dropbox adopting a permanent remote work policy. But the Exchange remains appealing to tenants, including in the growing biotech sector, because it can be configured as lab space. After Dropbox listed around half of the building for sublease, Vir Biotechnology took 133,896 square feet late last year.

“This transaction demonstrates that quality assets in quality locations remain highly attractive to buyers and in this case generated a record price,” said John Kilroy, CEO of Kilroy Realty, in a statement.

Kilroy spent around $585 million building the Exchange and leased all of the office space to Dropbox in 2017, in what was the city’s biggest lease at the time. Facebook’s lease for all of Park Tower in the Transbay district set a new record in 2018.

The Exchange sale follows the $650 million sale of the Transamerica Pyramid during the pandemic and a roughly $420 million deal last week for Uptown Station in Oakland, which is leased by Square.

“This is a resounding sign that people are still excited to be a part of San Francisco and its future,” Mayor London Breed said in a statement.

The sale will be a windfall for the city, generating $64.8 million in real estate transfer taxes. The tax bill is twice as high as it would have been in 2020, after voters passed Proposition I in November to double the transfer tax on sales over $25 million to 6% starting this year. Kilroy gave $225,000 to oppose the measure.

The Exchange’s annual property tax bill of around 1.2% will also increase to almost $1.3 million. It was assessed at $789 milllion in 2019, generating almost $9.5 million, and making it the ninth-most valuable property in the Bay Area.

KKR is one of the largest U.S. private equity firms with net income of $1.94 billion last year. It has invested in hundreds of companies and owns the San Francisco fitness operator Bay Club. Its tech investments include Lyft and Tik Tok app maker ByteDance.

Kilroy is one of the largest landlords on the West Coast and owns buildings leased by tech companies including Adobe, Salesforce and Netflix. Stripe is moving out of San Francisco into Kilroy’s Oyster Point project in South San Francisco, which also includes biotech space.

Roland Li is a San Francisco Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter: @rolandlisf

From January to September 2020, Black Millennials across the country began purchasing a lot of homes. The National Association of Realtors tracked the trend. In November, NAR released data showing Black people age 26 to 39 accounted for 5% of home buyers in the U.S. during the first six months of the pandemic. This group raised the homeownership rate of all Black Americans during that time by 2%.

We need this trend to flourish in the Bay Area. Years of gentrification in historically Black neighborhoods have pushed many of my people out of the region. The pandemic spurred some outward migration in San Francisco. Housing remains expensive and inventory is low, but there’s still space in the demand for a Black presence.

Black people must capitalize on this chaotic moment. This could be the time to increase our community wealth and to have a real investment in the future of the Bay Area.

Natalie Goolsby, a Black homeowner, told me the preservation of Black culture is why she recently purchased a two-bedroom house in East Oakland. Goolsby is renting one of the rooms to her niece and is looking for more local housing to buy. A growing number of her Black friends are doing the same, she said.

They’re focusing their efforts on Oakland. The city has a long history of being a Black cultural mecca. Oakland gained national attention in the 1940s and 1950s when Black jazz and blues musicians turned West Oakland into the Harlem of the West. The Black Panther Party was born in the 1960s. By the 1980s, we were half of Oakland’s population. Now we’re closer to 23%, according to U.S. census data. This decrease hasn’t dimmed Oakland’s significance as a landmark for Black America.

“Growing up out here, you knew if you wanted to be around Black people, you came to Oakland,” Goolsby said. “I wanted to do my part to keep driving Black homeownership. … Right now is the time we should be doing this.”

It won’t be easy drawing more Black folks to the effort. We wearily remember how our communities were debilitated by the country’s financial crisis in 2008. Our household wealth in 2009 was around $5,700, compared with $113,000 for white households, according to the Pew Research Center. From 2007 to 2010, our home equity dropped by an average of 28%, according to a 2013 study published by the Urban Institute. And many Black homeowners became renters.

Black communities have yet to recover. Our 13% of the U.S. population accounts for only 4% of the country’s overall wealth. The homeownership gap between Black and white Americans was nearly 30% in 2020. The last time the national gap was this wide was in 1960, before Congress passed the 1968 Fair Housing Act.

Land ownership leads to generational wealth in American families, or assets that can be passed from one generation to the next. Historically, Black people have been denied access to this type of financial security. A wave of us buying property in the Bay Area could change that. While both single- and multifamily units may appreciate over time, the extra income that comes with being a landlord could be a boon to Black families.

This fact is why Steve Peterson, the president and CEO of Black-owned Infinity Investments, an Oakland brokerage, said he’s directing Black people to properties with two to four units. Multiple family members may help pay the mortgage, or it may jump-start a family member’s path toward homeownership, he said.

“There is a reawakening, a movement of Black homeownership, Black wealth building, Black business sustainability that I’m seeing across the Bay Area,” he said. “In the world of multifamily homes, apartment buildings, there is a window of opportunity for us. It’s time for Black and brown communities, in both Oakland and San Francisco, to really get back in the market and start buying up our neighborhoods that we lost so much of in the last 20 years.”

Land inequity has been an issue for Black Americans since slavery. America never gave formerly enslaved Africans reparations, or “40 acres and a mule,” for their stolen labor. America’s history of discriminatory practices like redlining and racial covenants has scarred the Black populace. Today, we still find ourselves in neighborhoods where access to mortgage loans and other capital are limited, and even the homes some of us own can be undervalued just because we’re Black.

Combating the fear and hesitancy around homeownership can help inspire a Black real estate renaissance in the Bay Area, according to Shawneequa Badger of the Badger Real Estate Group in Oakland.

Over the past two months, Badger said she has worked with numerous Black people interested in buying and investing in local property. She is among a growing number of Black real estate agents and community organizations hosting classes to educate Black home buyers. Her solo efforts are mirrored by community organizations like San Francisco’s SF Black Wallstreet, which was formed in June 2020, and has recently hosted webinars to teach Black locals about buying and selling homes.

“When I do my workshops, I show people the numbers of where we’re at as a population, versus where our white counterparts are in the home-buying and wealth-generating process,” Badger said. “When people start seeing those numbers — for every white dollar, Black families have one cent — when they see that, their thought process tells them they have to buy a home. Right now, we’re seeing a movement. We’re seeing a purpose.”

The purpose, in my eyes, is for Black people to not only survive in the Bay Area, but to thrive. Hearing Black folks are trying to buy more land in this pandemic is a beautiful way to start the process.

San Francisco Chronicle columnist Justin Phillips appears Sundays. Email: jphillips@sfchronicle.com Twitter: @JustMrPhillips