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Article source: https://www.sfchronicle.com/bayarea/article/S-F-rent-prices-plunge-as-much-as-31-15644663.php

SAN FRANCISCO (CBS SF) — Rents are tumbling and the number of homes listed for sale are soaring — all signs that the COVID 19 exodus from San Francisco was not losing its momentum six months into the pandemic.

With many of the region’s top employers still under work-at-home mandates or having furloughed or reduced staffing, the once red-hot real estate market has gone into a chill.

Apartmentlist.com — the San Francisco-based online listing service — said rents in the city have decreased by 5.2% month-over-month in September and are down by 17.8% since the start of the pandemic in March — the fastest decline among the nation’s 100 largest cities.

Median two-bedrooms were renting for a cost $2,592 while one-bedrooms were going for $2,240. It was a much different snapshot of the local market at the start of the year before the COVID outbreak triggered layoffs, furloughs and employees being forced to work from home.

Moving vans have become a common sight during the retreat from San Francisco. Among those who has left the city is William Hauser, who originally came to San Francisco to pursue his digital dreams.

Hauser talked with KPIX 5 in late August as he loaded a moving van ready to begin his exodus to his childhood hometown in Ohio.

“Honestly, I started being a software engineer, I got into computers, because it’s convenient to be able to work remotely,” he said. “Now that everyone has been working remote, and policies aren’t cemented at least until next year, there’s no reason to stay here when I could go back to family and work remotely there.”

The same chill is sweeping through the home market. According to the San Francisco Association of Realtors and Multiple Listing Service, there was a 44 percent jump in the number of homes for sale in the city in the third quarter of 2020 compared to 2019. When it came to condominiums the number was up 34.4 percent.

As for prices, Compass — a San Francisco-based high end real estate broker — released figures showing a dramatic drop in the sale price for homes in Pacific Heights, Presidio Heights, Cow Hollow and the Marina. The average sale prices in September 2019 was $4.95 million while in September 2020 it had dropped to $4.4 million.

In San Francisco’s other neighborhoods, prices were slightly up or flat in Sept. 2019 to Sept. 2020. That was a much different picture from the steady increases since 2012.

“COVID is forcing people to think about what they need in a home,” said Frank Nolan, president of Vanguard Properties. “That’s the Number One reason people are buying or selling.

According to a report from Compass, the San Francisco condo market was taking the largest hit.

“The number of price reductions – again heavily concentrated in the condo market – has jumped to its highest point in many years,” Compass said in its report. “In certain segments, sellers are now competing for buyers, instead of buyers competing for listings.”

Aside from the COVID pandemic’s job impact, San Francisco residents Joe Imbriani and Anne Hocquet think city living has also lost some of its luster.

Imbriani cited the unkept condition of the city’s streets.

“They (those who are leaving) think the city is just gotten to be one big trash can right now,” he said.

Hocquet, who bought a home in San Francisco two years ago, felt the forced OVID-19 shutdowns of local businesses also was fueling the exodus.

“The city has lost a little of its appeal with everything being closed,” she said. “It’s not like you are missing anything.”

Article source: https://sanfrancisco.cbslocal.com/2020/10/10/covid-exodus-home-for-sale-listings-soar-as-pandemics-economic-impact-grips-san-francisco/

In the history of San Francisco real estate, the lows never drop too low or last too long. Will this time be different?

The number of single-family homes on the market just hit a nine-year high this week, as Socketsite reports. And with the number of condos changing hands typically about 60-percent higher than single-family homes in a normal year, the flood of condos onto the market hit a nine-year high back in mid-July. The overall inventory of homes for sale was nearing a two-decade high as of last week, and hit a 15-year high this week, per the Chronicle.

“While the market for condos tends to be more volatile, with higher highs, lower lows and faster swings between the two, it remains a leading indicator for the market as a whole,” Socketsite writes.

Another indicator of how flooded the real estate market in SF is right now: On Wednesday, the percentage of homes on the market that had seen at least one price reduction rose to 31 percent. A total of 595 properties had seen their prices slashed, which is more than three times the number that had needed price reductions at this time last year, per Socketsite.

Properties are still selling, but unlike in typical years in San Francisco, “the inventory is increasing so much faster than the sales rate,” as Compass real estate analyst Patrick Carlisle tells the Chronicle.

As one might expect in a pandemic where downtown offices have been deserted for seven months, the properties mostly likely to be sitting on the market for weeks or months are condos in downtown high-rises.

And the sales that are happening, particularly among larger properties in more desirable neighborhoods, are being driven by affluent buyers taking advantage of the market and their healthy stock market returns this year, the Chronicle notes. So in that regard, things aren’t all that different in SF real estate — but a few lucky people are perhaps getting some decent deals.

Anyone looking to sell a home in SF right now is cautioned to price it competitively and stage it well, or it’s likely to get buried in the pile of new things hitting the market each day.

Carlisle was the author of an April report produced by Compass examining the past 30 years of the SF residential real estate market. The straight-line chart below — which does not include the minor, though sometime dramatic fluctuations within a given year — illustrates how robust and consistent the growth in home prices has been since the mid-1980s, with brief recession-related drops that are pretty quickly recovered from.

“All the major recessions in the Bay Area in recent decades have been tied to national or international economic crises, which can take a wide variety of forms,” Carlisle writes in the report. “Absent an enormous natural disaster, it is unlikely that a major, negative market adjustment (or ‘crash’) would occur due simply to local issues. However, local issues can certainly lead to less dramatic market adjustments, or exacerbate a downturn caused by a macro-economic event.”

Photo: Richard Price

Article source: https://sfist.com/2020/10/09/number-of-properties-for-sale-in-sf-nearing-two-decade-high-condos-and-single-family-homes-see-price-drops/

SAN JOSE — The amount of office space available for sublease has risen in the Bay Area — and has more than tripled in San Francisco — an indication that work-from-home protocols amid the coronavirus may have prodded companies to rethink space needs.

Santa Clara County, the East Bay, and San Mateo County have all shown significant increases in sublease space, but San Francisco has earned the dubious distinction of suffering the largest increase by far in the Bay Area, according to a new report from Cushman Wakefield, a commercial real estate firm.

Significant increases in available sublease office space are a nationwide phenomenon but Cushman Wakefield indicated in its report that the Bay Area is being hammered  to a greater extent than the nation’s other major office markets, the Cushman Wakefield report shows.

“The increase in sublease vacancy has been widespread, though one region has been hit the hardest: the San Francisco Bay Area,” Cushman Wakefield stated in its report.

As of the end of June, San Francisco had 3.86 million square feet of sublease office space available, which was an increase of 2.81 million square feet. That equates to a jaw-dropping jump of 267 percent, or more than triple the 1.05 million square feet available at the end of 2019.

A comparison of San Francisco’s office market to Manhattan’s underscores the mammoth increase in space.

Manhattan, with 404.7 million square feet of office space, boasts an office market that dwarfs San Francisco’s, which has 83.5 million square feet of office space. But while Manhattan’s sublease space increased by 1.48 million square feet, that was far less than the increase of  in San Francisco.

From the end of 2019 through the end of June, the Bay Area’s four major office markets, Santa Clara County, San Francisco, the East Bay, and the Peninsula, endured a combined increase of 3.99 million square feet of sublease office space compared with an increase in sublease office space totaling 13.9 million for the entire country.

That means the Bay Area office markets accounted for 28.7 percent of the increase in sublease office space — even though this region accounts for only 8.9 percent of all the existing office space in the country.

“All of our major Bay Area markets recorded an increase over the first half of the year including Santa Clara County-Silicon Valley,” said Robert Sammons, senior research director with Cushman Wakefield.

Santa Clara County had about 5.48 million square feet of sublease office space available at the end of June, an increase of 399,400 square feet or 7.9 percent more than the end of 2019, Cushman Wakefield reported.

The East Bay, including Oakland, the 880 Corridor, the 680 Corridor, the Tri-Valley, and the Walnut Creek areas, had about 2.97 million square feet of sublease space available at the end of June. That was a 17 percent increase, or 430,900 square feet more compared with the end of 2019.

San Mateo County reported that 1.8 million square feet of sublease space was available at the end of June, which was up 24 percent, or an increase of 350,600 square feet, according to Cushman Wakefield.

With the onslaught of the coronavirus, tech companies were able to function with numerous employees working from home, and some high-profile tech firms put spaces up for sublease in San Francisco or terminated their leases. Pinterest and Twitter were among these.

“Tech-focused regions were heavily impacted by sublease vacancy,” Cushman Wakefield stated in its report.

It’s possible that companies won’t immediately rush back to reoccupy spaces they had vacated in the wake of state and local government mandates to combat the deadly bug.

And that potential reluctance could keep significant blocks of office space available for sublease.

“This significant amount of space will take some time to ‘work off’ even when workers return to the office,” Sammons said.

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Article source: https://www.mercurynews.com/real-estate-bay-area-office-sublease-space-soars-tech-coronavirus

With millions out of work, and restaurants, shops and retailers closing, one spot in the economy shines for thriving and affluent professionals — Bay Area real estate.

As if the devastating pandemic had passed over the tech campuses, Spanish-tiled roofs and Tesla-filled garages of Silicon Valley, luxury home sales exploded in August and drove median prices up 16 percent from the previous year to levels approaching the market peak in 2018.

The median sale price for an existing single family home in August in the Bay Area was $975,000, according to DQNews data. The gains were driven by a limited supply of properties for sale and a greater portion of high-end homes selling, agents and economists said.

“We’ve never seen such high price appreciation in a recession,” said Selma Hepp, deputy chief economist with real estate data firm CoreLogic. “The recession hasn’t hit everyone the same way.”

Year-over-year prices soared throughout most of the nine Bay Area counties: increasing 19 percent to $1.73 million in San Mateo; 18.6 percent to $1.34 million in Santa Clara; 18.6 percent to $770,00 in Contra Costa; and 13.4 percent to $975,000 in Alameda. The pandemic has continued to cool demand in San Francisco, where prices gained 3 percent to $1.55 million, according to DQNews.

The number of Bay Area homes sold grew by about 9 percent from last August, as traditional spring buyers waited until summer to tour and close deals.

Nationally, home prices climbed 14 percent, year-over-year, in late August and September, according to Redfin. The company’s chief economist Daryl Fairweather noted warning signs on the horizon — waning mortgage applications and more home listings boosting supply.

“Although the housing market is still red-hot, there are some early signs we may be nearing peak price growth,” Fairweather said. “This is likely to be as good as it gets for home sellers, who definitely have had it very good for a very long time.”

But the Bay Area is expected to counter that national trend. Professionals in tech and other fields have been able to work remotely, sustaining a stronger economy than regions dependent on service workers like Las Vegas, Hepp said. In recent years, home prices in both regions have climbed. But CoreLogic now projects Bay Area home prices will rise 7.8 percent, while Las Vegas prices will fall 6.5 percent by August 2021.

Bay Area agents say demand is driven by techies and professionals looking for more space for family and home office Zoom-rooms.

Will Doerlich, an agent with Realty One Group in San Ramon, said single family homes in the suburbs of Contra Costa and Alameda counties have been atop many wish lists. Fewer homes for sale has meant fierce bidding wars in the East Bay. “It’s not slowing down,” he said.

One listing in San Leandro for a small, two-bedroom house on a big lot drew 500 views online within the first 24 hours, Doerlich said. The home received 11 offers and sold for $40,000 more than the list price. That type of interest has been consistent during the summer, despite covid safety restriction limiting access for home tours, he said.

Agent Jeff LaMont of San Mateo said low interest rates and strong employment in software and biotech industries have driven millennial couples into the market. His advice to buyers: “Don’t overthink it. Grab the cheap money while you can.”

The typical interest rate for a standard, 30-year fixed mortgage is 2.9 percent, according to a Freddie Mac October survey.

The growing popularity of the suburbs has been fueled by major tech firms allowing many employees to work from home well into next year, minimizing commutes as a factor for homebuyers. Google, Facebook and Salesforce announced workers could stay home through next summer, and Twitter left the decision open-ended.

Zoheb Allam and his wife, Nishaath Khan, decided to move to San Francisco shortly after they were married. The couple, both tech workers, planned to spend two years living the city life — restaurants, bars, theaters and shops within walking distance of their SoMa apartment.

“We always dreamed what it would be like in the big city,” said Allam, 31. “When covid hit, our story changed.”

Their $3,700-a-month one-bedroom in SoMa was a small redoubt in a neighborhood of closed bars and limited office and restaurant traffic. The large homeless population and some residents with aggressive behavior made them weary of routine trips.

“We felt very boxed in,” Allam said. “What is really the point of sitting in San Francisco, paying the kind of rent we’re paying?”

They started looking for homes in Alameda County and opted out of their lease after one year. They settled in a two-bedroom apartment in Livermore, and continue to search for their first home. They’d like to stay in Livermore. “It’s the right move,” Allam said, “at the right time.”

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Article source: https://www.mercurynews.com/bay-area-home-prices-soar-with-suburban-boom