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Article source: https://capitolweekly.net/housing-is-core-issue-in-sfs-wiener-fielder-senate-race/

As renters have begun emptying out of the nation’s most expensive cities due to the one-two punch of the coronavirus pandemic and ensuing recession, monthly rental prices in those areas are nosediving.

Rents for September have plummeted the most in ultrapricey San Francisco compared with a year ago, according to a recent report from rental website Zumper. Median prices dropped by 14.1% in San Francisco, to a still very high $3,040 for one-bedroom apartments on the market.

This happened as some big tech companies based in the San Francisco Bay Area, like Google and Twitter, announced employees could work remotely for a year—if not forever. That enabled those accustomed to paying small fortunes on housing each month to relocate to cheaper parts of the country.

Prices dropped by about 7.2% for one-bedroom units in the nation’s most expensive rental markets compared with September 2019. Meanwhile, they rose by an average 4.8% in the country’s least expensive markets.

“Since [COVID-19] really started to affect the U.S. market in March, it has dramatically decreased the amount of people commuting to work every day—either because of social distancing measures or layoffs resulting from COVID-19’s effect on the economy. Given this, there is less of a reason for Americans to cluster in urban centers,” says Zumper analyst Neil Gerstein. “We believe this has caused a migration shift, and a subsequent demand shift, to historically cheaper cities.”

The site analyzed more than a million rental listings to calculate the median rents in the 100 largest cities and almost 300 more cities within larger, metropolitan areas. (Metros include the main city and surrounding suburbs, towns, and smaller urban areas.) Only listings on the open market, and not currently occupied, were included.

Other exorbitantly priced cities experienced similar double-digit declines. Median rents fell 11.5% year over year in San Jose, CA, in the heart of Silicon Valley, to $2,750 for a one-bedroom unit in September and decreased 10.9% in New York City, to a median $2,700. Rental prices also fell substantially in Salt Lake City, by 10.7%, to $1,000 a month; Denver, by 10.6%, to $1,430; and Washington, DC, by 10.5%, to $2,050. Median rents dropped 15.8% in the college town of Syracuse, NY, about four hours northwest of New York City, to $800.

Expensive cities that saw steep, but single-digit, price drops included Boston, where rental prices fell 8%, to a median $2,300 a month; Los Angeles, by 8.4%, to $2,040; and Seattle, by 9.6%, to $1,700.

“It is likely that prices will continue to decrease for some time into the future before they stabilize,” says Gerstein.

Where are monthly rents going up?

While prices fell in the country’s most expensive rental markets, they actually shot up dramatically in some of the more affordably priced Midwestern and Southern cities. Monthly rents have more room to grow in these places. And they may be seeing a boost in demand as renters from more expensive markets flee the big cities seeking more reasonably priced urban areas where they can get more square footage for their money.

“We largely attribute this to shifts in migration and demand within the country as Americans opt for cheaper places to live in the wake of COVID-19 and the recession,” says Gerstein.

Median rents surged in Chattanooga, TN, and Cincinnati, both by 15.9% year over year, to reach the same median $950 a month for one-bedroom apartments in September, according to Zumper.

The other highest annual increases were in St. Petersburg, FL, by 15.7%, to $1,330; Lincoln, NE, by 15.7%, to $810; Indianapolis, by 15.6%, to $890; Detroit, by 15.6%, to $740; Norfolk, VA, by 15.5%, to $970; Des Moines, IA, by $15.4%, to $900; Baltimore, by 15.3%, to $1,360; and Cleveland, by 15.3%, to $980.

Article source: https://www.realtor.com/news/trends/rent-prices-nosedive-in-ny-san-francisco/

Buckle your seat belts. The next two and a half months promise to be a wild ride, given the upcoming presidential election and the surging then subsiding then surging again pandemic. 

San Francisco’s real estate market has enjoyed to this point something of a calm before the storm — all things considered, performing remarkably well. Nevertheless, Compass Real Estate cautioned in mid-August that “supply and demand conditions have diverged dramatically between house and condo markets, with the latter being far weaker and rapidly climbing into ‘buyer’s market’ territory. ”

Inventory is higher for both condos and single-family homes, but condos are much more plentiful, with six months of inventory. Typically a buyer’s market exists at eight or more months of inventory, a scenario we could reach in just a few months if these trends continue.

According to Socketsite.com, the number of homes on the market in San Francisco, net of new sales and contract activity, at one point in August hit 1,490, representing nearly three times more homes on the market when compared to the same time last year, and surpassing the recession-era inventory levels that were driving the market back in August 2008 and 2009. It’s important to note that nearly 74 percent of these recent 1,490 listings were condos.

STABILITY AMONG THE STORM

All of this said, home prices continue to be high. In fact, based on a rolling three months of activity, according to the San Francisco Association of Realtors, the median price for a single-family home reached an all-time high in July of $1,700,000. The median price for a condo and loft that same month was $1,250,000 — down from its all-time high of $1,310,000, recorded in October 2019.

Now there have been price reductions to be sure, especially in the condo market. Indeed, there were nearly 400 price reductions in July, with condos making up more than two-thirds of those reductions. But prices remain high, and in spite of a devastating hit to employment and the economy, prices have not dropped as precipitously as some might have expected.

Zillow founder Rich Martin explains why home prices keep going up in a recent article on Inc.com, calling it “The Great Reshuffling.” He believes the current pandemic has permanently reshaped the way people live and work across the country, and that’s having a profound effect on the residential real estate industry. Residential real estate he says is mostly a seller’s market. Meanwhile, commercial real estate is hurting for customers.

According to the article, 70 percent of Americans report working from home at least some of the time, and all Americans are spending an average nine hours more at home per day than they did before the pandemic. That means people have new priorities about where they want to live. A bigger backyard and room for a home office are more important these days than a short commute or proximity to a bustling downtown.

This would explain why single family home values in San Francisco remain so high, while the condo market is softening. 

Meanwhile, Katherine Bindley, writing in The Wall Street Journal in mid-August, reports now that tech companies are giving their employees more freedom to work from anywhere, employees are taking them up on the option to relocate.

TYPICALLY ATYPICAL

It’s early yet, and information about who’s leaving and where they’re heading is just starting to come in. But in a recent internal survey, around 40 percent of Facebook’s employees said they were interested in permanent remote work, and three quarters of those employees indicated they might move to another place.

While it’s too soon to measure the total net outflow of tech workers from the Bay Area, it’s already affecting the real estate market. Rents have started falling for the first time in years. In fact, according to the story, rents have fallen in San Francisco for the first time since 2014, when Zillow began tracking them.

September is typically an enormous month for San Francisco real estate. With the summer behind them, owners put their homes on the market and buyers become more active. Listings swell, sales jump, and in recent years, prices climb. Momentum typically carries into October, and then sales slow in November and then really decline in December and January. 

Of course, 2020 is proving to be utterly unpredictable. The next 70 days or so will tell a remarkable tale, no matter what the outcome of November’s presidential election. Still, the purchase or sale of a home is always motivated by intensely personal things — a growing or shrinking family, a growing or shrinking income, a new set of priorities, new opportunities, or unanticipated obstacles. 

Even during these turbulent times, life goes on. Fortunately for us, San Francisco has always endured, even during some of the nation’s ugliest chapters.

Send feedback to letters@marinatimes.com

Article source: https://www.marinatimes.com/2020/08/the-calm-before-the-storm/

Redfin is reporting this week that a quarter (24.5%) of San Francisco-area home sellers cut their list prices during the four weeks ending August 2020, the highest share since at least 2015.

That’s more than double the rate from a year earlier, marking the largest annual increase in the share of active listings with price drops among the 50 most populous U.S. metro areas.

San Francisco’s price-drop rate has held steady at above 24% in late summer, clocking in at 24.1% during the most recent period in Redfin’s data–the four weeks ending Aug. 23, 2020.

San Francisco was one of just 11 of the top 50 metros that experienced an increase in the share of listings that cut prices, rising to 24.1% from 11.4% a year earlier. Chicago, Philadelphia and New York were among the 10 other places where the rate of price drops rose from the prior year during the four weeks ending Aug. 23.
 
“Buyers in San Francisco want fire-sale deals, and they’re not settling until they find them. They’re in no rush because there’s so much uncertainty right now–if the price isn’t right, they can just go rent a house in Lake Tahoe for a year until their employer gives concrete guidance on if or when they need to go back to the office,” said local Redfin agent Carlos Barrientos. “I’m seeing a lot of buyers make lowball offers that initially get rejected, but then they get a call back from the sellers a few weeks later saying they’re willing to drop the price.”
 
High-rise condos and smaller, outdated homes–where it may be uncomfortable or challenging to set up a home office–are the property types that are most commonly seeing price drops, Barrientos added.

San Francisco’s housing market has softened during the coronavirus pandemic as its residents have fled the dense, expensive city in search of more space to make remote work and homeschooling more feasible. In the second quarter, 22.7% of Redfin.com users searching from the San Francisco area looked to relocate–up from 21% a year earlier and the second highest share of any location Redfin analyzed (behind only New York).

As a result of this shift, the number of homes on the market in San Francisco surged 75% year over year during the four weeks ending Aug. 23, forcing sellers to cut prices, and giving buyers the upper hand. The median sale price for homes that sold during the period was up 6.6% year over year to $1.5 million, but this was well below the 11.4% increase nationwide. It’s worth noting that the share of homes with price drops is a leading indicator, so the trend likely would not carry over to the median sale price until these homes find buyers and their sales close over the next few months.

“It might not happen immediately, but we’ll probably see home prices fall in San Francisco eventually,” said Redfin chief economist Daryl Fairweather. “It’s clear that many homeowners think San Francisco is past its peak and that they’re better off selling sooner rather than later. Of course, the future of home prices largely depends on whether people will return to the office, or work remotely for the long run.”

According to a new report from Redfin, the median sale price for luxury homes in the U.S. rose 1.2% year over year to $825,000 during the three months ending July 31, 2020.

U.S. home builder confidence in the market for newly-built single-family homes increased six points in August 2020. HMI stands at highest reading in the 35-year history of the series.

According to Freddie Mac’s latest Primary Mortgage Market Survey, the 30-year fixed-rate mortgage averaged 2.96 percent in mid-August 2020. Homebuyer demand remains strong, especially for those in search of an entry-level home.

According to the latest Global Flexible Office Sentiment Survey by Workthere, Savills’ dedicated flexible office advisory service, revealed growing concern in the short term for the flexible office sector among providers in North America over the next three months.

Despite low interest rates, a supply shortage coupled with rising home prices contributed to a decline in housing affordability in the second quarter of 2020.

Boosted government unemployment aid has expired, meaning those numbers are likely to rise even further in coming months.

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Article source: https://www.worldpropertyjournal.com/real-estate-news/united-states/san-francisco-real-estate-news/real-estate-news-san-francisco-home-sales-report-coronavirus-impact-on-home-sales-in-2020-redfin-housing-data-12100.php

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  The surrounding community of Guerneville, located along the Russian River, is viewed from the air on August 24, 2014, near Healdsburg, California.

  The surrounding community of Guerneville, located along the Russian River, is viewed from the air on August 24, 2014, near Healdsburg, California.

  
  Photo: George Rose/Getty Images
  

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The surrounding community of Guerneville, located along the Russian River, is viewed from the air on August 24, 2014, near Healdsburg, California.

The surrounding community of Guerneville, located along the Russian River, is viewed from the air on August 24, 2014, near Healdsburg, California.

Photo: George Rose/Getty Images

Big second home real estate markets like Tahoe, Monterey County and Palm Springs have all seen an unprecedented year in terms of growth. Inventory is low, demand is high and people who have the funds to move out of cities and snatch up some acreage are doing so.

For nearby Sonoma County, inventory has been low since 2017 due to year after year of raging wildfires. First, it was the Tubbs Fire in 2017, which decimated more than 5,643 structures. In 2019, the Kincade Fire destroyed 374 structures in the county.

This year, it’s still early in the fire season and Compass real estate agent Peter Colbert listed a home on the market in Guerneville just two days before it burned to the ground in the LNU Lightning Complex.

Wildfires aren’t new to the region, but agents say this unending destruction has made it hard to keep up with demand, even if the buyers looking aren’t scared by the natural disasters. “Inventory is a problem. It’s been a problem. Now it’s just exacerbated because the demand is so high.” Colbert said. “Then our market just falls off the cliff because of the fires. The smoke doesn’t help.”

Colbert said he’s already sold more than $50 million worth of property this year. In an average year, he’d sell about $60 million, and it’s only Sept. He predicts he’ll far surpass that this year.

Redfin agent Starling Scholz said her business is also booming. “Last season, I had about three closings in this quarter,” she said. “This quarter, I’ve had 11 plus I have four [homes] in escrow and I’m prepping four listings. The business for me has quadrupled at the very least.”

The number of pending sales in the county was up 27% from June through August 2020 versus the same period in 2019, according to Redfin, and the percentage of properties that went off the market within two weeks was up 8% in the same period in 2020 versus 2019.

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“Inventory is really slim,” Scholz said. “I’d say there’s almost nothing available. It’s almost difficult to help buyers. We have to rush out totally prepared if there’s something.” Scholz said.

Redfin data show active listings were down an average of 11% from May to August 2020 compared to 2019.

Both Colbert and Scholz said most of their buyers are coming from San Francisco and Silicon Valley, and are looking for second homes. Colbert said the majority of them aren’t getting rid of their city homes.

“This year, they want it to be a second home but it also could become permanent,” Scholz said. “They’re confused. They’re trying to find a weekend home, but think ‘we may be here for six months and then do weekends.’ They’re doing their best to make the best choice, but they don’t know what will happen with work.”

Oftentimes these buyers assume that once the pandemic is over, they’ll be able to put their house on short-term rental sites like Airbnb. Since many are getting into the second home market in the area for the first time, they may be unaware of the strict vacation rental market restrictions put on a large swath of the county. Scholz said some have learned this and had to reconsider their search.

Meanwhile, she’s had several sellers offloading investment properties they’d typically list on Airbnb.

Colbert said prior to the pandemic, it wasn’t common to have buyers who were almost exclusively local. Typically, he said he’d see buyers come in from New York and Texas who fall in love with wine country on a trip. Since those buyers aren’t traveling, he’s not seeing much outside the Bay Area beyond the occasional L.A. buyer.

While the market has always been heavy in cash offers, Colbert said, now it’s almost required to make offers competitive, along with over-asking prices and short contingency periods. “There’s always been cash in this market but it was mostly for specific properties that were unique,” he said. “Now you just have to do it no matter what.”

But with the recent fire season, Scholz said she is seeing people start to take a break or reassess the locations they were targeting. Just in the first week of September, she said she’d had more interest in coastal Bodega Bay than ever before.

But even faced with yearly fire seasons and recurring flooding near Russian River, the market is still busier than ever. “It’s unbelievable. You see things go on the market and they go into escrow within 24 hours.” Scholz said.

Tessa McLean is a digital editor with SFGATE. Email her at tessa.mclean@sfgate.com or follow her on Twitter @mcleantessa.

Article source: https://www.sfgate.com/realestate/article/Sonoma-County-real-estate-growing-amid-fire-season-15569960.php