SF’s housing market is weakening as some suburbs see ‘crazy heated insanity’

The coronavirus continued reshaping the Bay Area housing market last month, as demand for homes was weakest in San Francisco — especially for downtown high-rise condos — and strongest in the North Bay as buyers untethered to an office sought more space.

July existing, single-family home sales were strongest year over year in Sonoma and Marin counties, each up roughly 36%, and in Napa, up 28% from the prior year, according to a California Association of Realtors report issued Monday. They were weakest in San Francisco, up 1.4%, and Alameda, up 6.5%, the report said. Overall, Bay Area existing, single-family home sales were up 14.8% year over year and up 26.1% from June.

“The contrast between San Francisco and some of the more suburban markets is dramatic,” said Patrick Carlisle, chief market analyst for the Compass brokerage firm.

In Sonoma County, “buyer demand is through the roof,” said Coldwell Banker agent Jeremy King.

After falling sharply in April and May as strict shelter-in-place orders nearly froze the market, Bay Area home sales surged in June and continued rising, but not as sharply, in July.

Relaxed rules on showings, record-low mortgage rates and less economic uncertainty coaxed buyers out of hibernation.

The median price paid for an existing, single-family home in the Bay Area rose to $1,050,000 in July, matching its all-time high set in May 2018, according to the Realtors Association. That price was up 5% from June and up 10.5% from July of last year.

Prices rose the most year over year in Marin (23%), Contra Costa (18.9%) and Napa (14.2%) counties. They rose the least in San Francisco (4.1%), Santa Clara (6.3%) and Solano (7.5%).

The report excludes sales of condos, newly constructed homes and properties that were not advertised on a Multiple Listing Service. Condos make up a much larger chunk of sales in San Francisco than other counties.

“San Francisco condos are definitely hurting,” Carlisle said. The single-family-home market in San Francisco “is basically similar to last year, but that is not digging it out of the hole made in April, May and June as far as sales. Other markets are doing, generally, from pretty well to stupendously crazy, heated insanity.”

King, who works mainly in Petaluma, said, “We are inundated with people from outside of Sonoma County coming up here, from San Francisco, the South Bay, East Bay. I just put into contract someone moving from London,” to be near family, he said. The London buyer is paying almost $200,000 over asking price for a place in Petaluma. What buyers want most “is more space,” he said.

“On the flip side, I have three sellers moving out of state, to be near family or to find a lower cost of living,” King added. He has two clients moving to Idaho, two to Tennessee and one to Nevada.

In a report last week, Carlisle ranked 12 markets by the change in the percentage of active listings going into contract in June and July compared to the same period of last year. By this measure, the “hottest markets” were Monterey, Santa Cruz, Sonoma and Napa. The coolest market was San Francisco condos, followed by San Francisco homes.

“The largest condo market in San Francisco — the greater South Beach, SoMa, Mission Bay, Civic Center area, dominated by large complexes and high-rise buildings, including continuing new construction projects — is seeing the weakest conditions,” Carlisle wrote.

In July, there were 1,169 condos for sale throughout San Francisco, said Gabrielle Bunker, a principal agent with Redfin. That’s nearly twice the number, 617, that were for sale last July. The number of single-family homes for sale in San Francisco was 597, up nearly 30% from 466 last July.

These numbers exclude some new-construction condos, because many developers don’t put them on a Multiple Listing Service, or may list only a few for a whole project.

“Because of the pandemic, people are not loving these high-rise, high-density environments,” Bunker said. Before, people were willing to put up with congestion south of Market because they were close to the Caltrain station. Now, with most offices closed, many are no longer commuting to Silicon Valley and Caltrain is fighting for survival.

Most of Bunker’s clients moving out of the city need more space for kids or proximity to family for child care. The need for child care is acute in high-priced areas where couples were more likely to have two jobs.

Joe Giovanetti is putting his condo in the Castro on the market this week. He and his wife had planned to stay in the unit, where they’d lived for three years, for at least two more. “We love it because of all the conveniences of the city. We lived next door to a charming flower shop,” he said.

Giovanetti could work remotely before the pandemic, and his wife actually prefers being in an office. The only reason they’ve moved to San Diego is because their day care center shut down and they need his wife’s parents to watch their 2-year-old son. They’re subleasing a place from a couple who moved to the East Coast to be closer to family.

Deborah Odier, a Coldwell Banker agent in San Francisco, said there are “well over 100 condos, (tenants in common units) and flats” in San Francisco that are being marketed as ‘coming soon.’” August “is a gearing-up month. September is when people launch inventory for the fall market.”

 SF’s housing market is weakening as some suburbs see ‘crazy heated insanity’

Although “it looks like there is an excess in the condo market, there will be plenty of condos still highly marketable.” Some neighborhoods are still desirable and “not everybody can afford a single-family home.”

Shanna Wagnor and her husband Sean Lewis put their two-bedroom, two-bathroom condo up for sale last week. They’ve purchased a larger home with a yard in Piedmont, to have more space, better schools eventually for their baby daughter Emery and to be closer to family in the East Bay. “We made multiple offers before we got this one,” Wagnor said.

She now works remotely for a San Francisco tech company. He works in finance and travels a lot. “Because of the pandemic, the commute doesn’t matter. A lot of the things in the city we love, the restaurants and cafes, are all closed at the moment,” she said.

Although the condo market has softened, theirs “feels more like a home,” Wagnor said. “Our agent said Pacific Heights ZIP codes should still have some draw.”

Paul Zeger, a principal with Polaris Pacific, which markets new condos for developers, said that when the pandemic hit, “We had about 250 homes in San Francisco in escrow ready to be delivered as soon as construction is finished. Just about all of them are going forward.” The number of buyers signing new contracts, however, has slowed.

In California, “you can only hold 3%” of the purchase price as a deposit, he said. Buyers who back out could lose their 3%. The fact that most buyers have not is a sign “they have a high level of confidence in the marketplace” over the long term.

Adam Gavzer, a Compass agent in San Francisco, said he hasn’t seen many price cuts on new San Francisco condos, but developers “don’t publish their pricing very much.” They prefer to “negotiate on incentives, like upgrades, credits toward (homeowners association) dues, payments towards closing costs, credit for parking or storage for a year or two. I haven’t had a lot of buyers for those towers.”

He has been trying to sell two existing condos in South Beach for about two months. “I am experiencing a slowdown of phone calls and emails regarding them. Yes, there is a trend away from communal living as people are concerned about infection. There’s a shift toward single-family homes or moving to the East Bay, South Bay, North Bay. There’s a strong appetite for outdoor space,” he said. If they’re looking at condos, they want one with a balcony or terrace.

 SF’s housing market is weakening as some suburbs see ‘crazy heated insanity’

Gavzer just cut the price on 650 Delancey St., #417, to roughly $1.5 million from $1.6 million. “That prompted a bunch of calls. We had a couple of showings,” he said. One buyer was ready to write an offer but “when they revisited his finances, he couldn’t afford it.”

He said the condo market “feels kind of stuck right now. If you are a seller, you’re being told you might have to discount. The reality is, you feel like you’re not getting full market exposure without an open house and broker tour. So why should I take a discount. Buyers feel, if I’m willing to purchase at this time with the risk that the market might go down, I want to build that into my purchase (price). You have this frozen market right now in condos while people try to figure this out.”

Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender

Article source: https://www.sfchronicle.com/business/networth/article/North-Bay-home-markets-sizzled-in-July-SF-showed-15490651.php

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In Bay Area’s COVID-19 Rental Market Renters Suddenly Have More Negotiating Power

SAN JOSE (KPIX) – The economic fallout from the coronavirus pandemic has caused the Bay Area’s once skyrocketing rental housing market to come back to Earth.

“The balance of power has absolutely shifted,” says Jeff Tucker, an economist with Zillow.

Tucker says potential renters and current lease holders have more leverage in negotiations with landlords than they have in years.

“The market is kind of static. And I think a lot of people are really struggling to pay the rent,” says Siddharth Manu who recently signed a new lease at his San Jose apartment complex.

Manu says he was pleasantly surprised when his landlord didn’t increase his rent.

“Usually, we have a six or eight percent increase,” Manu said.

According to Zillow, rent prices are down across much of the Bay Area. In San Francisco, Zillow says rent prices declined 3.2 percent compared to the same time last year. In San Jose, prices fell 1.4 percent.

Oakland’s rental market was the only to buck the trend, basically holding steady with a modest 0.6 percent increase in June.

Tucker says there’s an opportunity to shave hundreds off your rent if you do your homework and are willing to negotiate.

“If you can say, ‘There’s this vacant unit. It looks similar to mine. I think I might move there. It costs $200 or $300 less than what I’m paying now.’ That might be really convincing,” says Tucker.

Some renters, however, are simply satisfied not to see their leases go up for once.

“This time when we requested a new lease for another year, our landlord sent the lease over with the same price and didn’t ask any questions,” says Kristina Brusco.

Article source: https://sanfrancisco.cbslocal.com/2020/08/03/in-bay-areas-covid-19-rental-market-renters-suddenly-have-more-negotiating-power/

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‘Room to Zoom’ in Presidio duplex: Guess the rent in San Francisco

It’s no secret that Bay Area living is expensive, so much so that many people are leaving or coming up with some very creative solutions. If you’ve ever searched for a new apartment online, you’ve undoubtedly come across a place where the images make your jaw drop at the photos and price – and NOT in a good way. Welcome to the series we’re calling, “Guess how much this rents for in San Francisco.”

A duplex in the Ruckman neighborhood of the Presidio is for rent.

Article source: https://www.sfgate.com/realestate/slideshow/Presidio-duplex-home-san-francisco-Guess-the-rent-206808.php

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Report Shows Record Increase in San Francisco Real Estate Listings as People Continue Moving to More Affordable Cities

With remote work more popular than ever — amid companies like Google and Facebook now saying employees can work from home well into 2021 — people are leaving SF in throngs. A new Zillow report further supports that idea, showing a 96 percent year-over-year increase in local inventory listings.

Nowadays, it’s somewhat common to spot sub-$1K Craigslist ads for single-room rentals in areas like the Lower Haight, Inner Sunset, and The Castro — all neighborhoods where you would be hard-pressed to find anything remotely close to that price before, pre-pandemic. For the first time in over a decade: San Francisco’s now home to both a renter’s and buyer’s market, with home prices steadily on the decline as the Bay Area’s real estate market continues reeling from lackluster business.

The recent (and widely publicized) exodus event in San Francisco was highlighted in the “2020 Urban-Suburban Market Report” by Zillow, an online real estate company, showing that their real estate inventory for the city had a 96 percent year-over-year spike as unoccupied SF homes went on to the market in huge numbers, unlike any other metropolitan area mentioned in the study.

However, it’s also worth noting that for-sale housing inventory has always been low in San Francisco this time of year for at least the past decade… not to mention that the city is predominantly populated by a renting cohort. Being that the current median price for a house in the city is $1.4M and given most financial advisors recommend you put a 15 percent down payment on the home you wish to purchase — which, if you do the math right, would make for $210K fee in this scenario — it’s little wonder why thousands of locals opt to rent instead of own.

The reasons for the huge influx in new listings? They are as varied as they are similar. But, by and large — and what we’ve also found in our own reports on San Francisco’s “pandemic pricing” and mass leavings — is that people are seeking more “comfortable lives” elsewhere.

People are moving to more affordable cities (like Chattanooga, Tennessee) to “take back their time”; former San Franciscans are sponging up the sunshine and lower living costs of Palm Springs and Lake Tahoe; Austin’s startup culture, nestled inside the Texas Hill Country, is now growing even more enticing for twenty- and thirty-somethings.

And with city inhabitants increasingly working for major tech companies that now, essentially, have introduced near-permanent remote working structures, it’s understandable why people are fleeing the Bay Area’s notoriously high cost of living.

Though theorizing that the recent San Francisco exodus is solely related to an uptick in remote working lifestyles isn’t as straightforward as one might think, according to SFGATE.

“It may be tempting to credit the city of San Francisco’s inventory boom to the advent of remote work that came with the pandemic, but one only has to look at to San Jose to question that narrative,” said Josh Clark, an economist at Zillow, to SFGATE’s Andrew Chamings. “The San Jose metro, which like the city of SF is dominated by tech workers, has not seen a similar rise. Two things that could drive the difference are San Francisco’s density and its smaller share of family households.”

And… well: the cost of living. Per PayScale, a website that compares and contrasts the costs of living in cities across the country, San Jose’s cost of living is some 17 percent lower than San Francisco’s — with housing a whopping 25 percent cheaper.

In the report, the 96 percent year-over-year increase in new listings for the San Francisco metro area is noted as a “significantly larger jump than the surrounding suburbs,” the report states; other metropolitans in the state, like Los Angeles, and across the country — Miami, Boston, Seattle, and others — are actually showing a decline or at least flattening of their overall listings.

You can read the entire Zillow report, here. And for a bit of property porn binging, check out these two $25M properties (one overlooking Marina Green, the other in Pacific Heights) that recently went on the market.

Related: San Franciscans Continue Leaving for More ‘Comfortable Lives’ Elsewhere as Rental Prices Plunge

Spurred by Bay Area Tenant Exoduses, a Renter’s Market Surfaces in San Francisco

Home Sellers Slash Prices In San Francisco As Number of Houses For Sale Reaches Recession-Era Level

Image: Aldric RIVAT

Article source: https://sfist.com/2020/08/15/report-shows-record-increase-in-san-francisco-real-estate-listings-as-people-continue-moving-to-more-affordable-cities/

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The 2020 San Francisco exodus is real, and historic, report shows




10e94 920x1240 The 2020 San Francisco exodus is real, and historic, report shows

Real estate inventory change from February to July 2020, in metro area and city proper.

Real estate inventory change from February to July 2020, in metro…



A new report confirms what many have been talking about for weeks: There is a mass exodus out of San Francisco, and the numbers are staggering.

Online real estate company Zillow released new statistics shining a stark light on the issue this week. Their “2020 Urban-Suburban Market Report” reveals that inventory has risen a whopping 96% year-on-year, as empty homes in the city flood the market like nowhere else in America.


The reason for this change is likely a combination of a few unprecedented factors that have collided this summer, resulting in a historic shift in the city.

The astronomical cost of owning a home in the San Francisco city limits — which has been sky high for over a decade now, since the second tech boom — had to break at some point, and the coronavirus seems to be the straw that broke the camel’s back. The pandemic soon led to tech giants like Google, Facebook and Twitter rethinking what work looks like, as many have allowed employees to work remotely for the foreseeable future, and maybe forever.



This, combined with the fact that most entertainment venues, eateries and bars in the city have closed, has given many residents — particularly tech employees and transplants — little reason to stay, when more spacious, literally greener pastures beckon in (relatively) less costly regions in California such as Lake Tahoe or Palm Springs. 

It should be noted that San Francisco had an unusually low inventory relative to other large cities prior to the pandemic. Historically, the ratio of homes for sale relative to total housing has been a quarter of what New York’s was.



Regardless, the 96% year on year change in inventory marks a significant moment.

Zillow economist Josh Clark tells SFGATE that the remote work shift alone has not sparked the exodus.

“It may be tempting to credit the city of San Francisco’s inventory boom to the advent of remote work that came with the pandemic, but one only has to look at to San Jose to question that narrative,” Clark said. “The San Jose metro, which like the city of SF is dominated by tech workers, has not seen a similar rise. Two things that could drive the difference are San Francisco’s density and its smaller share of family households.”

The same dramatic shift has not been seen in other large cities across the country, according to the report.


“When comparing the principal city to its surrounding suburbs, the San Francisco metro area does break the mold. Higher levels of inventory, up 96% YoY following a flood of new listings during the pandemic, are sitting on the market in the city proper, a significantly larger jump than the surrounding suburbs,” the report states. “Whereas in similar cities like Los Angeles, Miami, Boston, Seattle, and Washington, D.C., declining or flat inventory is a consistent trend within and outside the city limits.”

Find the full Zillow report here. 

Andrew Chamings is an editor at SFGATE. Email: Andrew.Chamings@sfgate.com | Twitter: @AndrewChamings

Article source: https://www.sfgate.com/living-in-sf/article/2020-San-Francisco-exodus-is-real-and-historic-15484785.php

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