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Looking to move? The pandemic is pushing people out of Bay Area cities into the suburbs

A new report suggests more homeowners are looking to relocate in part due to the pandemic. According to real estate firm Redfin, a record number of people in the last two months searched to move away from big metropolitan cities like San Francisco and into suburbs and smaller towns.

SAN FRANCISCO – A new report suggests more homeowners are looking to relocate in part due to the pandemic. According to real estate firm Redfin, a record number of people in the last two months searched to move away from big metropolitan cities like San Francisco and into suburbs and smaller towns.

Realtors said it’s not surprising given the pandemic, more people are now working from home. For some people, living in a less dense city is becoming more appealing.

“The pandemic made us really think about do we really want to be in the city?” said Tania Zapata of San Francisco. “We are not going to be able to go outside. My daughter has to be wearing a mask.”

Zapata and her growing family moved out of their two bedroom with a den and two bath home in the Nema building across from Twitter in downtown San Francisco into a five-bedroom home in Napa with a vineyard.

The pandemic is one of the main reasons.

“You can no longer enjoy the city and all the benefits of the city,” said Zapata. “There is not really any point to be in the city.”

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According to Redfin, a record 27 percent of home searchers are looking to leave the Bay Area, Washington D.C. and Seattle for places like Sacramento and Nashville.

New York, San Francisco and Los Angeles all had the biggest net outflow meaning more people looking to leave than move in.

“I think this makes total sense,” said Realtor Rick Smith. “I think that there are people that have been cooped up in their homes especially here in the Bay Area, where a million dollars only buys a condo or a townhouse.”

Smith said people have left the Bay Area for less expensive places before and now more people, especially renters, are giving it serious thought. Many employers like Twitter and Facebook are announcing permanent remote work policies.

Redfin reports Bay Area residents make up the largest portion of migrants looking to Sacramento.

“Sacramento, El Dorado Hills, Folsom area spend far less money much bigger house and still work from home,” said Smith.

Realtor Jessica Branson said many of her clients are looking at Lake Tahoe and Sonoma as an escape to travel.

“From what I’m seeing from my standpoint is that a lot of people are looking at these smaller areas more for vacation homes,” said Branson.

“This place is amazing,” said Zapata. “We are going to have chickens we have a big enough place outdoors.”

Zapata feels her family made the right move, unsure how long the pandemic will last.

“We don’t know really know how long this is going to take,” said Zapata. “We have no idea if there’s going to be a vaccine soon or not.”

As for what this means for the Bay Area housing market, realtors said it’s still a hot market. Demand is high with interest rates at an all-time low and many properties are getting multiple offers.

Article source: https://www.ktvu.com/news/looking-to-move-the-pandemic-is-pushing-people-out-of-bay-area-cities-into-the-suburbs

Despite historic supply growth, East and South Bay multifamily developers say market woes should be limited to shorter-term leasing challenges rather than plummeting rents.

Marketwide average rents in the South and East Bays have yet to fall much from their highs despite the downturn, CoStar data shows. As of June 1, asking rents in the South Bay were down by 2.86% year-over-year, while in the East Bay they were down just 0.71% compared to that time last year, according to CoStar.

In both markets, developers are holding relatively still on rents, experts say. In Oakland, The ADDRESS Co., an East Bay multifamily developer, doesn’t plan on lowering rents, according to CEO Eric Chevalier, who spoke during Bisnow‘s East Bay State of the Market webinar on Thursday.

“We have a project in Jack London Square and we’ve been interviewing different property managers and we’re getting the exact same feedback of you don’t necessarily need to lower rents,” he said. “However, concessions are high on their list.”

Many multifamily developers looking to the East Bay have anticipated strong rent growth. In Q1 this year, average asking rents across unit types in Alameda and Contra Costa counties had risen year-over-year by 2.8% and 1.8%, respectively, according to Kidder Mathews.

In the South Bay, KT Urban partner Shawn Milligan said he has heard anecdotal evidence of asking rents dropping 10% to 15% and that short-term uncertainty makes planning new projects difficult.

“In the short-term, I think it’s going to be challenging to get the data to support the construction costs that we’re facing,” Milligan told Bisnow.

But marketwide averages across the San Jose area have yet to budge, according to CoStar. In the last few years, the South Bay has seen rents increase. Average asking rents in Santa Clara County rose 2.9% year-over-year last quarter, according to Kidder Mathews.

Both the East Bay and South Bay markets still have historically large pipelines. A year after Oakland alone outpaced S.F. in housing production, the East Bay has about 10,200 market-rate apartments under construction as of this month, according to CoStar Group.

Similarly, before the economic downturn, the greater San Jose area was poised to see supply growth more than triple this year, according to RealPage. About 6,300 units are under construction as of today in the San Jose metropolitan statistical area, CoStar data shows.

S.F., meanwhile, has seen a volatile housing pipeline in recent years as rent growth has stalled. It was 0.2% year-over-year last quarter, according to Kidder Mathews, as deliveries rose but the overall pipeline began to thin.

Now, with construction continued and many of those units coming online, leasing in markets like Oakland will proceed slowly and with more tenant concessions, according to Strada Investment Group Managing Director William Goodman.

“I do think, particularly in Oakland, where there are a lot of projects coming online, lease-up is going to be tough in the short-term, but I think that will settle out eventually,” he said.

Goodman and Strada have two big Oakland projects in different phases: 1100 Clay St., a 288-unit joint venture with CIM Group scheduled to deliver later this year, as well as a transit-oriented development near the Lake Merritt BART station with East Bay Asian Local Development Corp.

Speaking during Thursday’s webinar, Goodman said newer projects, including Strada’s joint venture with CIM, will for the time being look to offer attractive concessions like some free rent upfront.

“You’re seeing healthy concessions and leasing incentives in the market right now, folks trying to keep rents as high as they can but offer in pretty good deals on the incentive front,” he said. 

“We were already talking, leading into 2020, about rent growth slowing and the logistics of leasing up this amount of units in this short period of time,” CoStar Group Senior Market Analyst Marco Cugia said of Oakland’s booming multifamily market. 

With Oakland and the East Bay as a potentially growing job sector and Silicon Valley’s tech-fueled economy relatively resilient, developers in both markets are still high on them. 

“For us, the East Bay is just a value play,” Chevalier said during the Thursday webinar. “I think people are migrating to more affordable areas, relatively speaking.”

Milligan, too, said he is similarly optimistic about Silicon Valley’s long-term prospects. 

“Longer term, I still think Silicon Valley is one of the best places in the country for multifamily real estate,” he said. “We’ve had such a structural imbalance between supply and demand that that will offset the short-term headwinds we face.”

Related Topics: CoStar Group , CIM Group , Lake Merritt , Strada Investment Group , KT Urban , The ADDRESS Co. , Eric Chevalier , East Bay Asian Local Development Corp. , Shawn Milligan , William Goodman , Marco Cugia

Article source: https://www.bisnow.com/oakland/news/multifamily/bay-area-rents-104907

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  Former Golden State Warrior Andre Iguodala has put his East Bay home on the market.

  Former Golden State Warrior Andre Iguodala has put his East Bay home on the market.

  
  Photo: Lachlan Cunningham / Getty Images
  

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Former Golden State Warrior Andre Iguodala has put his East Bay home on the market.

Former Golden State Warrior Andre Iguodala has put his East Bay home on the market.

Photo: Lachlan Cunningham / Getty Images

With the NBA hoping to heat up soon, Miami Heat wing Andre Iguodala may be back to work in Florida. Accordingly, this former Golden State Warrior has put his East Bay home on the market.

The Lafayette abode is a 2004 “Mediterranean-inspired” 5,700-square-f00t mansion, featuring five bedrooms, 4.5 bathrooms, a huge kitchen, formal dining area, and capacious primary bedroom with luxurious spa-like amenities and a home theater.

Outside on the 0.43 acre lot is a pool, hot tub, putting green and an outdoor kitchen.

ALSO: SF homebuyers get pickier amid pandemic concerns, agents say

The property is not far from the Lafayette/Moraga Regional Trail, or, of course, from basketball courts.

The NBA star is asking $3.898 million for 648 Glenside Drive.

Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert. 

Article source: https://www.sfgate.com/realestate/article/Former-Golden-State-Warrior-Andre-Iguodala-lists-15411422.php

Two longtime San Francisco-based commercial real estate companies have formed a new subsidiary and tapped a veteran broker to lead it.

Commercial brokerage Starboard Commercial Real Estate and developer Brookwood Group have formed Brookwood Starboard, a full-service CRE firm comprising developers, brokers and strategic advisers. It will be led by new executive director Barry Bram.

The partnership will focus on advisory, brokerage and development management with a focus on high-density urban and transit-oriented projects. Bram, who spent over 30 years with TRI Commercial Real Estate, said he found the opportunity to lead Brookwood Starboard appealing.

“It’s a unique set of services you can approach a client with,” Bram said. “It’s a great opportunity and also a good time for me to expand beyond what I was doing at TRI and the changes that were going on there.” 

The new entity will pair Starboard’s expertise in representing high net worth individuals and partnerships with Brookwood’s focus, which Brookwood Group CEO Shepherd Heery said in recent years has primarily been strategic advisory for owners and other clients lacking CRE expertise.

Brookwood, which Heery said worked with Salesforce on its purchase of Mission Bay land (before the sale of that land to the Golden State Warriors), often works under nondisclosure agreements, or on a “confidential and strategic basis,” its website states. 

Both Starboard and Brookwood still exist, with their new joint venture acting as a subsidiary, according to a spokesperson. 

Founded in San Francisco in 1991, Starboard works with office tenants and owners around the Bay Area. In 2000, it became the San Francisco member of TCN Worldwide, a consortium of independent brokerage firms with over 60 offices. 

Recent Starboard deals include last year’s $7.75M sale of San Francisco’s 598 Bryant St. to Realtex, an S.F.-based developer, and the $14.5M sale of 570 Market St. to Frontier Group, which submitted plans for a 29-story hotel last year. 

Brookwood Group works with public and private sector owners, investors and tenants and was founded in 1989, currently holding principal offices in S.F., Atlanta and Dallas. Recent Bay Area work includes efforts with San Mateo County’s Jefferson Union High School District on a faculty and staff housing development. 

Hans Hansson, a co-founding partner of Brookwood Starboard and president of Starboard Commercial Real Estate, said a lot of the value in the new joint enterprise is its offering of a “one-stop shop” for clients.

“I think the ‘one-stop’ aspect for the types of deals that we’re doing is the unique selling proposition,” he said. “That’s what we’re really creating that’s different from what’s currently out there from anybody else that I’m aware of.”

Article source: https://www.bisnow.com/san-francisco/news/commercial-real-estate/longtime-bay-area-cre-companies-form-joint-venture-105222

The pandemic continues to push down the cost of rent in parts of the Bay Area partially because demand is dropping. Real estate experts say, people are taking advantage of working remotely and moving to some place cheaper.

With a Bay Area paycheck and the option of not paying Bay Area rent, a lot of young professionals are moving to places like Colorado or Utah. It’s a no-brainer for 23-year-old professionals Spencer Reed and Andrew Verilli.

As they continue to work from home, they’re both looking for adventure and a way to escape. Reed, who is a consultant at Trinity, said, “We’re going to save some money, definitely going to splurge while we’re there for sure and take advantage of that. But it’s a once in a lifetime opportunity and we can’t wait to get it all started.”

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Reed and Verilli are currently paying $3,000 for their two bedroom, one bathroom apartment with a yard in the Inner Richmond. Verilli is a teacher at Alta Vista Middle School who just started summer break and said, “With rent so high, why not experience something new for way cheaper?”

In two days, the two will head east to Colorado where they will be living just outside of Denver with two other people in a three-bedroom that costs around $2,500 a month. Verilli said, “As of now, we do plan on coming back, but things could change. If we don’t have to move back in, we’ll see.”

Real estate agent Patrick Sedillo of Jira and Sedillo Real Estate Group said, “I expected it, because of overcrowding, especially in downtown San Francisco. You are seeing social distancing actually taking the next step.”

Sedillo believes Reed and Verilli are joining the latest trend, which is pushing down rents in the city by about 9% according to Zumper, a rental housing search engine.

“Because of supply and demand. The more supply there is, the less demand there is and they need to get these places rented out,” Sedillo said.

Take a listing we found on Craigslist for example: a 1,200 square foot three-bedroom on 18th Avenue for $4,249 a month. The listing’s broker says this is down about $400 from just a few months ago, and could have been listed for about $600 more at this time last year.

Sedillo said some other people who are choosing to stay in the city are asking realtors for places with more space. They want out of high-rise apartments, away from crowds and potential germs.

Article source: https://www.nbcbayarea.com/news/local/making-it-in-the-bay/pandemic-driving-down-cost-of-rent-in-the-bay-area/2310654/