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Corporate investment in residential real estate set records in 2021, with private equity and public funds snatching up nearly 1 in 5 U.S. homes by the end of the year.

But the Bay Area? Nope. Investors bought up just 4% of the homes sold in the San Jose metro area, and 6% in San Francisco and the East Bay last year – about the same level as 2015, according to an analysis of data from online broker Redfin. Investment ticked up at the end of the year but did not match the overall U.S. rate.

Agents say high Bay Area prices mean rental cash flows sound more like drip, drip, drip, while homes in cheaper cities in the South and Midwest provide rivers of income.

“Investors want high returns,” said Redfin chief economist Daryl Fairweather. “The Bay Area is kind of past its heyday.”

The analysis refutes a common complaint from homeowners and slow-growth activists – that corporate real estate giants are pushing into the Bay Area, gobbling up property and driving up home prices. Instead, real estate agents and economists say the region’s high prices are being driven by near-record-low numbers of homes for sale and strong demand from wealthy tech workers and millennials. Bay Area home values rose almost 20% last year, and the median price for a single-family home has topped $1 million in recent months, according to CoreLogic data.

Homeownership is a central way for families to build wealth – buy a house, pay the mortgage, and, historically, get a property that gains value while providing a place to live. “It’s easy,” said Fairweather.

But in much of the country, buyers are facing new competition – from large, cash-rich companies – in the battle to purchase a family home and start building equity.

The share of single-family homes, condos and small apartment buildings bought by investors in the San Jose metro was 4% in 2015 and in 2021, according to a Washington Post analysis of Redfin data. In San Francisco and the East Bay, the share of investor purchases fell slightly from 7% in 2015 to 6% in 2021.

But nationally, investor purchases jumped from about 12% at the end of 2015 to 18% at the end of last year, according to Redfin researchers. Investor activity reached record highs in 2021, at least since Redfin began tracking the data in 2000. Single-family homes made up about three-quarters of the purchases, with condos and townhomes the next most popular investments.

Between 2000 and 2008, investor purchases made up between 6% and 10% of all U.S. home purchases, Redfin data shows. After dipping in the early months of the pandemic, investor shopping has taken off even in the Bay Area.

In the final three months of 2021, investors accounted for 12.6% of home purchases in Oakland, with a median price of $990,000, according to Redfin. In San Jose, investors made 12% of purchases, with a typical price of $1.7 million. In San Francisco, investors bought 18% of the homes sold, with a median price of $2.1 million.

The hottest region for investors was the Atlanta metro, where 1 in 3 homes was bought by corporate interests. Similar investor frenzy was seen in Charlotte, N.C., Phoenix, Las Vegas and Miami.

Redfin researchers used two decades of county property records and searched for purchases where a buyer was listed as a trust, limited liability company or other corporate entity.

Fairweather said strong corporate activity typically pushes up prices and pushes out other buyers, especially first-time purchasers and families with lower incomes and savings. But the new investments should also spur additional home construction, she said.

“We need more housing supply, anywhere we can get it,” she said.

Local agents say Bay Area landlords have been more willing to sell and invest in out-of-state properties. Bay Area mortgages on single-family homes typically exceed potential monthly rental income – meaning investors’ long-term gains are only realized when home values increase and they sell the property.

Santa Clara broker Myron Von Raesfeld has opened an office in North Carolina to serve Bay Area investors looking to relocate or shift their real estate portfolios. He hasn’t seen a lot of investors rushing to buy single-family homes in the Bay Area recently, but he’s served tech professionals looking to trade in some of their stock holdings for out-of-state property.

One client sold a single-family home in Santa Clara for $1.7 million, Von Raesfeld said. She bought five rental homes in the Raleigh-Durham region of North Carolina with the proceeds.

Another client sold a duplex in the South Bay, and turned it into about a dozen apartments in North Carolina. The North Carolina properties are generating about three times the rent that the South Bay duplex provided, he said.

“It’s just the difference of the marketplaces,” he said.

San Jose real estate advisor Paul Getty of First Guardian Group said investor buying and selling last year was unlike anything he had seen in his decades-long career. Bay Area property owners have been looking for deals in the Southwest and Southeast, seeking greater returns on their investments, he said.

“The movement out of California,” he said, “has really become like a tidal wave.”

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Article source: https://www.mercurynews.com/2022/02/28/big-investors-are-snapping-up-homes-but-not-in-the-bay-area

As are most things related to Bay Area housing, the answer is complicated.

Nationally, the market does appear to be slowing down, said Daryl Fairweather, the chief economist at housing site Redfin. 

“We’re going from 100 mph to 80 mph,” Fairweather said. “What’s happening right now is a lot of buyers seem to be backing off the market because of how high housing prices have gotten. We’re seeing lower sales and a slight uptick in price drops.” 

She noted that nationally, listings have “constricted the market,” but that’s not the case in San Francisco, which has seen a small exodus of individuals leaving the city for other Bay Area or California locales. As the logic goes, the more people who leave, the greater housing inventory available. 

Nonetheless, San Francisco remains the most expensive market in the country.

“That’s why everyone’s leaving, because it’s so expensive,” Fairweather said. “But if you have the money (and many in the Bay Area do), the market isn’t really a problem for you.” 

On a statistical level, the number of listings going into contract in the Bay Area’s largest markets — Santa Clara, Alameda, Contra Costa and San Francisco — is slightly down from peaks hit earlier in spring. The exception is Alameda County, which was slightly up from spring, according to data provided by Compass. 

Nonetheless, it’s not unusual for these markets to begin to slow after springtime peaks, as the summer season is typically slower. 

Likewise, new listing data in the four counties mentioned above did pick up significantly in June over May, according to Realtor.com. Alameda was up 5%, Contra Costa 16% and Santa Clara 5%. Only San Francisco was down, by 3%. Active listings on any given day of the month increased in June over May in all four counties. This number is affected by the number of new listings coming on the market and how fast buyers are purchasing them. 

Alan Thuma, a longtime realtor with Vanguard Properties, says he’s seen steady inventory but also “steady absorption.” In other words, while there may be many active listings, those properties are getting snapped up — and often quickly. Part of the reason for increased inventory may be that lots of people are traveling this summer as COVID restrictions wane. 

“But everything’s still steadily moving this summer,” he said, adding that he’s hosted an open house every weekend this season. 

Thuma believes we’re “steadily marching to a fall market.” He expects lots of inventory in autumn, but also expects buyers may anticipate that and start looking now.

“There’s a natural thing where if you’re a first-time buyer, you’re being coached that the market starts ramping up after the Labor Day,” he said, implying that many buyers will hold off their searches until then. 

Generally, he sees any lulls in the market being attributed to the season in “foggy San Francisco,” when the market typically slows. 

So is the Bay Area housing market cooling off? Probably not, no. And while inventory may increase in the fall, you can expect lots of competition, per usual. 

— After 20 years of planning, sales have begun on Yerba Buena Island

— Dozens camp overnight for chance to buy $1.2 million Bay Area townhouses

— Marin’s largest remaining undeveloped waterfront residential property headed to auction

Article source: https://www.sfgate.com/realestate/article/housing-market-cooling-bay-area-sf-16327613.php

What can I do to prevent this in the future?

If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware.

If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices.

Article source: https://therealdeal.com/sanfrancisco/2022/03/25/pcc-logistics-leases-460k-sf-from-centerpoint-port-of-oakland/

In the past week, we wrote about the dramatic rise in coronavirus cases in Europe and Asia, driven by the “stealth” omicron subvariant BA.2. It’s thought to be anywhere from 30% to more than 50% more transmissible than omicron, and is causing China’s worst outbreak of the pandemic. The subvariant is quickly moving toward dominance in the Bay Area, but what happens next still is not certain.

“Interestingly enough it is not driving up the levels overall,” Santa Clara County health officer Dr. Sara Cody said at a press briefing last week. “I don’t know why, but it isn’t.”

Most experts we’ve talked to have said a rise in cases is likely inevitable, but could the Bay Area’s high vaccination rates set it apart from the rest of the country?

Read more on whether the Bay Area can avoid a BA.2 surge here.

• Do you need a fourth COVID shot to protect against BA.2? It’s complicated, says UCSF’s Monica Gandhi.

Tiny homes

Here’s another measure of California’s deepening housing affordability crisis: Over the last few years, there has been increasing interest in tiny-home living — particularly across the Bay Area, real estate agents say.

Some sellers offer plots where people can live after buying their tiny home. Others require them to be shipped or trucked to land that the buyers own.

So what’s a $95,000, 200-square-foot home on wheels look like?

Check it out here, plus see photos of more properties that illustrate the sheer scale of how the market is growing.

Around the Bay

• Signs of life: Surgeons studied more than two decades of Golden Gate Bridge jumps. Their research shows why some manage to survive the brutal fall.

• Transamerica Pyramid: One of the city’s most recognizable landmarks is getting the biggest makeover in its 50-year history. Read about the redesign and see renderings here.

• Weather forecast: The Bay Area is logging temperatures up to 20 degrees above normal for early spring. How long will this heat wave last?

• New restaurant: They worked in S.F.’s top Michelin-starred spots. They’re now opening their dream restaurant in a sleepy coastal town.

• Delivery delay: Amazon is pausing work on its proposed warehouse after S.F. supervisors passed legislation on a delivery services moratorium.

• Giants: Why former All-Star Carlos Martínez said “yes” as soon as the team called.

• Speed racers: The Formula 1 of high-speed sailing is coming to S.F. Bay this weekend.

• 50 years later: Read The Chronicle’s 1972 “The Godfather” review: “Best gangster movie ever produced.”

Itineraries to explore … on less than a tank of gas

Spiking gas prices across the U.S. have put a damper on weekend getaways and spring road trips. That SoCal road trip you were planning? Suddenly it looks significantly more expensive.

May we suggest a Bay Area getaway: Perhaps make a day out of exploring a new-to-you neighborhood. The Chronicle food team’s “Best Day Ever” series guides you through one ideal day in culinary hot spots like San Francisco’s Mission District and under-the-radar gems like the city of Albany. Use these local to-do lists to get outside and start exploring.

• Outer Sunset: One of S.F.’s most appealing food and drink destinations.

• Uptown Oakland: Home to some of the Bay Area’s most thrilling bars and restaurants.

• S.F. Chinatown: From historic establishments to swanky new dining destinations.

The Poseys made a nice profit on the sale as they purchased the property for $4.585 million in June 2013, Realtor said. 

“The sellers trusted the process and have no regrets,” said Julie Del Santo, who represented the Poseys.

Del Santo said the Poseys did their homework and were smart to invest in the neighborhood. The real estate market in Lafayette and neighboring Orinda and Moraga, commonly referred to as Lamorinda, is “extremely competitive,” said Del Santo, noting that the quiet enclave of Happy Valley is especially popular with buyers. 

“You have close proximity to the freeway but it’s also a safe and quiet community,” said Del Santo, who grew up in the area and has represented several athletes during her 23 years as an agent. “It’s within walking distance of downtown. The schools are amazing and there’s community. There are so many times I’ve said, ‘It takes a village’ — and here, we’ve got a village.”

She said interest in the property was high. “We came out as a ‘coming soon,’ and we were going to do more painting and staging, but then we had an influx of calls. We ended up showing it early. We didn’t know whether it was a Buster factor or a Happy Valley — I think both. We couldn’t be happier for the buyers. They’re phenomenal people.”

Photos on the Dudum website show a stately wood-shingle home set on meticulously landscaped grounds. (Interior photos are not included.) Tucked behind a gated entrance, the home was built in 2003 and sits on 0.94 acres of land. The grounds are described as “park-like with a sparkling pool and spa” on the Dudum website. There’s also a custom treehouse, putting green, expansive grass lawn and a covered patio. The home features an open floor plan, vaulted ceilings, a custom kitchen with a large center island and bedrooms with large closets, the Dudum website says.

Posey retired from baseball at the end of the Giants’ 2021 season. He opted out of the COVID-19-shortened 2020 season to spend time with family. The Poseys have four children — two sets of twins.

When Posey retired, he said at a press conference that he and his family would be moving back to Georgia, NBC Bay Area reported. Posey was born and raised in Georgia and met his wife in high school.