With millions of unemployed people and restaurants, shops and retailers closed, one point shines in the economy for thriving and wealthy professionals – real estate in the Bay Area.
As if the devastating pandemic had gone through the tech campuses, Spanish-tile roofs, and Tesla-filled garages of Silicon Valley, luxury home sales exploded in August, sending average prices up 16% year over year , which approached the market high in 2018.
The median sales price for an existing single-family home in August in the Bay Area was $ 975,000, according to DQNews. The gains were due to a limited supply of properties for sale and a larger chunk of high-end home sales, agents and economists said.
"We have never seen such a high price increase in a recession," said Selma Hepp, deputy chief economist at the real estate data company CoreLogic. "The recession didn't hit everyone alike."
Prices rose year over year in most of the Bay Area's nine counties: 19% to $ 1.73 million in San Mateo, 18.6% to $ 1.34 million in Santa Clara, 18.6% to 770, $ 00 in Contra Costa and 13.4% on $ 975,000 in Alameda. The pandemic has further cooled demand in San Francisco, where prices rose 3% to $ 1.55 million, according to DQNews.
The number of homes sold in the Bay Area increased about 9% from last August as traditional spring shoppers waited for a tour and closed deals through summer.
Property prices rose 14% year over year in late August and September, according to Redfin. The company's chief economist, Daryl Fairweather, noticed warning signs on the horizon – dwindling mortgage applications and more real estate offers increasing supply.
"While the real estate market is still scorching hot, there are some early signs that we are approaching peak price growth," said Fairweather. "This is probably as good as it gets for home sellers who have definitely been very good for a long time."
However, the Bay Area is expected to counter this national trend. Professionals in technology and other fields have been able to work remotely and maintain a stronger economy than regions that rely on service people like Las Vegas, Hepp said. Property prices have risen in both regions in recent years. But CoreLogic now expects property prices in the Bay Area to rise 7.8%, while prices in Las Vegas will fall 6.5% through August 2021.
According to agents in the Bay Area, demand is being driven by technicians and professionals looking for more space for zoom rooms for families and home offices.
Will Doerlich, an agent for Realty One Group in San Ramon, said single-family homes in the suburbs of Contra Costa and Alameda counties were on many wish lists. Fewer homes for sale have meant fierce bidding wars in the East Bay. "It's not slowing down," he said.
A listing in San Leandro for a small two-bedroom home on a large lot attracted 500 views online in the first 24 hours, Doerlich said. The house received 11 offers and sold for $ 40,000 more than list price. That type of interest has been persistent over the summer despite security restrictions restricting access for home tours, he said.
Agent Jeff LaMont of San Mateo said low interest rates and heavy employment in the software and biotech industries had brought millennial couples to the market. His advice to buyers: "Don't overthink it. Grab the cheap money while you can."
The typical interest rate on a standard 30-year fixed-rate mortgage is 2.87%, according to Freddie Mac.
The growing popularity of the suburbs has been fueled by large tech firms, which have allowed many employees to work from home well into the next year, minimizing commuting as a factor for homebuyers. Google, Facebook, and Salesforce announced that employees could stay home until next summer, and Twitter left the decision indefinite.
Zoheb Allam and his wife Nishaath Khan decided to move to San Francisco shortly after they were married. The couple, both technicians, wanted to spend two years in city life – restaurants, bars, theaters and shops all within walking distance of their SoMa apartment.
"We always dreamed of what the big city would be like," said Allam, 31. "When Covid hit, our story changed."
The monthly one-bedroom bedroom in SoMa for $ 3,700 was a small redoubt in a neighborhood with closed bars and limited office and restaurant traffic. The large homeless population and some aggressive residents made them weary of routine travel.
"We felt very cooped up," said Allam. "What's the real point in sitting in San Francisco and paying the rent we pay?"
They started looking for homes in Alameda County and after a year they canceled their lease. They settled in a two bedroom apartment in Livermore and keep looking for their first home. You want to stay in Livermore. "It is the right step," said Allam, "at the right time."