Homesellers in the Bay Area are quickly regaining confidence as one of America’s first hotspots of the pandemic now begins to see housing market activity resurge.
“The housing market is one part of the economy that’s showing a V-shaped recovery,” said Joel Kan, an associate vice president at the Mortgage Bankers Association (the metaphor he used here indicates a rapid rebound). “A lot of this activity is from buyers who are still pretty-well equipped to get out there and shop. They already had the savings and the plans in place to buy.” Also, Noah Rosenblatt of UrbanDigs implied that, as housing markets rebound from the pandemic, home listings will be the first sign of life.
So what should we expect to see as Shelter-In-Place restrictions continue to relax?
Rebounding Markets
Compass Real Estate announced that new listings in San Francisco dropped to less than 20 per week by the end of March. Active listings fell from roughly 1,000 at the start of March to almost half that number within three weeks. Not surprisingly, the number of listings removed from the market increased more than ten times the usual number between March 9 and March 16.
However, by the end of that month, the number of listings entering contract gained ground quickly. The current numbers have almost recovered to the levels experienced before the Shelter-In-Place orders. In Oakland, the supply of homes costing above $1 million rose 37% by mid-May compared to April. In San Francisco, the same category of inventory gained 29% in that timeframe, while San Jose’s inventory rose 20% and San Rafael’s inventory rose 36%. In all of those areas, supply under $1 million has been slower to bounce back.
Rising Prices
Despite the uptick in new listings, home prices continue to stay high. The median price for a single-family home sold in April rose to $1.27 million in Santa Clara County, $940,000 in Alameda County, 3.1% to $1.49 million in San Mateo County, 2.2% to $666,300 in Contra Costa County, and 3.6% to $1.59 million in San Francisco.
“The really big picture story is that prices, especially for single-family homes, have really held up during the crisis,” said Zillow economist Jeff Tucker. He surmised that the tech-driven Bay Area economy, low home inventory, and very low interest rates all contributed to rising prices during the first full month of pandemic restrictions.
Shifting Expectations
Home sales between $1.7 million and $2.5 million seem to have maintained their pre-pandemic popularity. Most buyers and sellers have come to accept the new restrictions, and activity seems to be progressing as we edge closer to the end of Shelter-In-Place. Many expect our delayed spring season will be manifested in a longer, busier summer than usual.
With its large proportion of tech workers able to work from home, the Bay Area is expected to weather the economic effects of the pandemic and Shelter-In-Place restrictions better than any other region in the country. As the restrictions lift, however, new listings are expected to keep rising, which may slow the increase in home prices. Sellers who preferred to remain on the sidelines until a clearer picture emerged may want to consider putting their home on the market before all restrictions are lifted.
Can We Help?
To take advantage of this opportune moment in the market, trust the knowledge and experience that Julie and her team have to help you secure the best deal possible.
Please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.
