Here’s What You Need to Know About the Bay Area Real Estate Market Right Now
The coronavirus is causing people to flock to Marin County and wine country, and buyers are looking for a deal with more space.
As the world waits and wonders what will happen next with, well, everything, many curious eyes are glued to the real estate market. Will house prices fall? Is now a good time to buy? Will the demand for luxury homes decrease? So many questions.
In California, real estate has been deemed an essential business during the COVID-19 outbreak. Luckily, like many businesses in recent years, the industry has come to rely more and more on technology using virtual tours and online documents to keep transactions moving even when they can’t meet face to face, and that has proved very helpful in these precarious times.
“Virtual Tours are critical in selling real estate, and now more than ever. I think this industry is going to get more and more advanced with tech like AVATOUR and some others where you can walk through a property virtually with the clients. Virtual Tours do not seal the deal, but they help buyers save time and sometimes they fall in love with a property. Or they decide there are issues that they do not want to accept and this allows them to move on. Agents, like me, love it because as a result open houses have less lookie-loos and more people who really want to see if the house is what the virtual tour showed and if so, they are ready,” says Butch Haze, San Francisco-based Compass agent.
According to the California Association of Realtors, recent mortgage rates fell to an all-time low of just 3.13% a mere two weeks into the shelter-in-place mandate, which is down significantly from 3.8% at the start of the year. While lower mortgage rates provide much better borrowing rates that buyers will benefit from for years to come, this doesn’t seem to be a factor in Marin County’s evergreen market.
“Because the Marin market is such a desirable area, we aren’t usually as severely impacted as other parts of the country during major economic shifts since there are traditionally a lot more buyers than homes to sell,” says Scott Kalmbach of the San Francisco and Marin County-based firm Ahern + Kalmbach. Kalmbach does, however, predict that the way that people sell is going to change. “We expect to see the trend of the off-market or private sale to continue to be popular. One of the impacts we anticipate from the Corona epidemic is the desire for sellers to regain control of the marketing process and to have a more discrete and targeted marketing approach. Mass exposure does not necessarily equate to productive exposure and privacy will be a premium concern for sellers in the post-Covid world,” adds Kalmbach.
Other agents in the San Francisco Bay Area are already seeing changes as well. The city is known for tiny living spaces and a mass housing shortage, and the shelter-in-place order has forced families into their cramped living spaces with no end in sight. But those with the financial means are already looking for a way out.
Ed Lynch, who runs all of the Marin offices at Compass California says, “We began to see a shift away from urban areas before the pandemic began. We saw an uptick in buyers leaving urban areas like SF and looking for suburban homes with more space, outdoor living opportunities and away from their earlier requests to be close to public transportation.”
Christine Krenos, another Compass agent who specializes in wine country properties, reports seeing a shift away from the city as well, but her clients are looking for short-term solutions. “Over the past three weeks, I have received numerous inquiries from SF clients looking to get out of the city and hunker down in the wine country. High-end, short-term — 30-, 60-, 90-day — leases and fully furnished homes for sale at $3million-plus seem to be in highest demand. I’ve also noticed a drastic influx of cash buyers.”
While most of the country is curbing any nonessential spending, the San Francisco Bay Area is once again bucking the trend. The Bay Area’s tech industry seems to be suffering less than other sectors and buyers aren’t ready to sacrifice just yet, but they are proceeding with caution, and that is good news for many agents right now.
“I don’t think that budgets are changing yet, but I feel that buyers will be exceedingly cautious about overspending right now due to perceived or real losses in stock portfolios. While most of my clients do not need to live on their stock accounts, there is a ‘paper loss’ that translates to confidence in larger scale transactions. The bottom line is if a buyer sees a home that they love, in a location that they love, and it’s hard to replicate, they will likely step up,” says Marin County agent Tracy McLaughlin.
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Casey Gillespie is the editor-in-chief of SPACES magazine, but she doesn’t only write about design. Fashion, beauty, art, culture, luxury and wellness are favorite topics as well. Her work has been featured in Elle, The Telegraph, Furthermore, London Evening Standard, Haute Living, Sphere, Belmond, Modern Luxury and more. And when she is not pounding it out on the keyboard, you’ll find her hiking the trails in Marin County with her husband and French bulldog, Henry, or drinking wine and eating cheese. But probably drinking wine and eating cheese.