You may have seen this article from Bloomberg earlier this week, trumpeting a “mad rush” from San Francisco as residents flee from the city to surrounding suburbs, desperate to spread out.
Suffice to say, the article fails to include some rather important details. Here’s what the article does not mention: |
The SF market had a herculean rebound in May. |
The number of homes being purchased picked up rapidly, bouncing back from the steep plunge following shelter-in-place. Based on the trajectory, it is fully expected the recovery will surge and normalize in the coming weeks. |
While it's true SF hasn’t rebounded as well as the surrounding markets, our circumstances have been very different. SF has been more deeply affected by COVID-19 and instituted stricter SIP measures for a longer period of time. Densely populated urban areas have been hit significantly harder by the crisis, and SF is the second-most densely populated city in the country. It’s just not apples to apples. |
People are buying in wine country, BUT…. |
Surrounding areas in Marin, Napa, Sonoma, and regions to the south have seen a surge in interest from residents of San Francisco – many of them, however, are purchasing second homes. Those that are relocating will have various reasons for doing so, but one factor that can’t be ignored is that so much of what people love about living in the city has, for the time being, disappeared. Relocation may be the balm some people need right now – we are still in this crisis. It is simply too soon to say that this is a trend or will continue after the crisis. |
We’re learning more about prices and home values. |
Median sales prices in SF dropped in May, but those figures are based on a very low volume of closed sales in the month. The sales and prices mostly reflect the huge impact of COVID-19 in March and April. Based on the large jump in purchase activity in May, the next few months will be a better indicator of whether or not changes in home values will occur. I can say, however, that buyer demand has come surging back in some segments, so that is a positive signal for home values. |
The outshot is that it is too soon to proclaim anything about an exodus or a mad rush or anything else for that matter! We're still feeling the effects of shelter-in-place shake out, not just in the real estate market but in our own behaviors and plans. And hey! That's okay. Please stay safe and strong, everyone. Let me know if there's anything I can do for you this week, real estate-related or otherwise. |
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