|
Getting your Trinity Audio player ready...
|
Even a pandemic of historic scope that shut down most of the world in 2020 hasn’t been able to slow down the Midpeninsula’s housing market. After briefly going into semi-hibernation for less than two months in early spring 2020 during the initial COVID-19 lockdowns, the local market reopened with surprising strength and resiliency — and has since shown no signs of slowing down.
Pent-up demand blurred the traditional slowdowns during last year’s summer and the winter holidays, and, not surprisingly, industry professionals predict a lively, robust spring 2021 market along the Midpeninsula, limited only by available inventory and continuing COVID-19 restrictions on open houses, broker tours and other property showings.
But agents and prospective buyers have figured out a lot of productive workarounds to these restrictions: Buyers routinely screen new properties online before making arrangements to view them in person. Agents produce elaborate online presentations, particularly for high-end properties, and participate in online broker tours.
“It has been pedal to metal ever since last May and June,” said Lucy Berman, a real estate agent at the Golden Gate Sotheby’s International Realty office in Palo Alto. “The market has been just crazy. Extremely active.”
A report compiled earlier this year by Sotheby’s found that housing sales throughout the Bay Area were 30% higher this past February than a year ago, while 67% of those transactions were higher than the asking price, compared to 50% a year earlier.
It also found the median price of a home in Santa Clara County increased from $1.35 million in February 2020 to $1.46 million this past February, while San Mateo County saw an increase from $1.57 million to $1.76 million during the same period. The number of homes sold in Santa Clara County also jumped from 484 to 638, and from 221 to 278 in San Mateo County over this same period.
Statewide, the median housing price hit $758,990 in March — a nearly 24% increase since March 2020, according to a report from CalMatters based on figures released by the state Department of Finance on April 23. It’s at least the sixth time California’s housing market has broken its own record amid the pandemic — it did so five times in 2020 alone, cracking the $700,000 median price mark for the first time in August, according to CalMatters.
‘It has been pedal to metal ever since last May and June.’
Lucy Berman, real estate agent, Golden Gate Sotheby’s International Realty
Berman said prospective buyers are flooding into the Silicon Valley market from outside the Bay Area, but also regularly moving around inside the market. Most are looking for more interior space to accommodate work and school activities and additional exterior space for outdoor activities and recreation, as well as to serve as a buffer of sorts.
Properties that are new, or remodeled and turn-key ready are at a premium in Santa Clara and San Mateo counties. She said buyers are not looking to oversee renovations of older properties, due to cost, convenience and health and safety reasons.
“Inventory is low,” Berman said. “Some long-term owners living in those larger homes are reluctant to downsize right at the moment.”
Spacious homes and properties in places like Woodside, Portola Valley and Los Altos Hills that moved slowly a couple of years ago are now very popular, Berman said. But, so are well-priced, single-family homes in good condition in the mature, tree-lined neighborhoods of Palo Alto, Menlo Park, Los Altos, Mountain View and Redwood City.
While townhomes and condominiums are trying to shake off 2020 doldrums — as buyers favored larger, single-family properties and many younger buyers moved back in with parents to save money during quarantine times — entry-level homes priced at $2.5 million and below are drawing multiple offers reminiscent of the frenzied local market from 2015 to 2018, according to Brian Chancellor, Realtor in the Palo Alto office of Sereno Group.
Prospective buyers who have lost out on previous sales often make offers well above asking prices in their next purchase attempts.
“Some of our markets are even surpassing the number of offers we saw three, four or five years ago,” Chancellor said.
Not surprisingly, prices have risen in the high single digits in most categories, he said.
Midpeninsula homebuyers are further spurred by comparatively low-interest rates and profits made from robust stock market investments. High demand and low inventory are driving sales ranging between $10 million to $30 million among high-end properties.
And local residents aren’t just driving real estate sales on the Midpeninsula, Chancellor said. They’re snapping up second homes in premier resort areas such as Santa Cruz County and Lake Tahoe.
Despite sluggish sales during the height of the pandemic last year, Chancellor said he sees renewed interest in the local condo market this year. He shepherded the recent sale of a Sunnyvale property for $1.198 million — $200,000 over the asking price.
Tight spring inventory should improve, Chancellor said, as longtime local homeowners increasingly decide to take advantage of Proposition 19. Passed by voters in November, the new tax law allows homeowners, among other things, to hold onto their previous property tax levels when they purchase new homes elsewhere in California.
That may include buyers entering the Midpeninsula market, as affluent buyers relocating from densely developed cities like San Francisco flee south to purchase big houses surrounded by large oak trees, tennis courts and horse corrals in semi-rural precincts of Woodside and Portola Valley, said Elyse Barca, a Realtor and luxury home specialist at the Menlo Park office of Compass Real Estate.
Her recent transactions include many of the $5 million-plus sales in Atherton, Menlo Park and Palo Alto.
“It’s not surprising when people are sheltering at home, they become acutely aware of the deficiencies of where they live,” Barca said. “During the past year, space became extremely important for people needing more of it for working from home, educating children at home and exercising and recreating at home.”
Barca agreed with Berman and Chancellor that once reopened, the local housing market never skipped a beat — even for last year’s contentious presidential election and aftermath. Elections typically can have a depressing impact on real estate activities.
And, like Chancellor, Barca foresees an uptick in condo and townhome sales this spring. In fact, interest in entry-level and less-expensive properties is popping.
A property she recently listed on a Monday drew more than two dozen messages of interest within four days. Two prospective buyers requested a showing.
“Properties priced compellingly at $2.5 million or below are drawing tremendous levels of interest,” she said.
Barca said the shift to a greater online presence for Realtors and their clients is a logical one during the health crisis.
“Curb appeal has become less important than web appeal,” she said.
But, in a pandemic-affected market as competitive as the Midpeninsula in 2021, all online and in-person tools are being pressed into use, said Menlo Park real estate agent Brett Caviness. He said he has seen many properties draw anywhere from five to 20 offers in recent months. And that sends prices in only one direction.
“Well-priced, well-prepared properties are easily selling for up to 20% higher over last year,” Caviness said.
He said strict coronavirus protocols in place since last year — including restricting property showings to no more than two people from the same household who exhibit no COVID-19 symptoms — are among the bigger challenges to doing business these days.
“If prospective buyers do not have an appointment to see property by Thursday of any given week, it’s virtually impossible for them to get in to see a property that weekend,” he said.
‘Curb appeal has become less important than web appeal.’
Elyse Barca, Realtor and luxury home specialist, Compass Real Estate
The priorities of those prospective buyers has changed dramatically in the past year, Caviness said.
“In recent years, before COVID, buyers wanted very much to be close to work,” he said. “They wanted that short commute to Google or Facebook. Now, nobody says that.”
Nowadays, his clients are casting a much wider net, ranging from San Mateo in the north to Sunnyvale in the south.
“They are much less city specific in their searches now, more focused on a bigger area that might work for them. And they’re looking for larger properties.”
As for Midpeninsula Realtors like himself, Caviness said if he could bring back any pre-COVID-19 industry practice, it would be in-person broker tours.
“Open houses are nice, but not as crucial to our work, because they often draw people who are not serious buyers,” he said. “Virtual broker tours are helpful, but doing them in person really makes you feel in touch with your colleagues in the industry and, of course, the market.”
Chancellor predicts that if COVID-19 cases continue to drop as a larger percentage of the population is vaccinated, restrictions could start easing up over the next three to six months.
“I could see traditional broker tours and open houses beginning to come back,” he said. “If we stay on the right path, things could start getting back to normal later this year.”
View more stories in Spring 2021 Real Estate publication here.
David Goll is a freelance writer. He can be emailed at David.w.goll@gmail.com.
David Goll is a freelance writer. He can be emailed at David.w.goll@gmail.com.
David Goll is a freelance writer. He can be emailed at David.w.goll@gmail.com.
David Goll is a freelance writer. He can be emailed at David.w.goll@gmail.com.
Thanks for this excellent article.
What percentage of these buyers are investors or investor groups? I read that 20% of the buyers in Atlanta are investor groups these days. Given the huge advantages the 2017 tax changes gave to investor groups and rich landlords over single-family homeowners (who instead took an extreme hit and in California and high-cost-of-living states, often also a huge sudden tax increase with no time to prepare and no more ability to refinance their homes to compensate), it’s not surprising that investor groups are more represented.
How is that playing out in the Bay Area, and why isn’t that discussed in the inventory issue nationally and locally?
The wealthy ! Seek more square footage, more luxury bathrooms with gleaming fixtures, spacious marble interiors, more garage door spaces for their luxury cars. It’s all for the person who pay the City billions to build up, build out and build down for their private view. These are single family owned acreages of properties. While the rest of us, near 50% renters pay 50% of our wages for 24/7 shelter on a scrap of concrete, the many who carry the backbone of towns and cities. Yes the hourly wage Families / the fixed income elderly / the disabled. Us. The people of color who keep getting squeezed into smaller surfaces and into tighter corridors where auto soot collects on window sills in our lungs, where noise pollution travels up, where petroleum tar asphalt smell after a spring rain. The already payed foot print which soaks up no more toxins than a wetland frog. Palo Alto is saying NO to net zero, no to more climate friendly housing, says no to a sustainable future with well planned, multi family / multi generational / multi ethnic housing. It’s is a lose, lose for people, for community strength and socio economic prosperity. Sadly. My small children have become amateur realtors and vacant lot sleuths . “Daddy! Why can’t they build over there at Stanford where all the empty ground is?” Because darling, that is where the non-native Eucalyptus trees stand, planted for infilled and soil erosion, a Century ago, thrived and now are dying. Yes. Planted when barely a quarter of the human population existed on Planet Earth, let alone this City.
For many healthcare professionals and software designers who have settled in the midpeninsula from abroad, to reside in an affluent upper-middle class SF Bay Area community is the culmination of a dream. It is what many of us worked hard for via higher education and the subsequent acquisition of in-demand vocational skills.
It is an opportunity easily afforded to most American citizens whose families have resided here for generations and anyone who fails to succeed must take a good look in the mirror and ask themselves why.
Ad a practicing MD in infectious diseases, my family sought local residency in a safe, quiet community with an excellent public school system and ease of access to high-end shopping and dining.
The bucolic mansions in Woodside, Portola Valley, and Los Altos Hills are somewhat excessive and from the standpoint of required upkeep and property taxes, a bit too expensive for our needs.
On the other hand, a relatively modest suburban home in Mountain View, Los Altos, or Palo Alto should be within reach of most people providing they have a sustaining vocation and moderate tastes.
There is no excuse for failure in America, especially among those whose families have been here for decades or even centuries.
There you have it, two perspectives on this.
Reality is closer to @Dr Singh, though I’d downplay a bit that native-borns had it easy. A few siblings may inherit their parents’ house, but everybody else here went through a huge grind of work and luck to get here, no matter where they came from. Differences certainly, but it was hard for all of us.
Housing may or may not be a human right, but few would argue in public that spacious housing in expensive areas is a human right for anybody who wants it. I doubt “@Native to the Bay” means to claim that as a birthright, but that’s their implication: “I was born here, so I shouldn’t have to go through the same gauntlet everybody else did.”
The sad truth is that many people born into expensive areas might not be able to stay if they don’t train for what Dr Singh delicately calls “a sustaining vocation.” Not being able to settle near your family is a wrenching burden, and one less familiar to people who grew up in less-desirable areas; though in a biggest-burden contest, we might argue we simply carried a different one.
@Native would surely argue for a different reality: the 1% are holding me down, others had it easy, if only Stanford would zone Chuck Taylor Grove for townhouses, I could afford one. None of that is true. What’s true is that Everybody wants to live in “a safe, quiet community with an excellent public school system,” and the Bay Area and the World have a lot of Everybody. Even Stanford cannot change that.
What to do? Tell our kids to chase their dreams, but know if they study French Lit they might not be able to live on the Peninsula for awhile. We did that. You can say that’s too harsh a choice to lay on young people, but it’s the world. At least the world outside Palo Alto.
Most of us work hard for our money, and with the exception of having everything handed to you on a silver platter or ill gotten gains — we’re all probably where we should be financially.
I don’t think it’s all that hard to live in Palo Alto. Atherton — yes, but not Palo Alto. 35-40% of the residents are renters, and it was that way in the 60s and 70s when I was growing up there… according to the Census records. Renters are people too. There are all different levels of socioeconomic status in Palo Alto. Home prices are overly inflated (including ours) thanks to Silicon Valley. We didn’t inherit our home (my elderly mom is still alive and in a nice section of Palo Alto) nor did we buy 40 years ago… we were teenagers. All we did was go to college, and we invested wisely.
Also — there is no right way to live your life, whatever is right for you. The world would be boring if we were all the same. Everyone has there own definition of “success” and not everyone wants to be a doctor or a lawyer. Nor should every child go to college. As long as you have something lined up (college, trade school, military, etc) If you’re comfortable with who you and where you are in life, that’s all that matters. As long as your happy!
Dr. Singh I’m shocked. I’ve been repeatedly beaten over the head for the previous four years, from media, even this very site, that it’s impossible for a person of color to succeed in this white supremacist nation of ours. Yet there you go, working hard, sacrificing and showing these lazy clowns that the only real impediments are your work ethic, values and your IQ. You’ve probably got a solid nuclear family with a father in the home too. I’m starting to think this narrative we’re being fed is just a distraction….
*it’s impossible for a person of color to succeed in this white supremacist nation of ours.
*the only real impediments are your work ethic, values and your IQ.
^^ So where and how does systemic racism and discrimination root itself in terms of the various perceptions of equal opportunity in America?
The liberals, progressives and minorities always cite the societal and systemic detriments of racism while the conservatives focus on self-will and pulling oneself up from the bootstraps as the key to success in America.
It is interesting to note that the more recent immigrants to America regardless of their occupation tend to work noticeably harder than those whose families have been here for generations.
Are countless children of long-term American residents simply getting lazy?
And it has nothing to do with race as this phenomena seems to be crossing the color lines.
Perhaps this is why America is now finding itself behind the 8-ball economically, militarily, politically, and educationally.
Whenever I go the the med clinic nowadays, it seems that all of the MDs are either East Indian or Mandarin.
No African-American or Hispanic MDs and very few white ones.
And add Google to this overall observation as well as the majority of the movers and shakers there are of East Indian descent.
Meanwhile we have two kids who went to college and have now returned home to roost.
The eldest majored in Russian Literature at Yale and the other in Art Appreciation at UC Berkeley.
Vocationally, one is a laid-off waiter due to the coronavirus and the other a part-time barrista with aspirations of touring Greenland for some obscure reason.
And both complain about how tough it is for them to afford luxury items they cannot either afford or justify owning, including a house in Palo Alto.
Is this yet another example of a systemic breakdown that knows no color lines?
Or lazyness and lack of focus?
So Dr Singh you are in the medical profession. But are you in the profession of Caring for People. Do you understand the socio-economic pressures for someone with a brain injury, for spinal injuries, for a nosocomial infection that caused a disability (per a doctor contaminating during surgery – as a Nurse I know this happens), or what about the child who is more intelligent and a harder worker than you were but by chance have an addicted or mentally ill parent? Why is it that you are entitled to your tax shelters and profit driven medical job in the face of a community (yes yours), and society (yours) and world (doing your part?) — in the face of bad luck of other Human Being who are worthy of a safe place to live, healthy environment, and good schools? Why is it the money for schools is not collected at state level and distributed evenly per pupil?
No there are people smarter than you and work harder than you who live can not afford one of these resource guzzling mansion compounds, or in a safe and healthy neighborhood.
Respect Neuro-diversity doctor & other “should-ers”. Know we are all humans & deserve to have basic safety & health needs met even if its one person ill means you might be next. If you want to put it in a narcissistic & not humanitarian ethical light. Not everyone can do math, not everyone (esp girls) have been nurtured by STEM teachers, not everyone from countries that create a social group of people call the “untouchables” succeeds in this country. There are more people who were born in this country who work harder and longer and pay into the system than some ever have, but because we are Americans we share our bounty with others via tax payer supported schools (even with needed changes in financing), health care (needs work), family visa’s, roads, housing vouchers (as little as there are and as hard as they are to get) and in some many other ways.Just halting to let a car with a problem over to the shoulder is American. R U willing?
A practical sense of reality would seemingly dictate that if one is seeking a well-paying job and the finer amenities of life, choose a vocation that pays well or be relegated to the underclass regardless of one’s education or upbringing.
A college education is not a prerequisite for success as there are many skilled trades including HVAC technicians, mechanics, and heavy equipment operators who will make far more than any Liberal Arts major could ever aspire towards. Choose wisely.
And the same applies to much-needed medical doctors and skilled software developers.
The bottom line…who would you pay more? The aforementioned skilled professions or some erudite food server with an M.A. in Fine Arts?
Only whiners complain about their lot in life.