Six months after the start of containment linked to the Covid-19 epidemic, the real estate market has changed in San Francisco Bay. Today, it is characterized above all by strong local movements linked to remote work. “Customers look for additional space and move around to find it. We have a lot of people who leave downtown San Francisco to settle in the bay. At similar prices, they can have an additional office, a terrace or a garden. The suburbs therefore attract more ”, explains Servane Valentin, real estate agent for Andrea Rentals, rental expert in the bay.
With several mega-companies established in the region which announce to prolong the remote work indefinitely, like Facebook or Twitter, the employees are indeed looking to push the walls. To work more comfortably, have something to welcome home help or family. A trend that is found in San Francisco despite departures noted for the suburbs, other cities or even other states. “After the calm of the weeks which followed the confinement, the demand on individual houses and apartments with exterior increased », Confirms Anne Laury, real estate agent for Coldwell Banker in San Francisco. And the sales specialist clarified: “the median price of a detached house has even just reached the record price of 1.8 million … A very hot market at the moment! “
Relative price reductions
Far from the predicted tumble, the sales and rental markets are therefore holding up. You have to look in detail, by type of property and by district, to observe price reductions. It is then the dynamics of demand that directly influence fluctuations. Concretely, the amounts of the most sought-after properties – the famous single-family houses and apartments with gardens – remain stable, or even increase in certain popular districts. The prices of the most shunned goods – studios and apartments without exterior – on the other hand go down and for longer. “Sonly apartments in tall buildings and luxury properties are not currently selling well ”, adds Anne Laury.
Note on the rental side that the drop in rental prices for a studio in San Francisco would be more than 10% compared to last year prices at the same time, the largest drop in the country according to a report by the Zumper platform. But even after this depreciation, the city remains in pole position among the most expensive cities in the United States: a one-room apartment for rent costs $ 3,200 per month when, in New York, it costs $ 2,840.
If rent cuts are found throughout the bay, they are less significant on the side of Berkeley, Oakland or San José and mainly concern small surfaces. ” Admittedly, the rents for small apartments are decreasing slightly in the city, because they are less popular in these times of COVID, but in addition, prices remain stable and there is always competition… ”, assures Servane Valentin. Last point shared by Anne Laury, who received several offers in San Francisco to buy goods sold and adds “ that these goods go quickly “.
Negotiate and invest
Unemployment and wage cuts, direct economic consequences of the pandemic, do not however spare the inhabitants of the region and the real estate market also reflects this despite its surprising resistance. Result: some beneficial side effects. Less rent increases on renewed leases, more room for first-time buyers and for negotiation.
” Some landlords are forced to sell their property for fear of not being able to rent it out properly, and others offer rent reductions so that their tenants don’t go away … », Says Servane Valentin of Andrea Rentals. So is it time to negotiate the price of your rent? ” Yes, but with caution ”, warns the expert. ” Before negotiating, be sure to make serious comparisons to see in which category your property falls. An East Bay house is clearly a risk at the moment and owners will find new tenants without a problem. “.
On the purchasing side, the significant impact of Covid-19: a very high inventory of goods for sale in San Francisco. ” With the closing of bars, restaurants and other places of life, homelessness issues arose and people wanted to move away from the city. But San Francisco will remain San Francisco. Things will pick up on their course and if you think long term, so now is a great time to buy and invest Says Anne Laury of Coldwell Banker. The challenge for the next few months lies in the absorption, or not, of this large inventory. ” We are at a turning point », Concludes Anne Laury. And we will therefore have to closely monitor the coming months to see how the real estate market will react to these unprecedented circumstances. The specialists remain confident.