Marina Times – The real estate market, two years after shelter-in-place began

A year ago, I wrote in this column that it has been just over 12 months since shelter-in-place protocols were initiated due to the coronavirus pandemic. I wrote: ‘Finally, there really does seem to be some light at the end of this dreadful Covid tunnel, as vaccinations become increasingly available and things seem to be opening up again.’

Good. Of course, it looked like that at the time. This was of course before the omicron surge that plagued us in December and January. Once again this spring, however, things are starting to look up, as long as you overlook the new Covid surges that have emerged recently in Asia and Europe. Hush. Will this thing ever end?!

NEVER A BORING MOMENT

And then, unlike last year, this year we had a war to face. What has happened in Ukraine over the past few weeks is absolutely horrifying – the stuff of nightmares.

Add to that inflation, political unrest, drought, supply shortages and a number of other deeply depressing crises, and it’s a wonder anyone is sleeping, let alone thinking about buying a home.

And yet, that is exactly what is happening. The San Francisco real estate market remains strong and home sales continue unabated.

“It continues to surprise us how resilient the San Francisco market is: the pandemic, war in Ukraine and a fluctuating stock market haven’t kept buyers away,” said Missy Wyant Smit, one of the top agents. of Compass production. “” Inventory remains relatively low and competition between buyers is once again fierce. For properties fully prepared for sale with cosmetic upgrades and staging, we are seeing the return of multiple offer situations. It feels like 2016 all over again in most market segments.

Nonetheless, website SocketSite.com reported in mid-March that the number of homes on the market in San Francisco had reached a seasonal high in 10 years. According to the site, this is explained by a slowdown in the pace of sales and new contracts signed. While this is certainly a departure from what many experience in the city, it may offer a glimmer of hope for buyers.

Ted Andersen, with the San Francisco Business Timesrecently wrote that Bay Area real estate markets, so far, remain largely insulated from the threat of rising interest rates, inflation and market volatility due to the uncertainty surrounding the invasion of Ukraine by Russia.

While some buyers and sellers have been hit by declines in stock market portfolios, or have put their plans on hold waiting to see what will happen overseas and at home, the prevailing momentum remains one of demand very high buyers with insufficient housing supply. for sale.

NUMBERS

Andersen adds that in February 2022, the city saw 290 new units hit the market. The percentage of sale price at list price during this period was 121.6% – the highest since before the pandemic – indicating several offers on each list.

At the start of March, San Francisco had almost 1,000 active units on the market, compared to around 500 at the start of January. Again, this should be a welcome sign for potential buyers competing with multiple offers, especially for single-family homes.

On the other hand, less promising for buyers, a recent Redfin analysis reports that six of the top 10 metros in the country where homes sell for six figures above list price are in California. The Los Angeles metro area led the way, with 718 homes selling for at least $100,000 above asking price, followed by Oakland with 580, San Jose at 490 and San Francisco with 335.

In terms of home values, Redfin found that 88.7% of homes in San Francisco were worth at least $1 million in February — the highest share among the 100 most populous U.S. metropolitan areas. San Jose was second with 85.9%.

According to Ashley Fahey with the National ObserverThe country’s housing market is off to a busy start to 2022, and that’s setting the stage for a busy spring – seen as kicking off the prime housing market season.

She suggests that inflation and mortgage rates continue to be among the main indicators to watch in the housing market with regard to the evolution of demand and the appreciation of house prices over the coming months.

Inflation is a big concern right now for everyone. For homeowners, it is at least somewhat comforting to know that real estate has long had a reputation as a good hedge against inflation. It has a unique combination of appreciation in value and depreciation of debt that helps it cope with rising costs.

Of course, predicting what the rest of this year will bring, or even what next month will bring, is a guess. And having learned my lesson last year, I’m certainly not ready to speculate.

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