The COVID-19 pandemic has uprooted work, life and study patterns for many families in the Bay Area, prompting people to reevaluate their living spaces. Some have decided to search for larger homes in the suburbs or rural areas, while others have decided to leave the region altogether. With real estate remaining an essential business throughout the pandemic, the industry adapted quickly to its new circumstances. In this article, we’ll examine what the real estate market looks like in 2021.
More People Have Been Moving
While most of the nation was on lockdown throughout 2020, the number of people moving actually increased about 4 percent from the previous year. People relocated for a variety of reasons—some wanted to live closer to relatives, some had to move because of unemployment and some wanted to live in less densely populated areas. San Francisco saw more than 27,000 residents move away from the city in 2020.
Homes have long sold quickly in the Bay Area, and that trend has continued during the pandemic. Mortgage rates have fallen and are predicted to stay low, making borrowing easier for most home buyers. However, the inventory of available properties is lower than usual, which has created a highly competitive market.
New Selling Points in a Home
With many companies planning for remote or hybrid work models to continue into the future, people are reexamining their needs. For example, a short commute time is no longer a high priority. Marc Roos of Sereno Group, a Diamond Certified Realtor®, says home offices are a big selling point for his clients. “Since the lockdown started, the thing that people want the most is square footage. Larger outdoor spaces and pools are in demand. Overall, buyers just want more space. If they’re working from home, they definitely need more room to spread out.”
Additionally, many in the Bay Area are searching for homes with auxiliary dwelling units (ADUs), which can be used as rental units, in-law suites or studio spaces. With more young people moving back home and multiple family members setting up home offices, a home that can accommodate different generations and competing needs has added value.
House Viewing While Social Distancing
Most people start searching for new homes online, and that trend has also continued during lockdown. Some buyers are willing to purchase homes based on video tours alone, but the majority want to visit homes in person. Busy open houses on a Sunday afternoon are a thing of the past—visits are now conducted by appointment only. Before entering a property, potential buyers are asked to sign a Property Entry Advisory Declaration that states they have no signs or symptoms of COVID-19. For additional safety, visitors will likely be asked to wear protective foot booties and use hand sanitizer before entry.
Advice for Leaving the Bay Area
The pandemic has led many people to question whether they want to continue living in the Bay Area. Some have opted to leave for areas that are more affordable and less densely populated. The Southwest and the Rockies have seen a particularly large influx of people relocating from the Bay Area.
If you’re planning to move to a different region, Mr. Roos recommends interviewing multiple real estate agents and reading their reviews. Most importantly, he advises buyers to find an agent who understands the local market. “I often see homeowners list with an agent who doesn’t have much experience in the town in which their clients are selling,” he says. “[Your home] is one of the largest assets you own, so it’s important to take the time to find an expert who has integrity, ethics and a strong record of selling in the immediate area.”
Post-Pandemic Changes to Real Estate
Many in the industry predict that real estate will remain a seller’s market even when the pandemic is over—inventory is low and few new homes are being built. Trends also suggest that the market for vacation homes and rentals should remain strong into the future as more companies adopt remote work models.
Real estate professionals anticipate that technology will continue to play an important role in the industry even once restrictions are lifted. Video and 3D home tours will be as essential as photographs for future listings.
There’s some speculation that the pandemic may change how homes and neighborhoods of the future will look. Mr. Roos says he’d like to see homes with more versatility. “It’s important that a living room or dining area can also be used as an office. I also hope architects allow more in the way of outdoor space in their designs.”
The pandemic has prompted people to reassess how they want to integrate work life, family life and leisure activities in ways that will have a lasting impact on the housing market. If you’re considering buying or selling your Bay Area home, find a Diamond Certified real estate agent near you.