SAN FRANCISCO—The property market goes through cycles, no matter where in the world you are. Since property is a long-term investment, supply can run thin after one good year – but a few years down the line everyone is selling again. This is particularly true in San Francisco, which contains some of the most prime real estate in the world. Supply is extremely limited, until all of a sudden it seems to be in abundance.
Usually, these cycles are actually fairly predictable. Those of us in the real estate industry keep up-to-date on where big sales happened and when, and know when to look out for the next stage in the cycle. However, 2020 put a massive spanner in the works.
At the beginning of the pandemic, many predictions had real estate around the world, and especially in expensive cities like San Francisco, plummeting. Property owners would supposedly no longer be able to afford buildings which were standing empty, but buyers would be few and far between, with limited funds in a decimated economy.
That never quite came about. San Francisco’s property market did face a blip, but it was not major and it didn’t last for long. Nonetheless, it did throw the normal cycles off course. Real estate in San Francisco is very unpredictable in 2021.
That said, we can already see some trends emerging.
Homes with yards are in demand
There are no clear winners in the property game when considering the impact of COVID-19. However, houses with yards are now more in demand in San Francisco, even if they are a little bit distant from the city center. Right now, people are realizing that outdoor space is hugely important to them.
Location is no longer everything, especially since what have always been nightlife hotspots have become COVID hotspots. Living in a small apartment in a great location is incredibly frustrating during a pandemic. While the pandemic will end and we will return to life as normal, people are getting more in touch with what they want from their living space.
Homeowners insurance in San Francisco
Many people make the mistake of assuming that buying a house with a yard in San Francisco is only as expensive as the down-payment and mortgage. Unfortunately, it is never quite that simple. Owning a home immediately creates all sorts of other expenses, and one you cannot avoid is homeowners insurance.
However, San Francisco residents are becoming more savvy about homeowners insurance. It is all-too-easy to assume that one is as good as another, but variance in prices is actually fairly wide. Click here to find out what you should be paying for San Francisco homeowners insurance.
The insurance industry is still a huge player in San Fran real estate in 2021, but with more reasonable options available, the big corporations can no longer charge whatever they want.
Supply is low
As things stand, supply of property in San Francisco is still low. While many predicted a mass exodus from big cities like SF and New York, due to the struggling economy, that never came about. In San Francisco, in fact, many property owners decided to stay put and hold onto their assets.
In other words, there are few properties available to purchase right now and that is unlikely to change in the near future. People are going to wait for more certainty before making the decision to put their properties on the market again. Even if you are able to find the property you want for sale, you are probably going to have to pay more than during normal times.
Another thing that has changed during the pandemic is how we look at time. A week seemed like a long time to put your life on hold at the beginning of 2020. Now, months are passing as we continue to wait things out. Our behaviors have changed so that what once seemed urgent now seems laughable.
Property owners are therefore likely to continue to hold onto their real estate as they assess the financial and cultural landscape. If a buyer is in a hurry to purchase a property, the seller has a huge advantage.
The real estate climate in San Fran is more complicated than it was a year ago, but it is still possible to make predictions. We still don’t really know how the rest of this year will turn out – it will be fascinating to wait and see.
