As reported in The Mercury News, the economy is not at all affecting affluent professionals as it relates to Bay Area real estate.
Despite the pandemic, luxury home sales skyrocketed in August and had median prices up 16 percent from the previous year to levels that approached the market peak in 2018.
According to DQNews data, the median sale price for a single family home in the Bay Area in August was $975,000.
“We’ve never seen such high price appreciation in a recession,” said Selma Hepp, deputy chief economist with real estate data firm CoreLogic. “The recession hasn’t hit everyone the same way.”
Year-over-year prices went up throughout most of the nine Bay Area counties: increasing 19 percent to $1.73 million in San Mateo; 18.6 percent to $1.34 million in Santa Clara; 18.6 percent to $770,00 in Contra Costa; and 13.4 percent to $975,000 in Alameda.
The number of Bay Area homes sold increased by almost 9 percent from last August, as traditional springtime buyers held off until summer to tour and close deals.
On a national level, home prices went up 14 percent, year-over-year, in late August and September, according to Redfin. The company’s chief economist Daryl Fairweather spoke about warning signs on the horizon — waning mortgage applications and more home listings boosting supply.
“Although the housing market is still red-hot, there are some early signs we may be nearing peak price growth,” Fairweather said. “This is likely to be as good as it gets for home sellers, who definitely have had it very good for a very long time.”
However, in the Bay Area, professionals in tech and other fields have been able to work remotely, sustaining a stronger economy than regions dependent on service workers like Las Vegas, Hepp said.
CoreLogic projects Bay Area home prices will go up 7.8 percent, while Las Vegas prices will fall 6.5 percent by August 2021.
Bay Area agents say demand is driven by techies and other professionals seeking more space for family and home office Zoom-rooms.
Agent Jeff LaMont of San Mateo said low interest rates and strong employment in software and biotech industries have led millennial couples into the market. His advice to buyers: “Don’t overthink it. Grab the cheap money while you can.”
The rising popularity of the suburbs has been due to major tech firms allowing many employees to work from home well into next year, making commuting less of a factor for homebuyers.
Google, Facebook and Salesforce announced workers could stay home through next summer, and Twitter left the decision open-ended.
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