Real estate

2021 record changed real estate in San Francisco, maybe forever

2021 has been a crazy year for real estate nationwide, but in San Francisco, where real estate has always summer a little wild, the remarkable year has been remarkable. Records have been broken and set across the region, and as we look to 2022, it looks like real estate in the Bay Area will never look like it was before the pandemic.

Before looking locally, let’s note that nationally, 2021 has been an extraordinary and record-breaking year. Home selling prices in 2021 hit the highest median price of all time, according to Redfin. The factors behind this increase were multiple, “The number of homes for sale has fallen to an all-time low, [and] there was a record demand for second homes, ”Redfin reported. Combined with historically low interest rates, a new work-from-home (or anywhere, forever) economy, booming tech industries and a volatile stock market, there has been an unprecedented domestic demand situation. of real estate.

In San Francisco, that demand was insatiable. The typical American home sold for almost $ 400,000, up 24.4% year-on-year. Meanwhile, in San Francisco, that prize was $ 1.5 million.


But it wasn’t just the city proper – the entire Bay Area was in a frenzy. The region’s median selling price of nine counties in Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano and Sonoma, was $ 1.3 million ($ 733 per square foot) , according to Norada Real Estate Investments. . This is an 18.2% increase from last November and the highest year-over-year gain in California, according to the California Association of Realtors. House prices in the Bay Area also increased by 2% from the previous month (October 2021).

Pushing those prices is a record inventory across the country, according to data from Redfin. There were just 1.38 million homes for sale in June, down 23% year-over-year, which was an all-time low. Inventories were also down in San Francisco, although historically inventory has always been tight in the city of seven by seven square miles.

Probably linked to this scarcity, housing flew off the market in record time at record supply prices. Nationally, the average home sold in just 15 days, another historic marker as the lowest median days on record and down from 39 days in June 2020, data from Redfin showed. . In San Francisco, homes sold on average in 16 days – and 72.9% of those homes sold above the listing price.

Demand for housing has resulted in record-breaking (and worrying) bidding wars, unlike any the country has ever seen.

Data: Redfin

Red tuna

This strong demand exceeds record supply prices in the rest of the country: 56.5% of homes in the United States exceeded the list price in 2021, up 29.6% from 2020.

Nationwide, demand for second homes has nearly doubled from before the pandemic, up 91% from pre-pandemic levels. In the Bay Area, that demand has translated into record prices in places like Tahoe, Santa Cruz and Hawaii.

The desire for sanctuary has put a premium on luxury homes. The median selling price of luxury homes in the United States jumped 26.5% to $ 990,000 in the second quarter of 2021, setting a new record in the United States. In San Francisco, this trend is reflected: a sharp increase in sales of very expensive homes that started in 2020 continued to climb until 2021.

Luxury homes have seen an incredible surge in popularity in SF over the past couple of years.  Image via compass.

Luxury homes have seen an incredible surge in popularity in SF over the past couple of years. Image via compass.

SFGate

2022 is unlikely to be much different. Even if interest rates rise, demand is unlikely to fall. “There is a main trend from 2020 that has continued through 2021 and I expect that trend to continue in 2022. This trend is the importance of the house, regardless of the price. . Luxury or not, more people value their primary residence more than ever before, ”said Alex Clark, real estate agent and founder of The FrontSteps Real Estate.

Anna Marie Erwert writes from both the perspective of the tenant and the new buyer, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and the Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert.