Here’s some good news and some bad news, real estate junkies: good news first.
Per a flurry of national news articles (many based on a study completed by the real estate site Redfin), Americans are not sheltering in place when it comes to home buying. Against all odds, they’re snapping up houses like 1982 Pac-Man snapped up dots. They’re buying homes sight-unseen, they’re waiving contingencies and they’re doing it everywhere… except here. We’re San Francisco, don’t breathe that sigh of relief just yet.
This is the bad news.
For the first time since re-urbanization reversed the suburban trend some 30 years ago, real estate trends are not favoring big cities like San Francisco. It seems that during spring, when everyone was shut up in their homes, adjusting to full-time telecommuting, everyone decided they’d just as soon continue working out of that home office, thank you, and maybe it’d be nice if that home office was in Tahoe.
And it seems like everyone who decided to do that called up their local newspaper to share the news. It’s too early to gather any meaningful data on who’s moving where in the past two months, but that hasn’t stopped the deluge of panicked news articles holding wakes for America’s cities. Whether or not it’s true so far, say it enough and eventually, it might come true.
Here in San Francisco, the proof of concept is the flood of new listings that have come to market since the beginning of June. Condo owners, specifically, seem to be especially eager to hang a sign in their window and get out, witness an increase of new listings by 180 percent year-over-year. Again, it’s difficult to know how much of that is pent-up demand from spring, when restrictions made it almost impossible to sell a house so why bother (remember “summer is the new spring?”) and how much truly is home-office neophytes fleeing to the unspoiled country.
Ultimately, the impact of COVID on local real estate will not be as simple as what happens when the lifeguard yells “everybody out!” at a public swimming pool. For San Franciscans, though, this should all have a faint whiff of familiarity. In a sense, this migration is more supercharged than it is unprecedented.
In speaking with a pair of local realtors this week, I learned that what used to sell a San Francisco house — 90+ WalkScores, access to nightlife and shopping, easy access to transit — has been made irrelevant by COVID, now that the bars are closed, the shops are doing curbside pick-up and riding Muni is deemed only slightly less reckless than attending a Trump rally. Today’s buyers are looking for perks like outdoor space, updated kitchens and baths, pleasing views and turn-key condition. In other words, they’re looking for the same things that buyers in the suburbs have always been looking for.
Per the Redfin survey, the two “must-haves” for buyers in 2020 are “designated space to work from home” and “more outdoor or recreational space.” “Want a designated space for my children to learn,” also ranks highly. That it’s difficult to find these features in a city where only 20 percent of all homes are detached on all sides is what’s driven San Franciscans to the suburbs since the dawn of time. Before World War II they moved from North Beach to The Excelsior. Now they move to Marin, usually right around the time their kids start kindergarten.
The trade-off, of course, was often a mind-melting commute. The average Bay Area worker spends over an hour a day driving back and forth from work. COVID, and the resulting “new way to work,” has removed that obstacle. But has it removed it permanently?
Maybe now actually is the time where the rest of the country, which has shaken its head in wonder (and maybe privately seethed) for decades as it watched San Francisco housing prices soar, gets to snicker at us, trapped as we are in our tiny, overpriced and now perhaps underwater homes. Will the 2020s be the decade of “I told you so” for Bay Area urbanites? I hope not, because though it might seem quite satisfying, schadenfreude isn’t a human emotion.
And I think not, because the key word here is “permanent.” The problem with the “cities are dying” argument is that it hinges on young workers’ ability and desire to live simple lives outside cities, and on businesses’ ability to integrate, train and mentor all workers exclusively via Zoom calls. It’s an attractive money-saver all around, but is it sustainable?
Someday, with a little luck and a lot of good sense, the restaurants and bars are going to reopen and the businesses are going to realize that not everyone can or should thrive working exclusively from home. It may be awhile before this all happens, but once it does, those who were fortunate and savvy enough to have stayed in The City or purchased here during the recession will toast themselves.
Larry Rosen is a San Francisco-based writer, editor, podcaster and recovering former Realtor. He is a guest columnist and his viewpoint is not necessarily that of the Examiner. The Market Musings real estate column appears every other week.