San Francisco Bay Area Market September 2021 Update
Fall is officially here! Now that the kids are in school, the air is crisper, and PSLs are in full swing, what does this mean for the real estate market? Autumn has historically been a busy time in the industry for the Bay Area. This year, as we continue to face challenges set forth by covid-19, we are seeing sales constrained by low inventory. Are potential homebuyers still looking? Is the inventory going back up?
Our August market data continued from previous month’s sluggish summer trend. The counties that experienced the most set backs (Marin, San Mateo, Santa Clara, Napa) are those that rose the most since the pandemic.
There are several explanations as to why these counties experience bigger fluctuations. First off, these are affluent areas, where residents were not affected by the negative economic consequences of the pandemic. The vast majority were able to continue to earn a high income while working from home. Secondly, because the time that they spend at home doubled or tripled, residents started to place a greater emphasis on the quality of their homes. They started to reassess their the square footage, the number of rooms, the size of the backyard, etc. The sudden demand in these amenities contributed to a shift in demand to higher price homes. Lastly, because these areas are affluent to start with, there is generally more “hot money” around to invest in fixing and expanding the size of the homes.
On the other hand, as shown in the mortgage chart below the increased 30-year fixed mortgage interest since July also dampens the market-wide demand, on top of the summer family travel season.
We expect the summer effect will lingers onto September’s data and the market will stabilize once again as buyer demand picks up in September, which will show in October sales data.