by Lex Shan
We are almost one year into the COVID pandemic. What has changed? What did we learn and how will it impact the 2021?
Below, we looked into the buying trends of various real estate properties in the Bay Area, as well as possible future outcomes, to help you navigate these constantly changing times.
Taking Advantage of Low Prices in Condos
At the beginning of 2020, real estate agents were practically rubbing their hands together in uncontainable anticipation of a successful year. What we saw, however, was a pandemic that set the real estate market off-kilter, momentarily halting the housing market in its tracks.
Fortunately, the real estate market adapted to the COVID-19 situation, and more and more Bay Area residents began to expand to suburban areas. While this negatively affected the rental and condo markets for landlords and condo owners, it couldn’t have been a better time for residents to make the switch to the suburbs.
Urban Condos vs Suburban Single Family Homes
All of this changed over the year, however. In a desperate need for space to social distance, residents fled the urban areas for the suburbs in such a fashion that they drove up prices in suburban areas of all kinds, including ones that had been overlooked for years.
With all of the residents moving out of the urban parts of the Bay Area, bumping prices in the suburbs up, this in turn knocked down the prices of condos in the cities. What this means for buyers presently is that many condos are sitting at 15% off pre-pandemic prices in the hopes of attracting new residents.
If you’ve had your eye set on moving into the big city, 2021 could be your year. Whereas many prospective buyers had been outpriced previously, due to San Francisco’s exorbitant housing costs, the city’s condos have seen the lowest prices since 2018. It might even go down further as sellers continue to list new condos and lower prices to sell their properties.
Once the market inevitably recovers, your property will automatically increase back to its original value, making this year the best time to make that purchase.
What Does the Future of Real Estate Properties Look Like?
Though we’re not able to know for certain, the coronavirus will likely continue to impact the future of real estate properties in the Bay Area for the next year. Depending on how quickly the vaccines can be rolled out, and how effective the vaccines are at preventing COVID-19, the situation can change very fast.
As of now, here is how the pandemic will likely continue to impact the real estate market:
The Rental Market Will Slowly Recover
Expect to see lower costs for real estate properties during this time. I predict that we’ve almost reached the lowest tipping point for the rental market, but we’re not there quite yet.
Winter is an unpopular time of year for renters in the Bay Area, with springtime being when people begin to consider renting in a typical year. With the added variable of the looming pandemic at the forefronts of most peoples’ minds, it’s quite possible that the lowest point will be in February.
By summertime, things could change. July and August are typically the most popular months for renters in the Bay Area, and this trajectory is unlikely to change, even if the rate in which renters are moving to the area has decreased significantly.
What this means for renters is that this is perhaps one of the best times to rent, as prices are expected to slowly increase again as the vaccine begins to take effect and cases go down.
Virtual Tours Will Likely Continue
To reduce foot traffic in homes for sale, many sellers and real estate agents switched to online tours or limited in-person tours. That means in-person open houses have decreased incredibly since last March. Most people who tour an open house don’t end up buying a property, so having less foot traffic can potentially save sellers and real estate agents time, allowing them to focus on more serious buyers.
More People Will Choose Suburban Housing
When remote jobs became more commonplace, it was no surprise that those with families looked to step away from the hustle and bustle of the urban lifestyle. This didn’t mean, however, that they were willing to move too far away from the city.
While suburban homes have always been a common switch made by families looking to settle down, 2020 really pushed people who were on the fence about suburban living. Less crowded stores, the ability to work from home, and more space for the kids made a strong case for making the move, which is another reason why the condo and rental markets have dipped so low. Because of all of these perks, it is likely that many of those families will continue to live in the suburbs post-pandemic.
Now Is the Time
There’s really no time like the present to make an investment in a condo or real estate property. The housing market is at the lowest it’s been in years, and if we know anything, it’s that the market is likely to swing back to equilibrium as the year goes on.
With more and more people getting vaccinated, there is always a possibility that real estate properties will go up again, leaving you wishing you’d taken advantage of these unprecedented lows.
Check out the latest market data
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