There is no doubt that the COVID-19 pandemic has negatively affected the economy, not only in the United States but around the world. Here’s a strange surprise: San Francisco real estate, and Bernal Heights in particular, is on the rebound after a brief slip in March and April this year.
According to the latest market reports, the San Francisco real estate market has made a significant recovery. The median house price of $1.8 million recorded in June 2020 represents a new monthly high.
Additionally, there has been a marked demand for high-end houses in almost every Bay Area real estate market. Read on for our in-depth analysis of real estate trends in Bernal Heights, San Francisco.
After months of the pandemic, it has become crystal clear that the more affluent San Francisco residents have been least impacted economically by COVID-19. Perhaps that is no big surprise. They have greater buying power and larger reserves, which goes some way to explain the upbeat activity in the housing market.
Performance in the condo market, by contrast, has been weaker. There has been little supply and demand movement, and median sales price has been flat. Rising unemployment among young professionals might account for lackluster performance in the condo market.
The rebound in buyer demand has been even more astonishing. In fact, the number of listings accepting offers (purchases of listed properties that go to contract) was even higher in June 2020 than it was last year. Shelter in place, which began mid-March, affected the second quarter’s figures, but attractive interest rates have helped boost the market back..
At the moment, a more granular approach to the property market is perhaps the way to go. Examination of very recent trends and short-term forecasts offer better information than longer-term views.
High-price houses bucked the trend and spiked in June at almost 30% of total sales. Of course, sales are a lagging indicator. Most often, they reflect offer acceptances which occurred roughly three to six weeks earlier.
The June figure contrasts sharply with the May figure, at a mere 15%. For comparison, the four-year average for this metric sits at 18% of total house sales.
The condo market went into steeper decline than the single-family home market once shelter-in-place came into effect. Its recovery has not been as strong as the house market, but it is recovering nevertheless. Buyers and sellers in this market are showing greater caution.
The impact of the pandemic is presenting them with greater uncertainties. The less-than-favorable outlook for small businesses and fears of unemployment in this sector are contributory factors.
Let’s be short and sweet: high-end prices are… well, higher. Condos prices have, on average, declined slightly from their peak in 2019. It is interesting to note, however, that the median condo price in San Francisco is still above the upward trend line, and condo prices are currently about 2.5 times higher than they were at the beginning of 2012.
The old adage that your best investment is in property still holds true.
In a buoyant economy, bids over the listing price are common. During this COVID-flavored market, the overbidding percentage fell to zero. This correlates with consumer caution expressed elsewhere in the market.
In April 2020, the personal savings rate (what portion of their disposable income people save) spiked at a record high of 33% in the United States. The last record in May 1975 (not a typo!) was almost half that, at 17.3%, coupled with a general slowdown in capital investments.
In other words, consumers are generally holding onto every dollar they have in what The Economist is now calling “the 90% economy.” This is one that’s more fragile, less innovative, and more biased toward those with higher annual earnings.
This sharp slide down to zero overbidding may level the playing field where a sale house receives competing offers, and preclude consumers having to learn the fine art of overbidding.
We may not see a return to the trend in the last three years of overbidding averaging out at anything between 103% and 109% of the listed sale price. In this regard, intelligent guesswork by avid trendwatchers is our best bet.
In any case, it would seem to indicate a slight leaning toward this pandemic-related situation entering a buyers’ market, especially if you consider the anticipated foreclosures despite Federal and State efforts to bolster support to mortgage lenders via the imposition of moratoriums.
Buyer demand continues to be strong, and many analysts are seeing the seasonal spring surge being pushed forward to the summer months, the delay being the upshot of COVID-19 mitigation measures.
Year-over-year increases in the listings acceptance offers weighted by population density in San Francisco in June 2020 stood at 6%. This is despite the sharp downturn seen in March and April.
It is important to note that if the market was strong last year, the percentage increase may be lower owing to other factors, such as:
A broad interpretation of these figures means that despite shrinkage elsewhere in the economy, prospects in the real estate market are fairly bright. At the very least, numbers reflect a certain stability, and that’s a good thing in any investment environment.
Any market analyst worth their salt will recommend against basing decisions solely on quarterly figures. It seems premature at this stage to make longer-term forecasts until we are confident that the COVID-19 pandemic is behind us. In the past, the same has been true of other crises beyond our immediate control.
One thing we do know is that a more realistic assessment can only be made at the end of Q3 or Q4. That might seem vague, but it is unwise to proffer definitive statements just yet.
What we can tell you with certainty is that per price segment, listings accepting offers in respect of both houses and condos have bounced back from the decline, which reached its depth in April 2020. The rebound brings most categories back to levels before the COVID-19 outbreak.
All except the high-end house market indicate lower market activity than in the same period in 2019. What is encouraging is that market activity is indeed occurring. This might be because of a mini-trend that could be gaining ground: the pursuit of suburban or rural homes rather than urban or city ones.
Many people have seen the rural and suburban centers have been less affected by COVID-19 than urban settings where population densities are higher. This has prompted some buyers to switch to more suburban locations. Traditionally city residents are opting to move to the suburbs in the hope of a safer, healthier environment.
The move to the suburbs is more or less equally split between first-time homeowners and people purchasing second homes. The lower housing costs in suburban environments is not always the determining factor. There might even be another dynamic at play; time will tell.
What we do know is that as SF suburbs go, Bernal Heights has several factors in its favor. You might like to consider a few of them below.
Bernal Heights is a neighborhood in San Francisco, California. The current population is just over 15,000. Located in San Francisco County, Bernal Heights is one of the best places to live in California.
Roughly 60% of residents own their homes. Bars, coffee shops, restaurants, and parks give an urban-suburban feel to the area.
Public schools in Bernal Heights are highly rated, and the neighborhood is one of the most diverse in the country and popular with the young professionals who live here. Bernal Heights is favorably regarded as one of the 103 neighborhoods in San Francisco suitable for raising a family.
The median home value is just over $1 million, while the median rent is $1,967, compared to the national median of $949.
Prices for residential homes for sale range from around $995,000 to $2.9 million. At the lower end of the range, you’re able to get a two-bedroom, two-bathroom up-and-down measuring roughly 1,100 sq. ft. that includes a basement, garage, and backyard.
This is California, and most homes listed are built to suit the California climate and lifestyle. Spacious living areas are pretty much a given in all the properties bought and sold.
The Bernal Heights real estate agency follows market trends with great interest so that we can best advise our clients. Our knowledge of the market adds to the professional efficiency we inject into the process of buying and selling homes. We back up our intuition with a mountain of research and data so that our clients can make big decisions in their lives.
If you’re thinking of relocating and investing in SF real estate, Bernal Heights is a must-see neighborhood. At Bernal Heights Real Estate Agency, the first thing that will strike you is that we know Bernal Heights inside and out. We are the obvious first choice and know we have the knack to find you exactly what you’re looking for.
We believe our thorough, engaged approach yields enormous benefits all round. If you would like to know more, explore our site and register as either a buyer or seller.
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