The Bay Area has traditionally been seen as one of the most competitive and expensive housing markets in the U.S., but like many locations, it was rocked by the COVID-19 outbreak in 2020.
As the pandemic intensified, more and more people decided to move out of crowded, expensive locations, which cast doubt on the future of the Bay Area and other metropolitan markets. Were we writing the “big city obituary?”
At least in the case of the Bay Area, the answer seems to be “no.” First quarter sales in San Francisco are up 60 percent compared to one year ago, and the median price is up nearly 7 percent.
Demand certainly seems to be there, and that’s part of a national trend. On the flip side, housing supply across the U.S. remains woefully behind — the Wall Street Journal recently reported that the market is nearly 4 million homes short of meeting current demand. In the Bay Area, there are only about half as many homes on the market now as there were in April of 2019, which has contributed to rising prices.
There’s at least some good news on the inventory front, as Reuters recently reported that home building surged to a 15-year high in March. There’s still a long ways to go to meet consumer demand, but it’s a positive start.
Mobility programs should continue to focus on providing the best possible home-finding support to relocating employees. In a market where demand and prices are high while inventory is low, those looking for a new home will face plenty of competition and may struggle to find something in their budget.
Comparing San Francisco's first quarter of 2021 to its first quarter of 2020, the median house sale price is up 6.5%, home sales volume is up 60% and luxury house sales are up 51%, according to Compass data. Luxury condo sales are also up 39%, though the median two-bedroom condo price has fallen by 8%.