SF homebuyers get pickier amid pandemic concerns, agents say
July 8, 2020
Is the pandemic hitting the condo market the hardest?
Photo: Open Homes Photography
Private outdoor space is a new must for San Francisco buyers. This Castro home with a three-level garden is a prime example.
The rumors are rampant — San Francisco residents are fleeing the city in droves and the real estate market locally is doomed.
But according to local agents, reports of the San Francisco real estate market’s death have been greatly exaggerated, and they instead report that there’s a “robust” market for homes that tick all the boxes for ever-pickier buyers.
It’s not that the trend of buyers moving out of the city isn’t happening, explained Compass agent Bill Kitchen, who had several SF clients decamp in search of more space in the suburbs. There are still plenty looking to stay put, with their sights set on a new must-have: private outdoor space. “I am seeing outdoor living as a big trend right now in San Francisco,” he said. “Those cooped up in a small condo are looking for some outdoor space, even if it is a small patio.”
A Strong Market for Single-Families
The real decline may hit the condo and rental market more than the single-family market, as those who were renting may be more likely to leave the city entirely and those who want to stay may be seeing homeownership with new eyes. “It seems as though buyers are prioritizing single-family homes as opposed to condominiums and, more particularly, homes that offer some outdoor space,” said Sotheby’s agent Tania Toubba. “One of my clients was tired of sheltering in his small apartment and decided it was time to buy a place with some space.”
While rents may continue to decline and condos without private outdoor space are likely to see a drop in value, the single-family homes those condo-owners and renters now want have become more desirable than ever. “Single-family homes at the entry-level seem to be moving quickly, while some of the higher price points are slower,” said Compass agent Dennis Otto.
“I am definitely seeing a slowdown of the ultra-luxury market,” agreed Compass agent Nina Hatvany. “We had a beautiful listing on Jackson for $8.5 million, which only got one offer and it was an unusual structure. Listings are taking longer to sell and buyers have the luxury of being more discerning and taking their time to consider construction costs and get additional inspections before they settle on a home.”
Is Summer the New Spring?
Toubba said the slow spring season has pushed sales out by a few months. She expects an “unusual” summer for luxury listings in particular; they usually drop precipitously in the summer months as high-end buyers and sellers often take extended summer holidays. But this year more of those buyers are in town, while at the same time, more sellers who had the option to wait out the spring are feeling comfortable listing their homes. “Our San Francisco summer market may very well feel like our spring market because of the pent-up demand,” she said. “Sellers who held off putting their houses on the market in March and April seem ready to sell.”
But the summer season might not have the same frantic feeling as the typical spring. All the agents felt that spending more time at home has made buyers realize they aren’t willing to compromise on getting exactly what they want. “It seems that homes with a perceived flaw or those that are overpriced are being overlooked,” said Otto.
“Being able to have the entire family home with adequate work and study areas plus space to unwind and play now needs to be perfect,” agreed Compass agent Brendon Kearney. “Having the perfect mix of indoor and outdoor space is essential. Pre-COVID any of these details may have been compensated for with a nearby park or coffee shop, but today the home must be multipurpose and still have an intimate connection to the owner.”
Still, San Francisco neighborhoods that were popular pre-COVID are likely to remain in demand, even if all the amenities in those neighborhoods aren’t accessible at the moment, he said. “I am seeing buyers stay true to the neighborhood and locations that they know and love,” said Kearney.
Emily Landes is a writer and editor with an obsession for all things real estate.
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