In the midst of the ongoing COVID-19 outbreak in the Bay Area, San Francisco’s home sales inventory have nearly vanished.
In the weeks since Bay Area counties began following shelter-in-place orders, the number of new homes appearing on the multiple listing service (MLS) during what is typically one of the region’s busiest periods is shockingly small, with a great number of once-listed properties disappearing around the same time. The market melted away in a matter of weeks or, by some metrics, days.
Compass Real Estate reports that the rate of new listings in San Francisco fell off a cliff in mid-March, dropping to less than 20 per week by the end of the month. The number of active listings nosedived from roughly 1,000 at the start of March down to just 550 three weeks later. And the number of listings pulled off the market increased more than tenfold in just a single week between March 9 and March 16.
Jeff Tucker, economist for the real estate listing site Zillow, tells Curbed SF that on March 16, the day that six Bay Area counties, including San Francisco announced shelter-in-place orders, SF-centric traffic on the site dropped by one-third. Since then it’s risen slightly, but still down 20 percent year over year last weekend.
A similar trend can be found on the other side of the bay. Red Oak Realty CEO Vanessa Bergmark, who calls the last three weeks “grim,” says that the East Bay saw only 55 new listings last week, a decline of 70 percent compared to mid-March. The East Bay (including Oakland, Berkeley, Alameda) showed 374 homes listed last week, down 37 percent year over year.
Lending markets are actually quite busy these days, but the biggest mover isn’t mortgages but refinance requests. Finance site Lending Tree reports that refinances are up 417 percent year over year in SF, the highest rate in the country. San Jose came in third nationally with 394 percent.
Compass analyst Patrick Carlisle points out that early spring is usually the busy buying season, but the public health emergency has chopped it off seemingly at the roots.
“It is unknown what the ultimate effects will be over the longer term,” he cautions, pointing out that longer-term benchmarks like median prices won’t be affected for months. But right now there’s essentially nothing by way of encouraging signs.
Nevertheless, some real estate agents are sticking with the principles of salesmanship and continuing to tout what they say is the strength of the SF home market, even as it contracts.
Marco Carvajal, a realtor with Vanguard SF, says that with inventory down 40 percent in three weeks and the stock market disintegrating, “In almost every other city this would lead to buyers climbing under the nearest rock.”
Despite the downturn, he persists that the appeal of SF real estate remains a strong motivator, reporting anecdotally that more homes have shied away from the MLS and are instead trading hands privately. If a chance to buy the kind of home that only comes along every ten or 20 years pops up, “the time is now,” he says.
Wilson Leung, owner of Own Real Estate, tells Curbed SF, “People do want to sell, in any market,” and predicts that current declines represent uncertainty about shelter-in-place orders rather than loss of faith in real estate.
“I anticipate inventory will spike once the shelter is over,” he adds.
Zillow’s Jeff Tucker concurs, noting that a lot of missing listings are likely from people afraid of having a property linger on the market without buyers right now and hurting their long-term prospects, or of having a sale potentially fall apart because of economic uncertainty.
“It never looks good to have a sale fall through,” says Tucker. Although the current circumstances could provide some charity about sales snafus, in the end “it’s still adding some risk.”
Questions about how strong SF’s real estate market is right now might be moot, given that it’s unclear whether Realtors are even allowed to perform basic tasks of selling homes. For weeks, shelter-in-place orders have precluded agents from giving tours, taking photos, or visiting listed properties.
Over the weekend, the federal Department of Homeland Security released an advisory designating both residential and commercial real estate as “essential businesses” during the public health crisis. California Gov. Gavin Newsom concurred.
However, local health ordinances, like the one in San Francisco, still do not permit real estate businesses to do anything except work from home, and it’s unclear which set of orders takes precedent. As with all other things, uncertainty is very much the zeitgeist right now.