Market Update: Northern California
Areaa Global’s most recent Market Update featuring Northern California takes a look at the current real estate trends within each center, focusing on San Francisco and including Silicon Valley, Central Valley, Sacramento, and Lake Tahoe.
While looking specifically at the current Luxury Real Estate market throughout Northern California, Goldengates Sotheby’s international Realty’s number one agent and Areaa A-lister, Herman Chan, describes the current Bay Area Luxury Market as “segmented”.
While ultra-high net-worth purchasers are taking this opportunity to invest in completely self-contained compounds that fulfill one’s every need, buyers in the $5-$10 million dollar range are being a bit more cautious with their purchases. In other words, those with the money are buying now simply because they can, whereas the luxury working class buyers are not generally being reflected in the current Bay Area luxury home market.
“There are people from Silicon Valley leaving the area to get a better value elsewhere, but everyone’s looking for where they are going to be able to serve all their purposes,” Herman highlights. “A home is not just a home anymore.”
While Bay Area residents adjust to post-covid living, many buyers rush to the more affordable and spacious locations, as many are now working from home. Priced lower than Silicon Valley, the Central Valley has been experiencing this first hand, where relocating clients are snagging up available listings throughout the area. A strong Sellers Market is currently underway for the foreseeable future, explains Saeng Bunsy, Real Estate Agent with Iron Key Real Estate and Areaa A-Lister.
More aftermath can be seen rippling through the affluent second home market of Lake Tahoe, now being more recently referred to as “San-Tahoe”, explains Rachel Turner, with the Luxe Group Tahoe Sierra Sotheby’s. While the Bay area has always been the primary feeder market for Lake Tahoe, mainly consisting of second homes with an average of only 20% occupancy rate year round, a recent shift in real estate trends has sky-rocketed the recent demand for permanent residences in the area, completely changing everything, and not just throughout Lake Tahoe.
Similarly in the state capitol of Sacramento, only 1.5 hours away from Napa, Tahoe, and the Bay Area, buying frenzies are occurring with an influx of Bay Area buyers looking for more spacious and affordable homes to shelter in place, pushing the demand past available inventory levels. For example, there were a total of 17.2 listings which received multiple offers throughout July 2020. Not only are people taking advantage of low interest rates, but investment buyers of all kinds are simply moving in because the market is that hot, says Samantha Tov, Co-Founder of Portfolio Real Estate and Areaa A-lister.
The question of how long these trends will last remains. Overall, the next 3 months will be very interesting as we head into the election and government subsidies from COVID-19 come to an end, Herman Chan explains.