Summary

• The San Francisco Bay Area has experienced one of the largest COVID-19 real estate market slowdowns in the US
• Sales of existing, single-family homes in May dropped 51.1% YoY; median prices also dropped
• Sales have dropped significantly compared to supply, which has resulted in an increase in inventory.
• Tech companies signaling long-term acceptance of remote work has increased demand for single-family homes and condos in outer suburbs 

Across California, sales of detached homes fell by 41.4% year-over-year in May due to the continued impact of COVID-19, according to a monthly report released by the California Association of Realtors (CAR). The median price of a single-family home is $588,070 — a drop of 3.7% YoY.

The median price of a condo in California was $464,900, a drop of 1% YoY

Figure 2. shows sales and active listing percentage change for different areas of California for May 2020 versus May 2019. The graph is taken from www.car.org.

Sales of single-family homes dropped more than supply (i.e active listings) in the San Francisco Bay Area, Southern California, Central Valley and the Central Coast, which has resulted in an increase in inventory of 34.4% YoY.

Figure 3. shows the median prices of single-family homes in Bay Area counties for May 2019 and May 2020. Sales of single-family homes in the Bay Area declined by 51.1% YoY. 

Figure 3. Median prices of single-family homes for May-2019 vs May- 2020

The median price of single-family homes decreased in all Bay Area counties except for Solano, Marin and Santa Clara counties. Here’s how home sales and prices broke down by county in May 2020 as compared to May 2019:

• In Alameda County, sales fell 56.5% from a year earlier, while the median price decreased by 0.4%.

• In Contra Costa County, sales fell 52.6%, while the median price dropped by 1.5%.

• In Marine County, sales fell 49.6%, while the median price increased by 7.1%.

• In Napa County, sales fell 53.9%, while the median price decreased by 7.2%.

• In San Francisco County, sales fell 55.6%, while the median price decreased by 4.1%

• In Santa Mateo County, sales fell 44.5%, while the median price decreased by 6.6%

• In Santa Clara County, sales fell 51.1%, while the median price increased by 2.2%

• In Solano County, sales fell 35.1%, while the median price increased by 8.1%

• In Sonoma County, sales fell 54.0%, while the median price increased by 1.4%

“I’ve never seen the demand higher for Marin County real estate than when COVID-19 hit,” Sotheby’s Josh Burns told Bloomberg this week, suggesting real estate agents have been seeing a surprising uptick in wealthy buyers leaving San Francisco. 

Another report by Bloomberg suggested that across the San Francisco Bay area — home to some of America’s earliest and strictest shelter-in-place rules — demand for real estate is soaring in the outer suburbs and wealthy havens known for their gorgeous landscapes. 

From affluent Marin County to Napa wine country and south to Monterey’s Carmel Valley, brokers say the coronavirus outbreak is leading to a surge of interest from homebuyers looking to spread out.

Figure 4. shows the median prices of condos in counties of Bay Area for May 2019 and May 2020. 

Figure 4. Median prices of condos for May-2019 vs May-2020

The median price of condos declined in all Bay Area counties save for Marin and Alameda counties. Here’s how condo sales and prices broke down by county in May 2020 as compared to May 2019:

• In Alameda County, sales fell 67.8% from a year earlier, while the median sales price rose by 1.9%.

• In Contra Costa County, sales fell 63.4%, while the median price dropped by  7.9%.

• In Marin County, sales fell 71.7%, while the median price increased by  13.5%.

• In Napa County, sales fell 50.0%, while the median price decreased by  28.8%.

• In San Francisco County, sales fell 66.9%, while the median price decreased by  11.9%

• In Santa Mateo County, sales fell 49.1%, while the median price decreased by 13.7%

• In Santa Clara County, sales fell 62.8%, while the median price decreased by 6.5%

• In Solano County, sales fell 50.0%, while the median price decreased by 3.5%

• In Sonoma County, sales fell 69.6%, while the median price decreased by 11.2%.

The economic fallout of COVID-19 appears to be impacting the San Francisco Bay Area real estate market in at least two distinct ways. With consumer confidence strained by COVID-19, sales of homes have been dramatically impacted. After all, it’s hard to justify buying a home when your employment situation is uncertain. Additionally, with the advent and potential continuation of work-from-home policies within major tech companies, there is increased interest in moving to the outer suburbs. 

As jurisdictions across the country begin to ease lockdown and stay at home measures, there should be a gradual return to normal buying habits. How long it will take to get there is still unclear.