The new year is well upon us, and thankfully 2020 is now long gone. Of course, there will be carryover — many of the challenges we faced in 2020 are still unfortunately much a part of our daily lives. But we can all hope for a better tomorrow, and truly take comfort in knowing that in the not-too-distant future Covid-19 will be less of a factor, and consequently the economy and our lives will be able to return to a near-normal.
All in all, 2020 was a rather remarkable year for San Francisco real estate. In spite of the pandemic, a battered economy, and an interruption in the way properties could be sold, home values actually went up in the city.
According to the San Francisco Association of Realtors, based on a rolling 12 months of data, the median price for a single family home in 2020 was $1,650,000, up 3.1 percent over 2019 — and an all-time annual high. Meanwhile, the median price for a condo or loft during the same period was $1,206,000, down 3.1 percent from the previous year.
There were 2,229 single-family homes sold in 2020, up 2.3 percent over 2019. And there were 2,426 condos or lofts sold, down 4.3 percent from the previous year.
According to Ron Wong with Compass Real Estate, December ended strong. “Responding to off-market deals, expired listings and vaccine talk, serious buyers started to resurface,” he said. “At the same time, a large number of sellers began to coordinate with agents to prepare for the listing of their homes in 2021.”
Momentum carried into January. Early in the month buyers were actively looking, and there were many multiple-offer situations on single-family homes. According to several sources, the real estate market was especially strong in Marin and the East Bay.
“A Sunset house went on the market and two days later got multiple preemptive offers,” said Mike Tekulsky, Wong’s partner at Compass. “In the East Bay, a North Oakland house got twelve offers and will sell at least 45 percent over asking,” he added.
Low interest rates and good weather contributed to the strong start. Condominiums continue to be the best bargain in the city, and savvy buyers are beginning to catch on. When things open up again industry insiders believe that there will be a big increase in demand, and consequently price. Now they say might be the best time to get a foothold in the condo market.
There is a chance that open homes may be a thing of the past, even postpandemic. They were once considered an important part of the home-buying process, but according to a recent SFGate.com report, buyers have grown comfortable with searching for homes online and touring them remotely. If genuinely interested, buyers can ask listing agents for a viewing appointment.
For both agents and sellers, this is actually a positive change, because in the past the majority of people visiting a home during an open house were never actually going to buy the property. Buyers benefit as well, as they are no longer rushed to look at as many homes as possible in an all-too-short two-hour window on any given weekend.
What is now just beginning to emerge is the impact of Proposition 19 on the market. This is a hot topic among real estate agents, according to Wong.
Proposition 19, billed as “The Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment,” passed with 51.1 percent of California voter approval in November. As a result, 2021 will see sweeping changes in property taxes assessed on personal residences. Those changes are just now coming on line.
For residents age 55 and older, severely disabled, or a victim of a wildfire or natural disaster, there is much to like about Proposition 19. Effective April 1, 2021, those eligible homeowners can sell their homes and take their property tax base with them to any other property they buy for the same value or less in the state of California.
Teresa J. Rhyne, with the TR Law Group, explains the proposition and its ramifications clearly in a recent column published by The Press Enterprise. She notes that residents over age 55 can also benefit from the proposition even if they’re looking to upgrade to a more expensive home.
According to Rhyne, the rub is for their children. Essentially, beginning on the 16th of this month, a transfer of a principal residence by a parent to a child is only exempt if the parent was using the property as their principal residence and the child will also be using the home as his or her principal residence immediately following the transfer.
The details on all of this can become fairly involved. Suffice it to say, this is uncharted territory. However, because of this proposition, there will most likely be an increase in the volume of homes sold this year and beyond.
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