In the midst of an ongoing pandemic and raging wildfires, home sales in Los Altos have rebounded from pre-COVID levels and are outpacing numbers from a year ago. Want to get a market report for your city? Send us an email.
As you can see from this chart, the Bay Area is experiencing net negative migration, which means more people are moving out every year than moving in. And more and more often, Bay Area residents are migrating just outside the region to adjacent counties. Why?
Well, as you might expect, affordability is the most common concern, and a longer commute is worth the savings on housing costs. But these days, there’s often a lot of two-way traffic, particularly between Alameda and Contra Costa counties.
When they move out of state, Bay Area (and California) residents mostly choose states with no income tax like Texas, Nevada, or Washington, adjacent states such as Arizona and Oregon, or states with major high-tech centers — all of which have much lower costs for housing and basic needs. At the same time, California has some of the highest income tax rates of any state in the country, and the legislature is actually considering increases on affluent residents!
Meanwhile, people moving into the Bay Area come from just about everywhere — including a significant, but declining number from other countries. Please contact the Geek for a full report.
Last week, we showed you how sales activity in the Bay Area didn’t dip significantly during the recent wildfires, except in the few counties where the fires were concentrated. According to the chart below, listings going into contract in Santa Cruz County fell more than 30% during the height of the CZU complex fire, nearly reaching lows from the peak of the shelter in place.
Meanwhile, things weren’t much better in Monterey, Marin, Napa, Solano, and Sonoma counties, all of which saw huge year-over-year declines in August activity.
Surprisingly, the fires did not significantly impact the number of deals being made in most Bay Area counties during the last two weeks of August — with exceptions in Santa Cruz, Sonoma, Monterey, and Napa Counties, which saw declines of 13% to 33%. This chart takes a look at week-by-week activity in the Bay Area.
If you’re thinking of getting into the rental property market, you should know that COVID-19 is having a significant impact on many landlords, but it’s nowhere near the norm. According to a nationwide survey by the National Multifamily Housing Council (NMHC), 30% of tenants couldn’t pay their rent on time in April, and nearly ¼ of Americans had difficulty paying rent at all.
But it’s worth noting that less than 3% of historically on-time tenants were late or defaulted on their payments. Additionally, renters paying less than $1,000 and over $5,000 per month were more likely to be late or default. This is primarily tenants in service industries with low incomes and students in overpriced rental housing near universities.
Meanwhile, the vast majority of landlords have tenants who are still paying on time, so don’t count yourself out of the rental property market yet!
