Amount San Francisco County Apartment Price Reductions by Year
If you’re bullish about people flooding back into big cities after vaccinations are distributed, it may seem like the perfect time to purchase a condo in San Francisco or the SF Peninsula if you were previously priced out, whether as a residence or as an investment. But there are a lot of variables at play, mainly inventory and job creation.
With an influx of condo inventory, and new construction apartment buildings either nearly complete or about to break ground, it would seem the condo market still needs time to return to normal levels. In San Francisco at least, there are 18,000 condo units approved or permitted to begin construction, with around 4,000 units nearing completion, most likely hitting the market this year. These new SF developments include the Four Seasons Private Residences on Mission Street and One Steuart Lane on the Embarcadero. With more apartment buildings set to complete in 2022 and 2023, inventory could stay at higher-than-normal levels for at least the rest of the year and potentially longer.
In addition to inventory, one of the biggest drivers of the value of rentals and condos in the Bay Area is jobs. While companies like Twitter and Facebook have come out with a “pro-WFH” attitude, there are still plenty of tech CEOs that are looking forward to a return to normalcy, and their grand Bay Area offices. Reed Hastings, CEO at Netflix said in a recent Wall Street Journal article, “I don’t see any positives. Not being able to get together in person, particularly internationally, is a pure negative.”
Reed Hastings, CEO @ Netflix
Tim Cook, CEO at Apple said in a recent conference “In all candor, it’s not like being together physically. And so I can’t wait for everybody to be able to come back into the office. I don’t believe that we’ll return to the way we were because we’ve found that there are some things that actually work really well virtually.”
Both CEOs, making up 2/5 of FAANG, seem primed to get back into their Bay Area offices. When those companies make their way back to the office, expect even more job creation. Local tech companies like Apple, Netflix, Tesla, and Facebook have posted huge gains in both revenue and stock price, which will most likely mean more investment in job creation. Speaking of Facebook, in September they purchased REI’s new corporate headquarters in Seattle for a whopping $367M. Along with Amazon’s recent lease of 2 million square feet in two new developments in Washington, tech giants are betting big on an in-person future.
If you can stomach prices potentially staying at current levels or dipping a bit more before bouncing back to normal Bay Area prices, it’s a great time to snag a condo in San Francisco and the peninsula. It’s certainly a buyer’s market with condo inventory at the highest it’s been in 15 years, and interest rates lower than ever. Even still, you’ll want to make sure that you’re negotiating the right price as the market continues to twist and turn.
Need help navigating the market? Use our chatbot to the bottom right to get in touch and chat with us.