California is Still a Great Place to Call Home
Despite the headlines on wildfires, gubernatorial politics, and mass out-migration, a recently released study by the University of California confirms what multiple other studies have shown, namely that there is no evidence of an abnormal exodus out of the Golden State, particularly amongst high wealth individuals. The study reveals that two-thirds of individuals leaving San Francisco moved to the neighboring eleven counties in the
greater Bay Area region, as opposed to outside the state. MLSListings partner economist Dr. Elliot Eisenberg notes that “buyers are still looking to leafy areas for their post-pandemic
lifestyle and the counties of San Mateo, Santa Clara, Santa Cruz, Monterey and San Benito, with their overall proximity to San Francisco, check the boxes for many tech workers who want to take advantage of employers’ work-from-home policies but may still need to go into the office periodically.”
Additionally, California remains a highly attractive state for technology and venture capitalists. As has been the case since the beginning of the pandemic, the stock market has performed well, which has greatly benefited our region during the pandemic.
While interest rates went up early in 2021, which portended bad news for tech stocks, the recent decline has boosted tech stock valuations. Dr. Eisenberg notes that “it appears as though the interest rate fears of early 2021 are firmly in the rearview mirror, giving added fuel to the local real estate market.”
All of this makes California real estate one of the most steadfast and strong factors driving the Golden State’s economy. In fact, the compelling story of this most recent quarter is the stunning
amount of real estate that has changed hands across the region – with $16.5 billion in combined sales volume across the five MLSListings counties of San Mateo, Santa Clara, Santa Cruz, Monterey and San Benito. While an imperfect comparison, the MLSListings service area alone would have had an annualized
GDP greater than Costa Rica or Panama. 2021Q2 GDP growth will most likely exceed 9%, and possibly
even an eye-popping 10%, encouraged by the residual effects of the $1.9 trillion American Rescue Plan, improving vaccination rates, steady job creation, high levels of savings, and a strong demand for dining out, travel and other services that were largely off-limits until recently due to COVID.
2021Q3 GDP growth should weigh in at close to 8%, and 2021Q4 should close out the year at better than 6%. At worst, this year will experience the highest rate of growth since the recovery
from the double-dip recession of the early 1980s, and at best, it could be the strongest since the very early 1950s.
“There is a gravitational center to the tech industry here that can’t be denied. This creates a halo effect that nurtures the indomitable spirit of Silicon Valley innovation and supports living in a community with other creative people that in turn spurs even more collaboration and ingenuity. Meeting people in-person and making connections within the Northern California ecosystem is a driving force in the real estate values here. It is that palpable sense of opportunity at every corner,” remarked Karl Lee, Chair
of the MLSListings Board of Directors.
What does this mean for you? Now is a good time to consider whether to buy or sell a home here. With the economic indicators at play, this is an opportune time to start to think about your next home. Is this the time in your life to downsize due to an
empty nest or to upsize as your family grows? Are you interested in moving closer to nature as a respite from the city or conversely, seizing the chance to move back to a city after spending time in the suburbs? As summer slowly yields to autumn, whether you are contemplating to buy or sell a home, your Realtor® is your guiding star. Armed with MLSListings data, your Realtor® can help you navigate the change of season both in your life and as the calendar pages turn from summer to fall.