The Intersection of Open Houses and the Reopening of California
The recent major news announcement that REALTORS® can hold open houses with less restrictions in California adds yet another reason for optimism in the local real estate market. The return of open house advertising and a partial relaxing of social distancing guidelines is in lockstep with the reopening of California as the pandemic begins to recede.
Now, as the summer season begins, it’s a good time to take stock of where we’ve been this past year. No doubt the pandemic has challenged us all. With lives and livelihoods lost and lingering health and economic issues affecting many, we must pause to recognize what we have gone through as a society.
COVID shifted the patterns for everything in our lives, and real estate is no exception. The pandemic saw a shift in open houses and the use of technology to advance the ability to view and purchase homes during the crisis. With the arrival of June, it is possible to see that although the tunnel has been long, there is light at the end. With the deployment of vaccines, and reopening accelerating, there is a slow but steady return to as close to a new normal that we can find. The housing market is but one part of that subtle but positive shift in mood.
There are many national trends contributing to this palpable change in rhythm. First, economic forecasts have steadily improved. These forecasts, combined with substantial pent-up demand from the last year and the sizable amounts of forced savings in the trillions are contributing to a robust real estate scene. The greater Bay Area reinforces these trends with hyper-local elements like a vibrant job market and strong consumer spending.
The home prices in the counties of San Mateo, Santa Clara, Monterey, Santa Cruz and San Benito have also benefited from the rapid and sustained rise in home prices due to many factors, some of which are largely unique to this region according to MLSListings partner economist Elliot Eisenberg. Tech firms were early adopters in allowing their employees to work from home, and offered early guidance about flexible future work arrangements. In fact, tech as an industry has not just survived but thrived during the pandemic. If the pandemic revealed anything, it was the intense need for reliance upon technology for school, work, retail and social needs.
Further, tech stocks have largely outperformed other traditionally strong sectors such as energy, banking, and healthcare, and the greater Bay Area is home to many of the world’s largest tech companies. In addition, equity outperformance has been enhanced due to the widespread practice of granting stock options to employees. This increase in wealth has contributed to home prices rising to levels outpacing much of the nation. In some cases, new all-time price records have been set.
COVID also reinforced the concept of home as refuge from the many stressors of the pandemic. Not only did we need a place to retreat physically from the dangers of COVID, but we needed more indoor space than before for work, school and family harmony. We also saw the value of large backyards to safely gather outside
with family and friends. “Across the country, we saw home buyers expressing a desire for more space due to being at home more, as well as the ability to work from home even post-pandemic. We are unique in that a higher percentage of employees can work from home here than in almost any other geography,” remarked Dave Wetzel, President and CEO, MLSListings. “This cultural flexibility of telecommuting pre-COVID reinforced by shelter-in-place work restrictions is now followed post-pandemic by a large number of companies offering a hybrid model of in-person and remote work.”
As these factors reinforce each other and the summer months get underway, it remains to be seen as to whether we have seen the peak of the market for this year, or whether new records will be set. But one thing is certain: the summer months are historically a good time to buy or sell a home and this year that continues to ring true. As you consider whether to buy or sell, your Realtor® is a guiding star. Armed with MLSListings data, your Realtor® can help
you navigate this summer and beyond.