Real Estate Trends
Something funny happened to me at work this week. We manage our son’s condos and co-op apartments. The one near downtown San Francisco has been on the market for lease for months now. We reduced the lease price 3 times. The other apartment on Grosse Ile Michigan leased in one day with two takers!
San Francisco known as one of the tightest real estate markets in the world has an overabundance of 1 bedroom apartments to rent. Grosse Ile that had a slow rental market in January is now all rented up. Is this the trend.
Little early in the pandemic to know if these trends will continue but the reports are saying that there is a move back out of the urban centers and into the country and suburbs. As to the pandemic people want to reverse the trend from getting near the action and close to people. The safer place to be is out in the country not using any elevators and wide spacing between neighbors.
If one is out of work or working from home it no longer seems beneficial to pay the high dollar to be close to the central business centers. Might as well live where the rents are lower and congestion is less.
A long term concept that seems to be holding true is that one-bedrooms rent well in good economic times. People move out of parent's homes or are willing to pay the whole rent. Two bedrooms rent better in hard economic times as individuals double up to share the rent. A two-bedroom rent divided in half is well below the cost of a one-bedroom rent.
Some national are regional reports are suggesting that for at least as long as the pandemic is an issue, buyers are also moving from the central cities to the suburbs and countryside. This reverses a 20-year short term trend and a 200 year long term trend. Those trends were interrupted by 50 years of moving to the suburbs from the city by the prior generation or two.