West Coast City and Suburban Condominium Markets Are on Totally different Planets

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West Coast Urban and Suburban Condo Markets Are on Different Planets

SAN FRANCISCO – Polaris Pacific recently launched a weekly real-time market trend dashboard that measures changes in the condominium sector in eight core West Coast markets and provides data to help manage the complexities caused by COVID-19 in those markets. The COVID-19 dashboard is updated every Tuesday and offers real-time statistics and insights that provide a glimpse into the ongoing impact of the pandemic.

"Polaris Pacific's goal was to develop a tool that would provide real-time data on the condominium segment of the markets we operate in to help our customers and the public make informed, informed decisions at this unprecedented time," said Garrett Frakes, managing partner of Polaris Pacific. “Our experience with COVID-19 shows that the various segments of the real estate market act radically differently. Broad-based tools like Case Schiller have worked in the past to assess the entire housing market but do not work effectively in the current situation. The weekly data we provide shows how different markets function independently and how local pandemic conditions are affecting sales. "

Core cities monitored in the dashboard include San Francisco, Los Angeles, San Diego, Silicon Valley, Oakland / Emeryville, Phoenix, Seattle, and Denver.

"COVID-19 has improved the typical methods of evaluating sales data and trends in urban areas," Frakes told GlobeSt.com. “The urban markets on the west coast do not correlate significantly with the markets in the suburban areas with low density. The purpose of the COVID-19 dashboard is to provide specific lighting for condominium housing. Substantial investments have been and will be made in this category. The Polaris Pacific team and our clients need up-to-date data to make decisions about the direction of the assets in which we are involved. "

Since the shelter-in-place regulations began in February 2020, most markets have seen a decline in transaction volume. While median sales prices in many markets have remained close to pre-COVID levels, the decline in sales is a leading indicator of possible price declines. Most of the West Coast markets recovered that summer. However, the volume remained volatile as cities grapple with different numbers of coronavirus cases.

"The biggest surprise we've seen is the resilience of certain markets to others," said Paul Zeger, partner at Polaris Pacific. “Phoenix is ​​a prime example. Arizona saw serious spikes in COVID-19 case numbers in June and July, but condominium market conditions remained healthy. Silicon Valley has done well even during this crisis, which is evidence of the need for housing in this region. The other welcome surprise is the relative optimism most have about 2021 and beyond. This is reflected in the number of closings in various new communities. Very few buyers are currently rethinking purchasing decisions. "

After a dramatic decline from late March through June, sales volumes in San Francisco appear to have stabilized at levels below 2019. In May, June, and July 2019, San Francisco condos were 7.5 to 8% above listing average.

In the same months of 2020, homes sold for just 0.6-1.4% above list price. Lower demand was the driving force behind this as fewer buyers in the market led to fewer opportunities for bidding wars.

San Francisco transactions in the $ 800,000 to $ 1.4 million range have been most active in the final months of the pandemic, while the $ 2 million and above range is still struggling to get back on track, so the COVID-19 dashboard.

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