The Monday Morning Real Estate Update — Monday, December 14th, 2020
By: Mykel Ferrantino
Tags: San Francisco, Covid 19, Real Estate

The Monday Morning Real Estate Update — Monday, December 14th, 2020

Podcast Transcript of Never Too Late To The Game’s Monday Morning Real Estate Update, December 14, 2020.

San Francisco Comings and Goings

Rents have plummeted 35%. I don’t think we are anywhere near bottom yet.

Japantown is hanging by a thread. But let’s be clear, Covid-19 is the nail in the coffin and not by any means the sole cause for the impending demise of Japantown. Tenants already had their Common Area Maintenance Fees (CAM Fees) spiked 90% in 2019. It appears that the owners, 3D Investments and Kinokuniya, — have bigger plans.

SF Gate contacted 3D Investments for comment but they were ignored.

Meanwhile businesses in Chinatown are also struggling.

San Francisco’s only Olive Garden has closed permanently.

The Cliff House Restaurant is closed permanently

Oracle has announced that they are moving their headquarters to Austin and mentioned the new employee structure (remote work and office options).

Covid-19 gave companies the answer to two long-standing questions: could employees be trusted to work from home and would there be any change in productivity?

The answer has been a resounding yes and yes productivity has reportedly gone up, releasing employers from a plethora of expensive benefits and ultimately office space.

If there is any hesitation, it is the outstanding question of whether or not productivity will change post Covid-19, as social and recreational options return.

For San Francisco the question remains: has the city (or state) done enough to secure Federal assistance for small business, house the homeless, work with landlords?

The answer is No.

This past week I talked to a friend who manages 600 San Francisco apartments. He said he can’t even count the number of vacancies or of people who have just stopped paying rent. He also mentioned that many landlords (the smaller ones) are severely hurting.

It is interesting to observe how other governments have handled the financial effects of Covid-19 with assistance to citizens.

In San Francisco, as tech companies and other corporations move to avoid dealing with the very income inequality they created, where is the city in negotiating and repurposing office space into residential space?

There are many opportunities being missed.

The NY Times published an article this past week to talk about the notion of converting vacant commercial space to residential. Seems NYC is thinking out of the box…

The “Professionals” are Weighing-in, Bullishly

Real Estate Coach Brian Buffini and Lawrence Yun, a NAR economist, are both bullish on 2021 predictions for the housing market. Here’s a quick summary of what they are predicting (my comments in parentheses):

Remote work will continue to spread out the population; they’re calling it decentralization. (I guess everyone wants to mimic blockchain these days — Duh.)

to spread out the population; they’re calling it decentralization. (I guess everyone wants to mimic blockchain these days — Duh.) The death of open floor plans continue as homeowners scramble for zoom meeting privacy in their homes. (The Pandemic has forced people to use their kitchens and with open floor plans, frying garlic & onions can permeate the entire house.)

continue as homeowners scramble for zoom meeting privacy in their homes. (The Pandemic has forced people to use their kitchens and with open floor plans, frying garlic & onions can permeate the entire house.) The wealthy are upsizing and so is everyone else by moving to suburban and rural areas.

and so is everyone else by moving to suburban and rural areas. The biggest challenge is connectivity. Believe it or not, America has become somewhat of a 3rd world country in terms of connectivity outside of larger cities. (This must be socialism.)

Buffiini is so bullish that he goes as far as to recommend that real estate professions should buy for themselves. (Buying is good, but as always it is about two things: Market Timing and location.)

The San Francisco Market by the Numbers

STAY POSITIVE & KEEP HOPE ALIVE

Together we will get through this time, together we will co-create a better world, a better community and a better economy that we all know in our heart’s is possible.

If you would like to hear my Podcast of this article, please visit Never Too Late To The Game’s Monday Morning Real Estate Update for December 14, 2020.

You can also find me on Spotify, Google, TuneIn, Stitcher and Apple Podcasts.

If you’re a buyer, seller or investor in the Bay Area and looking for an agent, you can contact me on Facebook or leave a message or text at 415–787–7350.

I have a great team with a lot of resources behind me at Keller Williams where I am a broker associate — and this means that you will also have a great team and resources behind you.

CA Broker’s License is #01884928.