Inspired by an article from McKinsey and Company, we have been talking about the impact of the current COVID crises on San Francisco luxury real estate and what will happen after there is a cure or vaccine.
Not surprising, COVID and SIP have made people more aware of the limitations of their current living situations. Loud neighbors and a lack of outside space are leading to an increase in supply of condominiums and an increase in demand for freestanding homes in San Francisco. We want to share some examples of the long-term behavioral changes we are seeing and the impact they could have on San Francisco real estate:
- E-commerce and delivery have made a 25 year jump forward in 5 months. We don't think consumers will go back to shopping, especially for essentials and groceries in stores like they used to. This means that going forward, secure and temperature controlled delivery spaces in homes or common areas in condo buildings will be necessary.
- Fears of viral outbreaks will keep baby boomers in their current homes longer. This will increase demand for San Francisco homes without stairs and/or with an elevator. In the ultra luxury segment, we will see an increase in demand for homes which can accomodate 24 hour live-in help.
- We are seeing an increase in demand for homes with multiple office spaces. Will people go back to the office again, and if so, what for? There are conversations in the commercial real estate world about converting 80% of spaces to meeting spaces, since the other work will continue to happen from homes. When did you have your last guest in your guest room? Seperate office spaces might become more important than the extra bedroom- especially when you have multiple people in your home that all need to be in their own virtual meetings, multiple smaller (office) spaces will be a big pro.
- We have enjoyed dinners with our core family most nights. It is one of the silver linings of this crises. We are so happy that we added the formal 12 person dining room to our family room during our remodel several years ago. Larger family rooms, where families can be together while doing their own things are the future.
- Some homes have already added hand washing sinks, before one would enter the main home.... Are people going back to not washing their hands frequently when this is over?
- We have a shortage of bikes for sale in San Francisco. Now that we no longer use ride sharing, people have started using them for their commute, which also leads to a need for storage including charging for electric bikes.
These are just some examples of long-term behavioral changes driven by COVID. I'm sure that there are many more. Through the years, people have valued different aspects of homes. Over the last century, we have seen the kitchens increase in importance and dining rooms becoming less of a sales point. We are seeing that buyers are and can be more critical at the moment and we encourage owners and future sellers to think about the longer lasting behavioral changes when remodeling or when they get their homes ready for sale.