Year-End 2020 Real Estate Market Report

August 6, 2021

Market Update + Prediction

Welcome to the final Payton + Binnings newsletter of 2020! As I’m sure you would agree, this is a year we are all happy to put behind us. While we could take this opportunity to tout our accomplishments this year, we would rather focus on the real heroes of 2020...the many frontline workers who have given so much as we faced this terrible pandemic and the scientists who worked tirelessly at unprecedented speed to bring us vaccines. The strides we as a society made in raising awareness of racial justice and inequality were painful, but also were of historic importance. It’s a year none of us will forget and we can only hope things get better from here! We certainly are optimistic, and as many a wise sage has said, pleasure follows pain.

The K-Shaped Recovery:

The K-Shaped recovery theorem states that different parts of the economy recover at different rates. This type of recovery drives a deeper wedge between the haves and have-nots, a recurring theme in societies going as far back as our existence. There is a sector of our economy that is doing quite well, while another sector is getting left behind. San Francisco real estate will mirror this going into the new year. High-quality homes in good locations will be hot commodities (assuming they are priced correctly), while homes that are flawed or suffer obsolescence will depreciate or not sell at all. See our Monthly Prediction section below for more info!

Marin's real estate market has been more forgiving this year. Due to its demand spike, most homes listed in 2021 will continue to ride the wave of increased desirability. The air gets a little thinner above $5m, meaning some of these homes have more difficulty selling due to the smaller target audience and tendency to have higher deltas between list price and selling price. The Marin market will continue to be more forgiving towards flawed properties than San Francisco in the new year and pricing will be of utmost importance.

Things We’re Closely Tracking:

Wow - big things going on here. This is a crucial time in our country for the transition to the new presidency, and our economy is faced with many challenges but also many opportunities. It’s a sea of unprecedented change, so things could go in any number of directions. There are rumblings of a stock market correction in Q1 2021, and the recent red-hot IPOs of AirBnB, Doordash, and Palantir are exciting but also give people PTSD from 1999. The Fed just printed truckloads of money and interest rates have plummeted, both of which have sent people into stocks, ETFs, gold, and cryptocurrencies as cash instruments. Real estate, while less liquid, is also a place people are parking their money. It would seem no one wants to hold cash right now, so it has to flow somewhere. We’ll be eyeing these mega forces closely as we head into 2021 and report back on how any of these open-ended stories impact us here locally. It’s going to be a wild ride!

Monthly Prediction:

This is a new section where we'll attempt to make a prediction about the future based on all the inputs we receive each month - whether it be boots-on-the-ground experience, roundtable discussions we're participating in, or the countless articles, podcasts, industry reports, and other media consumed. Read at your own risk!

What's that squeaky sound you ask?? It's the sound of the window closing. The window of opportunity to snatch up a "deal" in San Francisco real estate. We sense that many buyers have been waiting for a glimmer of hope in order to feel comfortable getting back into the SF market before the opportunity vanishes. With all the positive news of vaccinations, buyers can see a light at the end of the tunnel as we gradually restore confidence in public health. As a result, we expect buyers of this mindset to all rush into the market at the same time, resulting in a very robust Spring 2021 market, with multiple offers commonplace for average, above average, and excellent homes. Dare we say San Francisco's market comes roaring back early next year? We think so.

That wraps up this edition of the Payton + Binnings newsletter. May you and your loved ones have a wonderful holiday season and enjoy a fresh start to the new year, all in good health!

Click here to read the San Francisco market report.

Click here to read the North Bay market report.

*Big news! We are adding two new team members in January. More soon!