Pandemic splits housing market and rental costs in San Mateo County

Median rents reached $2,215 for a one-bedroom unit in the city of San Mateo according to the October report from rental website Apartmentlist, marking a 3.7% dip from the previous month and steep 11.9% drop from the same time last year.

The price drops are not specific to San Mateo, said the report, which indicated the general Bay Area is experiencing widespread declines — most notably in San Francisco, where prices plummeted 20% from the year prior.

Citing the influence of those wanting more space, as well as a desirable buying landscaping featuring low rates, housing experts said the pandemic fueled divergent market trends.

“The U.S. housing market has been caught up in a ‘perfect storm’ during the COVID-19 pandemic,” said Selma Hepp, an economist with housing market resource CoreLogic, in a prepared statement. “The substantial swing in demand is driven by a need for indoor and outdoor space met by record low mortgage rates and a wave of millennials who were on the verge of buying — all competing for fewer and fewer homes on the market.”

Hepp’s perspective is a national one, assessing the Case-Shiller Index which in July showed a nearly 5% increase due to positive drivers backing the housing market.

Her report said the real estate industry experienced rapid growth over the summer, as buyers scrambled to make up for lost time following the spring shutdown at the start of the traditional selling season.

Elmer Martinez, president of the Board of Directors for the San Mateo County Association of Realtors, or SAMCAR, said a similar phenomenon occurred locally as well.

“As soon as we were able to start showing homes, the market took off,” said Martinez.

Once transactions started, Martinez said he feels the market has caught pace with prior years culminating in a hot summer for home sales and rising prices.

SAMCAR reports support that assessment, as the county’s median prices gradually ticked up to $1.7 million in September — about $100,000 more than April and May when the market stalled due to bans on showing homes. Overall, the September prices mark the top of the market over recent years, and up about $300,000 from this time last year.

Real estate website Zillow projects additional growth ahead too, suggesting the sales price of San Mateo County homes will increase by 3.6% over the coming year. For context, the website claimed home values grew by 1.6% over the past year.

There are some signals that home sales are softening though, said Martinez, who suggested there are more homes available now than have been in recent years.

MLSListings concurred, showing the county’s inventory of 673 homes in August marked an increase of 26% from the 535 listed at the same time last year.

Further assessing the pandemic’s sway on the market, Martinez said he has seen some who are priced out of the Peninsula find home buying success in East Bay communities they wouldn’t typically consider.

With remote work cutting traffic and shrinking commutes, Martinez said proximity to the Peninsula’s job center is less important and expanding the horizons for those in the housing market.

And with notable employers announcing that workers will not be expected to return to an office any time soon, Martinez said he expects the emerging trends to hold through the immediate future.

“This is the new normal,” he said.

austin@smdailyjournal.com

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