Welcome to the May 2021 edition of the Artemis Real Estate newsletter! We hope your summer plans are taking shape and you've got some fun things in store. In the meantime, we'll keep you updated on all the latest going on in our real estate markets.
The San Francisco and Marin markets have both cooled a degree or two since we last wrote. While both markets remain very active and prices are continuing to increase (for most--not all homes), one harsh reality has come to light. Homeownership may very well be the latest luxury good. "Luxury" because housing has become inaccessible for many Americans, particularly in the Bay Area where wealth inequality is some of the starkest in the nation.
Pressure on the housing market is coming in from all angles - from a bullwhipped supply chain (affecting the cost of raw materials) to investment firms snatching up huge swaths of housing stock -- supply-side pressure is continuing to mount. Combine this with low interest rates and an all-time high for demand in housing, and you're left with an unprecedented set of market conditions that have driven prices into the stratosphere. Move over Hermes bags, homeownership may be the new luxury good.
Monthly Prediction - More YOLO'ing:
This is 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!
As the reality of the pandemic set in, many of us were faced with pondering our own mortality, as well as our loved ones. Facing these realities have far-reaching psychological effects, and we've come to understand a few ways in which this will (we predict) affect commercial and residential real estate for years to come.
Bloomberg just put out THIS article stating that many employees are quitting their six-figure jobs in order to retain the freedoms that remote work has afforded them. When asked to come back to the office, many have put in their resignations instead. Brian Chesky, Founder of Airbnb, recently stated that the company has uncovered new data trends, showing that many young people are using Airbnb to hopscotch around the globe, working remotely, while simultaneously exploring every surface of the Earth. It's an innovative way to experience something usually reserved for the retired or very fortunate - but doing so now while also earning. A couple of months working in London, pack the bags, head to Amsterdam for a couple of months, rinse and repeat. These nomadic types are not in the housing market at all - not even the traditional rental market.
These trends point to a dramatic shift in thinking. People are coming up with clever ways to enjoy life now - not wait around for retirement. The term YOLO (You Only Live Once) describes this trend best. With flexible work arrangements becoming increasingly common, new lifestyles have become possible. And there are many hybrid versions. YOLO'ing around the globe. YOLO'ing for that resort-style estate. YOLO'ing your life savings into AMC (haha).
Said trends could forever change real estate as we know it, and that takes us to this month's prediction: Expect to see significantly more YOLO'ing. The above stories are not uncommon and represent just a few examples of not just where people live, but the very way in which people live. Commercial and residential real estate will forever be impacted by psychological changes brought on by the pandemic.
Click here to read the San Francisco market report.
Click here to read the North Bay market report.
That wraps up this month's edition! If we can help you or any of your connections YOLO for that new house, you know where to find us!
Arrian, Payton, Sejal, Jennifer, Lorelei, and Colin