Checking in on the path of pandemic homebuying

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In early 2021, Marketplace spoke with three real estate agents in San Francisco, Tahoe City, California and Missoula, Montana to trace the path of pandemic homebuying as Americans migrated out of big cities and into more rural parts of the country. 

As the acute effects of the pandemic subsided and the housing market cooled, we’ve kept in touch. Now, with U.S. mortgage rates averaging close to 7% and some housing economists predicting a “turning point” on the horizon, we checked back in. 

San Francisco

“There was a point where selling real estate in San Francisco was almost like being in one of those quiz game booths where cash is swirling around, and you just have to grab it,” said Cynthia Cummins, owner and Principle Realtor at Kindred SF Homes. “That’s not happening now.”

Cummins said while inventory remains low and prices high, there are fewer sales happening than in recent years. “It’s still a seller’s market,” she said. “But buyers are being very circumspect.”

Recently, a number of retailers including Whole Foods, Old Navy and Nordstrom have closed stores in downtown San Francisco, triggering news stories about a retail “exodus.”

Cummins said she feels like “doom and gloom” narratives about San Francisco’s changing real estate landscape have been overblown, but said the city is noticeably quieter. “There’s something nice about it, but it does feel a little too quiet,” she said. 

Tahoe City, California

By contrast, David Westall of Sierra Sotheby’s International Realty said North Lake Tahoe is much busier than its ever been. 

“Our town has become more vibrant,” he said. “The downside to that is there’s a little more traffic, there’s a little more congestion.”

That’s due in part to an influx of remote workers who bought vacation homes during the pandemic. Westall said it seems like most of them have been able to maintain at least partially remote schedules even as companies call workers back to their offices. 

“The key to our market right now is a lack of inventory,” he said. “It’s putting upwards pressure on pricing.”

Low inventory has pushed rental prices higher too, making housing even more unaffordable for workers in Lake Tahoe’s restaurants, hotels and other service-oriented businesses. “Housing for our workforce is a crisis,” said Westall. “So we’re actually seeing a lot of employers up here, purchase multifamily homes, where they can house some of their employees.” 

As the mountains around Lake Tahoe become more crowded, Westall said he’s seen some people decide to sell their properties and move to other mountain communities in Montana or Idaho. “A lot of our sellers do get fed up,” he said. “They’ve been here for 20-plus years and seen changes for the negative and they decide to move.” 

Missoula, Montana

Mindy Palmer, an agent with Berkshire Hathaway HomeServices in Missoula, Montana, said the stream of buyers flowing into Missoula from out-of-state has not stopped.

“They’re bringing their jobs with them and able to work remotely,” she said. “The pandemic paved the way for that,” she said.  

Even so, Palmer said Missoula’s real estate market has slowed considerably. “A number of agents are catching their collective breath,” she said. 

With less competition for properties, Palmer said buyers are giving sellers more pushback on practices that became common in the frenzied market of the pandemic years, such as waiving home inspecting. “The buyers have really had a tough the past few years, and frankly, they’re not going to take it anymore,” she said.

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