Happy New Year.

Another COVID year in the rear view mirror and I am excited about 2022! Hopefully you are as well!

The number of homes sold in 2021 is set to be one of the highest on record. The fourth quarter was extremely active. Even though inventory was very high, most available homes sold quickly. The only San Francisco segment that was spotty was the ultra-luxury market ($10M+). I am seeing traditional San Francisco sellers/families (in the ultra-luxury bracket) holding steady if their kids are entrenched in schools (vs. a possible sale). Newcomers to this market are most likely looking outside of San Francisco. Premium Bay Area markets like Woodside, Atherton, Ross, Kentfield, Alamo, etc. all proved more desirable (and performed well above the San Francisco market) in ‘Q4 and that will not change this quarter.

As far as what I expect to see for the local market this year, I expect the demand for single family homes will still be greater than the inventory (not only SF but in the region). Houses with amenities like gyms, offices, large outdoor space, spas, etc. will continue to stand out against their competition. Interest rates will increase, but I do not see this as a dampener for San Francisco and A-level cities. I expect the activity to be strong out of the gate in January. Some may still prefer to list properties in (old) seasonal cycles; but as the market has changed I tend to list when seller competition is low (or when you can stand out above the competition), a seller wants to sell and demand is present. The time of the year is barely a secondary consideration.

Last year I covered the top markets for departing Californian’s looking for greener pastures. Well, after a year and a half of COVID-life, many of the top destinations made the latest list of cities with the greatest decline in housing affordability. The top five markets (Y-o-Y decline):

• Phoenix (33.7%)

• Charlotte, N.C. (32.3%)

• Tampa, Fla. (30.9%)

• Jacksonville, Fla. (29.3%)

• Memphis, Tenn. (27.5%)

On the same theme and looking forward to some undervalued housing markets (that should attract buyers this year). Here are some “gem” markets where price appreciation will outpace the national average. These markets include (in A/O):

• Dallas-Fort Worth, Texas

• Daphne-Fairhope-Farley, Ala.

• Fayetteville-Springdale-Rogers, Ark.-Mo.

• Huntsville, Ala.

• Knoxville, Tenn.

• Palm Bay-Melbourne-Titusville, Fla.

• Pensacola-Ferry Pass-Brent, Fla.

• San Antonio-New Braunfels, Texas

• Spartanburg, S.C.

• Tucson, Ariz.

Lets looks at some data for the quarter (and year end).