Can you believe that we are more than halfway through 2020? The year is certainly on track to end quite differently than where we started, and this week we are reviewing what that means with regards to the inventory crisis that has plagued the Bay Area for years.
As reported by the Silicon Valley Business Journal (SVBJ): “For the period between 2023 and 2030, the state of California’s Regional Housing Needs Assessment has found that municipalities in the Bay Area will need to build 441,176 new housing units.” Meeting this goal requires Bay Area counties to strive for a planning number that is broken down by housing type from “very low income” to “above moderate income”. The SVBJ also provided a breakdown of what housing units have been added thus far:
-114,442 very low income units
-65,892 low income
-72,712 moderate income; and
-188,130 above moderate income
The biggest challenge and lack of supply pertains to meeting the need for very low income and low income units, which requires financing support such as a government subsidy. San Jose Spotlight has outlined the next steps to make progress by September, in which the Association of Bay Area Governments is supposed to allocate housing units needed per city to help accomplish the overall 2030 goal. The initial recommendation expected this fall will be finalized by 2021.
PROGRESS THUS FAR
The Bay Area Council has been actively working on the region’s housing crisis for decades. View recent wins and housing resources in light of COVID-19 here.
In late 2019, Apple, Facebook, Google, Amazon and Microsoft pledged amounts ranging from $113 million to $2.5 billion to support affordable and middle income housing. Read in full here.
On account of recent events and employees working from home, the question many are asking is if a remote workforce will ultimately ease housing supply as location becomes more malleable. CCN has projected that “The supply and demand imbalance could be corrected with thousands of tech workers telecommuting from remote areas.” In the Bay Area that could ease demand in urban areas some, yet increase the desirability of the region’s suburban neighborhoods. Read more here.
In the meantime, many media outlets including NBC Bay Area have called our market ‘hot and expensive.’ Corelogic reports that both nationwide and in the Bay Area, home prices have climbed 4-5% year-over-year. With 22 Silicon Valley start-ups making Fast Company’s ‘Future Unicorns’ list… more tech buyers are expected the enter the market accordingly. Read more at NBC Bay Area & Fast Company.
What a real estate round-up! While there are many questions regarding how the challenges of Bay Area housing supply will play out, the current opportunities outweigh the future uncertainty for many. Please let me know if you have any questions about how to maximize your ROI and get closer to your long-term goals today!
All my best,
NAR Instructor….“Designations Create Distinctions”
CIPS, SRS, ABR, CRS, SRES, GRI, CLHMS,
REI, AHWD, RSPS, MSLG
Bobbi Decker & Associates fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. For more information, please visit: http://portal.hud.gov/