Real estate pro Al Nucifora reveals the hot trends for the region’s market and discusses factors that will impact buyers in the year ahead—including Silicon Valley Magazine’s Leading 100 List.
In the September issues of San Francisco and Silicon Valley magazines, we published the annual Leading 100 List, which showcases the top-producing real estate agents in the Bay Area based on sales volume. The essential guide for buyers prompted us to reach out to Alf Nuciform, who helped compile the data for this year’s List. Nucifora is chairman and founder of LuxeSF (luxesf.com), an organization representing leading affluent brands in the Northern California region embracing San Francisco, Carmel/Monterey, Silicon Valley, Napa and Sonoma. A native of Brisbane, Australia, Nucifora earned his MBA at Harvard Business School. Below, we get the lowdown from Nuciform about the List and trends he’s seeing.
What's your big takeaway from the Leading 100 List this year?
COVID played havoc with the Leading 100 List. It brought great success to those agents who were able to mobilize instantaneously in order to capitalize on the chaos and respond to demand trends that changed by the day. The Leading 100 List, which ranks the top 100 individual agents and the top 100 agent teams, saw calendar year sales for 2020 that were significantly higher than previous years.
For instance, where it took $63.9 million to make the Teams list in 2019, this year it took $90.1 million, a 41% increase. In addition, more than 45% of agents rotated off the Leading 100 List this year versus previous years, attesting to the fact that agents who reacted to the crisis with speed and agility were able to capitalize on a confused marketplace that tossed previous real estate marketing practices out the window. San Francisco-based agents suffered from the exodus of buyers who sought refuge in the outlying areas, particularly Marin, the East Bay, wine country and the Tahoe region.
What are the top real estate trends you're seeing in the Bay Area market right now?
Inventory still remains low, although that trend is showing some amelioration. The region’s natural geographical boundaries, coupled with depressed building rates caused by NIMBY influences and strict zoning regulations, points to the fact that inventory, particularly for properties priced under $2 million will always be in limited supply.
It’s still a seller’s marketplace with better properties attracting multiple offers, no-contingency contracts, shortened days-on-market and all-cash offers. The “depressed” San Francisco condominium market, which suffered from the exodus of buyers to the suburbs seeking single-family homes and more living space, has bounced back as the city reopens and bargain values are being scooped up by investors and first-time buyers.
Luxury properties, priced at more than $10 million, which stayed on the market for extended periods of time, pre-COVID, are now selling at a faster clip. The traditional selling peaks of spring and fall have flattened as COVID played havoc with the timing of listings and sales. This was caused by the sudden demand of buyers seeking to escape their current living environments and the enforcement of COVID mitigation protocols
Today’s buyers, particularly Millenniums, are seeking move-in ready homes that require little or no major remodeling. Open floor plans still prevail, but there is now a desire for more outside living—for example, pools, exterior kitchens—and a lessening of the separation between interior and exterior. Buyers are also demanding specific and discreet living spaces where seclusion is possible for work use and privacy—like Zoom rooms.
Which areas are extremely hot, and which ones are on your radar for being the next-big hot areas?
This is always a moving target, but assuming that COVID continues to lurk in the background, we will continue to see buyer migration within the Bay Area region—for example to the East Bay, Marin, Wine Country, to other parts of the state like Sacramento, Tahoe region, Central Valley, and to less expensive out-of-state regions where the dollar delivers more home value and less taxation like Texas, Florida, Idaho, Wyoming and the Carolinas.
What are some top agent trends that you're seeing right now, and what has surprised you the most?
COVID forced agents to “return to the basics.” That is, cultivating past client and prospect lists, re-engaging via the telephone and even returning to old-fashioned marketing techniques such as direct mail
The steep reduction in the number of open houses because of COVID mandates and restrictions took away a primary agent marketing tool. However, it delivered, in return, a more qualified buyer who was willing to visit by appointment and deal with COVID restrictions, thereby eliminating nosey neighbors and looky-loos who traditionally populate the open house scene
Social-media marketing remains prominent as a way of communicating new listings and keeping in touch with clients, prospects and colleagues and associates.
Agents are now more accepting of technology products, services and enhancements that reduce the workload, allow for more productivity and lessen the administrative and contractual burdens that accompany every transaction. These enhancements are coming at a faster pace as the tech sector continues to focus on the real estate category and brokerages provide their agents with more affordable and user-friendly access to costly technology
Brokerage consolidation will continue as independent brokerages find it difficult to compete against the well-funded and investment-minded behemoths of the industry. The days of the individual ”star” agent are gradually disappearing as agents congregate in teams that are better equipped to handle the marketing, transaction complexity and manpower requirements of more expensive listings and sales
When it comes to making a purchase in the Bay Area right now, what are three things every buyer should be thinking about carefully in this ever-changing marketplace?
Irrespective of current challenges, including fires, drought, obscene cost of living and elevated median price points for real-estate sales—above $1.5 million—the Bay Area will always remain a “hot” region for real estate activity because of nearby Silicon Valley and the natural advantage of living in one of the most beautiful and attractive localities in the world. Buyers will always see long-term gains in asset appreciation by purchasing real estate property.
That said, today’s buyer has to comprehend that first, it’s still a seller’s market where unreasonable listing prices and expectations prevail, so anticipate the possibility of disappointment and rejection and cultivate persistence.
Second, buyers need to be willing to make buying decisions with speed and limit the traditional obstacles to a “clean” sale; for example, limited contingencies.
Third, buyers need to have full financing lined up in advance—or better still, come to the table with an all-cash offer.
And a fourth piece of advice: Select your agent with care and due-diligence. Carefully comb resources like the Leading 100 List to identify agents who have time, history, experience, scar tissue and results on their side. Make sure that your agent knows the geography like they know the back of their hands. For example, very experienced agents who specialize in Pacific Heights real estate will know the background and inside scoop on all the major properties in that region, by street, house number and floor.
Are there any other insights about real estate and the Leading 100 that you think our readers should know?
The Bay Area real estate sector remains strong and robust in 2021. For the first-half of the year, total residential sales volume hit $60 billion, 48% higher than the previous first-half peak registered in 2018. Continuing low interest rates, combined with cash-laden buyers’ pockets, means that sales activity should remain strong. This projection is based on the expectation that the current COVID Delta-driven resurgence will fade as we enter 2022.
At an elevated level, attention must be paid to the work-from-home (WFH) phenomenon, which is now migrating to permanent status. The great irony of the COVID crisis is that it taught the working public, in stark terms, that WFH and remote communication adds considerably to lifestyle—fewer commuting hours, more and better quality time with family and pets and an understanding that there may be a better alternative to the traditional American way of life that prizes work and career above all else.
With a broadband connection and a Zoom platform in the home, productivity is enhanced, commuter agita is lessened, and the home becomes more than an abode with a bed to be visited in the evening. If WFH becomes a permanent addition to the American career lifestyle, expect the real estate sector to remain buoyant for decades to come.
Photography by: Photo by Lycs Architecture/Unsplash