Tri Pointe Homes Expects Strong Housing Sales and Price Appreciation in Bay Area

Tri Pointe Homes’ San Francisco division it looking forward to a good year. The firm is bullish on the housing market in the greater Bay Area, expecting strong demand for for-sale product and strong pricing appreciation. A lack of supply in the area will help to drive pricing increases and home sales this year.

“The Bay Area housing market outlook is very positive,” Jeff Frankel, president of Tri Pointe Homes’ Bay Area division, tells GlobeSt.com. “In 2021, we expect continued strong sales and price appreciation in most markets, which will result in low inventories. The year will not be without its challenges. Builders must manage COVID-19-related issues including supply chain adjustments, labor shortages and municipality delays. For buyers, the main challenge, again, will be lack of supply.”

San Francisco has been badly impacted by the pandemic with some reports estimating double-digit rent declines. On the for-sale side, however, Frankel says that new demand has emerged for larger, flexible spaces. “A major trend coming out of the pandemic has been that homebuyers are looking for not only newer and larger space but also flexibility,” he says. “More people are focused on finding a home that can accommodate work-from-home requirements and virtual schooling needs versus the old priorities of proximity to the office and commuting ease.”

Working from home is at the center of new buyer demands, both in terms of the home and space as well as geographic markets. “Convenience has always been a core consumer value, but in the COVID era working from home is vital,” says Frankel. “First-time buyers are more open to commuter markets in a new environment as buying a home is sometimes less costly than the rent they were paying in San Francisco.”

It isn’t only about space but also about quality, because people are spending more time at home. “Overall, people are doing more in their homes—working, schooling, quarantining, etc. Fewer and fewer people are away from home for that professional third-plus of the day, which means more space and enjoying the comforts of home are more important than ever,” adds Frankel. “They need that flex space as well as convenient design features with home offices and “Zoom rooms” facilitating the new work and schooling reality.”

While demand has retracted for rental product in the market, these changes have fueled activity in the for-sale space. “The dynamic housing changes that occurred in 2020 related to COVID-19 are driving the resale and new home markets,” says Frankel. “All the above, along with the still very low interest rates and solid affordability in select markets, are driving people into new homes with desired features.”