Real Estate Principals Series – Economic Outlook 2021 for the San Francisco Bay Area, California
- Feb 4, 2021
EisnerAmper participated in its third annual real estate principals economic forecast presented by Patrick Kallerman, Research Director at the Bay Area Council Economic Institute. As a proud member, we are grateful to collaborate with the Bay Area Council; many of our firm’s clients and friends attended.
Patrick started with “2021, is there light at the end of the tunnel?” Below are some highlights from his presentation.
- Two years ago (2019) was one of our economy’s best years yet; while 2020 was on track to be an economic boom to the greater Bay Area.
- The stock market is not the economy, but(!): Dow is up 6%, GDP was doing great, and then took a 30% hit; now it seems to have mostly recovered.
- Massive job losses, particularly for women, who have had to make difficult choices in balancing work and caring for their families. Only 40% of jobs have come back; the Bay Area now sits at 6.9% unemployment.
- Real estate pricing continues to grow, as SF rents drop like a rock.
- Lightweight vehicle sales seem to be a decent barometer for small business; sales for these is down considerably. This correlates; as small business is down double digit this past year.
- Transportation and city budgets are slammed for years to come. Shortfalls in infrastructure and social services.
- Common theme: COVID-19 has stymied our economy; specifically the folks that cannot work from home and our small business community.
- Retail sales are brisk, but moved to online ordering.
- We have enjoyed a 20-year run of job growth; this has changed dramatically this past year.
- Exodus of big companies and high earners from the Bay Area including HP, Oracle and McKesson, along with a large group of high wage earners.
- Still, of 245 U.S.-based unicorns, 114 are based in the Bay Area.
- SF metro is the second highest outflow in the U.S., with Sacramento as a top destination, making the Bay Area a super geographic market.
- Half of all Bay Area residents can work from home.
Bottom line: Consensus is we need mass vaccination to reopen our economy.
The Real Estate Principals Webcast Series features a variety of thought leaders throughout the year who address timey topics that are impacting the real estate industry on the West Coast. Learn more about upcoming events here.
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Michael Morris is a Director of Business Development, specializing in accounting, tax, and consulting services across a broad range of industries including financial services, real estate, and family offices.
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