Bay Area Home Sales and Median Price Are…Down

Down south, home sales in Santa Clara County totaled 1,744 in May, down 11.0 percent on a year-over-year basis and sales in San Mateo County totaled 636, down 9.0 percent versus the same time last year.

Despite the fact that there were more expensive homes on the market in San Francisco, the median price paid for a home last month dropped from a record $1,400,000 in April to $1,325,000 in May, which was down 4.0 percent versus the same time last.

The median sale price in Santa Clara County was $1,127,500 last month, down 6.0 percent versus the same time last year while the median sale price in San Mateo County was $1,432,000 and 3.8 percent higher, year-over-year.

SCC is very weak.

Indeed, in both sales volume and median price - I think it is safe to say we are about 10% down from April peak last year in SCC.

San Mateo seems to be still holding up, but at the same time, San Mateo doesn’t go up like SCC in last couple of years, maybe that’s the reason.

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Who said previously that house prices in SV won’t drop more than 10%, please raise your hands. Prices have declined to 2017 prices.

SF is still holding kinda firm. Edging slightly lower. SCC is super weak for some reason. Not sure why.

Agree :lying_face:

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Why a real estate investor says ‘the housing market is done in America’

The investor attributed the state of the market to “a loss of mobility” among potential buyers.

“people have more money invested in their home than in their self-improvement”

“I buy real estate that produces income. I rent where I live and I own property that pays me money. I will only buy a piece of real estate if it produces cash flow for me,” the investor added.

Rent in SV, buy rentals in Austin. What happened if everyone realize this is the correct strategy from a financial perspective?

I am not sure that would really happen. Dealing with rental far away would create hassles and SV techies don’t like hassles on top of long hour working. One can argue that you can simply hire PM but i am not sure how many people would feel comfortable with investing in the town they’ve never lived and trust someone to take care of their properties there. There are a few local couples that i know who are interested in real estate in Texas but they are all in non-tech fields and hence, moving to Texas is not a big deal for them if necessary.
If busy techies think BA real estate is done, they would rather invest in index fund than out-of-state real estate.

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I agree. Plus, what percent of tech workers own rental property? I’m guessing it’s a very small (low single digit) percent. The decisions of those people aren’t going to move the market.

Good to know. Hate competition.

All yours!

There are intense competition, made and lost 3 times :face_with_symbols_over_mouth:. Those are cash bids :flushed:. If they are not tech investors from BA, local tech investors? One house (not any of the three I bidded) went pending as short as few hrs… didn’t have the chance to bid. Those three I bidded, went pending within 7-10 days. Those I didn’t bid, still around :grinning: bad location or overpriced, IMHO.

China’s ICE car sales is crashing down hard. We may have seen peak oil demand. Oil is still a big part of Texas economy. Good times may not last in Austin. :smiling_imp:

Austin got no oil. Are you talking about Dallas, Houston and Sugar land. I only hear about tech, healthcare, government and music.

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Maybe investor’s from mainland china or real estate investment firms?
I am under the impression that chinese investors don’t mind buying a house after looking at the photos only.
I doubt they are BA techies.
Any investment which requires significant amount of time is no-go for high paid and not-yet retired SV techies.

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My realtors said he has many clients from California. On the ground, I see many Indians in Avery Ranch and Cedar Park.

There will be spillover effect. Besides Austin is the state capital. A hurting oil sector will depress government tax revenue.

Frankly, i think Texas has many benefits to live in such as no state income tax and good public schools (cheap yet high quality education at UT which strongly prefers in-state kids unlike CA) but not sure as a pure investment option.
Its property tax rate is higher than CA, no proposition 13, no strict rule on zoning like CA. No good reason to expect steep hikes in housing price like BA. Good choice for retired people who need steady cash flow but not attractive to younger investors who are looking for high long term return.

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Property tax is not critical, what matters is cashflow/ cap rate. As I pointed out in another thread, in Austin, you get cashflow neutral (PITI, HOA, pm) with 30% down while in California, need to put down 80-90% to get cashflow neutral (exclude HOA and pm). Can get same house in Austin at 1/8 the price and 1/4 the property tax of California.

Early this month, annual property tax increase is cap at 3.5%.

So long don’t buy too close to new construction, is ok. Your rental would go up in price from increasing land cost (because of nearby new construction) and increasing cost of construction & building materials.

@BAGB had previously linked a chart showing Austin is a better long term investment.

Good cash flow let’s you keep buying more properties though. It’s hard to keep adding more when cash flow is negative.

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I was looking at this home in Austin. The price dropped 12% in the last month. At that level it only appreciated about 60% in the last 12 years. Schools seems to be good. Are Austin prices going down?

https://www.redfin.com/TX/Austin/11010-Oak-Knoll-Dr-78759/home/31322869