Bay Area Housing Stats For December 2016

First up, the Case Shiller SF index. SFH value goes down 0.1%, but condo goes up 0.1%.

Sidebar: the appreciation of condo and SFH are virtually identical. Condos actually appreciate slightly more. I don’t know where this myth of condos appreciating less comes from. Data says otherwise.

Second, sales volume goes down bigly!

Bay Area as a whole: Volume down 9.1% YoY.

SF: Volume down a massive 12.4% YoY in Dec.
Alameda Co: Volume down 7.5% YoY. Median price (685K) up 5.4%.
Santa Clara Co: Volume down 8.0%, median price (805K) up 2.1%.
San Mateo Co: Volume down massive 11.5%, median price (1M) up bigly 10.0%.
Contra Costa Co: Volume down 7.9%, median price (505K) up 5.1%.

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Over the long term Condo appreciate less…The reason is location, location, location. .Shiller averages dont account for location…Classic case is condos in RWC vs Houses in Atherton…Prices in Atherton for shfs in the 1970s were about double RWC condos, now they are 10 times more…


Must we beat a dead horse? Condos are essentially apartments. Who wants to buy an apartment, where you are restricted by the HOA as to what you can or can not do to YOUR OWN property? Sure, shared prosperity but more scary is the shared liability potential. Who wants that? And then, the bloody monthly additional hoa cost that one endures especially for possibly services you don’t ever use. And in places like SF where hordes of condos are coming online, unless you know something I don’t the law of supply and demand will have its day.

Condos are the last to appreciate and the first to drop if and when the downturn happens…They are the canary in the mine…They have a glut in SF…will prices drop? Probably. …most buyers want sfhs…and SF condos are overpriced. …

You guys can have your theories but I choose to have facts. Just look at those two charts, pick some years and compare.

For example, in 1995, condo index was at 60. The latest number is 245. For SFH it’s 65 and 230.

Year 2000, condo and SFH both at 100. Condo went on to reach 245 and SFH 230.

These two’s appreciation rate is not that different. If you pick the absolute peak in 2006, condo only reached 200 and SFH 220. Again not that different.

Condos also have the advantage of being a less crowded trade it seems. Some folks just won’t touch it no matter what… :slight_smile:

At the same location, I would pick SFH over condo. If there is a SFH and a condo next to White House, I would pick the SFH.

But between a condo next to White House and a SFH in Alaska, I would choose the condo.

In Manhattan, SFH either does not exist or exceed your buying power. Between a Manhattan condo and a SFH in New Jersey, I would pick the condo.

Comparing with Manhattan, SF SFH is dirt cheap. InSF, many SFH are cheaper than condos in the same city. So SF condos are bad investment.

I think that SF SFH should be 10 times of the condo price. We only need to invite Trump over to be SF mayor and allow people to build 30 story condo building in the Sunset. By then, your SFH will appreciate 10 times in one year. Your stupidvisors are using rent control and planing process to depress your price, enjoy your dirt cheap house in SF

If Trump is willing to be SF mayor, I would sell everything and buy the cheap houses in SF.

SF is cheaper than peninsula and Palo Alto. That’s weird

Shiller has been been discredited time and again…There is no location allowance in his parameters. …Of course where condos are the only option there are exceptions. …But the biggest problem with condos is lack of control…What if the HOA bans rentals, of raises a cash call, or doubles their fees?

Forget the charts and get back to reality. Again, at least here in SF, there is a glut of condos (sure mostly luxury, for now) and there are more on its way. In a situation like that, why would anyone want to own one? Isn’t it feasible that the developers will just go, “let’s cut bait, move them at any price” and sell them off or rent them at reduced levels? What happens to the person who bought one a few years back then, at a presumably higher price? He/she is screwed, that’s what. You have an asset that is unfortunately being pummeled down in value due to more new product. Whereas SFHs for the most part are not being built anymore and thus have that intrinsic value maintained if not increased over time as more folks fight over that relatively static number of homes. Come on, basic Econ stuff…

If the development won’t sell they can always dump them onto the rental market…landlords beware

I have been saying that forever as a possible scenario. It is quite possible, no? And perhaps our Stupidvisors were thinking the same thing. We let them build all those luxury condos to the point of oversupply which would then trickle down to the masses as rentals. Heck, a lot of the developers probably made money already (just not as much) so they could dump them at reduced prices or say rent them until the good times roll again (if ever). There is nothing in this world that does not respond to the law of supply of demand!!!

If condo market craters then SFH would be immune? If a 1000 ft 2/2 condo near downtown can be had for 500K it won’t affect the SFH market? C’mon now.

I am not saying always buy condo and forget about SFH. I just keep it as a tool in my tool belt. In places like SF you won’t find a SFH that remotely cash flow. If I am loaded sure I can pay cash and all is merry. But I am not there yet. So I don’t mind buying condos.

Agreed that sure if one has the money SFHs would be preferred. I still say it is not advisable to buy a commodity that they are continuing to make more of. Your pool of competitors is increasing, Sir. Why would you want to wade into a pool like that? You don’t.

Used to be but since 2009, seem to track SFH in term of %, at least in my neighborhood.

When I started FT in RE at C21 in 2005, this agent who knew me for decades said: Sam Shueh knows how much these condos were being sold before. Tax bill in 2005 is more than mortgage payment (PI+assoc fee) way earlier.

Fast forward (2017) I see the condo prices surpassed the 2005 historical high. At Apple new Space Ship I think they are selling more than $1.1 M that people paid just a $32K (34X) in 30 years ago…
Someone has to live on a busy street, next to a red flag property, sleep in the same room as deceased. You can not afford an expensive home you own a maintenance free TH, condo or sleep in a RV at a RV Park. Most come out ahead in the long run. The opinions about must have to have a SFH is just an opinion, often biased.

Sam Shueh Realtor
Realty One Group
Campbell, CA

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Yeah, you buy what you can afford. Condos are perfectly fine. I grew up in one, and I turned out OK I think…

Do not knock down on condo investors methodology. Between 2009-2011 I know one laid off engr. bought 10 condos for a total of $1.5M using mostly heloc and wife’s name for loan. He took cared of renting, fixing up. Their gross income is $20K a month. I believe he told me their equity on the properties is triple that of before(~$4M equity @ 2.5% with a HELOC and personal savings for down payment). Cap rate is about 16%.

This is poor man’s investment. Likewise, I know some realtors flip condos they typ gain a low 5 figure per simple condo. It is fairly risk free.

Want to be rich one can be lucky become a founder of a company or count and save all your pennies. The condo investor is the latter type.

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How many times were there RE fire sales like 2009-2011? I am wondering whether we’ll get another one in the next 30 years? If so, we should focus on saving money now!

Do you still need the money then? Meanwhile live like a beggar? IMHO, once in a lifetime is good enough. If too old, don’t bother.

Good point. Let’s hope for the opposite then. May Trump bring healthy inflation and healthy economy and bring the housing price to rise 100-200% in the next 10 years.

And live a good life, no need to live like a beggar :grinning:

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