Financial Samurai On SF Real Estate

But the good times are now over. San Francisco real estate above $2M will correct over the next two years by roughly 10%. Real estate under $2M will correct by ~5% because mortgage rates will stay low and six figure jobs are a dime a dozen here. In other words, the spread between high end and lower end will narrow.

The large supply of new condominiums in the SOMA/downtown district is putting downward pressure on the luxury market ($2M+). Eventually, the price weakness will work its way down. Potential buyers should not be in a rush to buy anything. Instead, be patient and wait to buy before the thousands of Uber and Airbnb employees get liquid through an IPO.

I am certain that six months after their respective IPO lockups, thousands of employees will sell their RSUs and options and convert their funny money into real estate. They will reignite the property market. Why do I believe this? No, I haven’t gone to the year 2018, I’ve simply talked to hundreds of private company employees who all are itching to buy real assets.

As for District 2 (GGH, Inner Sunset, Parkside), I’m sticking with my prediction that if you can find a single family home here, especially one with an ocean view, you are going to outperform the rest of the SF market and the national market the longer you own.

I just looked at GGH on Redfin. Price seems more affordable than couple months back. Is that my illusion? You can now get a reasonable house for around 1.3M.

I like Parkside too, and the area around Stern Groves and that dinky tiny Pine Lake in general.

His point about buying before the hundreds of Uber/AirBnB overnight millionaires is very important. If Snap’s IPO goes well, which I think it will, pressure will be on Uber and AirBnB to IPO sooner rather than later. The VC’s need to cash out. And both companies lock up tons of VC liquidity. So I guess they will IPO late 2017 or early 2018.

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Buying before IPOs work. FB’s 2012 IPO re-ignited the RE market in SV.

Late 2017 or early 2018. Good I shall wait for it.

All those areas are nice, including Lakeshore, which is where Lowell High School is. A lot of homes there are nice, large and fully detached. To have one of the homes around the bend there by Lake Merced is kinda of prestigious I think as everyone drives around there from freeway to the Sunset and sees them. Some really go all out on the Halloween and Christmas decorations.