House Price Prediction 2020

The rent argument doesn’t work since the vast majority of homes are bought as primary homes not investment property. Most people wait to buy until they have kids and want to raise a family. It’s about stability not rent vs buy calculations.

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The value of Fortress BA property has been divorced from rent for many years. Very few are available for rent and rents are extremely low on a cap basis. So low that many owners prefer to leave them vacant than rent in CA, with tenants rights being a gun to the head of every homeowner.

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That is correct. Most bloggers here stay in the fortress mentioned by @elt1 below, they don’t even buy rental houses based on rent, appreciation :grinning: prospect of good future appreciation.

@pandeyathotmail When bloggers here talk about RE in California or Bay Area, most of the times they refers to 7x7, San Mateo and Fortress.

Please help me understand these terms: 7x7, fortress etc.

7x7 refers to the small pond called SF that @manch stays in.
Fortress refers to certain cities in SB where people (including @manch) desire to stay in, Los Altos, Los Altos Hills, Palo Alto (exclude East PA), Mountain View, Sunnyvale (94087), Cupertino, West San Jose, Saratoga.

@manch: come to mountain view. We’re seriously loving the proximity to work: most jobs in Sunnyvale, Cupertino, San Jose are reverse traffic. Depending on where you pick, you can be < 10 mins bike ride to MTV downtown and LA downtown. All your fancy restaurant and/or Chinese restaurant needs are fulfilled. :slight_smile:

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@notabene are you the only person in your circle who have done this South Bay to SF back to South Bay round trip? And you don’t even have kids! (Last time I checked.)

Yes, just completed making my wife happy move. But continuing onto making my wife happier with adding ~1000 sqft addition. One co-worker also closed his first home (single guy with gf), and two others are looking to buy right now.

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Congrats! May I ask where?

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We were looking in Los Altos & Palo Alto. Pulled the trigger in PA for more flexibility with future work locations.

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How was the buying situation on the ground like? Did you see competition? Were open houses mostly full or empty?

Inventory is quite low - so all the houses with good asking prices are quite packed. PA houses definitely have more people than LA, but if you are asking for 2018 price, there are not a lot of ppl. For good houses, there are multiple offers. We lost like 5+ houses, but we were not aggressive either. We also sold our Milpitas house (to claim tax exemption & smaller loan), we got 7+ offers (mix of first time buyers & ppl upgrading from townhouses) and each day of our open houses were 50+ families visiting.

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Man! Looks like we need to hurry up… :running_man: :running_woman:

As I was thinking about rebalancing my RE portfolio, it occurred to me debt on rentals is more advantageous than debt on primary. We can deduct the whole interests payment on rentals as operating cost, but have a cap on primary residence.

Totally agreed. Just that we prefer less debt - we felt we’ll be stretching (let us sleep better). And goal is to reduce our monthly after-tax expenses.

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To push a bit further on my stock-RE relationship thesis, if I were to pick two stocks to gauge the health of South Bay housing market, I’d pick Google and Nvidia. One representative of big internet and software firms and the other representative of the hardware side.

For SF and upper peninsula, I would look at the stock price of Salesforce and Uber. Salesforce is the biggest pure play SaaS and cloud company, and Uber is the biggest among last year’s IPO. I don’t see much decline around SF housing price last year at all, unlike South Bay. If I am correct that we will see a strong rebound in cloud and 2019 IPO names this year, the RE price around SF and the upper peninsula will rocket higher.

Buying season started early this year.

What? You said first? I said first! Search your forum.

Contradictory to below.

Selling fast gainers for slower movers?

Not of a fan of portfolio rebalancing?

Implicit in my statement is my bet that core Bay Area housing price will wake up from its nap and resume its climb.

:+1:

OTOH my virtual neighbour from Fremont is leaving me… :crying_cat_face:

:slight_smile: