It was a drop and not a nap, prices fell 15-20%.
Once more, Did anybody come up with a rational & plausible explanation yet as to why RE in Bay Area went down 15-20% without any recession and supposedly “severe” talent crisis in tech?
2 Likes
It may have dropped in a few places but an across the board 15-20% drop has not been documented. And since inventories are super low it is statistically insignificant. I sold in 2015 and my house is up 30% since I sold. I doubt the buyer would seek it back to me for 15% less
It dropped 20% in 94087 also, right across Apple Park across Homestead. Similarly in Fremont. Not sure @Palo Alto and Los Altos, maybe they were 15% instead of 20%.
1 Like
I bought in 2015, and my house in Fremont is also up 28% today. But at one time in early 2018 it was up 45%.
So maybe there was a little blip that affects 1% of the market. Meaningless. There maybe some glow that has worn off. My guess is consumers that are paying $2-3 m don’t value overhyped school districts as much, when there are private school alternatives.
Ok so it only affected 1% of the market? 
Don’t worry my house is still there and I love Fremont. Who knows that’s where I’ll FIRE after kids finished their high school.
I think that’s about right. My take is market went up crazy in 2017 so it needed to let some air out, ppl stopped buying so prices come down, then sellers stop selling, so prices went back up again.
2 Likes
I thought there was a remarkable timing coincidence with the Trump tax changes & price reductions. In addition, companies like Moody’s(who have salaried MBAs with full time jobs studying these issues) had predicted beforehand the negative effect of the Tax changes in high priced markets.
Just to make myself clear, my only reason to ask this question repeatedly is “If we don’t know why something happened in the past, we will be making the same mistake repeatedly in the future”
4 Likes
Very true. I am amazed, how strong is the urge to avoid rent as a barometer of the price of real estate on this forum. And the great length at which some forumer have gone to relate the home prices with everything else.
Are you saying your Zillow estimate dropped 20% in a year? Or you actually saw houses bought for X dollars in 2018 and resold for 0.8X one year later?
I don’t see price swing nearly as wild around SF, in actual sales record. We need to see if we are not inadvertently debugging Zillow’s model.
According to Zillow all my properties are up not down.
But the crazy appreciation rate of the last 8 years has definitely paused.
Decrease is since @mid_2018
The closest correlation is the tariff war with China. First tariff started in mid 2018 and phase one deal announced in Oct 2019.
Tax deduction limit for SALT has hurt some markets. Chinese foreign buyers maybe disappearing. Rent control. Lots of anti homeowner policies. A ton of reasons for a price drop. But it hasn’t happened over a large part of the market. Buyers are just looking at other areas. Sellers are holding tight. Inventory is low. Prices will go up not down.
Elaborating on it a bit more. Most flips with a small amount of work and fix up done sell for 20 to 30% more, and they take about a year to get back on market. So if you see most flips in 2019 sell for close to their acquired price or even less, then we can say price most likely went down 20%.
Otherwise we are just banging our heads against Zillow’s black box model, which may or (most likely) not accurate.
Both.
Not the exact same house, but similar sq ft, same school district , location, condition etc
Nope. Among the folks in my peers that switched jobs, all 4 of them went to sf and back down in south bay. But they were commuting.
Once a suburban boy always a suburban boy. 
1 Like