Housing prices soften as 2017 ushers in thousands of new units

http://www.bizjournals.com/sanfrancisco/news/2017/01/26/housing-projects-real-estate-bay-area-construction.html

Currently, San Francisco is experiencing the biggest apartment building boom in more than 75 years. Thousands of new apartments and condos are coming online in the Bay Area in 2017.

The increased supply is “definitely impacting rents,” according to Patrick Carlisle, chief market analyst for Paragon Real Estate Group.

“Rents climbed to stratospheric levels to become the highest rents in the country,” Carlisle says. “But in the last year we’ve started to see them kick down.”

Specifically, he’s seen a 5 to 10 percent drop since the peak of the market in 2015.

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Meanwhile, the condo market hasn’t been flooded to the extent the apartment rental market has. Still, the region has seen condo prices dip in 2016, in particular in areas where big projects are being built, according to Carlisle.

“At the same time that we’re seeing greater supply, demand has started to cool down,” he said. “As a result, (condo) prices have come down 2 to 5 percent since the end of 2015. I’m not expecting any sort of crash because even with these small declines, these are the highest prices in the country. But all this competition is not helping values.”

I suspect the same sentiment. In bay area, presently, there is a frenzy in buying home only to lock the rates at low. Lot of waiters and last minute doubters are buying whatever home they could get.

I do not think this will long last forever. As mortgage rates are getting hiked, their eligibility is coming down and we will see a good market with less competition.

At that time, full cash payers/investors get a great chance.

Too much building in SF, told you 2 years ago

After the board put down extra tough affordable housing requirements building permits plunge. So wait another 2 years and price will soar again.

The supervisors always have landlords’ back. Not to worry.

+1

Maybe soft in SF…Nobody except Manch really wants condos, anyway…lol
Meanwhile in the real world, RWC is white hot…Buying season has started…10 HOUSES have sold in 11 days…Two weeks ago there were only 8 houses on the market…Now 20 active…but at this rate they won’t stay on long…One house will sell for over $5m. 1003 Lakeview is coming to market soon…New records in RWC… $5m and houses selling for over $1000/sf…I left too soon…Appl over 120…let the good times roll…

:smile: I am practicing the Number 1 rule for real estate: Location location location. If only condos and TH cash flow in SF, that’s fine. I will gladly buy condos and TH.

Speaking of condos, this tiny 1/1 in San Mateo rents for $2400, and PITI is also $2400.

https://www.redfin.com/CA/San-Mateo/932-Peninsula-Ave-94401/unit-412/home/17308273

HOA buddy!!! = negative!!!

HOA is communism that works. :smile:

Ask the Millenium Tower folks what they think about their HOA…

Peninsula ave area is full of apartments turned condos.

This one is better than the above, $/sqft, Location preference etc, easier to rent as this near by 82 road (el camino)…etc

https://www.redfin.com/CA/San-Mateo/44-Lodato-Ave-94403/unit-101/home/973397.

+30% appreciation in one year…great…sold last Jan for 315K…

RE in peninsula must the shortest way to multiply your money…

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Was this a condo conversion last year? I do not see much condo conversion outside of SF. Actually I am not aware of any condo conversions in peninsular and South Bay and East bay.

Why is there no condo conversion? Rent yield is too good to give up? Or condo price is too low to justify?