How the Coronavirus will affect Bay Area Housing Market

You are in wrong side of the company ! As long as stocks are going up, SFBA will not fall drastically.

Exactly. Smart money is moving from RE to Stocks. SF RE has got every fundamental wrong - WFH, Exodus, Taxes, Filth, Unsafe, Crime, Shit homes aka pigeonholes. I think even after 50% correction it may still remain overpriced but would be good time to enter.

Good luck holding the bag.

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JPMorgan’s forecast for the U.S. economy improved slightly, but it still expects unemployment to remain above 7% for all of 2021.

With such statement, this correction is less than dot com burst and year 2008 burst. In addition, FED and USG pre-empted with unlimited funding for recovery.

IMO, we will not see 50% dip in stocks (I doubt), but healthy correction like 10% possible here and there.

If Trump comes back, we will not see any big dip as he is monster behind market economy. If Biden comes, potential chance for stocks to take a big dip as he is going to hit economy with huge tax burden.

https://news.ycombinator.com/item?id=24765398

Read the top post in the link above. That tells you everything you need to know about what’s going to happen in SF.

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True for stocks but in RE, specially overpriced ones like SF it’s gonna be very bad. At this price and growing tax and tenant regulation and rapidly falling income, they are a liability not asset and will remain so till there is at least 50% drop in price.

As I wrote in this thread, SFH sales in SF actually shot up 30% in Q3. Median price increased 5%. Condos are soft though as expected.

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50% SFBA RE DROP is a Day Dream !

Mark my words or screen shot this update. Fifty Percent drop in SFBA real estate is in your dream and will not happen in next 5 years (until Dec 2025).

Like manch said, prices may go up every year 5%-7%.

I am assuming Trump is coming as president. Even if Biden comes, stock may sag, Real estate may sag, but not even 30% possible. My reference is median price home in SFBA location drop.

Mountain House competitive bidding 100K+ and my own friend sold his home 105k above list price recently, suggests me that SFBA RE drop is done by now.

Your dream can happen when at least one company (AAPL,GOOGL, FB, TSLA) files a bankruptcy !

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Somewhat quoted from internal forum “hoping to get townhome in Sunnyvale. Asking 1.38M, sold for 1.43M and seller got 5 offers”. And a few people chiming in with their own frustrating experience with waiting prices to drop. But some saw the silver lining that they can negotiate the rent price down.

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I think we are looking at two trends. Long term trend that will follow the population (growth or decline) and the other is short term moves. Long term trend moves slowly unless one can say population will decline by 50% in one year. Unless all the empty homes have a buyer, I will say the homes that are priced right for the demand are selling, else siting.

Added Later:
1 Another thing to check would be how much the homes could have been sold for two years ago.
2 SP/LP ratio is not a good indicator if homes are purposely listed for less to attract buyers. What if someone lists a home for $1/OBO. I don’t know if MLS has any such pricing restriction. But, I think one can sell outside MLS with such pricing.

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I was surprised even SF price held firm. Median price went up as people are buying bigger homes.

Nasdaq is a hair below all time high and interests rates are at historic low. People want to lock in the super low rate.

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Dear Sailesh, how many years have you been in this area? Did you live through the cycle from 2005 (peak) through 2011 (bottom), and watch the RE market actively during these years?

Yes, 50% drop can happen. Even 90%. It would take a few nukes or an EMP attack. Be careful what you wish for.

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Only thing I’d like to say is you might need to look for a better agent :wink:

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Stimulus and policy changes (squatters right or rent moratorium or easing zoning requirements) will not solve the structural issues (demand and supply). A stimulus is taking money from one group of people and giving it to another. So, whether it is a net gain or loss to someone can be tricky to know. What is the point of gain in RE if one loses somewhere else? If there is a genuine drop in demand (how to know that?) it will become more apparent in a few years when a trend is established and the effect of stimulus is accounted for.

I think it’s a bad comparison. Every friend of mine who visited NY think whole NY is like Manhattan, very busy and filthy but it’s false. If they visited Hamptons in Long Island views would totally change and it’s just one example. We know Antartica is cold from weather report which is a constant. Iraq has green zones which are safe to travel. Either we need to live in SF for long time or educate everything about the city before commenting. Handpicking wrong sample and projecting it to total population is statistically wrong.

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Meanwhile in Tahoe on my street.
This is crazy. Up $1.2m , 60%, in less than a 4 months

https://www.redfin.com/CA/South-Lake-Tahoe/2030-Marconi-Way-96150/home/167281880?utm_source=myredfin&utm_medium=email&utm_campaign=listings_update&riftinfo=ZXY9ZW1haWwmbD0xOTQ4Nzc3NyZwPWxpc3RpbmdfdXBkYXRlc19kYWlseV8yNCZhPWNsaWNrJnM9c2F2ZWRfc2VhcmNoJnQ9aW1hZ2UmZW1haWxfaWQ9MTk0ODc3NzdfMTYwMjY2NjM3MV8xNCZ1cGRhdGVfdHlwZT00JnNhdmVkX3NlYXJjaF9pZD00NTA0NTQ5NyZsaXN0aW5nX2lkPTEyNDQ5MDkyNyZwcm9wZXJ0eV9pZD0xNjcyODE4ODAmcG9zaXRpb25fbnVtYmVyPTM=

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It seems that many tech companies are allowing employees to WFH permanently. Suspect they are trying out to see whether it is viable and then gradually replace them with more reasonably paid employees, probably through natural attrition enhanced by perhaps minimum bonus/ slow promotion.

Investors buying at high priced neighborhoods are taking more risks than investors during dotcom bust and 2010-2012. Fundamental drivers of RE have changed.

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.[quote=“hanera, post:2593, topic:8328, full:true”]

Investors buying at high priced neighborhoods are taking more risks than investors during dotcom bust and 2010-2012. Fundamental drivers of RE have changed.
[/quote]

That’s why I am suggesting a slow decline as opposed to dramatic short-term price change like it happened during 2008-2009

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More Covid19 good news. Air traffic is 1/3 of what it was a year ago. One third of air pollution. One third of screaming babies and miserable passengers. People flew too much before. Flying used to be glamorous, now it’s dreary. People are driving to vacation. Keeping their money in the country and not off to Europe or Mexico. Hawaii can enjoy itself without tourists and their money. No more hoales to complain about

Companies are forced to WFH by the County rules for COVID. Unless county lifts the rules, companies can not open. Unless COVID medicine is available, counties won’t remove COVID restrictions.

When will it happen practically? Indefinite timeframe!