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.
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.
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.
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.
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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That’s why I am suggesting a slow decline as opposed to dramatic short-term price change like it happened during 2008-2009
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!
Mostly tech companies. Anecdotally, in Austin, many restaurants/ grocery stores are almost back to normal traffic. There are many for hiring signs. My guess is people don’t want to work, not because businesses don’t want to operate.
Definitely driving right now (did Oregon last month, Utah this month) but honestly I’m counting down the days to get back to flying/international travel, it’s just not the same…
Also air travel is picking up again. I have several friends who have been flying this whole time and in the last few weeks said planes are getting more packed / flying is becoming more chaotic. It’s also becoming harder to enforce mask wearing / they are seeing a lot of people flying who just don’t care, but the airlines are still trying to enforce, escorting people off planes who don’t comply.
It depends on county by county rules. Wherever COVID is increasing, counties strict the rules. To comply the rules, companies have to create physical space with lot of health related security measures which is very expensive. It is easier to make it WFH rather than complying county workspace requirements. Otherwise, Covid related law suits will increase and companies must insure/pay the penalties.
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