Just to stay in topic:
Assuming you’re right, how would property market behaves? When is the bottom? Take note that the property market hit ATH in mid 2018, dropped, re-bounced and peaked (not ATH) in Feb (I think) and down again.
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I think best case property values drop 20%.
That’s assuming we can get the economy going in June and the stock market rebounds.
But even the best case has to assume a return of peak virus next winter. The affects of this virus will be long lasting. Even if a vaccine is developed next year.
Worst case economy collapses and we have a depression that lasts 4-10 years. Then 50% loss in RE values …depends on location of course.
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My reply was to tell @elt1 why it is not a black swan event and why he should not worry too much about it. As far as housing market valuation returning to levels it reached in 2018, I have been skeptical of it even before coronavirus pandemic started.
You are conjuring up images of an apocalyptic scenario. It does not look to me that way. Housing market valuations have been in decline for 3 years, long before coronavirus became an issue.
According to author of the linked article:
But the coronavirus, although dangerous and scary, isn’t some unpredictable, “Gosh, who woulda thunk it?” black swan. And employing that powerful metaphor lets governments evade their responsibility to keep us safe and avoid accountability if they fail.
You are predicting secular decline 
IMHO, won’t happen unless USA stop immigrants coming in.
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Fixed it for you:
You are predicting secular decline IMHO, won’t happen unless USA stopped immigrants coming in. And all new immigrant decide to come to bay area to buy expensive real estate.
Stocks can easily drop 50% from the ATH in February. Similarity RE could, too . But RE is sticky and it would take years. It comes down to government action, employment and rental rates. If landlords have to eat rents and banks have to forbear loans then RE values could unravel rapidly. It took 4-6 years to decline in 2006-2012. Some areas recovered early, starting before 2012. Others have never really recovered.
White elephant homes in Atherton and PA could easily drop 50%. A thin market that had been faltering since 2016.There are thousands of $10m-$100m mansions across the US that could drop in price and affect very few people. They went up ridiculously fast and are dropping just as fast.
Prices were all ready falling in NYC. Even steeper declines ahead
Many of these houses have frivolous stuffs like stupidly expensive flooring, art pieces and facilities e.g. bowling alleys? huge wine cellars? indoor swimming pools?
It gives the reason:
A continued drop in foreign buyers, changes in the federal tax laws that make it more expensive to live in high-tax states and a glut of high-priced condos have created the worst real estate market in Manhattan in a decade. Sales in the third quarter dropped by 14%.
There has been a glut for three years. They have become a national joke. They have limited appeal to buyers. Mostly just ego trips for eccentric owners. The classic example is the African Queen house in Missouri. Original ask price of $13m. Now in foreclosure for $1.3m. Or the $20m house in Utah that Karl Malone owned that his manager bought for $3m. Micheal Jordan’s $50m house is still for sale after 2955 DOM. There are a few in LA that have dropped in price over $100m
https://www.zillow.com/homedetails/2700-Point-Dr-Highland-Park-IL-60035/4902463_zpid/
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High end property values have already dropped 20%. Who is buying $3m plus homes? Even last year they are in a slump. If rental property market is destroyed by Newsom it will get worse. It all depends on the length of the shutdown. Most economists think this crisis is worst than 2008. I hope they are wrong.
My city says I should post on my rentals that I can’t evict and tenants don’t have to pay till June. What if they extend that in June?
My lawyer says they can’t force me to post. But in reality tenants already know they don’t have to pay.
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2008 knocked us down so bad it took 10 years to climb out of that hole. Corona will never be that bad. Sure, the headline unemployment number looks scary as heck. But these laid off restaurant workers will get rehired back when the virus recedes. Many restaurants will go out of business but new ones will open to take their place.
Not saying it’s going to be V shape rebound but it ain’t gonna be L shape either. Things will get back to normal relatively quickly. Within a year is my current guesstimate.
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Question is…when will Covid recede? On May 7th do we all go back to work wearing masks? What if it comes roaring back and we have another 2–3 month lockdown? A vaccine in 12–18 months seems like the surest bet but we don’t know how effective it will be. If it’s like the flu vaccine Covid may continue to be a major issue.
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As long as Tech remains strong, the ability to buy a $2M house will continue, but if the lower income group has to leave because it can no longer afford to stay before their job market rebounds, it’ll open up housing from the lower end.
For SV, it didn’t take 10 years to rebound, maybe 4… 2012 to 2014, housing prices were back to normal and climbing. I’m not sure I’d agree that CV will be less of an effect…
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I am betting on gradual reopening after Memorial Day. May 7th is too soon. Bay Area will be ready but we are dragged down by those states that were late to the lockdown.
I continue to think we won’t need a vaccine for the economy to roar back to life. People will learn to adapt. Corona may come back in the fall but we will be better prepared. Flu vaccine has been available forever but how many people take it every year?
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