Redfin estimate:
Price rose from 1.7M to 2.2M in 5 years. 5% compound. Inflation has been less than 2%.
There is 2% inflation rate in remodeled place.
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Now we have a 1500 sq ft Sunnyvale home sold for more than $3M. Big lot probably contributed to high price
This one sold by David Lillo, who advertises that he takes only 1% commission from seller
And now we have the first house in Sunnyvale 94086 sold at $3M.
Big lot and large square footage, but located at a busy intersection of two main roads
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Big lot is good for owner-occupied and price appreciation.
Not so good for rental yield/ cap rate because renters mostly pay for built-in 
Anyhoo, amazing that houses along Helena and Iowa can sell for over $3M.
If you double the money supply and economy does not tank, the same home will sell for 6 M.
Correlation between money supply and home price is not quite clear to me. Stocks may be a more direct beneficiary of increased money supply than RE.
Since 2017, real estate in RBA has gone up about 30% by my reckoning. For example, the same house in Sunnyvale that sold in 2017 for ~ 2.5M, sold in 2021 for $3.2M.
But in the same 4 years 2017-21, S&P has risen from ~ 2500 to 4200 - a gain of almost 70%. Nasdaq has risen from ~ 6200 to 14000 - gain of 125%.
I am only comparing Silicon Valley home price vs. broad stock indexes like Nasdaq or S&P, because these are highly capitalized to begin with (here in 2017). Assets like crypto have gone up 10x or more in these 4 years, but they had a very small capitalization in 2017.
So, it strikes me that Real estate is not the prime beneficiary of the low interest rates or increased money supply. Rather RE lags behind stocks. When enough appreciation has occurred in stocks, some of it spills over into RE
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Real Estate prices have appreciated astronomically all over the united states in the past decade and it is not due to the real estate becoming more valuable. Asset price inflation (API) has a significant role to play into it. Think of API as twin brother of inflation in consumables. Real Estate in Bay Area is not out of world. It follows same trend and patterns as the rest of the USA. The only reason the bay area real estate is of any interest to me is that I work and live here and I am part of it. That is all. In terms of its quality as an investment vehicle, BA RE it is just average.
Here are 2 houses on the same street in 95130 zip code, sold during the same week
House 1: has an ADU. Sold for $2.22M
House 2: only main house, no ADU. Sold for $1.78M
Difference is $440k. Looks like ADU created $250-300k in additional value - I have discounted $150-200k towards land value, since house 1 has a larger lot
Analysis of sold houses in the last 3 months in 95130 shows that house #1 (4988 Harmony Way) was the most expensive house sold in this zip code. Selling price exceeds other SFH of similar or even larger total square footage. Looks like buyers placed a clear premium on the permitted ADU
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The video talks about the Migration patterns. Such patterns have existed through out history. Even among the nomads, the pattern of movement was not random., They moved from place to place in a certain rhythm. California is neither destroying nor creating housing markets across other parts of the country. But, California housing market is part of the same bigger economic forces that are driving the house prices in other parts of the country. If one can argue Sunnyvale, CA home prices have doubled in past decade due to Google and Intel, what caused the home prices to double in Minneapolis, MN and Sioux City IA during the same period. Minneapolis and Sioux City have no Google, no Facebook. Only plenty of land and plenty of corn. I have read that California transplants are not much liked when they go to more rural places like Boise or Spokane. It will take them (CA emigrants) a generation or two to forget California.
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| Neighborhood | Metro | April 2021 | 1Y Chg | 3Y Chg |
|---|---|---|---|---|
| Lower East Side | New York-Newark-Jersey City | $882,317 | -20.7% | -8.3% |
| Financial District | New York-Newark-Jersey City | 911,942 | -15.6 | -26.5 |
| Chelsea | New York-Newark-Jersey City | 849,681 | -13.0 | -21.3 |
| Presidio | San Francisco-Oakland-Hayward | 2,232,181 | -12.1 | -4.6 |
| West Village | New York-Newark-Jersey City | 1,082,874 | -11.3 | -22.1 |
| Carnegie Hill | New York-Newark-Jersey City | 3,247,927 | -10.7 | -6.7 |
| Cow Hollow | San Francisco-Oakland-Hayward | 3,254,240 | -10.4 | -12.7 |
| Cobble Hill | New York-Newark-Jersey City | 1,309,370 | -10.3 | -4.2 |
| Marina | San Francisco-Oakland-Hayward | 2,195,910 | -10.2 | -9.6 |
| South of Market | San Francisco-Oakland-Hayward | 959,672 | -10.1 | -8.1 |
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The biggest drops came in wealthy areas around San Francisco and New York City, where many employees in well-paid industries like tech and finance shifted to working remotely during the pandemic.
Any comment? Look like your theory that more millionaires because of more startups would lead to higher RE prices is not working. Basic supply and demand theory works 
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don’t the areas that lost the most value above have mostly townhomes and condominiums? SFH are appreciating? What happens to walkable score - left’s cute way to promote multi-unit housing?
The suburban areas in Silicon Valley with SFHs appreciated quite nicely in the past year - up about 30%. By this I mean, Los Altos, Mtn View, Sunnyvale, Cupertino etc.
But probably prices stagnated in San Francisco city proper, where housing is more dense
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I know this. I just want to tease @manch.
@manch insisted that the right place to invest is SFC (aka 7x7) and the rest of the neighborhoods & other States are 
because SFC has the most startups! I told him what matters is RE demand and supply, and he has yet to show strong connection between number of startups and RE price trend, and that the effect on price is higher than elsewhere.
He also insist that winners remains in SFC and losers leave to say Austin. It may well be true but what matters is demand and supply Demand and supply drive price
@manch made a lot of qualitative reasoning and show charts but didn’t establish concrete connection.
I don’t think we’re fully back from Covid, are we? In every market crash, it started with condos / THs till SFHs get dampen. In an up cycle, SFHs start to go up, followed by condos / THs. This one doesn’t feel too different.
The only thing that’s different this cycle is, some of the rich are moving to exurbs and other cities, yes. That’ll reduce the housing price gap between SF/NY and rest of US, certainly. But it’ll never reach “equal”, since only fractions of techies would go to different states while SFBA retains the majority. For cities like Chicago to “beat” SFBA prices, they’d have to come up with an industry where the bulk of QQQ / SPY replaces tech stocks.
To put things in perspective, even 94040 hasn’t reached the 2018 craziness yet. And in SFH heavy neighborhoods in SF, they’re all coming back. See the jump in 2021 across these neighborhoods.
I remember you could get a SFH in Bernal for 1.5, and 2M in Glen Park - no more. For 2M, you get a large-ish condo, but SFHs are going over 2.5M.
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Housing cycles are long. Don’t know why folks are so obsessed with 1-3 years trend. And when I compare SF with Austin, I use the term “SF” to mean Bay Area, just like Austin is not meant to be just the city of Austin but includes the surrounding suburbs as well. Only when I compare SF with other Bay Area locations do I mean city of SF.
But focused on the city of SF, I think the WFH trend is overhyped. Yes we will see some hybrid workdays going forward but it’s not like most tech companies will go 100% remote. The lower rent in the city of SF will entice the young and hungry to set up shops here.
I focused on startups so much because these are the seeds that will grow to be the future Facebook and Apple. A place’s economic future is very tied to its wellspring of economic dynamism.
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Want to save your ass by defining the boundary and limits? I give you benefits of doubts… I am a forgiving and generous person 
Allow me to poke a hole in your statement, to make it more relevant, when is your start point? From today? I raise the comparison in 2016 (vaguely recalled, didn’t verify by searching past posts) and proven right. Anyhoo, from today is relevant because we can’t go back to the past, so talking about the past is not fruitful. Also, Bay Area is too big… bigger than SF MSA… include East and West bay.
Are you saying (10 years, 20 years, 100 years) from today, price appreciation in SFBA would be faster than the Austin MSA?
Be bold, give a stand!