The top concerns for residents are homelessness, housing and crime/safety, in that order.
According to @manch is fake news.
Why keep posting articles in Pay Wall.
The Chronicle’s pay wall is so easy to get around that it’s almost ridiculous how they don’t block it better.
Here are a few ways:
Open link in incognito/private mode.
Open link and stop the loading before the page fully finishes.
On your iPhone phone, as the link loads, turn on Show Reader mode. (not sure the Android equivalent.)
Lastly, use this Archive link to read for free as well:
https://archive.ph/nymzW
I’m sure I missed some other ways to bypass the wall but this should get your started for now.
1 Like
Made an offer for SFH in San Leandro yesterday. Wish me luck y’all!
3 Likes
Not afraid of possible RE bubble? Many articles are saying so.
Then buy more. I’m not smart enough to “time the market.”
Many of my units have rents at 30-50% below market, I think I can handle some pain. Also I still have a few properties with low LTV.
Besides I need to catch up with you so I gotta keep buying! 
Don’t worry though. No NINJA loans or aggressive projections here. Just a lot of sweat equity and waiting. Get rich slow.
3 Likes
Mortgage is well over 5% now. It seems like Fed is planning several 0.5% hikes. Mortgage may hit 7+% by year end which will be unprecedented. Tech stocks obviously will take a big hit, specially the mid and small cap tech which is already down 50% BTW. This seems like a double whammy for Bay Area RE. And given that there is practically no immigration and population growth last year and this year, it seems like a perfect recipe for RE disaster in Bay Area. What do you guys think? Is it time to get out while prices are still high.
.
Also cost of selling is high.
Unless we have a better opportunity that return more than cost of selling, is better to hold.
I’m quivering in my boots. You say this every time.
Even if you are right, how low do you think the real estate market will go? 20%? 50%?
Rule of thumb is 10% for every 1% rise in mortgage rate. So 3-4% rate increase (which is likely by year end compared to beginning of the year) can translate into 30-40% drop, no?
The other two main drivers of Bay Area RE price appreciation are also gonna be absent this year - population growth, and Tech Stock/IPO boom.
Very true, very true. I’m looking forward to see how this shakes out. Wouldn’t shock me if it goes down but I would be surprised at anything more than 15% decline.
Go ahead an provide evidence of that ever happening.
1 Like
Let me be more clear. Find the data that shows a time when rates increased and home prices decreased. That’s not what that article proves. You’re in theory land. Reality says it’s never happened.
2 Likes
That makes sense as an individual parameter, but unfortunately effects on housing prices are highly multivariate and correlated. Marcus is right that the emprical data doesn’t show this to be the case, probably because so many other factors are changing at the same time.
That being said, examples in U.S. history where there have been big rises in mortgage rates is a sparse data set, so hard to generalize the trends.
In the Bay Area, one thing that could keep prices high is that many people have a lot of cash to put for down payment, so mortgage rates aren’t as big of a factor.
Another is of course the pandemic / wfh induced increased demand for SFH. This may make demand chronically higher and supply chronically lower.
On the flip side, I wonder if there has been some “pull-forward” of demand the past year that may settle down prices. People not originally intended on buying a house until a few years later may have accelerated purchase due to pandemic/wfh. Maybe some of that will stall as those pull-forward buyers flush out.
All in all my guess is by the end of the year, with increased mortgage rates and flatish stock market, prices are mostly flatish.
1 Like
And what is your guess on Bay Area RE prices if stocks aren’t flattish but rather fall by another 20-30% by year end?
The stock price drop is almost certain with interest rate rise because PE ratios will have to come down to match the guaranteed yields.
Bears should visit Patrick.net to understand why bearish about SV real estate has been wrong for decades.
Not questioning long term Bay Area appreciation, we all know its gonna be always green long term.
We are talking about headwinds over next couple years. It seems like a perfect disaster brewing for a RE reset in Bay Area over the next couple years. All data points to this: little to no population growth, serious stock market and IPO decline, mortgage rate jump, reopening of offices resetting the strong SFH case, many people now stuck with really bad commute, unsustainable price growth over last year.
Is this an academic debate?
If not, then…
. If renting and want to buy a primary, can afford then buy
. If want to upgrade, prudent to sell current Primary rather than hold
. If buying a rental, I prefer to buy elsewhere YMMV
Btw, pretty sure cash rich strong moats megacap companies like AAPL TSLA NVDA GOOG MSFT won’t be affected by inflation much and their employees would be doing very well regardless of economic conditions and Fed’s decisions.