.
Won’t this support stronger prices in RBA?
Btw, I presume you meant RBA when you say BA. Some part of BA may see price weakening.
Has been the case for RBA for decades.
Doesn’t mean must follow by price decline. Could be slower price appreciation.
In my mind, this is a stronger case for renting. People who could not buy homes in RBA in the past and have moved far away of course cannot buy now with elevated rates (and prices for now). So these folks would look for renting in RBA, and selling their homes.
It has always been easier in the pocket to rent rather than buy in RBA. People buy Primary in RBA for non financial reason and betting for good price appreciation, historically about 6-8% 
p.a, has been higher than 10% since 2009.
Sound logical and could be the right thing to do. However I don’t like to end up owning no house.
Home prices barely moved when the dotcom bubble popped. That included massive layoffs as companies failed. Why do you think this would be different and lead to a big home price drop?
People always over estimate the impact of interest rates. They don’t realize how it kills supply. People with ~3% mortgage rate aren’t going to sell their home when rates are 5%. They stay, so there’s very little supply. The people that think rising rates will lower prices only think of the impact on demand.
He has noticed the continued, strong demand for more home and work space. Gonzalez helped two recent home sellers move out of San Jose for bigger homes, with smaller price tags, in Tracy and the Sierra foothills.
Remote work and the desire for bigger homes and lots have inspired many sellers. “When people call me, ” he said, “they’re ready to sell.”
Lot of tech company are kicking their staff to work physically, starting 2 days and soon will be full time, those moved out will have to move back
Remote job wage are lower, more competition , it’s actually easier to find a local job that pays lot higher than remote(not saying all, but overall is lower)
Even with the interest rise, i don’t see it makes huge impact on the bay area housing. maybe in other states.
we’re going back to 3 days per week in person by July - slowly building up to that
https://www.redfin.com/CA/Los-Altos/41-Hawthorne-Ave-94022/home/635008
More than 14 days and price reduction in Los Altos, near down-town location. Signs of some cool down in RBA?
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Listing prices, both before and after reductions seem to be well below Zillow and Redfin estimates.
May be a strategy to get more buyers attention. Thinking that they may be expecting more than 5M.
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Read an article which said once the low rate mortgage locks are gone, after that the sale prices should show us the effect of rise of mortgage rates.
End of Dec was < 3%
Jan - Feb <4%
March <4.5%
I guess add 60-90 days(for rate lock) to those Months and the “sold” prices which went pending after May should show us the effects. Demand should definitely go down after May IMO. Key will be supply and how much new supply comes to the market and the equilibrium or lack of equilibrium between demand and supply will determine prices/trends going forward.
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House is facing the commercial building & parking lot - I doubt Zillow or Redfin would take that into consideration in their estimates. For >4M, people are probably picky about that - but there is always a price for the house to sell.
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It is close to commercial. However, LA downtown is quite nice and it is a nice perk to be able to walk to the down-town. Agree it is a bit too close and may be discounted due to that.
This house falls under the Los Altos historical home inventory which means that there are a lot of restrictions on what you can do with it.
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Wells Fargo, in confirming the cuts, blamed the sharp decline in home mortgage originations as the Fed raises interest rates to combat inflation. In recent weeks, average rates for 30-year fixed mortgages have reached those last seen in 2010, above 5%.
Postings on The Layoff, however, suggest Wells Fargo’s layoffs hit mortgage teams in at least five US cities, including the Phoenix, Des Moines, and San Antonio markets, as well as in Portland, Oregon, and Raleigh, North Carolina.
What’s crazy to me is treasury and MBS yields aren’t going up nearly as quickly as mortgage rates. That means either mortgage lenders or Freddie/Fannie will have MASSIVE profits off the spread. My guess is Freddie/Fannie, since they set the rates they’ll pay for mortgages. MBB which is for MBS is 1.64% yield. 6-months ago the yield was 1.51%, so why are mortgage rates up 2%? Maybe current MBS auctions are at much higher yields, and the fund yield is low because of how much older debt it owns. If that’s the cases, then the price will keep dropping as newer MBS are purchased.
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Current yield number is available/not?
From what I see, the going price for a 30-year bond with 4% coupon is $99.28. The 15-year 4% coupon is $100.63. That should be mean there’s are more downside in the bond fund, because why buy the fund paying 1.64% when new bonds are just under 4% (15-year).
Effective duration of MBB is only ~5 years (may have to do with the typical length a homeowner keeps a mortgage). So those 3% mortgages are going to start getting replaced by 5% mortgages at a rate of ~20% per year. It will catch up much faster than a 15 or 30 year bond.
The theoretical penalty for a 2% rate increase on a 5 yr duration fund is about 2% * (1 + 0.8 + 0.6 + 0.4 + 0.2) so basically 6%.