Not a bubble a dislocation


I chatted with my mortgage broker who confirmed that rates did go down slightly so I don’t see the market slowing down anytime soon (unless The Donald does something really, really stupid). Should be a great selling season this year. I am in the field since I love real estate porn, attending open houses here in the Fab 7x7, and I see young professionals, couples, tons of Asian, all looking and obviously buying and paying over list when prudent. Come on, it is so different now in the modern age with all this information. All MLS homes are immediately shot to your Iphone so you know about every freaking house that is listed in your desired neighborhood(s), you have numbers to compare, so anyone can conjure up a “selling price” range that is probably darn accurate. It is simply a matter of do I push in all my chips on this one, or not. Hence, the average/ugly/warted ones may not be as pursued but the really, really good boned ones/the prom queens are overbid to no end because once they are off the market, they are essentially gone for your lifetime most likely.

Santa Cruz is becoming hot, it has 36% cash sales.

Alameda county has very low cash sales. Maybe there are more primary home buyers in Oakland and other Alameda county cities.

I think the best 4 counties are SF, San Mateo, Santa Clara and Alameda. This is the first tier.

Second tired countiers are Marin, Santa Cruz and contra Costa.

Third tier is Solano.

Fourth tier is Sonoma county, which is not even included in Bay Area

Wow - look at the distressed inventory - all but wiped out. That’s an upside to the median prices going sky high. And I guess that’s why my FB feed is filled up with real estate investing coaches and their get rich quick scams. No more easy foreclosures - time to fleece the Flip or Flop crowd.

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CC and Solano are still quite some way from last peak. But if we are talking about commuting to Silicon Valley these two are too far. I think Central Valley on the other side of the Altamont Pass is more commutable to SV. Towns like Tracy, Manteca and even Stockton. But if we are talking about commuting to SF then CC county along Bart route has a lot of upside I suppose.

Two things to keep in mind. First is that rent growth is slowing down. As price-vs-rent continue to go higher, there will come a point renting makes more financial sense. I think in some locales we are already there. It will dampen price as the pool of potential buyers dwindles. Second, as interests rate goes higher the yield on other investments will look more attractive than real estate. Right now a lot of money is parked in RE because yield is so low on other “safe” investment options.

Taken together I think price will flatten out in the next 2-5 years? But then there is this pesky corner of Sunnyvale that’s defying gravity… :thinking:


The shortage of rentals is nationwide…Builders are still afraid or unable to build…I think rents will continue to appreciate. .The highend areas of the BA have hit a temporary supply glut of overpriced new product…That will work its way through in 3years max…Meanwhile exburb rents are headed up. …Macro issues will be the biggest concern till 2020…