I see at least 2 people on the forum are actively bidding on houses. The market is definitely becoming hotter after Trump’s win.
When market cools down last year, less buyers. When it’s heating up, many people are buying. People here are buying houses based on momentum?
Warm after Trump’s victory, hot after stock market roars. Just sell 3,000 AAPLs can already bid above listing price by $200k. Any senior managers or architects have more than that.
I buy houses year long so I don’t buy based on momentum. The current condition is the spring/new year pop. It will cool down again toward the end of the year and pop again next spring. The cycle has been like this for the past several years.
How much of this do you guys think is the effect from rising interest rates? With rates going up at this speed, in a year or so, a lot of these places will be unaffordable to even most folks at FANG.
On the other hand, what do you guys think of price outlooks in SF, as compared to south bay? South bay seems to have residents that are more seasoned (30+ folks with family) while SF tech scene is quite a bit younger. Granted, most of these folks are cash hungry (pre IPO), so the prices in SF will get lagged until 2018+?
Why 2018+ for SF?
SF has been weaker since a year ago. I think it’s a reflection of weak startup funding activity.
With snap IPO, SF may get quite a few high profile IPO which could jumpstart the housing market.
If you look at potential IPO candidates, almost all of them are located in SF
SF now has Snap(not so hot), MuleSoft IPO. Upcoming IPOs are Okta and what else?
Appdynamics got acquired by Cisco. I think SF market will still be strong.
With rates going up I think the % appreciation year over year will slow down? Instead of 5% or 10% maybe half that in gains?
Yeah, many startups are postponing IPOs. Snap just went, so at least Sep 2017 till they can cash out (6 months freeze), and AirBnB/Uber/etc aren’t gunning till 2018+. I’m not betting on their stocks going crazy post IPO, but these guys are just sitting on illiquid assets.
True, I do not buy on momentum. Low interest and locking 30 year fixed played major part in my purchase. I never stopped looking for new homes even though I had many setbacks, left 3 to 6 months gaps. I buy (bid) houses based on value and ROI. Once I get sufficient funds for down payment, either through earning or investment returns, I start looking at next home.
wuqijun and Jil,
Very systematic 
. Buying also one year long but in Austin (not Texas) 
betting that it will be as expensive as SV one day.
No impact of interest rate hikes seen in Sunnyvale SFH.
Forget about it. That will never happen. Even if a major earthquake rocked here and all houses buried into the ground.
I was referring to the reverse impact; given the speed of rate hikes, folks are determined to get a place before becoming ineligible. Price declines due to rate hikes will (if happens) take longer of course…
They understand the rates are not going to roll back to 3.25% or 3.5% ! Yes, I see the same action, many are disturbed to lock at low rate.
Not value investing, no margin of safety !!!
Example of my value analysis:
https://www.redfin.com/CA/Sunnyvale/805-Gary-Ave-94086/home/664121
This is a good home, large lot. Very few, but cashy buyers or builders, will step in. I like the property as I see value in it. If I buy with 25%, and rent cash flow negative holding for few years, the value goes up later. After few years, if I tear down and build a nice home, I get better return.
I always liked the southwestern most area of Sunnyvale. Cherry Chase elementary, Sunnyvale middle, Homestead high are a notch below Cupertino, but still excellent schools. And it is slightly closer commute to 101 corrider than Cupertino.
I would expect slight discount vs Cupertino. Looks like that discount is disappearing today.
This one sold for 565k in 2011 and 1.626m this week. Even if the interior was fully done - a 1.1m appreciation in 6 years is super high. These kind of gains make me scared about a market top.
They’ve done quite a bit of extension. Original was 2/1 and now 3/2, extra 400 sq ft of living space. I would say that renovation would cost about $200k. Adding the 100% appreciation since market bottom would get you to around $1.6M.
So I think this is very reasonable pricing. No we are not anywhere near a market top.
We won’t know until it starts to drop. Hmm… how much is consider start to drop? Obviously few percentage is no count since every year the decline between peak late Spring/early Summer and Winter is about that.
So long inventory is extremely low and interest is still very low…