Quora: Will house prices go down in the Bay Area?

Bay Area
82

the type of loan is a critical detail… the commercial loans have a balloon after 10 years. They average 60% LTV; biggest loan is presently in year 3 and around 37% LTV. Should be fine 7 years from now even with a huge correction. Their refinance will be driven by the prevailing interest rate and the rental income.

The lender on these loans do an annual evaluation of the asset, both value and income and, if things develop too unfavorably, they can actually force me to pay the balance down… I hope with at least 30 days notice.

I don’t want to imagine what would need to happen to make this a reality. EMP attack, West Coast not habitable?

2 Likes
83

Maybe, but

84

Are you getting very good rate on these balloon commercial loans? I asked a commercial broker a few years ago and I remember he can offer 30 year amortized commercial mortgage for 5+ unit apartment

85

Sound like scary loans. I don’t have loans except on my deals with partners. The banks have to much power.

86

Oil prices are tanking. And Midland is booming?

1 Like
87

Rental income means gross rent less all expenses including depreciation?

88

My oils stocks have taken a big hit

89

Midland median income is $71k. Is it higher than Sacramento, AUSTIN, Seattle and Los Angeles?

Median income in Midland is only 8% lower than San Jose, CA.

If you earn $71k and the home price is only 249k, will home price tank? It’s so remote so home construction is even more difficult than Tahoe.

I’m not looking to buy in Midland any more. I was reading about it 8 years ago but BA price suddenly dropped so I didn’t bother travel there. It seems not easy to even get there.

90

Which zip codes/ neighborhoods are hot? According to Zillow is COOL.

48%20AM
48%20AM693×150 10.2 KB

37%20AM
37%20AM724×264 23.9 KB

Consistent with Zillow. Cool. May be BAGB’s info is passe.

91

It was up 15.7% in the last 12 months. So it was hotter than Austin and San Francisco. Much better than South Bay.

Future can be different. Don’t buy midland today :rofl: I’m not buying and will never buy

92

Don’t tell us the past. Investment is about the future. Btw, steady growth is better.
For example,
1.08 x 1.08 x 1.08 x 1.08 x 1.08 x 1.08 x 1.08 x 1.08 = 1.85
1.20 x 1.10 x 1.00 x 0.90 x 1.00 x 0.80 x 1.00 x 1.20 = 1.05

93

Once the news is reported the trend has passed. Oil has had a huge hit in the last 3 months. Midland RE prices will drop soon.

94

Exactly, exactly. I forgot why I mentioned Midland, but nobody should buy Midland today or even in the future

95

I think we can crown you the new net worth king :slight_smile:

1 Like
96

Replacing ptieman?

97

Replacing you! Unless you can show us some assets worth more than $12 million.

98

Assets only? How about liabilities?

99

Certainly. Do show… :rofl:

100

I got 2 from CHASE at 4.0% and 4.5% (0.5% hit for loan below $1m). 30 yr amortized. To me, anything under 5% is a great rate. I got another one from “Bank of Internet” at 4.98%.

101

Thought higher quantum higher rate. Didn’t know commercial loan is same as margin rate, decrease as you borrow more.