Techies are very rich. Just this forum, we did a NW survey in 2018, most of us have less than $6M in NW. Now quite a few are UHNWIs.
In 2018, most with less than $6M in NW.
In 2019, most with less than $25M NW
Today… well, you know. $3M SFH is nothing burger.
Don’t you think demand is higher than supply from DDR?
I agree with this. There is always a demand for housing, esp. nice safe SFH, from young people who are starting their families. On the other hand, there is always a supply of houses from people who have either left this world or whose families have broken up. That is the bedrock of demand and supply.
But when the new family needs to liquidate $1M of RSUs (very few young engineers get this kind of RSU grant - as a mid career engineer, I have never got even 5% of this!) to afford the down payment, and after that they have to pay 3-4x per month compared to rent for the same house ($16k PITI vs $4-5k rent), then something is really wrong. Either rents have to double/triple overnight or home price has to come down…
@hanera, true that some folks like yourself and @wuqijun are one percenters now, and from your vantage point $3M NW is a nothing burger. But you guys are not youngsters starting out families - you are quite established. And even you choose to be based in Austin rather than Cupertino.
Even among techies in Silicon Valley, it takes quite a number to years to accumulate $3M NW, unless you had exceptional timing - early stage employee of unicorn that went IPO etc.
The 1500 sq ft ranchers in many parts of RBA like Cupertino, West SJ etc are really meant for young families starting out. But how are they supposed to afford $1M RSU for down payment and then $16k per month. Instead they have to rent the same from established landlords like yourself for $5k per month.
The supply from DDR is indeed very small, but when buyers are so badly squeezed, even that limited supply can build up into a large inventory
It only takes a very small number of people that can afford it to sustain it. Only the new buyers have to be able to afford current prices. People aren’t buying/selling homes the way they do stocks. They buy and live there long-term. They aren’t trying to jump in and out of the market to make a profit. They are raising their family there.
Well…remember the pictures I posted of my La Honda woodshed turned into an office?
Those folks bought my 610 sq ft. house. Then had a kid. They’re not planning on moving.
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This is what going around in YouTube and FinTwit. It seems…
and
Some through selling a large portion of their holdings.
It’s weird. King county which includes Seattle had SUPER low inventory in 2017. It skyrocket by 2019 and has been declining since. It’s still much higher than 2017. I’m not sure why it was so low in 2017.
Inventory is rising in Tahoe. Double the low but still one third of historical normal. About 100 sfhs active in South Lake Tahoe. Prices peaked in November. Condos still going up though only 10 active. Affordability is the issue .
High end homes still selling to the one percent.
def more listings in Danville, the nice ones are going in 1-2 days and the meh ones are sitting for several weeks
I am noticing more and more price reduction (as well as lower asking price) in last couple of weeks. As well as a lot less Hot homes. This is typically the time buyer have fatigue in the cycle, but with all the macro condition, I wonder cooling off period is here. Time will tell. Share your experience if you are actively going to Open Houses and what you see.
Active houses with price reduced:
Clearly less “HOT” houses on Redfin & number of favorites on some categories(size, area_ of houses I am tracking are down.
our neighbors (4bd. 2.5 bath with nice yard, listed 1.8) just sold to Opendoor (neighbor said sold for more than 1.8) as they got no offers after sitting on the market for 3 weeks. They had to close on their new house and needed the money.
it DOES need a lot of work but location desirable (Dublin, quiet neighborhood, easy access to 680/580 but away from highway noise, walkable to two starbucks and shopping.
Another evil of inflation and our inability to respond to it. Real estate shelters wealth and not people.
This argument does not make sense. Even if as homeowner has a fixed, low 3% mortgage rate, their stock portfolio is getting lowered thanks to interest rate hikes and all other items except housing and getting more expensive. So, their money is buying them less and less.
Eventually, housing prices will have to drop just like stocks because buyers just won’t be able to afford homes when all other expenses are going higher
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Pay of buyers could be going up as fast as expenses.
Middle class buyers. Rich buyers may continue to use real estate as an inflation shelter. Inflation clobbers the poor and lower middle class, whose financial life revolves around dollars, and ultimately makes the rich, whose wealth is in assets, richer at least in a relative sense.
