That’s where all techies live and drives the home values. Once offices fully open up, the demand for these will again rise and values will follow, but after decline till end of year.
I think home values in these places will fall the hardest once offices fully open up as folks from there will migrate back to peninsula and South Bay near offices.
From investment perspective, what do you guys think will be the best areas over in terms of value and rent growth over next decade.
I am still bullish on Sacramento MSA. I will not invest anymore in BA rental properties. Too many anti landlord policies . But I don’t rule out living there part time. As far as buying…. I am in no hurry. Just waiting for the 50% off sale.
Redfin report seems to say something completely different.
Again I don’t know for sure what will happen, just saying.
Month old data but posting to show what has been happening with lately.
- The office vacancy rate in San Francisco rose to 24.2% in the second quarter from 23.8% in the prior period, according to CBRE research.
- Big tech employers like Salesforce and Google are staying flexible when it comes to bringing people back.
While big cities across the country struggle to fully recover from the pandemic, San Francisco is on another level, as tech companies exit leases and residents bolt for more affordable locations.
Only place in the BA I would consider would be an unincorporated area in the Santa Cruz mountains. Redwoods, meadows, mountains (albeit small ones) and the ocean. Every eco-zone from grassland to oak to scrub to dense forest and a few oddball spots like the Bonny Dune Ecological Preserve. Just an amazing place. Tremendous history if you know where to look. The massive old log loader parked at the intersection of the McCrary Ridge and Skyline-to-the -Sea trails has tires salvaged off of a B52. I miss the Corrolitos Sausage factory. Great motorcycle destination. And the Moss Beach Distillery.
East Bay literally appreciated by 2-3x during last 2 years of pandemic induced movements. It will certainly reset the most as more people return to office.
South Bay did not appreciate that much during pandemic that’s why it will get a bump up or stay flat after 2022.
Pandemic swung the pendulum to the other side, once things get back to normal, it will swing back to this side.
I see about a 10% price drop everywhere. I think WFH is here to stay. I think the tech invasion upset the normal BA values. I doubt it will stay that way. I think the East Bay and Marin will still be desirable and will not drop 50%. Wait till January. See what happens. But the stock market has rebounded and inflation is abating. Meanwhile there is still a shortage of housing and rents are high. And unemployment historically low
I think the longevity of WFH will depend on the strength of the labor market. Throughout 2020 and 2021, the combination of Covid plus one of the strongest labor markets since WW2 has allowed employees to call the shots (management is not happy about it!). Covid has also had a major impact – if you bring people back, and they all get sick and have to quarantine, that defeats the purpose (never mind the liability).
Facebook/Apple/Tesla…most of the competitive companies want butts back in seats at headquarters asap. If unemployment rises to >5%, you better get back to the office unless management feels you’re irreplaceable. The further out areas will take a significant hit in this scenario.
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Wow. That’s much. That make Austin price appreciation puny, double over 3 years. Yet, social media keeps trumping on Austin is very over-valued.
But closely monitor as Sep Fed mtg approaches. Situation can change in a flash.
Shortage of housing would provide the secular tailwind. ST headwind is due to Fed scared tactics and sudden jump in mortgage rates.
This one might change in a flash too. From what I have read (since I am not on the ground have to depends on reading opinions), employment of SWEs would remain strong, not sure about other professions and services jobs.
Even though FOMC watch tool expects 0.5% rate hike, it may be either 0.75% or 1.00% ( unusually large one ) that can topple economy for six months to remove all inflation.
However, impact to stock market, very likely similar to year 2008 ( not real estate though ).
Across country we will see drop in price including real estate and stocks.
All guess work, no guarantee it is correct prediction.
Fed Rate Monitor tool predicting 50/50 chance of 0.5/0.75 bp hike in Sept.
0.75 is increasingly likely.
Btw, survey of Americans is many (78%) of them are ready to pound if there is a RE crash, defined as 20-30% drop from ATH.
There is a CME group too here https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
They all predict 0.5% now, but 33 days are more. FED will have weekly review and finally decide the rate at the last 7 days.
Wall Street somehow gets all information ahead and adjust market for it!
With all these, like hanera said potentially 0.75% or 1%(worst). I do not expect 0.5% as I infer last conference FED is not happy with rate hike effectiveness.
If Fed is honest and not politically influenced they should raise by 0.75 or 1. This is the only path given record inflation and employment. Fed has lost most of its credibility already and it’s their chance to regain some.
And if that happens then along with QT all assets will be in free fall.
RE thrived in higher inflation in the 70s. Inflation is bad for stocks but good for RE.I was buying from 1976 on. The worst inflation in last 70 years. RE prices kept going up. Even in 1981 in the Volcker caused recession. Demand remained strong. Deals were hard to find. Nothing like the crash of 2008. 50% reduction is a fantasy. However there could drops like that for expensive trophy homes that are always way over priced… like the mega mansion in an LA that was listed at $500m and sold for $150m. The value of the top 1 percent of market homes last little effect on the overall… but gets all the headlines. Good time to pick off a trophy home.
This is often mentioned by vested media professionals as they are unable to guess/get what FED will do next !
Here, people are talking about good schools and school district, good colleges, universities…etc.
Why?
People think if their kids go to good schools, colleges, universities, they can excel well, right.
Now, you see FED, group of cream financial professionals, experienced in managing, handling, controlling big financial institutions across the country.
They are well trained and well equipped (government funding & huge data center) which others can not see or review.
In short, they are above all these universities etc.
Do not believe the media, they are run corrupt running commentary kind of people.
Trust fed and they will do whatever best for country, not necessarily for market.
Do you think FED team do not know about this? Then why do you base media 0.5% rate hike?
In short, I stopped taking Media translation, either stocks or anything else, for many years that is the key step for independent thinking and my success.
I read them for fun, laugh at the way they present and do not account for any of my activities.
Good Luck to you all, going for hibernation.
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Not excel in academic but would do well in work because of the entrenched effect. If the CEO and a few of the leadership are from Stanford, which one would they promote if there are two potentials (one from Stanford and one from Minnesota) and only one can be promoted?
Well, you should know who Fed really work for. Fed does not work for its true mandate anymore. We have record high inflation and record low unemployment and we are still sitting at negative 7 percent real interest rate. This is astonishing. Fed should have been doing QT and raising rates last year when inflation hit 5+%. They did not because they work for the super wealthy and not ordinary citizens. 90% ordinary Americans do not even own stocks or investment RE properties. The current Fed is a joke and those who still do not get it are delusional.
Not sure about this one.