Real Estate in Secular Uptrend

That comes from stock market, particularly tech stocks and those are down big !

You are again talking like REinv here, may be his alias ! You just talk with data points.

Those are down big => How much down 10% or 90%

It is very common last 5 years many IPOs go bankrupt in every recessions. How many are NOT recent last 5 years IPO? You will see very few like FB.

Tell me at least 10 stocks which were BIG DOWN but not recent 5 years IPOed. And that are bay area based (which affects bay area real estates). A company must have more than 500 bay area employees.

Netflix, Meta, Intel, Nvidia, Square, Zillow, Redfin, Paypal, Roku, Uber, Twitter, its a long list

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Have you seen year 2001 here?

Unbelievably, One of my IT manager started working at Fry’s electronics as sales man ! Another person was holding a sign board at Lawrence highway “Any IT job is fine for me !” with coat and suit. I used to go past that person.

It was completely dot.com burst, largest bay area companies filed bankruptcies, mass exodus of people out of bay area, San Jose alone 500k people left, the population was reduced by 500k.

Many laid off people left the car at SFO air port (without paying loan) left country, never returned. It was a mess at airport clearing all such cars !

But home prices drop did not even touch 20%

Here you go How the Bay Area Bounced Back From the Dot-Com Bust - Zillow Research

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That’s because home prices were not in the record bubble territory at that time. A damp dark creaking shack was not selling for 4M then. And Fed was not after crashing the housing bubble.
Housing markets that are not in bubble territory will not drop much even this time; every time you will see the same pattern. Record bubble ends up with record burst. No bubble, no bust. Fed has realized its mistake. Bay Area housing bubble is not good for anyone. Don’t fight the Fed.

I moved out from my folks in the late 80’s. BA housing has always felt like a bubble.

In 20 years, wages have doubled but RE has quadrupled, so bubble has certainly grown.

Exactly the point. Only 2008 was housing bubble. This one is Pandemic, supply chain and Russia war. If these three did not exists, FED won’t increase rates.

Current real estate market has got higher down payment, cash down, esp bay area, which won’t break like that in 2008.

Either RE goes up or down, it does not matter as I do not have rentals and primary is paid off, it is a non-issue.

Just blogging against your wrong expectation which will not happen. Any way, enough said, let us see by Dec 2023. Good Luck.

Not sure what’s your definition of bubble. A simple definition is when homes become unaffordable for 80% of population and even doctors and lawyers are priced out it’s a clear bubble. When cost of ownership far exceeds rent it’s a clear bubble.

Haha but the reality is that Fed is raising the rates and will keep raising for the foreseeable future. Live in reality not fantasy.

I think money printing has more to do with it than COVID or supply chains which are old news. And Russia would be irrelevant if the US and Europe hadn’t given up energy independence. Until and unless the money printing stops the Fed can raise rates until it’s blue in the face and it will have little effect. In my county a family of four who apply for all forms of welfare available can make almost $10,000 more than the median income. So of course there’s a labor shortage - which drives up wages and prices.

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Correct, this has results money flow M1, M2…etc, but FED won’t tell that openly as they only made it under the pressure of Trump !

In theory if money printing is compensated by goods and services matching increase, it is fine for economy. Since it is out of balance, too much, FED started aggressive.

This will impact entire economy, but never going to affect BARE by 50% as most of the Bay Area, esp old homes - pre-1980 are paid by high cash down payers selling stocks. The biggest benefit came to real estate by its low mortgage rate below 3.25%.

Based on last 20 years, whoever my friends bought homes, condos, townhomes after 2008-2018, never sold it so far, but turned into rentals with low mortgage rates.

Rarely, I have notice two people alone selling old homes to pay full cash down for new home. Those who locked at below 4%, they wont sell unless they face hardship.

It is really hard for Real estate to come down below 20% even in this downturn. Let us wait and see.

couple of days back 2 SFHs I was tracking went not only above asking but also @ 7-9% above Zillow estimate.

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Shows perfect bias, you choose your own sample and dream about it.

Beckwitt sorted housing markets into three categories: those that have continued to perform well, those where sales momentum picked up after the company adjusted prices or incentives, and those that could require further price adjustments to drive sales.

Sales remained strong in nine areas, Beckwitt said. They include New Jersey; Maryland; Virginia; Charlotte, N.C.; Indianapolis; San Diego, Calif.; and three markets of Florida: the southwest, the southeast, and the area around Palm Beach.
“These markets are benefiting from extremely low inventory, and many are benefiting from a strong local economy, employment growth and in-migration,” Beckwitt said, adding that Lennar offered mortgage buy-down programs and some incentives to maintain the sales pace. “Some communities in these markets have required targeted price adjustments on a limited basis,” he added.

The bulk of locales fell into the second category. The company said it “made more significant adjustments to regain sales momentum” in more than 20 markets. Among them were some of the pandemic housing boom’s hottest markets, such as Phoenix, Dallas, and Tampa, Fla.

Other areas in this category included Orlando, Fla.; Jacksonville, Fla.; the coastal Carolinas; Atlanta; Chicago; Nashville; Raleigh, N.C; Houston; San Antonio; Tucson, Ariz.; Las Vegas; Colorado; Seattle; and several parts of California, including as the coast, the Inland Empire, the Bay Area, the Central Valley, and Sacramento.
Traffic has slowed in each of these markets, and cancellations have increased, Beckwitt said, adding that the company offered buyer perks such as “aggressive” financing programs, price reductions, and increased incentives to drive sales.

The company says buyer pullback had been strongest in seven markets, including Boise, Idaho, where prices skyrocketed earlier in the pandemic amid lower rates and the work-from-home housing boom. “While the drivers and individual dynamics of these markets are varied somewhat, traffic has slowed significantly,” Beckwitt said. Other markets in this category include Philadelphia; Pensacola, Fla.; Austin; Reno, Nev.; Minnesota; and Utah.
Many buyers in those markets “need to be convinced that now is the time to buy,” Beckwitt said. “There is fear that sales prices have not hit bottom, which has led to an elevated level of cancellations.”

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in CV, Dublin it feels like 30% SFH are rentals. at least in the 1.1-1.5m range homes

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Unless Rents Rise, Housing Is Set Up for an Epic Crash

All of the reasons to suggest residential real estate is not facing a disaster have melted away

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Tenants are struggling to pay. This is worrisome. If recession (new definition is increased unemployment):face_with_peeking_eye: So no way I would buy any rentals when the environment is declining house price and increased risk of tenants defaulting on rent.

Cash is King.

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“For the longer term, what we need is supply and demand to get better aligned, so that housing prices go up at a reasonable level … and that people can afford houses again,” he added. “The housing market may have to go through a correction to get back to that place.”

Level is the same as rate? Go up at a reasonable rate? Correction means 20% price decline from ATH? Stock market definition of correction is 10-20%. Prices have declined 8-12%. So already in correction.

The country’s still facing a shortage of homes for sale.

There are people disputing this statement.

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This is the biggest lie perpetrated by RE people. There are shortages in some pockets but overall we have a glut of housing in USA.

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How to tell? IMHO, the most important is net gain/loss in population. If population is increasing, temporarily over-built would be absorbed eventually.