San Francisco Bay area housing bubble not bursting, but moderating

Real estate markets are moving toward a “new normal” in the San Francisco Bay area. This is according to the local “feet on the street” stories I hear from top Bay Area Realtors.

I recently attended a forum for top Bay Area Realtors. The agents were some of the area’s finest covering the area from Lake Tahoe to the east, Santa Rosa to the north, and Carmel to the south, with Silicon Valley to the west. While we cover different regions and have dramatically different markets, we are seeing similar trends.

Our view — despite what you may have heard — is that the Bay Area housing bubble is not bursting. It is changing to what appears to be a “new normal.” Let’s look at the big picture to understand what we believe are the trends driving the current market and how we think they will continue to impact the market in 2016.

This gels with my feeling in several markets. But strangely my old hood in Evergreen seems to be galloping higher. It has been lagging so maybe now playing catchup.

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This is what I’ve been saying for a while. Housing is getting to expensive in the bay area and people are looking for cheaper places to live. Evergreen has lagged but it is catching up because it is not too expensive and still close to jobs centers. Santa Clara county added 5,800 jobs in May.

At least in evergreen it’s still pretty hot. But I only pay attention to the <1M market.

Yup. Once people realize they can’t afford an area, then they move onto the next closest area in their price range. That drives up the prices in that area. That or they refuse to buy where they can afford and become a housing bear. I’ve yet to see a housing bear that wasn’t priced out of the area they believe they deserve. I think it starts with the disbelief that they can’t afford where they want to live. Of course it’s not their fault they can’t afford it, so it’s the housing market’s fault.

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