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Old 06-26-2017, 10:26 AM
 
3,570 posts, read 2,508,013 times
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Quote:
Originally Posted by GoodHombre View Post
The tech bubble is the reason why Seattle is becoming expensive. Microsoft, Amazon, Airbnb, Facebook, just to name a few.

But, Portland Oregon is also getting quite expensive even though tech industry isn't that big there.

The real estate price in San Juan Islands, Washington is also very high. There's practically no high paying jobs, and foreign buyers are very unlikely to invest there.
It's only a bubble if the companies are overvalued. Microsoft, Amazon, and Facebook are all publicly traded companies with pretty solid financial performance. Airbnb is a totally different scale & is a private company.

I think the single biggest driver in rising West Coast housing prices is population growth exceeding the growth in housing stock. It's a simple supply & demand problem, 40+ years in the making.

Quote:
Originally Posted by JasonF View Post
There are certainly bubbly areas. San Francisco is already seeing prices fall. Oakland has been more stable but even there, we were able to negotiate the rent below what the leasing company was asking.

Reading the local news, it's pretty clear that a lot of the VC-funded tech startups that never made any money and never had a real business plan are starting to hit a wall and many are shutting down now that their funding sources have grown tired of throwing money into the trash.
San Francisco saw a ~5% year-over-year dip after a stunning series of rises. I would not call that "seeing prices fall." That's letting off of the gas pedal. If Oakland is stable, then I don't know what red hot could possibly be. Oakland has been the fastest growing housing market for the last couple of years, with price per square foot approaching $1000 in some neighborhoods and sales over $1M quite common.

Last year saw ( I think) the largest increase in new housing units in the last 50 years in SF & Oakland. But population growth is still outpacing housing construction.

People keep saying there must be a tech bubble because tech firms fail. VCs expect a lot of their investments to fail. They are investing in small companies in hopes of growth. There is greater risk there than investing in, for example, a publicly traded company. But VCs who got in on Facebook at the early stages can comfortably fund a decade of failures.

Uber might be the canary in the coal mine of our current tech startup situation. But they remain a private company with reported valuations that are pretty sky-high. We know they are losing a lot of money, but we also know they have tremendous revenues. What they do from here: who knows?

 
Old 06-26-2017, 11:22 AM
 
9,837 posts, read 4,609,968 times
Reputation: 7292
Quote:
Originally Posted by SportyandMisty View Post
A fundamental issue with bubbles is they cannot be forecasted. There are no set of criteria you can use to predict them.

Moreover, you cannot tell when you are in them.


You can only tell in hindsight after they have popped -- and even then it is difficult to say they really were a bubble, as at that point in time asset prices reflect all information available at that time.

I see people post this a lot.


The truth is you cannot be absolutely certain until after the event, no more than you can be certain about almost anything.

But there are lots of signs of a global asset bubble in real estate. investors are chasing yield and driving prices very high indeed. Many purchases are simply defensive positions intended to protect from a national, regional or global decline. put a big down payment on a home and it will produce income in any almost any recession. Lots of folk have purchased masses of dividend paying stocks , REITs /rentals because they provide longer term security in an unpredictable market. They may not be getting the best return but the buyers feel it might make it easier to ride out a big and perhaps protracted downturn.

It is also worth noting that there is a lot of speculative purchasing of Real estate in "hot spots" i know because i have to compete with speculators who appear to be fine with relying on a future greater fool for their profits. Well at least that is how it pencils out to me, but maybe my expectations are too last century.

Last edited by evilcart; 06-26-2017 at 11:35 AM..
 
Old 06-26-2017, 11:32 AM
 
1,869 posts, read 2,210,501 times
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It feels like a bubble because we've seen prices increase at much faster rate than income. However, we're also seeing low inventory, higher down payments, and historically low costs in lending. I keep hearing talking heads touting that Texas has been taking jobs from California, but it's not affecting the California housing market one bit. It's as though the company moved for tax purposes while the employees are staying in Ca and telecommuting.

Perhaps there's also a shift in intangible value with homeownership. People are willing to pay up to get a piece and so we might be in a blip where people are wanting homes now more than ever. During the bubble, you literally had low wage earners leveraging credit to buy multiple properties (to leverage again)…that's not happening anymore. Don't expect home prices to drop significantly, though I believe high real estate prices is a net negative for society.
 
Old 06-26-2017, 11:38 AM
 
3,570 posts, read 2,508,013 times
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Quote:
Originally Posted by kwong7 View Post
It feels like a bubble because we've seen prices increase at much faster rate than income. However, we're also seeing low inventory, higher down payments, and historically low costs in lending. I keep hearing talking heads touting that Texas has been taking jobs from California, but it's not affecting the California housing market one bit. It's as though the company moved for tax purposes while the employees are staying in Ca and telecommuting.

Perhaps there's also a shift in intangible value with homeownership. People are willing to pay up to get a piece and so we might be in a blip where people are wanting homes now more than ever. During the bubble, you literally had low wage earners leveraging credit to buy multiple properties (to leverage again)…that's not happening anymore. Don't expect home prices to drop significantly, though I believe high real estate prices is a net negative for society.
Job growth is faster in CA than in TX. Lower prices will only come with 1) population decrease, 2) economic contraction, or 3) increased housing construction.
 
Old 06-26-2017, 03:11 PM
 
2,956 posts, read 2,330,581 times
Reputation: 6475
Bubble burst in high demand areas are nothing but buying opportunities.

Bubble bursts in areas with significant supply issues due to demographics shifting or major economic shifts are a problem.

Florida is a great example of a bubble due to demographics. The West coast is due to demand (long term population) and jobs. Over 30 years one will fair much better than the other on average simply due to what specific factors are driving demand.
 
Old 06-26-2017, 05:09 PM
 
Location: Riverside Ca
22,146 posts, read 33,340,390 times
Reputation: 35433
Quote:
Originally Posted by Pub-911 View Post
Mostly, the people who have their BS-Detectors turned on.
Pretty obvious you dont want to hear it.

Yeah there are 33 million people living in California alone because nobody wants to live here. And it sure doesn't seem like people are going to stop coming here. You can whine scream and complain all you want but plenty of people buy and invest in the west coast. Just because you have a sandy vagina because someone posted a west coast topic in economics doesn't mean anything.
Might wanna check your bs detector seems like it's overloading your mouth.
 
Old 06-26-2017, 07:59 PM
 
2,762 posts, read 3,172,805 times
Reputation: 5407
I don't see a bubble yet. Unless we have mass layoffs or they start giving away the loans like last time to a bunch of unqualified people, we aren't in bubble territory yet.

Will it slow down, sure, maybe even go negative some, sure, but don't expect 35-50% drops in prices any time soon.

I will say this, buy in any desirable place today, such as Seattle, San Francisco, Coastal Socal etc...., and in 20 years your property will be worth lots more no matter what the market does between now and then.

If you are in for the long term, buy, stop over thinking it.

With the way real estate works in desirable areas, how supply reacts to the market, and how demand happens in a world with an ever increasing population, it is about as good as it gets from a long term perspective.
 
Old 06-26-2017, 08:52 PM
 
Location: Riverside Ca
22,146 posts, read 33,340,390 times
Reputation: 35433
Quote:
Originally Posted by High Altitude View Post
I don't see a bubble yet. Unless we have mass layoffs or they start giving away the loans like last time to a bunch of unqualified people, we aren't in bubble territory yet.

Will it slow down, sure, maybe even go negative some, sure, but don't expect 35-50% drops in prices any time soon.

I will say this, buy in any desirable place today, such as Seattle, San Francisco, Coastal Socal etc...., and in 20 years your property will be worth lots more no matter what the market does between now and then.

If you are in for the long term, buy, stop over thinking it.

With the way real estate works in desirable areas, how supply reacts to the market, and how demand happens in a world with an ever increasing population, it is about as good as it gets from a long term perspective.
This is nothing more than people that can't afford the housing in areas that they want to buy in, basically hoping that housing dumps so they can.........buy in the exact same place they claim is in a bubble for a lower price because they missed the train the first time. So they're rooting hog or die the housing crashes. Even if it crashes it sure isn't gonna be overnight.
These same people weren't buying in the big housungbpop because they were "waiting for prices to go down more because houses aren't worth it right now" so they sat on a bench watching the train move. By the time it took off they were left in the station.


Buying in a down market sounds great. The problem with buying in a down market is you gotta have the cash money or the cash money and the job to qualify if you're taking a loan. Otherwise you're renting if you dont have those things. And a large portion of home buyers can't buy in a downturn even if the prices are lower. Let's say that housing drops 50%. What good dors it do you if you got laid and are on unemployment. You still can't buy.

The housing would crash when you go back to liar loans and hocus pocus financing. Companies would need to do massive layoffs. And banks are going to hold properties off the write and kick the can diebnthe Fuad like they already did once before
 
Old 06-26-2017, 09:16 PM
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n/a posts
Quote:
Originally Posted by TheCityTheBridge View Post
San Francisco saw a ~5% year-over-year dip after a stunning series of rises. I would not call that "seeing prices fall." That's letting off of the gas pedal. If Oakland is stable, then I don't know what red hot could possibly be. Oakland has been the fastest growing housing market for the last couple of years, with price per square foot approaching $1000 in some neighborhoods and sales over $1M quite common.

Last year saw ( I think) the largest increase in new housing units in the last 50 years in SF & Oakland. But population growth is still outpacing housing construction.
Well, if an apartment costs less this year than it did last year, then yes, by definition the price fell.

The price did not collapse, but prices have fallen.

Quote:
People keep saying there must be a tech bubble because tech firms fail. VCs expect a lot of their investments to fail. They are investing in small companies in hopes of growth. There is greater risk there than investing in, for example, a publicly traded company. But VCs who got in on Facebook at the early stages can comfortably fund a decade of failures.

Uber might be the canary in the coal mine of our current tech startup situation. But they remain a private company with reported valuations that are pretty sky-high. We know they are losing a lot of money, but we also know they have tremendous revenues. What they do from here: who knows?
Sure, they can fund a lot of failures, but everyone has a breaking point.

Recently I've been started to see more well-known names (at least, well known for people who follow tech closely) failing. I also read an article earlier this year about a company that winds down failed startups and liquidates whatever assets there are - the guy who runs it was talking about how business hasn't been that good since the dot com bubble.

I don't think we're dot-comming it but there is evidence that things are started to return to a more reasonable state.
 
Old 06-26-2017, 10:54 PM
 
30,876 posts, read 36,825,967 times
Reputation: 34462
Quote:
Originally Posted by TheCityTheBridge View Post
I think the single biggest driver in rising West Coast housing prices is population growth exceeding the growth in housing stock. It's a simple supply & demand problem, 40+ years in the making.
^^This is definitely the biggest factor. Population growth has slowed down. But housing supply increases have slowed down even more. That leads to astronomical price increases.
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