The San Francisco housing cycle will be more difficult to predict (San Jose: rental, mortgage)

[HappyinCali]

Originally Posted by andyadhi01

I think the discussion is getting a bit outdated given the real estate slow down for last couple of months. The bidding war is almost gone compared to earlier in the year and less desirable peninsula towns are seeing house sell at or below asking. A quick research on redfin will reveal that. The whole madness was driven by low interest rate and now the fear of a interest rate rise is slowing things down.

That's a bit counterintuitive. If people were concerned about higher interest rates in the future, they would be rushing to buy now. If you were a buyer who could buy right now, would you wait to buy, because you are worried about rates rising, or would you buy now and lock a 30-year Jumbo mortgage at 3.8%?

I would agree with you, if you mean speculators, because the demand for housing in the future might be lower with higher rates, so they are less likely to buy now to flip.

Finally, I am not seeing any cooling. a house down the street for me, which I thought was overpriced at listed, sold for $300k above asking with 6 offers. We might very well be in the final throes of the mania, but it is silly to talk about a cool down when prices are up 10%+ YTD.

[Ultrarunner]

Originally Posted by ssmaster

There is a lot of wealth in the Bay Area outside of tech
2 physician couple easily $400,000
Finance executive +physician
Corporate law partner + physician
Finance executive + accounting firm partner
Finance executive +corporate lawyer

Throw on some family money and you can see the $2 million all cash offers. What strikes me about the Bay Area is how little ostentatious displays of wealth you. very few ferraris and Bentleys considering the wealth compared to LA or Miami

Guess it depends...

I've posted before about a young couple I know... they started as high school sweethearts... both, the first in their families to attend college... her family is from the Philippines and his family is African American.

At 23 years of age they bought their first Bay Area home in San Leandro... she is a Registered Nurse with lots of overtime working at Highland Hospital and he is Police Officer with overtime...

They earned almost 250k and have excellent retirement and medical...

Just saying... even a young couple starting out, coming from modest means can and do buy homes here.

[TR95]

Originally Posted by mysticaltyger

As far as I'm concerned, it's irrelevant. I'm being steadily priced out of the Bay Area in terms of both buying and renting. In the 19 years I've lived in the Bay Area, nothing has been done to keep housing supply up with demand, so I'm not holding my breath that it will ever happen in my lifetime. I'm just one more middle class person who will be forced out of the Bay some day--possibly soon.

No slowdown here in Berkeley, Albany or even the good areas of Oakland. Surprised the Peninsula has slowed down. Now that interest rates were held close to 0, this will likely continue for the next 4 months at least. When interest rates start to increase there will still be buyers and if it is anything like 2003, it was a frenzy with people looking to buy before rates rose too much.

[BayAreaHillbilly]

News flash, still no interest rate rise and probably never will be. Short term, way too much fear of inciting a recession. Long term ... those above world wide median income are not fecund. Future consumers who actually have money / disposable income will enter into a population decline, the poor huddled masses below median will never be a factor for things like iCruds, cars, and so many other things we now rely on to fuel the economy. We may even start to see negative interest rates. That's when people really will start to hide money in walls and mattresses.

[calicoastal]

The latest monthly housing report from CoreLogic was released today...

YoY median house sale price increases (Aug '14 to Aug '15):
Alameda 6.6%
Contra Costa 8.5%
Marin 2.1%
Santa Clara 12.1%
San Francisco 16.3%
San Mateo 15.6%

Not exactly a downturn.

[Ultrarunner]

Just looked at the last quarter sales report for my area of East Oakland...

19 sales and 15 were over asking... so there is still demand.

I looked at a home today that is priced 50% higher than it sold for in 2012... it will be interesting to see what it goes for.

Looks like the market has risen enough for me to bow out... even with low rates... the money borrowed still needs to be paid back... at least in my mind.

Also... property tax on a 600k home is pushing 10k... something else to think about too.

[andyadhi01]

Originally Posted by calicoastal

The latest monthly housing report from CoreLogic was released today...

YoY median house sale price increases (Aug '14 to Aug '15):
Alameda 6.6%
Contra Costa 8.5%
Marin 2.1%
Santa Clara 12.1%
San Francisco 16.3%
San Mateo 15.6%

Not exactly a downturn.

There is a slowdown going on:

Bay Area home sales, prices drop in August - San Francisco Chronicle

There was a mortgage rate spike around July-August but it has come down. I don't think further price appreciation is realistic at this point although I will be happy if it keeps going up-

[andyadhi01]

Originally Posted by ssmaster

What strikes me about the Bay Area is how little ostentatious displays of wealth you. very few ferraris and Bentleys considering the wealth compared to LA or Miami

Well I think they want to but after paying for mortgage and sometimes private school the average bay area family with 250k+ income does not really have much extra cash! The upper middle class live like lower middle class here and the middle class live like poor-

[TR95]

Originally Posted by andyadhi01

Well I think they want to but after paying for mortgage and sometimes private school the average bay area family with 250k+ income does not really have much extra cash! The upper middle class live like lower middle class here and the middle class live like poor-

I'll take whatever class you want to put me in here compared to upper class that I guess you could have considered us living in Texas for the last few years. Would rather wake up to what I'm looking at out my window right now than driving a Maserati in Texas.

[TR95]

Originally Posted by andyadhi01

There is a slowdown going on:

Bay Area home sales, prices drop in August - San Francisco Chronicle

There was a mortgage rate spike around July-August but it has come down. I don't think further price appreciation is realistic at this point although I will be happy if it keeps going up-

This article means nothing. Just because the median price and number of sales is lower than the prior month has no relevance. It is just one month. There could have been fewer active homes, the mix of purchase prices could have included higher homes one month or lower homes another. When I see a trend of 3-6 months that are down, maybe that will be a sign of a slowdown. Just don't see it yet. Mid July mortgage rates dipped and then increased very slightly in August. By increase I mean a 30 year fixed at 3.875 cost $800 closing costs on July 17th and in August it got to as high as $3,000 for that same rate. Yesterday, it cost $1,500 for closing costs.