Finally Real Estate prices are going down (San Francisco, Orange: section 8, real estate market)

[teoreticar]

We have new trend. down down down.
Realtors Worry Downturn In Chinese Economy Could Cool Red-Hot Bay Area Real Estate Market « CBS San Francisco


I would say that we could see drop 30-40% from current market value in real estate prices in bay area.

[BayAreaHillbilly]

Originally Posted by teoreticar

We have new trend. down down down.
Realtors Worry Downturn In Chinese Economy Could Cool Red-Hot Bay Area Real Estate Market « CBS San Francisco


I would say that we could see drop 30-40% from current market value in real estate prices in bay area.

Probably not that much in the core areas. Maybe out further - Contra Costa, maybe Gilroy, parts of the North Bay ...

In the last correction some inner places were merely flat for a while, others declined modestly.

[TR95]

Originally Posted by teoreticar

We have new trend. down down down.
Realtors Worry Downturn In Chinese Economy Could Cool Red-Hot Bay Area Real Estate Market « CBS San Francisco


I would say that we could see drop 30-40% from current market value in real estate prices in bay area.

over what time period would you anticipate a 30-40% decline? This didn't even really happen in the worst recession we have had since 1930. Only the far outlying areas declined by 40%. So the Chinese have bought $600M woth of real estate in the last two years. That is really nominal in terms of the total market.

Now, if the stock market continues its decline and tech has major layoffs then a slowdown in appreciation is very likely and even a decline at some point. But we are no where near 2007/2008 for a 40% decline to occur.

[crouching_tiger]

Originally Posted by TR95

over what time period would you anticipate a 30-40% decline? This didn't even really happen in the worst recession we have had since 1930. Only the far outlying areas declined by 40%. So the Chinese have bought $600M woth of real estate in the last two years. That is really nominal in terms of the total market.

Now, if the stock market continues its decline and tech has major layoffs then a slowdown in appreciation is very likely and even a decline at some point. But we are no where near 2007/2008 for a 40% decline to occur.

When crashes come, they usually come overnight and it's usually a massive correction like we saw in the stock market today.

The Hedge Funds and PE firms have made a ton of money selling overpriced stocks and real estate to suckers over the past few years. It's time to take massive short positions now and guess who will be left holding the bag?

Yup they make money both ways.

[LalloG]

I'm moving up there in October from Orange County, Ca. Maybe this will make my move easier. Time will tell.

[TR95]

Originally Posted by crouching_tiger

When crashes come, they usually come overnight and it's usually a massive correction like we saw in the stock market today.

The Hedge Funds and PE firms have made a ton of money selling overpriced stocks and real estate to suckers over the past few years. It's time to take massive short positions now and guess who will be left holding the bag?

Yup they make money both ways.

Remember October 1987. That was 22% and happened overnight. If you think 3.9% is a massive correction in one day you haven't lived very long. Like I said, it's going to take a lot more than a 15-20% stock market decline for a 30-40% decline in the housing market here. That's what the OP posted about. This didn't even happened in the last Great Recession.

[Lanienguyen]

I don't buy on this new. The uptrend of Bay Area housing last 2-3 years was exactly like the trend I saw in 1999-2000 during Dot com era. Lots of high tech people in the bay area make lots of money thru their ESPP, stock options that they had/have been collected for a decade.
Expect a 40% correction? Never say never but I don't think so when the section 8 allows ~$3000 for 4 BR house.

[DMenscha]

Real estate prices don't go up or down "overnight".

[cardinal2007]

For better or for worse most of the activity in the South Bay has been due to the increasing profits of Apple and Google (Alphabet), which have decided to expand into other markets due to their success. A recession may be enough for them to start reducing their expansion plans and focus on their core business.

They wouldn't even have to lay off people, reshuffle somewhat, and let some people leave by attrition.

They have been expanding into each other's territory for a while now (Android, Apple Maps) with mixed success. If they stop doing so, that is enough of a reduction in the number of new people they would hire.

A major worldwide recession and Apple would see their profits go down a lot, their stock will fall so less RSUs, same for Google, and they stop hiring like crazy, and housing will stop going up as fast.

But yeah, it would have to be at a worldwide level for their numbers to go down enough that Google (or Alphabet) or Apple start to reduce their speculative products and focus just on core. For better or for worse they are less likely to just focus on the quarterly numbers and want to focus on the long term, but if long term prospects look more dim for speculative projects, then they will be downsized or cut.

That may help startups in other places, like SF, as they will have less competition for talent though.

[eureka1]

Dream on.