The truth about Bay Area real estate appreciation (San Jose, Belmont: modular homes, neighborhood)

[Perma Bear]

Originally Posted by dogandcat

You can buy 900 acres in the middle of nowhere for 150,000 or less. Obviously, the land in prompt location costs more.

It would be a 15 minute commute to San Jose. Cheaper than Gilroy even if you build a manufactured home (not a trailer home) and a better location.

[TheGreatCurve]

Originally Posted by dogandcat

In Silicon Valley, you pay for land not for house itself, because land costs much more compare to structure. In case of TV, you pay only for TV box.

OK, then why does land cost 100% more than it did 18 years ago? It's still the same pile of dirt that it was 18 years ago, isn't it? And why do condos appreciate when you're just buying the four walls?

[Perma Bear]

Originally Posted by TheGreatCurve

OK, then why does land cost 100% more than it did 18 years ago? It's still the same pile of dirt that it was 18 years ago, isn't it? And why do condos appreciate when you're just buying the four walls?

Because something something disruptive tech something something the future!

[dogandcat]

Originally Posted by TheGreatCurve

OK, then why does land cost 100% more than it did 18 years ago? It's still the same pile of dirt that it was 18 years ago, isn't it? And why do condos appreciate when you're just buying the four walls?

Because it is how a law of supply and demand works in a free market... I guess it would be helpful to refresh knowledges of microeconomics 101 class. And if you do not like capitalistic market economy you can move to North Korea where people get houses for free...

When you buy condo, the land is owned by condominium association, and you own a very small portion of it on practice. That's one of the reasons why on hot markets like Silicon Valley it's wiser to buy detached houses with backyards not condos to make a bigger profit when reselling it in the future. Because of land value in Silicon Valley: too much people with money, and too little land.

[simboticus]

Originally Posted by WanderingFar

I'm just not seeing a catalyst yet that will pop the bubble. Deflate it maybe, if there's a VC pullback for tech startups. But that's not having enough of a ripple effect yet. I think some other force will be necessary for there to be anything close to a "dive." I guess we'll see. I'm in it for the long haul either way.

Its all about stock options. Apple is way down, FB and GOOGL are still strong. If enough of the big ones take a hit to stock prices, cash for down payments will dry up.

[WanderingFar]

Originally Posted by simboticus

Its all about stock options. Apple is way down, FB and GOOGL are still strong. If enough of the big ones take a hit to stock prices, cash for down payments will dry up.

But it won't be immediate. Anyone trying to buy a house now has probably liquidated many of of the shares they need anyway because of the expected market volatility. If you're trying to buy a house, you're not going to gamble on a potential market dive. It's the newer employees just getting their ESPPs who will be most affected by that. Besides, there's other money in the Bay Area besides tech money. My family is a good example of non-techies in the market. We're not the only ones.

Unless you've been in the market in the past few years, I don't think you can appreciate how much pent-up demand there is, especially in the $900,000-$1.5m price range. All those people participating in bidding wars are still looking and they still have the funds.

[dburbs1975]

there are still crazy bidding wars on shacks all the way up to 2.5 million going on as we speak. Over that price things start to slow down.

[Perma Bear]

Originally Posted by dburbs1975

there are still crazy bidding wars on shacks all the way up to 2.5 million going on as we speak. Over that price things start to slow down.

Bubblicious

[tehsquishmeister]

Originally Posted by dburbs1975

there are still crazy bidding wars on shacks all the way up to 2.5 million going on as we speak. Over that price things start to slow down.

Just FYI, Redfin is sending me around a dozen reductions per day, in the south bay, in the < 2.5 mil range. Take it for what it's worth. Well, or don't.

[Chuck5000]

Originally Posted by Perma Bear

It would be a 15 minute commute to San Jose. Cheaper than Gilroy even if you build a manufactured home (not a trailer home) and a better location.

Hey, genius, after you pay for a) roads/driveway, b) sewer and c) do other earth work, you are in for several hundred thousand dollars before you even start construction.

These are the reasons parcels like this are undeveloped even in the current market.