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San Francisco Home Prices Fell for the First Time in Four Years in March

redfin.com

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Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#91

Post by soperj »

jonnathanson wrote: post #65
ryanSrich wrote: post #43

It's always hard to believe the numbers, but I trust Redfin since I used them to purchase my home. I think the problem is comparing what's turn key and not. For example they say: > Portland, OR had the nation’s highest price growth, rising 16.1% since last year to $325,000... The problem is you're fighting 100's of people for that one house in Portland that is livable at $325,000. Most houses that cheap need a ton of…

"SF on the other hand is just seeing their ceiling come into play. Only so many people can justify raising a family and purchasing a home in The Bay. Why not change jobs to Seattle or Portland and make around the same money, but spend half on a house? I think that's what we're seeing. " It's more than just tech workers. SF real estate prices have been influenced significantly by foreign speculation (especially from C…

Why isn't this drying up in Canada then?

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#92

Post by scurvy »

Domenic_S wrote: post #66
deegles wrote: post #54

Earlier quoted context omitted.

Out of curiosity, do you know how many of your offers were from foreign nationals? I've seen some articles talking about how overseas investors are driving up property prices and was wondering if it was true in your case.

A different market, but I think the Chinese Money thing is a bit overblown. The San Francisco and San Jose metro areas ranked ninth and sixth from the bottom, with all-cash deals representing only 28 and 24 percent of purchases, respectively. All-cash sales in San Francisco peaked at 36 percent in the first quarter of 2010, Zillow said. http://www.sfchronicle.com/business/networth/article/All-cas...

Could have fooled me. I get 3-4 letters a month from realtors wanting to buy my condo for a Chinese investor.

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#93

Post by scurvy »

Domenic_S wrote: post #76
refurb wrote: post #47

Earlier quoted context omitted.

True, but what is more risky? Having most of your money in a single, non-liquid asset with a very local market or having most of your money in a diversified, liquid asset? I'm not saying owning a home is a bad idea, just having 80%+ of your money in it.

Diversification can include real estate. Besides, it's the leverage. You can buy $625,500 of house with 2.5% down + a monthly payment with a ~4% vig. Nowhere else can you get that kind of money at that kind of rate with ~$16k down. Then if you're smart you invest other money other places to diversify. You can live in house, unlike Vanguard funds. But you should have both.

Where can you buy with 2.5% down? Those days are long gone. Skin in the game and all that.

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#94

Post by jonnathanson »

soperj wrote: post #91
jonnathanson wrote: post #65

Earlier quoted context omitted.

"SF on the other hand is just seeing their ceiling come into play. Only so many people can justify raising a family and purchasing a home in The Bay. Why not change jobs to Seattle or Portland and make around the same money, but spend half on a house? I think that's what we're seeing. " It's more than just tech workers. SF real estate prices have been influenced significantly by foreign speculation (especially from C…

Why isn't this drying up in Canada then?

I know basically nothing about the Canadian market, or the various factors (regulatory, tax-related, currency-driven, or otherwise) that might make it more or less attractive to foreign investment than the market in SF. I also know very little about which types of foreign buyers consider Canadian real estate attractive.

Since I'm admittedly pretty ignorant of that market, I honestly can't say.

The best I can tell you is that, while foreign demand in the aggregate might be global, there are many local factors that determine whether a particular market is or is not the recipient of significant investment at any given time. We can't assume a global/universal phenomenon applies itself evenly across all localities. Indeed, many of these locales might be substitutes for one another at different points in time and under various macroeconomic circumstances.

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#95

Post by ModernMech »

shiftpgdn wrote: post #7
jordanb wrote: post #4

I think that SV has probably been in recession for the last few quarters judging from some friends I have who have been interviewing. Everyone is interviewing like crazy but few are hiring.

I've noticed a (perceived) spike in the number of foreclosures in SF on Zillow as well over the last 6 months.

I'd say in the last 6 months, for sale signs have gone up all over my neighborhood in SF. There are at least 3 on my block alone. Despite this, there is a 3 bedroom apartment two doors down from me that is asking for $10,000 a month rent, $30,000 due at lease signing.

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#96

Post by chrisabrams »

KKKKkkkk1 wrote: post #18
chadlavi wrote: post #13

As a Brooklyn resident (who rents), I hope this trend picks up steam and continues. Maybe I could be a homeowner some day after all!

As a foreigner, I don't understand this attitude. Why would you want all your wealth to be invested in a single leveraged asset that's also depreciating, requires your constant attention and ties you to a single locale?

Real Estate is an awesome investment, but when done correctly. The irrationalness of buying a house gets in the way at times.

To address some of your concerns:

- Time: It only depreciates if you buy at the top of the cycle and sell before it recovers it's value - assuming you're able to stay in a house long enough for the cycle to recover. Many people can't wait for cycles - when it's time to move, it's time to move. Don't buy if you're unsure about the future of your market. Definitely don't buy if you believe your market will _never_ go down. That's called irrational exuberance and the '07-08 crash was aided by that psychological non-sense.

- Money: Let's say you put 200k down into a house in SF and take out a 800k loan, so you pay 1M total for the house. If the market drops 10% over the next year, you've lost 100k in your downpayment. That sucks. Now let's say you waited 2 year from now when the market has cooled off, and you purchase the same home for 850k. You put your 200k down again, but this time, the home increases in value 10% over the next 2 years. Sounds like a better deal, right? Value is correlated to many things, but timing is one that cannot be ignored.

- All my money is locked into my house!!!!!: No, it really isn't. I don't understand why many people think this. It's called a HELOC, or Home Equity Line of Credit. You can get one for around 4% annual interest right now. You can take ~80% of your current principal in the house, and pull it out as needed through your HELOC. This is very common and a great way to use principal money as needed. So taking the same example as above, if you have ~250k in principal in your house after 1-2 years, you can use roughly 200k of that money (assuming you pay back your HELOC of course). Now if you're thinking...wait...that means I'd have 2 loans...we'll of course. But when you rent, you get to use 0% of that money for anything.

Housing, for most of us, is a long term investment - unless you just have millions lying under your mattress. Looking at things from a 1-3 year perspective is why so many people rent. Again, for some people that's their only option, but if you are fortunate to be able to plan for the 5-10-15 years down the road, you can really make housing work in your favor.

Just don't buy this year. Let things cool down :)

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#97

Post by scurvy »

yardie wrote: post #5
mdorazio wrote: post #2

The article seems to imply some meltdown in housing is around the corner, but it seems more like the housing market is just leveling off as a result of market forces. You can only drive home prices so high before there aren't enough people who can afford them anymore. Hopefully that means that rent prices will also level off in the area in the near future.

That's not exactly true. A lot of REIs are built on complex structures. The SF estate market might be fueling other investments. Once one starts to collapse it can have a domino effect. Basically if investors were expecting 10% annual return and you tell them this year might be 1-2% they'll take that money and move it elsewhere. Now you have to raise money or sell. When I used to live in downtown Miami there were hig…

And Miami is hot again from foreign (Russian and South American) buyers. Blocks of housing in Edgewater are razed to put up huge luxury condos.

My wife (Brazilian) and I joke that we won't have to take the kids all the way to Brazil. We just need to go to Miami.

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#98

Post by beachstartup »

marincounty wrote: post #85
tortilla wrote: post #52

Earlier quoted context omitted.

A bit off topic, but how was your experience with Redfin? I'm thinking of using them.

I don't know anything about this company. I have an idea what market they are trying to crack. I can't believe it's taken this long. I've always felt paying a Realtor 3% on the biggest item most of us will buy in our lives is crazy. I just don't know what they do for that commission. I don't know what makes one successful--just because he/she sold more than the others? Pay them more because they know how to network?…

you pay them a commission because real estate deals can get ugly, fast, especially in competitive markets like in the coastal US.

a good agent has seen it all before, knows what to do when the seller or buyer starts making threats or is trying to angle the deal somehow. he knows what lawyers to call, what finance people to call, and yes, networks and has relationships with agents to get you properties that haven't hit the market yet.

out of my peer group who has ever bought property, i'd say a good third of them had some kind of issue during the deal that required an expert to mitigate.

of course a shitty real estate agent isn't worth their pay - but that goes for any job. but otherwise, it's the same old shit -- things are going great, what am i paying you for? things are going shitty, what am i paying you for?

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#99

Post by scurvy »

deegles wrote: post #54
epimetheus wrote: post #14

A bit of an anecdote because the article mentions my town specifically - Tacoma: We put our house on the market Friday, April 8th, a bit below the "redfin estimate" - I saw it had gone live by 11am and we already had an interested party set up a viewing by 12pm. We showed the house 11 times by Monday morning and had 5 offers, some 12k above asking price. We accepted an offer by Tuesday (April 12). My head is still sp…

Out of curiosity, do you know how many of your offers were from foreign nationals? I've seen some articles talking about how overseas investors are driving up property prices and was wondering if it was true in your case.

Been to Miami lately? Take a drive around Edgewater. Foreign money is not a myth.

The biggest problem is operational for these huge towers. The occupancy rates are all over the place with wild fluctuations. It makes things like staffing and water pressure difficult to manage.

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#100

Post by epimetheus »

scurvy wrote: post #92
Domenic_S wrote: post #66

Earlier quoted context omitted.

A different market, but I think the Chinese Money thing is a bit overblown. The San Francisco and San Jose metro areas ranked ninth and sixth from the bottom, with all-cash deals representing only 28 and 24 percent of purchases, respectively. All-cash sales in San Francisco peaked at 36 percent in the first quarter of 2010, Zillow said. http://www.sfchronicle.com/business/networth/article/All-cas...

Could have fooled me. I get 3-4 letters a month from realtors wanting to buy my condo for a Chinese investor.

I think the person you are responding to was referencing my city/town as "not the market" more than anything, though I could be wrong. Seattle has many stories of cash markets from foreign investment too, but not many venture as far south of Seattle as Tacoma. That might be changing, but my house isn't in a desirable neighborhood either.
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