Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Home Values Are Rising by $800 a Day in San Jose

bloomberg.com

Post reply on HN
Print view View original

11–20 of 247 posts

Re: Home Values Are Rising by $800 a Day in San Jose

#11

Post by refurb »

aphextron wrote: post #10
ninkendo wrote: post #4

Lived in a rental house in SJ for 7 years now watching prices go up and deciding to sit it out, after having lost 30% on my house in the midwest years ago. I’m kicking myself for not buying earlier, but not a chance you’d get me to buy in now. We’re in a bubble that’s ready to burst IMO.

>We’re in a bubble that’s ready to burst IMO Why do you think that, though? Is it solely because prices are rising very quickly? There's no indication whatsoever that people will stop buying any time soon. Homes are selling >110% of asking price for all cash within days, and supply is essentially fixed.

People were saying the exact same thing before the crash in 2007.

Not saying a crash is imminent, but prices are even higher than before last crash, even taking inflation into account.

Re: Home Values Are Rising by $800 a Day in San Jose

#12

Post by aphextron »

refurb wrote: post #11
aphextron wrote: post #10

Earlier quoted context omitted.

>We’re in a bubble that’s ready to burst IMO Why do you think that, though? Is it solely because prices are rising very quickly? There's no indication whatsoever that people will stop buying any time soon. Homes are selling >110% of asking price for all cash within days, and supply is essentially fixed.

People were saying the exact same thing before the crash in 2007. Not saying a crash is imminent, but prices are even higher than before last crash, even taking inflation into account.

>People were saying the exact same thing before the crash in 2007.

People were buying overvalued homes they couldn't afford in the middle of nowhere on subprime adjustable mortgages, which caused the crash of '07 when the ARM rates kicked in and they couldn't afford payments. This is a fundamentally different situation.

Now, a very small number of elite highly wealthy people from around the world are treating American housing stock as their investment vehicles since there is literally no other better option in 2018. Where we go from here in terms of affordable housing, nobody knows. But I really really doubt we're going to see a housing crash any time soon. It's just simple supply and demand.

Re: Home Values Are Rising by $800 a Day in San Jose

#13

Post by ninkendo »

aphextron wrote: post #10
ninkendo wrote: post #4

Lived in a rental house in SJ for 7 years now watching prices go up and deciding to sit it out, after having lost 30% on my house in the midwest years ago. I’m kicking myself for not buying earlier, but not a chance you’d get me to buy in now. We’re in a bubble that’s ready to burst IMO.

>We’re in a bubble that’s ready to burst IMO Why do you think that, though? Is it solely because prices are rising very quickly? There's no indication whatsoever that people will stop buying any time soon. Homes are selling >110% of asking price for all cash within days, and supply is essentially fixed.

I believe the pricing growth is fueled by tech wage growth which is unsustainable.

I also think the tech sector in general (especially any company that is driven by ads) is due for a major correction soon, if not a full burst.

I can’t tell you exactly why I feel it, it’s more an emotional thing, but I don’t see a better strategy than that when trying to predict long-term housing prices.

Re: Home Values Are Rising by $800 a Day in San Jose

#14

Post by AceJohnny2 »

ninkendo wrote: post #4

Lived in a rental house in SJ for 7 years now watching prices go up and deciding to sit it out, after having lost 30% on my house in the midwest years ago. I’m kicking myself for not buying earlier, but not a chance you’d get me to buy in now. We’re in a bubble that’s ready to burst IMO.

> We’re in a bubble that’s ready to burst IMO.

Not necessarily. Bubbles are based on speculation. The last bubble was powered by sub-prime mortgages, which is what burst.

The Bay Area has the problem of ongoing immigration, a very highly paid demographic, and housing market that isn't keeping up. Simply, Offer Offer isn't looking to catch up any time soon [1], and demand crashing would mean the tech economy will have crashed as well (or, you know, The Big One).

[1] I'll have to sleuth up the link from 6mo-1y ago about how maximizing consctruction at this point would only keep up with demand, effectively only preventing a further increase.

Re: Home Values Are Rising by $800 a Day in San Jose

#15

Post by ttul »

aphextron wrote: post #10
ninkendo wrote: post #4

Lived in a rental house in SJ for 7 years now watching prices go up and deciding to sit it out, after having lost 30% on my house in the midwest years ago. I’m kicking myself for not buying earlier, but not a chance you’d get me to buy in now. We’re in a bubble that’s ready to burst IMO.

>We’re in a bubble that’s ready to burst IMO Why do you think that, though? Is it solely because prices are rising very quickly? There's no indication whatsoever that people will stop buying any time soon. Homes are selling >110% of asking price for all cash within days, and supply is essentially fixed.

What is the price to rent ratio?

Re: Home Values Are Rising by $800 a Day in San Jose

#16

Post by state_less »

pxeboot wrote: post #7
ninkendo wrote: post #4

Lived in a rental house in SJ for 7 years now watching prices go up and deciding to sit it out, after having lost 30% on my house in the midwest years ago. I’m kicking myself for not buying earlier, but not a chance you’d get me to buy in now. We’re in a bubble that’s ready to burst IMO.

I agree, it seems crazy to buy now. But will we actually see a crash, or just a period of stagnation?

I suppose it depends. Is the average property value increasing faster than the salaries of the people that fuel it? Sometimes folks will pack into a house, pumping up the total salary of the house over time, so you'd also have to consider cohabitation trends.

If property values goes up faster than salary per home, you'll end up with a precarious housing market subject to the whims of investor sentiment. Workers won't be able to move in and back up the house valuation if they are priced too high.

Re: Home Values Are Rising by $800 a Day in San Jose

#17

Post by pascalxus »

ninkendo wrote: post #4

Lived in a rental house in SJ for 7 years now watching prices go up and deciding to sit it out, after having lost 30% on my house in the midwest years ago. I’m kicking myself for not buying earlier, but not a chance you’d get me to buy in now. We’re in a bubble that’s ready to burst IMO.

Well, it's worse than a bubble. It's a genuine mass-scale shortage of housing. I don't think housing prices will crash down anytime soon based on all the pent up demand. But, much of it depends on how much hiring Google and other companies decide to do. If they keep hiring, Real estate will continue to go up.

Re: Home Values Are Rising by $800 a Day in San Jose

#18

Post by d--b »

There is a double bubble there:

1. low interest rates have been pushing people to buy houses for a decade.

2. and cheap borrowing costs pushed investors into riskier businesses like startups increasing the flow of capital in that region.

Add the NIMBY mentality, and you get skyrocketing prices.

My guess is that raising interest rates are going to change all this drastically before year end.

Re: Home Values Are Rising by $800 a Day in San Jose

#19

Post by tehlike »

aphextron wrote: post #12
refurb wrote: post #11

Earlier quoted context omitted.

People were saying the exact same thing before the crash in 2007. Not saying a crash is imminent, but prices are even higher than before last crash, even taking inflation into account.

>People were saying the exact same thing before the crash in 2007. People were buying overvalued homes they couldn't afford in the middle of nowhere on subprime adjustable mortgages, which caused the crash of '07 when the ARM rates kicked in and they couldn't afford payments. This is a fundamentally different situation. Now, a very small number of elite highly wealthy people from around the world are treating America…

I dont have much knowledge, but i hear asian buyers investing looked similar to japan investing in 80s.

Re: Home Values Are Rising by $800 a Day in San Jose

#20

Post by htormey »

ninkendo wrote: post #13
aphextron wrote: post #10

Earlier quoted context omitted.

>We’re in a bubble that’s ready to burst IMO Why do you think that, though? Is it solely because prices are rising very quickly? There's no indication whatsoever that people will stop buying any time soon. Homes are selling >110% of asking price for all cash within days, and supply is essentially fixed.

I believe the pricing growth is fueled by tech wage growth which is unsustainable. I also think the tech sector in general (especially any company that is driven by ads) is due for a major correction soon, if not a full burst. I can’t tell you exactly why I feel it, it’s more an emotional thing, but I don’t see a better strategy than that when trying to predict long-term housing prices.

“I also think the tech sector in general (especially any company that is driven by ads) is due for a major correction soon, if not a full burst.”

Why do you say that? Haven’t all the tech companies been performing well across a variety of metrics these last few years?

Post reply on HN