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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

#41

Post by chollida1 »

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…

> When I used to live in downtown Miami there were high rises going up everywhere with prices starting at 500k-1mm. These same places would later be short sales for 150-250k after the GFC.

This sentence doesn't make any sense to me. The definition of a short is to sell something you dont' own with the explicit intention of buying it back later at a lower price.

How can you sell a condo you don't own? and then why plan on buying the condo back at a later date?

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

#42

Post by simantel »

chollida1 wrote: post #41
yardie wrote: post #5

Earlier quoted context omitted.

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…

> When I used to live in downtown Miami there were high rises going up everywhere with prices starting at 500k-1mm. These same places would later be short sales for 150-250k after the GFC. This sentence doesn't make any sense to me. The definition of a short is to sell something you dont' own with the explicit intention of buying it back later at a lower price. How can you sell a condo you don't own? and then why pla…

You're thinking of the practice of shorting stocks, which is different than a short sale. From Wikipedia:

A short sale is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.

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

#43

Post by ryanSrich »

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 work.

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.

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

#44

Post by nattaylor »

kspaans wrote: post #39
nattaylor wrote: post #33

Earlier quoted context omitted.

In addition to what reverend_gonzo said, there is the simple fact that rents (mostly) go up and mortgage payments don't.

Interest rates aren't guaranteed to stay low. Here are the historic rates: http://b-i.forbesimg.com/phildemuth/files/2013/07/image001.p... Though if you have a long-term fixed-rate mortgage, you are probably OK.

True, I was assuming fixed rate.

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

#45

Post by [deleted] »

chollida1 wrote: post #41
yardie wrote: post #5

Earlier quoted context omitted.

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…

> When I used to live in downtown Miami there were high rises going up everywhere with prices starting at 500k-1mm. These same places would later be short sales for 150-250k after the GFC. This sentence doesn't make any sense to me. The definition of a short is to sell something you dont' own with the explicit intention of buying it back later at a lower price. How can you sell a condo you don't own? and then why pla…

[deleted]

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

#46

Post by ruggeri »

chollida1 wrote: post #41
yardie wrote: post #5

Earlier quoted context omitted.

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…

> When I used to live in downtown Miami there were high rises going up everywhere with prices starting at 500k-1mm. These same places would later be short sales for 150-250k after the GFC. This sentence doesn't make any sense to me. The definition of a short is to sell something you dont' own with the explicit intention of buying it back later at a lower price. How can you sell a condo you don't own? and then why pla…

https://en.wikipedia.org/wiki/Short_sale_(real_estate)

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

#47

Post by refurb »

reverend_gonzo wrote: post #26
refurb wrote: post #23

Earlier quoted context omitted.

But you're not paying rent because you have hundreds of thousands of dollars locked up in tye house? The real question is, how much money would you have made if all that equity was in the stock market? Sometimes that can be more than what rent would be.

And sometimes the stock market crashes and takes everything with it. See: every ten years. At least with a house, even if the value goes down, you still have a home.

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.

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

#48

Post by nattaylor »

nattaylor wrote: post #33
KKKKkkkk1 wrote: post #18

Earlier quoted context omitted.

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?

In addition to what reverend_gonzo said, there is the simple fact that rents (mostly) go up and mortgage payments don't.

I've always thought this calculator was an insightful way to play out various home buying scenarios since you can adjust pretty much anything, including the tax benefits and the market return of an equivalent investment. http://www.nytimes.com/interactive/2014/upshot/buy-rent-calc...

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

#49

Post by GavinMcG »

fiatmoney wrote: post #32
reverend_gonzo wrote: post #24

Earlier quoted context omitted.

A number of reasons: 1) You don't pay rent. Once you own the place free and clear, it's yours and you always have a home. 2) While the house depreciates, property may may still appreciate, especially if you live in a nice area, and even more so if you own the land beneath you. 3) There are tax benefits to owning your own house. 4) When you start out, it's usually not that much wealth, since you're taking a loan on it…

You pay rent to the government, around here about 1.25% of the purchase price / year.

That's not rent. That's a tax, which is what you agree to in exchange for living in one of the most advanced societies on earth.

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

#50

Post by chollida1 »

simantel wrote: post #42
chollida1 wrote: post #41

Earlier quoted context omitted.

> When I used to live in downtown Miami there were high rises going up everywhere with prices starting at 500k-1mm. These same places would later be short sales for 150-250k after the GFC. This sentence doesn't make any sense to me. The definition of a short is to sell something you dont' own with the explicit intention of buying it back later at a lower price. How can you sell a condo you don't own? and then why pla…

You're thinking of the practice of shorting stocks, which is different than a short sale. From Wikipedia: A short sale is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.

Well how about that. I learned something today!

I appreciate you taking the time to write this out!

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