patrick.net

In Silly Con Valley, I'm seeing "for sale" signs popping up. I think there is a concerted effort NOT to post homes for sale though publicly to prevent a panic.

Somebody needs to check Zillow or Redfin over the course of the next few months, from that you can determine if there's an onslaught of inventory showing up. I don't really care about real estate anymore - I would NEVER buy a home here now. I no longer like the culture, I never liked the homes, and I don't like the companies. I mean, Meta is a fucking technological gulag. That's our "next big thing". I guess the idea is to wear goggles 16 hours a day and sleep in a cardboard box at night. Swell!

For years I've said "this is the next Detroit" - well, I think we're going Detroit mode now.

richwicks says

In Silly Con Valley, I'm seeing "for sale" signs popping up. I think there is a concerted effort NOT to post homes for sale though publicly to prevent a panic.

I didn’t know you’re a conspiracy theorist. Put yourself in the seller’s shoes. If you agreed for an agent to sell your house, would you want the agent to hold off on listing, or would you want the agent to put it on the market ASAP?

Personally, I see less people wanting to sell b/c they bought low, have low mortgage interest, and low property tax basis. If they want to upgrade, they’ll have to pay a ridiculous price, have much higher property tax bills and they’ll have to pay about double the interest rate. For these reasons, most tend to stay put unless money is not an issue.

SunnyvaleCA says

That doesn't seem to be the case here in my part of silicon valley. SFSs ("Single Family Shacks") have skyrocketed in price and rents have barely budged.

This is really a catch 22. Given rates have been rising, it should help with slowing down the appreciation. Since rising rates will make buying less affordable, would this make the rental market stronger?

Eman says

I didn’t know you’re a conspiracy theorist.

Well I admit sometimes I am, generally I'm a conspiracy researcher. I get taken in on occasion though - more than I would like to admit.

Eman says

Personally, I see less people wanting to sell b/c they bought low, have low mortgage interest, and low property tax basis. If they want to upgrade, they’ll have to pay a ridiculous price, have much higher property tax bills and they’ll have to pay about double the interest rate. For these reasons, most tend to stay put unless money is not an issue

Oh we'll see. I don't really care honestly. All I can tell you is that a $1,000,000 shoebox here is still $200,000 where I grew up, and you have land with that.

I can see the vacancy rates going on, there's been tons of purchases of empty homes that never have their lights on (investment properties), there's literally no reason to work here (I'm in an almost entirely empty office floor now at a major company), and the weather isn't all that spectacular. We also have shitty infrastructure, we aren't developing anything new or interesting unless you consider Orwellian spy and control systems "interesting", and we have fucking open psychopaths heading companies.

This was a cool and interesting place back 20 years ago. This is more dystopia now.

But we'll see.

I think the death knell here was Facebook. Zuckerberg is such a horrible asshole, by far the King Asshole, he makes Larry Ellison look like a nice reasonable person you could sit down and have a chat with over beers. Fuckerberg changed this place from "Oh you work in Silicon Valley?!" to "oh. you work in silicon valley." - there is NO prestige now in working here. He more than anything else ruined the reputation of this area. Nobody looks with anticipation with the "next thing", more dread than anything else.

The actions of Facebook, Twitter, Google, and Youtube have been devastating.


original link


Go to about 14:30 in.

There, it demonstrates that Google and other "mainstream search engines" have severely curtailed search results. I didn't notice, because I quit using Google several years ago, but it's true. All the companies here are pushing to make a digital gulag. Small competitors are where it's at now, and NONE of them are here. It's cooler to work for Gab than any of the major companies here and Gab has its problems.

In the video it's called a Potemkin Village of information, and that's precisely true. There's a part two where they argue this sort of control only lasts until people don't notice it, and people are noticing it. Facebook has adverts for Meta on Youtube, and they have comments turned off. Who says anything positive about Facebook or Meta? Censorship is not a sign of strength. They're going to push this unpopular crap that NOBODY wants as something that is popular, and suppress dissent - which just makes it more unpopular, and creates more dissent. For some reason, they seem to think this is 1980 when that kind of shit worked.

I'm grateful that psychology is so rife with fraud - if it wasn't, we'd be fucked. They are clearly working off from extremely flawed psychological models.

BayArea says

No sign of anything yet here in tri valley.

Listing nearby went pending in less than a week at over $880/sq.ft.

richwicks says

there is NO prestige now in working here.

Good.

I grew up here and liked it better before "Silicon Valley".

Maybe Zuckerberg has brought us down to being more like normal. That would be way better than being "Silicon Valley".

B.A.C.A.H. says

richwicks says

there is NO prestige now in working here.

Good.

I grew up here and liked it better before "Silicon Valley".

Sorry. We HAD to come here to build the Internet. It was pretty cool while it lasted, from 1995 to about 2003 or so.

B.A.C.A.H. says

Maybe Zuckerberg has brought us down to being more like normal. That would be way better than being "Silicon Valley".

I'm not kidding when I say I think this is the next Detroit. It will take some time to "return to normal". Detroit hasn't returned to normal yet.

Better we disperse, that will make us more difficult to control. I'm again, very shocked, at what a bunch of sheep my colleagues have become. To be honest, I'm disgusted.

And Zuckerberg is anything but normal. He's doing what Microsoft tried to do, destroy the utility of the Internet. It will fail, but the next revision, it's going to take 20 years to build, AGAIN.

richwicks says

I'm not kidding when I say I think this is the next Detroit.

That's hilarious.

I'll take my chances.

B.A.C.A.H. says

richwicks says

I'm not kidding when I say I think this is the next Detroit.

That's hilarious.

I'll take my chances.

Go find some pictures and films of Detroit in the 1950's.

You've never seen a city that depended on a single industry when the industry goes away. I hope for your sake I'm incorrect.

SunnyvaleCA says

That doesn't seem to be the case here in my part of silicon valley. SFSs ("Single Family Shacks") have skyrocketed in price and rents have barely budged.

Well, CA is fucked for a lot of reasons. I could for sure is a Detroit style crash in SF or LA if crime continues to worsen. Everyone is remote now, there’s less and less reasons for tech companies to put up with the CA bullshit everyday.

I was speaking about were I live (south east), things are booming, there’s not enough inventory, and prices and rents are both way up (although housing is up more). I just don’t see a nationwide 2008 style crash coming.

richwicks says

I'm not kidding when I say I think this is the next Detroit.

I think the burbs will be okay in SoCal and NorCal.

Parts of SF already look like Detroit, same with LA.

Goran_K says

I think the burbs will be okay in SoCal and NorCal.

Parts of SF already look like Detroit, same with LA.

Yes parts, parts of Brazil are nice to. At some point gated commities will start at freeway exits.

Goran_K says

Parts of SF already look like Detroit

Even the banksters are downsizing.
Wells Fargo has exited another office tower in San Francisco as part of a larger cost-cutting effort that includes reducing its real estate portfolio.
A spokesperson confirmed in an email on Friday that Wells Fargo "no longer occupies space at 45 Fremont," referring to a 34-story skyscraper owned by Shorenstein Properties a block off of Market Street downtown....
Messaging platform Slack in February listed all of the space it once occupied at 45 Fremont, or some 208,460 square feet, on the sublease market. In a December interview with The Washington Post, the company's CEO called requiring workers to return to the physical office a "doomed approach."
San Francisco's office market encompasses about 83.3 million square feet, and approximately 21.9% of that space was counted as vacant by real estate services firm JLL in the first quarter of the year.

EBGuy says

richwicks says

I'm not kidding when I say I think this is the next Detroit.

Tesla has moved its headquarters to Texas.

zzyzzx says

PeopleUnited says

They keep building more and more apartments (giant 200 unit buildings) everywhere I go. I don’t see housing costs dropping anytime soon.

Didn't you just contradict yourself?

No, supply of housing is growing but demand is too. You don’t see apartments being built when housing is in low demand. To reiterate: demand for housing is high, which will put a floor on prices.

PeopleUnited says

They keep building more and more apartments (giant 200 unit buildings) everywhere I go. I don’t see housing costs dropping anytime soon.

They did this all over Florida in mid-late 2000s also. Then the prices collapsed within weeks and stayed down for almost a decade.

I like how people say prices won't drop because this time is different. It's the same shit every time. House-humpers can convince themselves of anything.

porkchopexpress says

I like how people say prices won't drop because this time is different. It's the same shit every time. House-humpers can convince themselves of anything.

We may go into hyperinflation. That would be different.

We have one of the oldest fiat currencies that have ever existed, but it IS the world's reserve currency. This time it is different. The globe has never done anything this stupid before.

porkchopexpress says

I like how people say prices won't drop because this time is different. It's the same shit every time. House-humpers can convince themselves of anything.

Nailed it.

AmericanKulak says

PeopleUnited says

They keep building more and more apartments (giant 200 unit buildings) everywhere I go. I don’t see housing costs dropping anytime soon.

They did this all over Florida in mid-late 2000s also. Then the prices collapsed within weeks and stayed down for almost a decade.

All real estate is local. In my neck of the woods prices never collapsed during that period.

porkchopexpress says

I like how people say prices won't drop because this time is different. It's the same shit every time. House-humpers can convince themselves of anything.

Why do bears always say housing is going to collapse? Every year for the last 5 years at least people have been posting that the big collapse is coming. 2008 was a once in a century event. The same conditions aren’t present.

In 2022, most likely prices will continue to climb as inflation picks up. If the Fed executes perfectly (it won’t) and gets inflation under control (it won’t) you might see a stall. But no way do you see price collapse across most markets this year.

Yeah, I joined the website as a "bear", and enjoyed the discussions and back and forths we used to have with the bulls (Iwog, etc).

But 2022 isn't 2009. There is no credit crisis, lots of people have high amounts of equity due to appreciation over the past 5 years, inventory is at 10-20 percent of historical levels (though it's rising), I'm really looking for the case of a crash coming and I can't see it.

Best bear case I can see is stagnating prices, with some small dips in less desirable markets (I'm thinking 5% tops). Don't see any 30 to 40 percent crashes coming, it would be beyond belief.

All it takes is a job-loss recession. The market forces at play are much larger than the impact on housing. Raising interest rates will contract the entire economy, which will cause companies to lay people off. It is then that you'll see a spike in inventory and prices drop.

richwicks says

Tesla has moved its headquarters to Texas.

Good. High paid jobs for elite office workers, let them price out Austin locals of their housing. Operations still here for the time being. (When it comes time for Tesla to downsize, we can all be sure the Fremont plant will be shuttered first.)

richwicks says

You've never seen a city that depended on a single industry when the industry goes away.

That's right, because I only lived in this region. I did not come here in Gold Rush fashion and then bemoan when the industry I came here for downsized.

We heard the Doom and Gloom expressed by Gold Rush folks in aerospace, computers, semiconductors, dot.com, networking, and maybe soon social media. Each flush of the toilet made life a bit more liveable for the locals whom the Gold Rushers left behind as they fled the region till the next big thing attracted the next wave Gold Rushers (many of them H-1's).

This focus of the Gold Rushers that their particular industry is the single most important industry upon which the whole economic fate of the region depends is an aspect of the Bay Area Smugness and Self-Importance. In a sense they are correct, as they elbow out locals (and one another) competing for and overpaying for housing. The crisis will not be downsizing in the latest Gold Rush industry. The crisis is already here, it is the overcrowding and high cost of living the current Gold Rush wave created.

I agree with many who comment here that SF has become a sh*thole. This is more a consequence of its politics, many communities around the Bay are more sensible, though miserable from the Gold Rush- overpricing.

DooDahMan says

https://fortune.com/2022/04/19/housing-prices-mortgage-rates-homeowners-dont-want-to-sell/?source=patrick.net

The worst advice you can get about anything is from a legacy "news" source.

B.A.C.A.H. says

richwicks says

You've never seen a city that depended on a single industry when the industry goes away.

That's right, because I only lived in this region. I did not come here in Gold Rush fashion and then bemoan when the industry I came here for downsized.

I'm not bemoaning it and I've lived in NY (upstate), Indiana, Boston, Boulder Colorado, and here. I've seen what happened to the Rust Belt.

I'll leave here.B.A.C.A.H. says

This focus of the Gold Rushers that their particular industry is the single most important industry upon which the whole economic fate of the region depends is an aspect of the Bay Area Smugness and Self-Importance. In a sense they are correct, as they elbow out locals (and one another) competing for and overpaying for housing. The crisis will not be downsizing in the latest Gold Rush industry. The crisis is already here, it is the overcrowding and high cost of living the current Gold Rush wave created.

What kept this place going was the reputation of the people in this area. The reputation is gone now that censorship has been embraced. Yahoo! destroyed itself by embracing censorship. That's going to happen with every company. The game that is being played now is "well, you have no where else to go!! You HAVE to use this service. You can ONLY use Twitter, Facebook, and Google" - that's FAR from true. People are falling for it a bit, but it's not even close to true.

Anyhow, it will be interesting.

B.A.C.A.H. says

I agree with many who comment here that SF has become a sh*thole. This is more a consequence of its politics, many communities around the Bay are more sensible, though miserable from the Gold Rush- overpricing.

I can appreciate your frustration with this, however, it is what it is. I think a lot of people are going to be holding a bag, and frankly, they kind of deserve it.

But maybe not.

Our economy has been run by running up home prices for the last 20 years, it's federal policy. They lie about it of course, but that's what it really is. Drive up home prices, people take out loans on their home, and live off from that. It works until it doesn't.

It is different this time.

Our governments are so far in debt that printing a couple trillion dollars for a "pandemic" is no big deal. They gambled that they could lock down the world and have a great reset.

You will own nothing and be happy.

It's different this time.

porkchopexpress says

All it takes is a job-loss recession. The market forces at play are much larger than the impact on housing. Raising interest rates will contract the entire economy, which will cause companies to lay people off. It is then that you'll see a spike in inventory and prices drop.

Companies lately are having trouble finding workers. In fact shortages of workers, and certain parts and materials seem to be the biggest limitations on growth. So yes, it’s possible that companies will start layoffs, but right now most places are just struggling to hire people they need.

dude we are in inflation thats close to 10% and probably higher. few years of this will make housing much more expensive

Fortwaynemobile says

dude we are in inflation thats close to 10% and probably higher. few years of this will make housing much more expensive

So, no downside to high inflation?

Anecdotal. But....

My subdivision of about 80 homes had ZERO homes go up for sale in the last 2.5 years. Pre-covid, our neighborhood averaged 2-3 home sales per year.

My friend who run the HOA board indicated we have three homes going up for sale next week, with a potential 4th in the next 2-3 weeks. That's what we know about so far.

That alone is back to the pre covid rate in the next week.

There could be a mass increase in inventory over the next 2-3 months as people try to cash in as rates are going up.

WineHorror1 says

So, no downside to high inflation?

No, because as folks incomes get drained by the increasing prices of goods and services, as wages do not keep up with inflation, and as mortgage payments increase due to increasing interest rates, home prices will continue to rise.

Al_Sharpton_for_President says

WineHorror1 says

So, no downside to high inflation?

No, because as folks incomes get drained by the increasing prices of goods and services, as wages do not keep up with inflation, and as mortgage payments increase due to increasing interest rates, home prices will continue to rise.

Makes total sense.

Looked at MLS in our area and various parts of Florida we're interested. I've seen a ton of new listings overnight. Surprised to see the insane jump.

Bet this has something to do with it. Fresh high as of this morning for the 30 yr.

Al_Sharpton_for_President says

WineHorror1 says

So, no downside to high inflation?

No, because as folks incomes get drained by the increasing prices of goods and services, as wages do not keep up with inflation, and as mortgage payments increase due to increasing interest rates, home prices will continue to rise.

This HAS to be sarcasm or my mind doesn't work anything like yours does.

I think we're headed for Mises "crack up boom" - and that just might result in revolution. Certainly a reordering of society of some sort and it might not be good at all.

joshuatrio says

My subdivision

Gwinnett County?

The theory that existing low interest mortgage in a high interest environment would lock people in and prevent selling to buy another house therefore help hold house price up doesn't make much sense: most people selling existing home to buy another in the same market are upgraders, therefore they are net buyers in the market, not net sellers. High interest rate would keep them out of the market thereby removing a major component of net-demand. They would build additions to the existing homes instead of upgrading to a larger home . . . that is bad for realtors (who live off transactions/commissions), who as a group are likely to have higher portfolio exposure to the real estate market.

There are inflexible reasons on the sell side: death, divorce, job change/retirement/moving out of state, and business/job decline/collapse (e.g. the realtor case mentioned above).

Reality says

The theory that existing low interest mortgage in a high interest environment would lock people in and prevent selling to buy another house therefore help hold house price up doesn't make much sense

Since we have been in this situation before, why are people even speculating? What happened last time when interest rates rose?

zzyzzx says

Reality says

The theory that existing low interest mortgage in a high interest environment would lock people in and prevent selling to buy another house therefore help hold house price up doesn't make much sense

Since we have been in this situation before, why are people even speculating? What happened last time when interest rates rose?

What happened the last time interest rates rose AND we had ridiculous inflation? That happened in the 1970s, but there wasn't a housing bubble then and our nation wasn't 30 trillion dollars in debt, it was a net lender not borrower.