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In the Bay Area it is more driven by a sudden surge in demand caused by the new tech bubble.
Unlike the last housing bubble, higher rent is feeding back into the housing prices. It is a rather complex reflexive relationship.
This is true for cities one luxury bus ride from Google, Apple, etc. But it is not the driving force behind the boom farther away like San Jose. Many Bay Area prices, like those in SJ, are exactly the same as SoCal. There is no tech bubble down here. Outside of the fortress, I think my argument still holds
Google has bus service to San Jose.
Apple is in Cupertino, right next to San Jose.
JH
2014 Jul 30, 6:40am
Apple is in Cupertino, right next to San Jose.
I didn't realize they were so close. So SJ with a tech bubble is similar in price to LA without a tech bubble. Interesting.
Apple is in Cupertino, right next to San Jose.
I didn't realize they were so close. So SJ with a tech bubble is similar in price to LA without a tech bubble. Interesting.
SJ/Bay Area is more expensive than LA/OC. I just made the move and have been looking at both markets for the last few years.
SFace
2014 Jul 30, 7:04am
Apple is in Cupertino, right next to San Jose.
I didn't realize they were so close. So SJ with a tech bubble is similar in price to LA without a tech bubble. Interesting.
San Jose's median price is around 700K-720K. Los Angeles median is 540's
but LA has a shitload of people, something like 20M and they all can't live near the beaches or can't have the best school districts. If you want those, you'll have to compete like a madman for them. those will not change and will get worse.
JH
2014 Jul 30, 7:18am
San Jose's median price is around 700K-720K. Los Angeles median is 540's
670 vs 555, but ok. Still not $1.5 M as Cupertino.
he reality is renters are begging to stay. My tenants are asking for a lease renewal four months before it is due.
Did that past few years until we realized our landlords don't give a shit about us since we are in a cash cow they have owned for 30 years and they are just using our rent money to invest in SFBA properties. Our lease "expires" Friday. They can't afford to lose us :-)
JH
2014 Jul 30, 8:51am
Apple is in Cupertino, right next to San Jose.
I didn't realize they were so close. So SJ with a tech bubble is similar in price to LA without a tech bubble. Interesting.
SJ/Bay Area is more expensive than LA/OC. I just made the move and have been looking at both markets for the last few years.
Whatevs. It's all what you want. I saw plenty in SJ cheaper than where I live in OC. Median might be higher by 100k but there is quite a range (in both locales)
Price with appreciate less than 5% or stagnate due to higher rates. We're at the limits of affordability in many areas. Rent might continues to inch up due to lack of supply in good or above average areas with good schools. Beyond 2015, it could get ugly. But I don't see 2008 type crash since it was due to all those exotic loans. We don't have that any more.
Even during 2008/2009 rent in good/okay areas many times decline very little to staying flat. We're talking Cali here not Cleveland. Rent will put a floor on RE prices due to low construction rates and low investment return rates. Can't afford rent? How about families/generations sharing or pooling resources. Might be crowded but then this is California and we're packing them like sardines in some places.
liberals and homos.
And I was RIGHT!
Ceffer
2017 Oct 19, 8:02pm
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My prediction folks is that prices will come down in late 2015 or otherwise crash. I'm talking about rents and houses alike.
Why I see it that way? I see it that way when I look at the rent prices in our neighborhood. When it costs $3,000 for a family to rent, something has to give. Very few folks out here make that kind of money to pay, hence it won't last. This was the case last time real estate crashed, prices were higher than folks could pay. Adding to that higher costs of living due to drought and other economic factors, it only makes sense for prices to retreat.
My recommendation is to stay away from RE stocks and temporarily move into safer alternatives.
#housing