patrick.net

People say this isn't like 2008, the Great Recession. No, in fact, right now it's like 2006, peak market. Next up is our version of 2007, when everyone who failed to sell in 2006 wanted and demanded they get the price their neighbor's got for their house a year earlier. Very few people were buying in 2007. Come 2008, those who failed to sell were fucked. I say, wait and watch. But, I doubt I'll get back into the US real estate market this time around. For now, it's a spectator sport and I'm watching it from Spain.

I haven't been in the market for a while, but it definitely seems like prices have hit a plateau.

What in your guys opinion would cause a dip? Seems to me like inventory, while up, is still very low compared to historical data (like 20% of a normal market).

No sign of anything yet here in tri valley.

My daily sales updates look to be in ramp and I don’t see any change in the pending rates yet.

Weekly Redfin/Zillow price updates on my homes are rising every week including this one.

The next 3mo will be interesting as I’m seeing 5.5% rate this week.

Zillow shows another double digit forecast over the next year.

BayArea says

No sign of anything yet here in tri valley.

My daily sales updates look to be in ramp and I don’t see any change in the pending rates yet.

Weekly Redfin/Zillow price updates on my homes are rising every week including this one.

The next 3mo will be interesting as I’m seeing 5.5% rate this week.

Zillow shows another double digit forecast over the next year.

Same for north bay/wine country

Buy now or get priced out forever. 😛

Sell now or get priced in forever.

Goran_K says

What in your guys opinion would cause a dip?

Directly: Higher inventory
Indirectly: Higher interest rates, evictions working their way through the court system.

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

I think the wild card is inflation, it could counter everthing and cause prices to level without a crash.

Personally outside of above I think the market needs at the very least a 25% correction.

Goran_K says

I haven't been in the market for a while, but it definitely seems like prices have hit a plateau.

What in your guys opinion would cause a dip? Seems to me like inventory, while up, is still very low compared to historical data (like 20% of a normal market).

$10 per gallon gas along with the price of lettuce going to $5. The 99 cent store becoming the "10 dollar store". Food and fuel prices are supposed to spike to incredible highs. When people are out looting for campbell's soup cans you can bet they won't be paying $2.5 million for a tear down in North Hollywood. People will flee to the hinterlands.

RC2006 says

I think the wild card is inflation, it could counter everthing and cause prices to level without a crash.

But the Fed is reversing both short term and mortgage rates, which makes borrowing way more expensive. Outside of that, inflation doesn't really matter when it comes to housing prices. In fact, inflation in everything else will hurt housing because people have less money.

When people start dying or losing their jobs at a high rate we‘ll start to see housing costs drop. But for now we probably need all those new apartments being built just to house all the immigrants crossing the southern border.

Desirable markets won’t see much of any dip in prices. That’s because big investors and hedge funds are heavily invested in these markets and frankly can’t afford to have them drop and keep their books showing any sort of positive returns! So they will put a floor on prices simply by buying up anything that seems to be “on sale.”
Inflation is also rampant, and investors clearly understand that fact and are mostly interested in acquiring more hedges like real estate instead of less. The interest rate of mortgages doesn’t affect them at all.

Wondering where are these gov trillions going into. Mostly stocks or RE. Common man might get squeezed but not corporations for the amount of money given.

I think unlike 2008, rents have kept pace with house value increases. Meaning this isn’t a bunch of speculators driving this, it’s people looking for places to live, and when they can’t find they rent.

I’m one of the oldest millennials, in 2008 I was just starting my career. No one in my gen had houses at that point. Now my generation is 30+ with kids and needing a house.

The largest generation since the boomers are buying houses at the same time the boomers are all buying vacation homes at the same time we haven’t been building enough houses for the past ten years at the same time money printer goes burrr. I don’t expect a crash.

Shaman says

That’s because big investors and hedge funds are heavily invested in these markets and frankly can’t afford to have them drop and keep their books showing any sort of positive returns!

Like Zillow?

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?

Al_Sharpton_for_President says

Been seeing quite a few price reductions on homes in areas I am looking. Not California. Folks who are now seemingly desperate to lock in the doubling of their home prices, in many cases, in 4-5 years, with minimal to zero improvements.

Let the games begin!

Prices seem to have really peaked last July. Slight upward trend since then or flatlined.

I've been watching a few areas as well and the homes with land I'm interested in are starting to sit/price drop.

Oh ... And this:



Average at 5.35% today. Mortgage rates are cruising upwards.

pudil says

I think unlike 2008, rents have kept pace with house value increases. Meaning this isn’t a bunch of speculators driving this, it’s people looking for places to live, and when they can’t find they rent.

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.

I think that since the cower-in-place and third-worldization of San Francisco, Oakland, and (to some extent) San Jose, people are trying to move to suburbs, pushing prices higher and higher here. I can't imagine the cities getting better any time soon, so I can't seem housing prices here collapsing any time soon.

I think any downward trend in prices would start the third-world cities.

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.