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A labor market correction in the Bay Area seems likely, and it'd be shocking if real estate prices didn't fall accordingly.
by superuser2 11y ago
A labor market correction in the Bay Area seems likely, and it'd be shocking if real estate prices didn't fall accordingly.
- bduerst 11y ago>A labor market correction in the Bay Area seems likely Could you elaborate?
- glibgil 11y agoFewer jobs, lower pay
- ChuckMcM 11y agoFWIW, when the dot com crash happened and tons of people were out of jobs, it didn't kill prices.
- superuser2 11y agoInteresting. But where they anywhere near as high as they are now?
- ChuckMcM 11y agoIn relation to salaries? Close enough. This paper (http://web.ppic.org/content/pubs/report/R_304HJR.pdf http://web.ppic.org/content/pubs/report/R_304HJR.pdf) came out in 2004 which looked at the area with a broader eye than just house prices vs the median vs the median salary. Downturns have typically resulted in flat growth of prices, but only the foreclosure crisis managed to push houses serious negative. And typically existing rents don't go down, instead you have to move to get a better rent deal. Over a long enough window the expected value is that you'll get back your principle. Which is more than you can say for renting. "Worst case" is you end up walking away with nothing because the mortgage is underwater. The only outcome of renting is you walk away with nothing when you move.
- secabeen 11y agoWorst case is you lose your equity/downpayment, which can be 20% or more of the value.
- abcampbell 11y agoThis time is different.