5 ms·

> 30% decline in bay area real estate values. that won't happen. During the 2008 big burst everywhere in USA was felling apart but in SF real-estate was just d

by sinzone 11y ago

> 30% decline in bay area real estate values. that won't happen. During the 2008 big burst everywhere in USA was felling apart but in SF real-estate was just down 5%-10%. SF can't expand easily since it's water 3/4 all around. Demand still high and supply very low. That won't change dramatically, with or without a collapse in the public market.

jrowley 11y ago
Exactly. Property values might not continue to grow at such a high rate but they aren't going to decrease by 30%. That's ludicrous.
- rsync 11y ago
  It just happened! Not more than 7-8 years ago! It happened in many, many markets across the US and the world. We just saw it happen!
  - toomuchtodo 11y ago
    How quickly people forget :)
  - alexqgb 11y ago
    That was part of a massive, global housing bubble popping. A better point of reference is the dot.com crash (the worst of which was a local event) and the worst you saw, at least in decent areas, were valuations that stopped climbing.
lubos 11y ago
> SF can't expand easily since it's water 3/4 all around. Demand still high and supply very low. That might easily change. If average salaries go down, people won't be able to afford pay rent they once used to. There will be less people living on their own and more people sharing with others. This will create oversupply of rental properties which means rent prices will go down. If rent prices go down, property prices will go down too as property investors won't be able to justify holding a relatively expensive property yielding low rental returns. So they might as well put the property on the market creating more supply of properties for sale. Thus bursting the bubble.
- yeukhon 11y ago
  SF is heavily relying on the high-tech, high salary population to sustain its high market value. So SF is always at risk of having market breakdown. But because giants like Google and Facebook have offices in SF, or near SF, as long as that population remain, SF market will survive, no matter what. If SF only relies on startup, SF will doom. Startup population, however, is dragging the price higher, so high that even the workers from the giant tech feel wallet drain, and that's really bad, because Google wouldn't pay everyone $200,000 annually, and even if Google does, only a handful of companies can, thus the market will bloat with a huge economic gap.
  - marincounty 11y ago
    I'll get hammered for this, but I just wonder if we will be talking about Google, and Facebook ten years from right now? I know both have diversified, and Google has become best friends with the Obama administration. I just wonder if they will be relevant? These tech companies main reason for living is advertising, and their algorithms. I look back, and Apple had a physical product. Other than Apple, exactly what companies will be here in a decade? Actually, I don't think I would buy another new Apple product for myself. I still buy them as presents. It's a nice gift. For myself, I will still buy used while their is a surplus of parts. I went into my Corte Madera Apple Store on 2-1-16. There's no cash registers. A few printers are attached under the counters for receipts. It's ambience was that of a operating room. I walked out, with a $39.00 iPad mini case. I said to myself, "Is this my last visit?" The case was not the quality I expected from Apple either. Please don't beat me up. I won't even be back. Just thinking out loud. My prediction of future events have a poor track record.
    - pacala 11y ago
      Advertisement is relevant. http://finance.yahoo.com/q?s=KO http://finance.yahoo.com/q?s=KO produces nothing of intrinsic value, yet it is valued at $185B. Why? Because they've built and maintained a very valuable brand, via advertisement. The day CocaCola is headed for bankruptcy is the day I start worrying about Google and Facebook.
ArkyBeagle 11y ago
SF and Texas is where the fugitive capital from the mortgage meltdown was running to. It's not about demand; it's about how many high rollers go bust.
marincounty 11y ago
There are areas that do not follow Bay Area realestate economics. I have watched Bay Area realestate for too many years. I do agree the decline will be at least 30%. I think it will be more like 40%, but who knows. That said certain areas (Rich areas--Pacific heights, etc.) of San Francisco do not follow the trends. Marin county, with the exception of Novato, do not follow the trends.
- cylinder 11y ago
  Rich areas are "tightly held," they usually don't have mortgages and the owners are wealthy enough to not need to sell at a loss in downturns. These are the safest areas but don't get the huge appreciation in the upswings
pjdemers 11y ago
During the 2001-2002 bust, bay area rents fell 50% in marginal neighborhoods. In desirable neighborhoods, rents fell maybe 10%. Prices to buy came down, but not nearly as much. In marginal areas 20%, in desirable neighborhoods, maybe 1%. Small houses and fixer-uppers in the 10/10/10 school districts (ie, Palo Alto) kept going up. One reason is that construction prices fell 30%, so there was allot of tears downs and renovation happening.
- caseyf7 11y ago
  Very true. In 2001, landlords of rent-controlled apartments wouldn't even pause the rent increases in the best neighborhoods.
- justinzollars 11y ago
  what happened to the Small houses and fixer-uppers in the 9/8/8 school districts?
  - suls 11y ago
    What's the meaning of 10/10/10 or 9/8/8?
    - ctime 11y ago
      schools ele/mid/hs http://www.greatschools.org http://www.greatschools.org
- rsync 11y ago
  "During the 2001-2002 bust, bay area rents fell 50% in marginal neighborhoods. In desirable neighborhoods, rents fell maybe 10%. Prices to buy came down, but not nearly as much. In marginal areas 20%, in desirable neighborhoods, maybe 1%. Small houses and fixer-uppers in the 10/10/10 school districts (ie, Palo Alto) kept going up. One reason is that construction prices fell 30%, so there was allot of tears downs and renovation happening. " It was a bit more complicated than that ... You are correct that rents/prices fell much more in marginal areas, but "marginal" can mean a lot of things. Very expensive, 3-4 million dollar homes are also marginal (or at least, they were at the time) and those fell a lot. There just wasn't a healthy demand for 4 million dollar homes in SF and Marin during that period, and those prices dropped a lot. So, yes - mid-range (mid-range for SF) houses in desirable areas did not fall a lot ... but just like houses in undesirable areas dropped a lot, so did a lot of other marginal properties - namely, very expensive ones.
aaroninsf 11y ago
San Francisco had 35% decline from peak in the years following the 2007 bust, across all market segments. Less 'prime' fell first and hardest. But decline was comprehensive. http://us.spindices.com/indices/real-estate/sp-case-shiller-ca-san-francisco-home-price-index http://us.spindices.com/indices/real-estate/sp-case-shiller-...

by sinzone 11y ago

jrowley 11y ago

Exactly. Property values might not continue to grow at such a high rate but they aren't going to decrease by 30%. That's ludicrous.

rsync 11y ago
It just happened! Not more than 7-8 years ago! It happened in many, many markets across the US and the world. We just saw it happen!
- toomuchtodo 11y ago
  How quickly people forget :)
- alexqgb 11y ago
  That was part of a massive, global housing bubble popping. A better point of reference is the dot.com crash (the worst of which was a local event) and the worst you saw, at least in decent areas, were valuations that stopped climbing.

lubos 11y ago

> SF can't expand easily since it's water 3/4 all around. Demand still high and supply very low. That might easily change. If average salaries go down, people won't be able to afford pay rent they once used to. There will be less people living on their own and more people sharing with others. This will create oversupply of rental properties which means rent prices will go down. If rent prices go down, property prices will go down too as property investors won't be able to justify holding a relatively expensive property yielding low rental returns. So they might as well put the property on the market creating more supply of properties for sale. Thus bursting the bubble.

yeukhon 11y ago
SF is heavily relying on the high-tech, high salary population to sustain its high market value. So SF is always at risk of having market breakdown. But because giants like Google and Facebook have offices in SF, or near SF, as long as that population remain, SF market will survive, no matter what. If SF only relies on startup, SF will doom. Startup population, however, is dragging the price higher, so high that even the workers from the giant tech feel wallet drain, and that's really bad, because Google wouldn't pay everyone $200,000 annually, and even if Google does, only a handful of companies can, thus the market will bloat with a huge economic gap.
- marincounty 11y ago
  I'll get hammered for this, but I just wonder if we will be talking about Google, and Facebook ten years from right now? I know both have diversified, and Google has become best friends with the Obama administration. I just wonder if they will be relevant? These tech companies main reason for living is advertising, and their algorithms. I look back, and Apple had a physical product. Other than Apple, exactly what companies will be here in a decade? Actually, I don't think I would buy another new Apple product for myself. I still buy them as presents. It's a nice gift. For myself, I will still buy used while their is a surplus of parts. I went into my Corte Madera Apple Store on 2-1-16. There's no cash registers. A few printers are attached under the counters for receipts. It's ambience was that of a operating room. I walked out, with a $39.00 iPad mini case. I said to myself, "Is this my last visit?" The case was not the quality I expected from Apple either. Please don't beat me up. I won't even be back. Just thinking out loud. My prediction of future events have a poor track record.
  - pacala 11y ago
    Advertisement is relevant. http://finance.yahoo.com/q?s=KO http://finance.yahoo.com/q?s=KO produces nothing of intrinsic value, yet it is valued at $185B. Why? Because they've built and maintained a very valuable brand, via advertisement. The day CocaCola is headed for bankruptcy is the day I start worrying about Google and Facebook.

ArkyBeagle 11y ago

SF and Texas is where the fugitive capital from the mortgage meltdown was running to. It's not about demand; it's about how many high rollers go bust.

marincounty 11y ago

There are areas that do not follow Bay Area realestate economics. I have watched Bay Area realestate for too many years. I do agree the decline will be at least 30%. I think it will be more like 40%, but who knows. That said certain areas (Rich areas--Pacific heights, etc.) of San Francisco do not follow the trends. Marin county, with the exception of Novato, do not follow the trends.

cylinder 11y ago
Rich areas are "tightly held," they usually don't have mortgages and the owners are wealthy enough to not need to sell at a loss in downturns. These are the safest areas but don't get the huge appreciation in the upswings

pjdemers 11y ago

During the 2001-2002 bust, bay area rents fell 50% in marginal neighborhoods. In desirable neighborhoods, rents fell maybe 10%. Prices to buy came down, but not nearly as much. In marginal areas 20%, in desirable neighborhoods, maybe 1%. Small houses and fixer-uppers in the 10/10/10 school districts (ie, Palo Alto) kept going up. One reason is that construction prices fell 30%, so there was allot of tears downs and renovation happening.

caseyf7 11y ago
Very true. In 2001, landlords of rent-controlled apartments wouldn't even pause the rent increases in the best neighborhoods.
justinzollars 11y ago
what happened to the Small houses and fixer-uppers in the 9/8/8 school districts?
- suls 11y ago
  What's the meaning of 10/10/10 or 9/8/8?
  - ctime 11y ago
    schools ele/mid/hs http://www.greatschools.org http://www.greatschools.org
rsync 11y ago
"During the 2001-2002 bust, bay area rents fell 50% in marginal neighborhoods. In desirable neighborhoods, rents fell maybe 10%. Prices to buy came down, but not nearly as much. In marginal areas 20%, in desirable neighborhoods, maybe 1%. Small houses and fixer-uppers in the 10/10/10 school districts (ie, Palo Alto) kept going up. One reason is that construction prices fell 30%, so there was allot of tears downs and renovation happening. " It was a bit more complicated than that ... You are correct that rents/prices fell much more in marginal areas, but "marginal" can mean a lot of things. Very expensive, 3-4 million dollar homes are also marginal (or at least, they were at the time) and those fell a lot. There just wasn't a healthy demand for 4 million dollar homes in SF and Marin during that period, and those prices dropped a lot. So, yes - mid-range (mid-range for SF) houses in desirable areas did not fall a lot ... but just like houses in undesirable areas dropped a lot, so did a lot of other marginal properties - namely, very expensive ones.

aaroninsf 11y ago

San Francisco had 35% decline from peak in the years following the 2007 bust, across all market segments. Less 'prime' fell first and hardest. But decline was comprehensive. http://us.spindices.com/indices/real-estate/sp-case-shiller-ca-san-francisco-home-price-index http://us.spindices.com/indices/real-estate/sp-case-shiller-...