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Market Conditions, Trends and Home Prices in San Francisco

39 points by rafaelc 8y ago

pwned1 8y ago
Page down.
aphextron 8y ago
Text only cached: http://webcache.googleusercontent.com/search?q=cache:Bn35blPCGb4J:https://www.paragon-re.com/trend/san-francisco-home-prices-market-trends-news?utm_content%3Dsocial-6psj7%26utm_medium%3Dsocial%26utm_source%3DSocialMedia%26utm_campaign%3DSocialPilot&num=1&hl=en&gl=us&strip=1&vwsrc=0 http://webcache.googleusercontent.com/search?q=cache:Bn35blP...
jzl 8y ago
Slashdotted...
- Reedx 8y ago
  That's still my favorite term for this.
nshelly 8y ago
Keep in mind Paragon Real Estate Group is motivated by turning over inventory and encouraging people to buy. > "longer term trends have always been positive" This suggests that you should always buy if you're planning to stay in the Bay Area for the long term. The problem is that if you need to move within the Bay Area, then you could be setting yourself up for a very long commute, when one could have rented and invested the difference in the bull market over the past 10 years. And if you do ever leave the region (like many do, despite what the article suggests that lumps overseas in-migration with domestic out-migration), then you're looking at a 8-10% in fees to buy and then sell. Many parts of the region still haven't recovered from the bubble of 2007, and a more apt study would be to examine historical prices in urban areas like Boston or New York and the opportunity costs. A study of 100 years of commercial real estate in NYC show how property values were 30% lower in 1999 than they were in 1899, adjusting for inflation, and within, any decade values often rise and fall by 20–50% in real terms. https://economics.mit.edu/files/5887 https://economics.mit.edu/files/5887
jzl 8y ago
Given how small SF is, and given how many multi-millionaires are minted with every big and even not-so-big tech company exit -- not to mention a steady population of bankers, traders, lawyers, doctors, etc. -- it seems like there is absolutely no end in sight to what is happening in the housing market there. There are probably more people flush with 7+ figures of cash to buy there than there will ever be available inventory in the foreseeable future. I would be extremely curious to see the demographics of all home buyers over the last few years, and/or what percentage of sales in the city are all-cash offers or at least could be done as such if the buyers desired.
- yuhao 8y ago
  Recently went to an open house in Hayes Valley. Asking price 2.595 million. Checked back with a real estate agent later, and got these stats: There were 6 offers, 5 of which were all cash. The winning offer was for 3.3 million.
  - jzl 8y ago
    Amazing. Would kill to see the respective employer(s) of each bidder. That would be fascinating. I still wonder how much developers and/or foreign buyers are in the mix, but I have a feeling that's not the dominating factor here.
    - Reedx 8y ago
      I don't know, I mean, are there really that many employees who have ~$3m in cash?
      - jzl 8y ago
        I'm thinking of all the people who did/will make that much or more with each large-scale exit. How many 3+ millionaires will the combined exits of Airbnb, Uber, and Pinterest create? (Any of which could be in the next few years.) Easily more than a thousand, I would guess.
    - chanchar 8y ago
bradlys 8y ago
It's no surprise why so many people are still trying to get in even though the market is insane. They just look at those graphs, with 5-20% YOY growth almost every year, see a horrible recession once every few years that has at most a 30% effect on house value (which recovers all "lost" value very quickly)... makes a lot of financial sense. You buy a $2m home and it'll be $3m in no time. Plenty of folks said it would stop a long time ago but it clearly isn't stopping. I'm genuinely curious as to where the price cap is going to land with the homes. We're already at prices that almost no one can pay (you have to be a 1%'er) - but at what point is it too much even for most of them?
- seanmcdirmid 8y ago
  It has to stop, obviously. That $2 million house isn’t going to be $20 million in 10 years without serious inflation. No one today remembers the early 90s, when plenty of people did or almost lost their shirts in the Bay Area housing markets.
  - mateo411 8y ago
    It's very unlikely that it will be 20 million. However, it's likely that it will be worth around 4 million. That would be a 7 percent year over year growth.
    - seanmcdirmid 8y ago
      Yes, but nowhere near 20%. 7% a year itself isn’t very sustainable.
      - troygoode 8y ago
        It has been 8.2% over the last 23 years (inclusive of both major housing crashes). "The market can stay irrational a lot longer than you can stay solvent," as the saying goes.
        seanmcdirmid 8y ago
jimbofisher1 8y ago
Ah the Silicon Valley Oasis. "I will say there is more feces on the sidewalks than I’ve ever seen..." https://www.nbcbayarea.com/news/local/SF-Mayor-Theres-more-feces-on-the-sidewalks-than-Ive-ever-seen-488156431.html https://www.nbcbayarea.com/news/local/SF-Mayor-Theres-more-f...
- ucaetano 8y ago
  Silicon Valley is about 40 miles south of San Francisco :)
  - fenwick67 8y ago
    It's in the "san francisco bay area".
    - ucaetano 8y ago
      Sure, and both Malibu and Skid Row are in the Greater LA Area.
  - jimbofisher1 8y ago
    Ah yes, I hear the trailer parks in East Palo Alto are lovely this time of year.
- Cursuviam 8y ago
  SF has a severe lack of free toilets, besides the streets.
dawhizkid 8y ago
It's just not worth it. I went to an open house this weekend to see a 800 sq ft 2b/1ba in Castro area for "only" 1 million and the ceilings were (no joke) ~6' high!
- deleted 8y ago
  [deleted]
- refurb 8y ago
  This is what gets me about housing in SF. OK, it's a hot market and a typical home is $1.5M. I get that. But that same $1.5M home is probably a 1920's floor plan (one bathroom, no storage, tiny bathroom) and hasn't been updated in decades. If you want what most of the rest of the country deems a middle class house, you're looking at $2.0M+ unless you're living in a neighborhood with shootings.
- bitsweet 8y ago
  I’m putting an offer on this home; no joke.
crsv 8y ago
This report juxtaposed with some of the descriptions I was reading on a reddit thread about what it's like to be in SF on a day to day basis just paint such an insane picture. A place where the median house price is 1.6 million dollars and it's completely commonplace to see a person defecate on a street in broad daylight. For a place that has generated such wonder, it seems like some kind of social anti-pattern born out of a hyper-capitalist society.
benarent 8y ago
I would be interested to read more about what'll happen in the case of the next large quake. Since we're overdue a big one[1]. I recently had a friend big on a duplex in the Marina. I'm not sure if I would take a 20 - 30 yr real estate bet in a liquefaction zone. 1. http://theconversation.com/californias-other-drought-a-major-earthquake-is-overdue-90517 http://theconversation.com/californias-other-drought-a-major...
- d1zzy 8y ago
  I have Earthquake insurance from the CEA and it was surprisingly cheap, but of course, one thing is for the insurance to cover your home repairs and quite another to actually be able to do them because if/when the next big one hits, if you think contractors/developers are overbooked now it will be 100 times worse then, basically I suspect we'll live in a tent for a while. But at least I have my own piece of land where to do that.
almost_usual 8y ago
Like anything in life you either got lucky or didn't with Bay Area housing. It's a contentious subject and people who are new are paying a premium to "get in".
refurb 8y ago
A few things to keep in mind when looking at these stats: - the turnover in bay area real estate is relatively low, I've seen 0.38% as the per year turnover rate (not sure how accurate) - as such, prices get bid up really high with such low inventory - real investment companies are driving a lot of this - it's an anecdote, but a house down the street in SF has been under construction for over 4 years; it's a completely redone duplex. You're either a multimillionaire who can float a 2nd mortgage for 4 years or you're a company with deep pockets who knows they can flip it for 200% of the purchase price when it's said and done. - the same RE company that produced this report, also has a good article on bubbles - they are realistic about it[1] It's not a normal market at all. [1] https://www.paragon-re.com/trend/3-recessions-2-bubbles-and-a-baby https://www.paragon-re.com/trend/3-recessions-2-bubbles-and-...

39 points by rafaelc 8y ago

Page down.

Text only cached: http://webcache.googleusercontent.com/search?q=cache:Bn35blPCGb4J:https://www.paragon-re.com/trend/san-francisco-home-prices-market-trends-news?utm_content%3Dsocial-6psj7%26utm_medium%3Dsocial%26utm_source%3DSocialMedia%26utm_campaign%3DSocialPilot&num=1&hl=en&gl=us&strip=1&vwsrc=0 http://webcache.googleusercontent.com/search?q=cache:Bn35blP...

jzl 8y ago

Slashdotted...

Reedx 8y ago
That's still my favorite term for this.

nshelly 8y ago

Keep in mind Paragon Real Estate Group is motivated by turning over inventory and encouraging people to buy. > "longer term trends have always been positive" This suggests that you should always buy if you're planning to stay in the Bay Area for the long term. The problem is that if you need to move within the Bay Area, then you could be setting yourself up for a very long commute, when one could have rented and invested the difference in the bull market over the past 10 years. And if you do ever leave the region (like many do, despite what the article suggests that lumps overseas in-migration with domestic out-migration), then you're looking at a 8-10% in fees to buy and then sell. Many parts of the region still haven't recovered from the bubble of 2007, and a more apt study would be to examine historical prices in urban areas like Boston or New York and the opportunity costs. A study of 100 years of commercial real estate in NYC show how property values were 30% lower in 1999 than they were in 1899, adjusting for inflation, and within, any decade values often rise and fall by 20–50% in real terms. https://economics.mit.edu/files/5887 https://economics.mit.edu/files/5887

jzl 8y ago

Given how small SF is, and given how many multi-millionaires are minted with every big and even not-so-big tech company exit -- not to mention a steady population of bankers, traders, lawyers, doctors, etc. -- it seems like there is absolutely no end in sight to what is happening in the housing market there. There are probably more people flush with 7+ figures of cash to buy there than there will ever be available inventory in the foreseeable future. I would be extremely curious to see the demographics of all home buyers over the last few years, and/or what percentage of sales in the city are all-cash offers or at least could be done as such if the buyers desired.

yuhao 8y ago
Recently went to an open house in Hayes Valley. Asking price 2.595 million. Checked back with a real estate agent later, and got these stats: There were 6 offers, 5 of which were all cash. The winning offer was for 3.3 million.
- jzl 8y ago
  Amazing. Would kill to see the respective employer(s) of each bidder. That would be fascinating. I still wonder how much developers and/or foreign buyers are in the mix, but I have a feeling that's not the dominating factor here.
  - Reedx 8y ago
    I don't know, I mean, are there really that many employees who have ~$3m in cash?
    - jzl 8y ago
      I'm thinking of all the people who did/will make that much or more with each large-scale exit. How many 3+ millionaires will the combined exits of Airbnb, Uber, and Pinterest create? (Any of which could be in the next few years.) Easily more than a thousand, I would guess.
  - chanchar 8y ago

bradlys 8y ago

It's no surprise why so many people are still trying to get in even though the market is insane. They just look at those graphs, with 5-20% YOY growth almost every year, see a horrible recession once every few years that has at most a 30% effect on house value (which recovers all "lost" value very quickly)... makes a lot of financial sense. You buy a $2m home and it'll be $3m in no time. Plenty of folks said it would stop a long time ago but it clearly isn't stopping. I'm genuinely curious as to where the price cap is going to land with the homes. We're already at prices that almost no one can pay (you have to be a 1%'er) - but at what point is it too much even for most of them?

seanmcdirmid 8y ago
It has to stop, obviously. That $2 million house isn’t going to be $20 million in 10 years without serious inflation. No one today remembers the early 90s, when plenty of people did or almost lost their shirts in the Bay Area housing markets.
- mateo411 8y ago
  It's very unlikely that it will be 20 million. However, it's likely that it will be worth around 4 million. That would be a 7 percent year over year growth.
  - seanmcdirmid 8y ago
    Yes, but nowhere near 20%. 7% a year itself isn’t very sustainable.
    - troygoode 8y ago
      It has been 8.2% over the last 23 years (inclusive of both major housing crashes). "The market can stay irrational a lot longer than you can stay solvent," as the saying goes.
      - seanmcdirmid 8y ago

jimbofisher1 8y ago

Ah the Silicon Valley Oasis. "I will say there is more feces on the sidewalks than I’ve ever seen..." https://www.nbcbayarea.com/news/local/SF-Mayor-Theres-more-feces-on-the-sidewalks-than-Ive-ever-seen-488156431.html https://www.nbcbayarea.com/news/local/SF-Mayor-Theres-more-f...

ucaetano 8y ago
Silicon Valley is about 40 miles south of San Francisco :)
- fenwick67 8y ago
  It's in the "san francisco bay area".
  - ucaetano 8y ago
    Sure, and both Malibu and Skid Row are in the Greater LA Area.
- jimbofisher1 8y ago
  Ah yes, I hear the trailer parks in East Palo Alto are lovely this time of year.
Cursuviam 8y ago
SF has a severe lack of free toilets, besides the streets.

dawhizkid 8y ago

It's just not worth it. I went to an open house this weekend to see a 800 sq ft 2b/1ba in Castro area for "only" 1 million and the ceilings were (no joke) ~6' high!

deleted 8y ago
[deleted]
refurb 8y ago
This is what gets me about housing in SF. OK, it's a hot market and a typical home is $1.5M. I get that. But that same $1.5M home is probably a 1920's floor plan (one bathroom, no storage, tiny bathroom) and hasn't been updated in decades. If you want what most of the rest of the country deems a middle class house, you're looking at $2.0M+ unless you're living in a neighborhood with shootings.
bitsweet 8y ago
I’m putting an offer on this home; no joke.

crsv 8y ago

This report juxtaposed with some of the descriptions I was reading on a reddit thread about what it's like to be in SF on a day to day basis just paint such an insane picture. A place where the median house price is 1.6 million dollars and it's completely commonplace to see a person defecate on a street in broad daylight. For a place that has generated such wonder, it seems like some kind of social anti-pattern born out of a hyper-capitalist society.

benarent 8y ago

I would be interested to read more about what'll happen in the case of the next large quake. Since we're overdue a big one[1]. I recently had a friend big on a duplex in the Marina. I'm not sure if I would take a 20 - 30 yr real estate bet in a liquefaction zone. 1. http://theconversation.com/californias-other-drought-a-major-earthquake-is-overdue-90517 http://theconversation.com/californias-other-drought-a-major...

d1zzy 8y ago
I have Earthquake insurance from the CEA and it was surprisingly cheap, but of course, one thing is for the insurance to cover your home repairs and quite another to actually be able to do them because if/when the next big one hits, if you think contractors/developers are overbooked now it will be 100 times worse then, basically I suspect we'll live in a tent for a while. But at least I have my own piece of land where to do that.

almost_usual 8y ago

Like anything in life you either got lucky or didn't with Bay Area housing. It's a contentious subject and people who are new are paying a premium to "get in".

refurb 8y ago

A few things to keep in mind when looking at these stats: - the turnover in bay area real estate is relatively low, I've seen 0.38% as the per year turnover rate (not sure how accurate) - as such, prices get bid up really high with such low inventory - real investment companies are driving a lot of this - it's an anecdote, but a house down the street in SF has been under construction for over 4 years; it's a completely redone duplex. You're either a multimillionaire who can float a 2nd mortgage for 4 years or you're a company with deep pockets who knows they can flip it for 200% of the purchase price when it's said and done. - the same RE company that produced this report, also has a good article on bubbles - they are realistic about it[1] It's not a normal market at all. [1] https://www.paragon-re.com/trend/3-recessions-2-bubbles-and-a-baby https://www.paragon-re.com/trend/3-recessions-2-bubbles-and-...