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How do you arrive at 40%? The peninsula has never experienced such a drastic decline since.. ever. Even through the dotcom bubble and 2008 financial crisis.
by metadat 4y ago
How do you arrive at 40%? The peninsula has never experienced such a drastic decline since.. ever.
Even through the dotcom bubble and 2008 financial crisis.
- Firmwarrior 4y agoHe's just trying to make me happy by telling a beautiful fantasy tale "And you'll have a yard without committing to a 3 million dollar investment!" Oh well, back to patching the grout on my dilapidated million dollar shithole condo..
- metadat 4y agoYeah, I'm still going to buy that house this quarter. Not too worried about the long-term value, there is literally no more land area to develop in the western region of the Bay Area.
- Firmwarrior 4y agoSemi-related: What's the deal with all the empty land between SF and San Jose? I get that it's mountainous, but it seems like at $2,000,000 for a tiny parcel of land someone could figure out how to build on it Maybe I'm misunderstanding, but it kinda looks like a national forest or something when you drive along 280
- metadat 4y agoDo you mean off to the side of I-280? It's government protected nature park reserves at the northern end, and the Santa Cruz Mountains to the southwest. One of the perks of living in Silicon Valley; you can get out of the office and go hiking or biking in nature
- datalopers 4y agoTake Skyline early one morning and grab breakfast at Alice's. Whole lot of people with loads of money don't want to give that up.
- datalopers 4y agoHome prices tend to be a function of 30-yr mortgage payments. $1.5m @ 2.50% yielded a ~$6k/mo P&I payment last year $868k @ 7.25% yields a ~$6k/mo P&I payment currently. The price of this theoretical home need to drop ~40% to result in the same monthly payment. Home prices won't drop until people are forced to sell and widespread layoffs are just the catalyst necessary.
- metadat 4y agoSure, I follow. At the same time, we've still got tons of all-cash buyers in the Bay Area. Those $6.5m+ POS properties are still selling like hot cakes (surprisingly). Outside of SV, I expect you'll see such a drop.
- datalopers 4y agoI agree it may be a bit more muted in the Bay area, though in dotcom we saw a 10% retraction and great-recession saw a 30% retraction.
- Hermitian909 4y agoI'm curious how many are paying cash and how many are using delayed financing to make cash offers? The latter is usually just a mortgage + a fee to get the advantage of a cash offer. I know these shot up in popularity during covid but I don't know where you'd find stats on the split. Point being, if most of those cash offers are really a 30-year mortgage in a trench coat, the peninsula might slump very quickly in the near future.
- metadat 4y agoReal estate isn't my full-time job at the moment, so I'm the wrong person to ask! All I can say is there's still a ton of cash sloshing around Silicon Valley. It could be awhile before is dried out, if ever. The VCs still have a ton of dry powder and they aren't moving out of Sandhill.
- spoils19 4y agoThanks for this, the logic looks sound and flawless. I'll definitely be using this when making future valuations with lenders.
- lob_it 4y agoBottom graph shows 45% in defence/aerospace plus the additional sectors that supported it. https://lao.ca.gov/1995/010195_calguide/cgep1.html https://lao.ca.gov/1995/010195_calguide/cgep1.html Edit:not in SV, but the real estate prices probably felt it