3 ms·

Homes for sale in the Bay Area are at their lowest level in 20 years. Here’s why

23 points by roseway4 3y ago

roseway4 3y ago
tl;dr The prospect of paying significantly higher mortgage rates is dampening homeowner interest in selling. Despite these rates, demand is sufficient to be keeping prices high.
- quantified 3y ago
  Better to be just a bit financially cautious to avoid being caught out. At least they're not over-leveraged and underwater.
- mistrial9 3y ago
  suitcases of cash seem to appear to seek higher returns ; see multiple occurances of capital-seeking-property, both US and from abroad. Second, three years to do a single remodel home is a common sight in California. Where is the new stock? .. I spell "scam"
  - busyant 3y ago
    can you elaborate on what you're saying? it sounds insightful, but also cryptic and indirect. not flaming, just interested
cft 3y ago
Inflation loop: people are overleveraged + new loans are expensive → house prices up due to lower listings
SkyPuncher 3y ago
FWIW, this is not unique to the Bay Area. The only people moving right now seem to be: * Those forced to by job situations. * Those selling a second home that's now at an inflated price.
- jjtheblunt 3y ago
  divorces
dmitrygr 3y ago
It all makes perfect sense. I have a 2.5% fixed rate mortgage. That and prop 13 together make sure that my yearly costs get lower and lower in real-money terms (accounting for inflation). Renting the property out can easily cover mortgage, property tax, HOA, insurance, and maintenance. So... why would I sell? In fact the difference between rents that can be charged on my place in CA, and the abovementioned costs of keeping it are enough to cover rent in a nicer cheaper CoL area... Would I sell at all? Maybe, but I can afford to wait till higher prices, even if that takes 3 years, or 5, or 20.
sacnoradhq 3y ago
California has a huge swath of homeowners with Prop 13 (low property taxes) while others don't. They will never move and cannot afford to do so. Also, most who own outright may still hold the false belief of perpetual rising prices. And often with most of their net value is tied to the value of their home, they will wait it out regardless of the real long-term future outlook. Bay Area prices will probably not decline unless many big tech companies leave. It probably won't happen but there's a possibility of it.

23 points by roseway4 3y ago

tl;dr The prospect of paying significantly higher mortgage rates is dampening homeowner interest in selling. Despite these rates, demand is sufficient to be keeping prices high.

quantified 3y ago
Better to be just a bit financially cautious to avoid being caught out. At least they're not over-leveraged and underwater.
mistrial9 3y ago
suitcases of cash seem to appear to seek higher returns ; see multiple occurances of capital-seeking-property, both US and from abroad. Second, three years to do a single remodel home is a common sight in California. Where is the new stock? .. I spell "scam"
- busyant 3y ago
  can you elaborate on what you're saying? it sounds insightful, but also cryptic and indirect. not flaming, just interested

cft 3y ago

Inflation loop: people are overleveraged + new loans are expensive → house prices up due to lower listings

SkyPuncher 3y ago

FWIW, this is not unique to the Bay Area. The only people moving right now seem to be: * Those forced to by job situations. * Those selling a second home that's now at an inflated price.

jjtheblunt 3y ago
divorces

dmitrygr 3y ago

It all makes perfect sense. I have a 2.5% fixed rate mortgage. That and prop 13 together make sure that my yearly costs get lower and lower in real-money terms (accounting for inflation). Renting the property out can easily cover mortgage, property tax, HOA, insurance, and maintenance. So... why would I sell? In fact the difference between rents that can be charged on my place in CA, and the abovementioned costs of keeping it are enough to cover rent in a nicer cheaper CoL area... Would I sell at all? Maybe, but I can afford to wait till higher prices, even if that takes 3 years, or 5, or 20.

sacnoradhq 3y ago

California has a huge swath of homeowners with Prop 13 (low property taxes) while others don't. They will never move and cannot afford to do so. Also, most who own outright may still hold the false belief of perpetual rising prices. And often with most of their net value is tied to the value of their home, they will wait it out regardless of the real long-term future outlook. Bay Area prices will probably not decline unless many big tech companies leave. It probably won't happen but there's a possibility of it.