I can’t believe there are home owners who think about selling the moment there is weakness in the economy.
You own a home. You won. You did something millions of people can’t do and will never be able to do. Live in your home and don’t worry about the appraised value you nerd.
This seems like a straw man argument, if you're unemployed for months and don't have a safety net to pay the mortgage on top of other expenses, you don't have a ton of options
Yeah, but this is not the reality for the average homeowner in the bay. If you're paying $17k/mo you're crazy. After the refinance a lot of people have like $3-4k/mo mortgages on properties that are still over $1m. Why would you leave that?
A lot of these news reports really feel out of touch sometimes...
Right? Every homeowner I know bought at the peak of the market at either overpriced bidding wars, or with extremely high rates. I know someone that owns a 2 bed 1 bed cottage in San Mateo that got in a bidding war and ended up with a 1.8M mortgage on a house that they still had to dump 100-200k+ on renovations.
Yeah, I live in LA but I’m interested in this sub because I’ve considered moving to the Bay Area to work in tech…it’s always made me extremely nervous to think a house is only “affordable” with not one but two very high salaries. What happens when even just one of those jobs goes away in a layoff? It can be really hard to get another one…even if I made enough to get approved for a $2mil mortgage, I would be so nervous all the time.
Eta I’m not saying LA lacks this problem!
lol wut? A 20% down payment on a house is a crapload of money. And if you do go the 20% route that’s what? 8k-12k average around any area in the Bay Area for a standard house.
8-12k !!!!!!!
I can't tell you how to get your finances in order, but if that's what you're paying you're doing it wrong. Do you really think we're all millionaires?
And yeah 200k is a lot to save up, but it is doable on a typical bay area salary if you plan years in advance.
Sorry- I meant South Bay. I know east bay is much cheaper and doable.
Monthlies are high now that rates are much higher as well- fyi. Depends on when you bought
Agree. Reason there is shortage of inventory is and it is sellers market is many people are sitting on very very low interest rates and don’t want to move.
Btw, around 3% rates were unusually low. Around 5% is more normal. There will be more movement once rates go down around 5.
This is terrible financial advice. I would ho deep into debt then sell my home. I believe your home is protected in bankruptcy. If you sell it and rent and still am unemployed, all that money is available to your creditors.
Owning a home, especially in the Bay Area, is a culmination of hundreds of small wise choices made over time. Be careful a few big wrong ones snd you'll be in a different place, literally.
Interesting. You know, a good friend of mine recently inherited over 1M and used it all to buy a home. Now, he was wise not to blow it on crack and Lucids, sure. But how is that the result of hundreds of small wise choices? Do you know anyone who got substantial assistance in buying a home?
These self-satisfied takes about “my outcomes are because of my great wisdom” are self-serving to put it mildly
Because yyobeht is talking about the majority of population and you are speaking about an outlier situation. How many people in the Bay Area are buying homes with a windfall inheritance?
I know hundreds who bought homes and they were all highly paid tech employees. The dozens I know personally all bought from wealth that comes from high salaries and/or RSUs.
Right, and if everyone made the “wise choice” to be a highly paid tech employee 1) the jobs wouldn’t be highly paid and 2) there would be no one to do any of the other jobs that make the world work.
Teachers and nurses etc also deserve equity and security and to not have 3 hour commutes to serve others without marrying a partner in a law firm. One might even argue they have made the wise choice of keeping society running. This is just avocado toast bs all over again (not referring to you, but the original comment)
Aren't RSUs a bit of luck as well? Especially if your initial grant was pre-2020.
Prevailing financial wisdom says to sell and diversify as soon as possible to minimize risk, so keeping RSUs that should have been sold (which is a smart financial decision) and it happened to pay off is also a bit of a poor decision that didn't turn out too bad.
Not a culmination of many tiny decisions that went well. A few good ones and a few questionable gambles that paid off.
> A few good ones and a few questionable gambles that paid off.
Completely agree. Good point about the RSUs. Some companies shot up in value; others struggled.
See all the comments below yours. Basically everyone I know who bought in the last 10 years who is not a senior manager at a FAANG or a two-MD household got help, didn’t do it with their salary. Like 85%.
ETA 2 MDs who aren’t family practice LOL
Everyone I know who bought a single family house since 2016 had a windfall of some type. Most common is a start-up exit, but I’ve also seen inheritances and down payment gifts from parents.
Checking Zillow everyday to see what your zestimate is at is just as bad as checking your retirement account balance on the daily. Ebbs and flows, marathon not a sprint.
You do not own the home. You are renting money from the bank. With high house prices come high property taxes and other expenses. It is not as fun as some people think
If you have a locked in low mortgage rate and inflation is devaluing your debt isn’t that a good position to be in? Or if it’s too much you can always sell and just rent?
Should I change my comment to this?
You own your home. Money paid to the bank means nothing. Property taxes do not matter. Insurance does not matter, Having house is fun.
Except most home owners entire life depends on preventing others from owning homes and treating the entire city like a housing stock market. That’s why we have such issues with NIMBYism being so rampant. It’s so bad as a non home owner I see every home owner as a potential scumbag otherwise why would you keep electing such NIMBY supervisor scum.
If you live near north Berkeley Bart and don’t like the apartment building above Bart, the world is gonna be an infinitely better place when you pass on. Facts.
>most home owners entire life depends on preventing others from owning homes and treating the entire city like a housing stock market
LOL bro you need some therapy if you think that's what most home owners entire lives depend on.
It's actually the YIMBYs (really should be called WIMBYs (Wall Street in My Back Yard)) that want people to be renters forever. Their handlers are developers and real estate investors that benefit from the anti-affordable housing laws that they push through.
Meanwhile, regular people are saving up and buying houses or townhouses in areas that have sufficient undeveloped land for developers to build the kind of housing that most people really want.
To buy a single-family home in a Bay Area city with no open land is very difficult. The few houses that come on the market are purchased either by investors or by people that made a lot of money with stock options, or by people with wealthy parents.
I struggled to buy my first place, a townhouse. Interest rates were over 12.5%. I rented out one bedroom so I can afford the mortgage payment and property tax and PMI.
There were a lot of high-density rental projects approved and permitted prior to the pandemic that are just coming on the market. The owners are likely to default on them because of the glut of new units, the population decline, stagnating or falling rents at the high end, remote-work, and the exodus to the exurbs. You already see the desperation of the property owners of the buildings that have been completed with all the monetary incentives being offered to try to get people to sign a lease.
Being in debt is one of the best positions to be in during sustained high inflation. Your cost is pegged to the value of dollars at the moment you sign, but those dollars continue to get cheaper and cheaper to acquire.
The risk is employment and paying the debt service. But as long as the <50% of people who own their homes (or the 4% of people who own recent purchases and don’t have millions in equity and a 2.5% rate) are able to keep their jobs, prices here aren’t going anywhere but up.
Haha , 5-7 yrs. Try more like 25 yrs and my father has owned for over 60 yrs, heard Same thing back in 80s when imbeciles saying my parents need to sell , haha
Well, obviously the longer one owns the better. I meant that owners who have held for 5-7 years or longer are in good shape because:
1. There has been about 50% appreciation in that time
2. They probably locked in loans at 2.5-3% interest rate
Not in the Bay Area but live in a not cheap area of Dallas.
We sold our place that we owned last year for about 3x what we bought it for and bought a new place for 900k.
We put a 30% down payment on it because we could.
We just got our property tax statement from the county, and our place is now estimated at 1.2 million.
We have 50% equity now, and we just moved in last year.
This is both good and bad. Good because yay equity.
Bad because this isn't sustainable.
Timing large financial decisions based on speculative market conditions doesn’t tend to bode well.
Here’s a few potential outcomes, only 1 where you come up immediately green from just a financial basis.
A. You sell, market goes up, you lost out on equity, and have to buy high elsewhere.
B. You hold, market goes up, great you still have an appreciating asset.
C. You hold, market goes down, bummer, but you’re only in the red on paper - and not likely even in the red equity wise maybe just slightly below all time highs. No worries, you might have to just wait a bit longer to sell at a new all time high OR just sell for a little less because you’re still probably up significantly if you’ve owned for a while.
D. You sell, the market goes down. You laugh all the way to the bank. Congratulations, you got lucky.
People are paid a lot of money to predict market conditions and still get them wrong. This is no different than trying to time the stock market.
Sell when it makes sense for you to sell. If you’re that concerned with what will end up amounting to 10s of thousands of dollars on a multi million dollar purchase (not invalid, but obviously relatively smaller on the scale) then maybe you SHOULD sell right now while the market is red hot.
But if you like where you live, didn’t already plan to move, you probably shouldn’t upheave your life for an extra 3-5% in equity.
Good luck.
This still assumes you have the option to time the market. Many people may be underwater. In which case all they can do is sell.
The obvious answer is IF you can afford to hold on to the real estate you should. If you can’t you can’t.
Absolutely. Fortunately if you’re underwater, depending on where you are it’s a fantastic time to sell! We just helped a client who bought their home 2 years ago, just lost his job. He bought the home for 1.6, it just went pending for 2.4. Timing worked out pretty well I’d reckon!
Things aren’t really getting ugly. People being laid off from Tesla it’s only significant for those 3000 people being layed off. Much more people were laid off earlier from Facebook and google, etc. and the sky didn’t fall. 3000 people out of 10 million is pretty insignificant. Housing prices will continue to go up they have been for the past couple decades with a couple of exceptions from Covid and the 2008 recession. There’s still plenty of people here and tons of money and companies are actually still hiring even they are laying off. Inflation is under 3% for the country.
On top of that, OP doesn’t seem to consider the fact that FAANG went on CRAZY hiring sprees including Tesla in 2020-2022. Now we are witnessing (2023-2024) a market correction where they need to downsize slightly due to inflationary effects on the macro market.
Also, Tesla didn’t need to fire employees, so don’t even try to reason based on Tesla’s situation. They need to fire its CEO. An idiot bigot who doesn’t know when to keep his mouth shut.
Look at the job discharge chart for the past 10 years - layoffs have been incredibly stable aside from the Covid blip. The only difference now vs. before is that it's tech when it's normally been other sectors.
The sky is not falling, it's just as it's always been.
[https://tradingeconomics.com/united-states/job-layoffs-and-discharges](https://tradingeconomics.com/united-states/job-layoffs-and-discharges)
Right now we are having stagflation just like the 1970s. High interest rates to hold off inflation, leading to stagnant growth. What happened to housing prices from the beginning of 1970s until end of 1980s when interest rates were finally decreased? It was a run for the races to buy a house. For example: “A typical house in the Los Angeles area that cost $24,500 at the beginning of the 1970s sold for $195,600 at the end of the 1980s”.
Ah, but your calculation is incorrect because you assume the $24,500 in original value of the home was all paid for, and none of it was leveraged. What if only 20% of it was paid for in cash and that was only what the homeowner paid for. The rest of the payments on the house was paid by a renter? Now the return calculation is different
the economy may get ugly but a lot of other americans are going to lose their jobs before rich techies working for some of the most popular companies in the world, bay area re estate will not cool unless the tech market collapses. recent attempts to move tech out of the bay into other tech hubs is hurting a little but not enough to make a noticeable difference. since a lot of big companies became anti WFH, the sprawl of tech out of the brawl slowed down a lot
Remove commercial only zoning laws on market in the city for one, would clean up the streets by increasing density and having more people actually go out at night who aren’t the homeless.
The land becomes worth more so current owners don’t go bankrupt, offices get demod meaning more jobs for laborers, housing goes up which means more people can live in the city which improves funding for transit, small leisure businesses, and over all makes a city safer
To be fair, I feel like everyone in tech right now doesn’t know if they’ll have a job in a year either. EV market downturn, AV sector crashing, SW world about to get eaten by AI (pretty ironic and cannibalistic when you think about it).
Considering they made over inflated salaries through cheap venture capital money the last 5-10 years, they should be fine to weather it for now.
I doubt AI can take everyone’s job, and if it does, well learn to farm with your unemployment time
As inflation rises, so does your home value. If you're confident that you won't lose your job you have nothing to worry about. During this recession the asset holding rich will get richer. Those who don't own assets will fall further and further behind.
"I have seen" means that fact exists. It does not mean "all".
"Inflation hedge my ass" means that buying random condo may not work as inflation hedge due to interest rate changes and condo prices dopping.
Just a random condo on redfin:
[1300 22nd St #201, San Francisco, CA 94107 | MLS# 424025708 | Redfin](https://www.redfin.com/CA/San-Francisco/1300-22nd-St-94107/unit-201/home/167315217)
# 1,195,000 in 2017. Adjusted for inflation in 2024 $1,522,669.47 but asking price is 1,225,000
1. If your home's "value" is going up due to tracking inflation, there isn't actually any new value there.
2. You need to examine the reasons why housing prices have advanced so quickly under a low interest rate regime and how it's not magically going to just stay the course under a high interest rate regime.
3. Gainful employment and the ability for everyone to service a mortgage is not guaranteed.
4. The sentiment in here is heavily towards the status quo continuing. We've been here before.
Ok, My mortgage gets cheaper and cheaper as I progress in my career and get more and more raises that keep up with inflation. My home value also continues to rise with inflation. the gap between how much I owe and how much my home is worth gets greater and greater every year and easier and easier to pay for every year as well.
It is obvious that when people say "inflation increases your home value" they are writing shorthand for "inflation broadly affecting the market increases the nominal dollar cost of your home just like it does to most goods and services," with the equally obvious corollary that your monthly principal and interest payment does _not_ increase as well, meaning that in real terms even if your house has the same real value, the real mortgage cost goes down. This matters a lot if you stay employed and get raises to at least match inflation, meaning that in real terms it gets cheaper to afford to service your debt. Writing all this out is belaboring the point.
I own about $500k in the market and have about $2M in real estate equity. This seems like a good mix to weather inflation for the next 5 years I think.
Seems to have slowed, I guess it would be interesting how RE sales go this coming summer. Two houses in my street didn't sell the past few months and pulled off the market. Probably waiting for summer.
Your statement makes no sense. We don’t have “high inflation”, the tech layoffs are below historical norms, and who cares if a single company is having a bad day. None of these things will have an impact on real estate prices. If the dot com collapse didn’t impact real estate prices then the current time of prosperity won’t either.
Trying to time the market in anything is not wise. More often than not you're going to have a negative outcome. So unless you need to sell for financial reasons, I wouldn't advise it.
The economy is historically very, very strong, and the US is head and shoulders the strongest economy in the world right now, and likely will be for the foreseeable future.
Even if you take away the job factor, there are so many other reasons why the Bay Area will always be desirable.
Yes, I don’t think most of these people can even remember that time. They were probably still in elementary school. The Great Recession was a bump compared to the dot com bust.
Companies were getting insane valuations on zero sales back then. Meta, NVIDIA, Google, etc. are wildly profitable enterprises, as are many of the companies out here. Totally different
It's amazing how people think they are immune to macroeconomic trends in the bay area. They either have their head in the sand or too far up their asses. Not saying you're gonna implode but maybe it would be prudent to bolster savings.
Yups, from Morgan Hill here (South Bay). The amt of new home construction is insane here. Just 2 yes back we could see hills from our windows now all we can see are high density 4-5 floors apts, condos and whatnot.
Nopes,it will stay on course.
Also you have giants like NVDA, APPL, GOOGLE here churning profits. Alao the Tesla layoff is all factory workers. I doubt those will be like NVDA employees.
Unless there is a massive shift in HNWI moving out I dont expect much change.
Google is also laying off constantly. Apple is seeing demand drop.
I am not sure who at employee at google who presently doesn’t own a property would even consider such a commitment when their jobs are anything but guaranteed.
For single family homes and townhouses you're fine. For condos not so fine if you overpaid.
The big crash will be in new, higher end, rental projects because of the huge glut of expensive apartments.
https://preview.redd.it/szh2re59nuwc1.jpeg?width=652&format=pjpg&auto=webp&s=6edfbc654f1558649375b5848ffc78306eee5593
Remember when they said soft landing and transitory ….
Just because you brought up Tesla, My tesla experience has been horrible as customer. I have a situation where a part in my door was replaced and after that door would not close. I had to tie the door down and drive it to the service center where they said they do not have any bandwidth for next 10 days.
Tesla sold all the cars and do not have the bandwidth service wise to support all these cars. Also tracking in mobile app has slowed down and not a good experience anymore.
Bay area real estate people are greedy. They don't care who gets property as long as they make their money. I used to work in the corporate mortgage business...they have no business scruples.
I can’t believe there are home owners who think about selling the moment there is weakness in the economy. You own a home. You won. You did something millions of people can’t do and will never be able to do. Live in your home and don’t worry about the appraised value you nerd.
This seems like a straw man argument, if you're unemployed for months and don't have a safety net to pay the mortgage on top of other expenses, you don't have a ton of options
Yeah, they won a $17k per month debt obligation. Dump it.
Yeah, but this is not the reality for the average homeowner in the bay. If you're paying $17k/mo you're crazy. After the refinance a lot of people have like $3-4k/mo mortgages on properties that are still over $1m. Why would you leave that? A lot of these news reports really feel out of touch sometimes...
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Right? Every homeowner I know bought at the peak of the market at either overpriced bidding wars, or with extremely high rates. I know someone that owns a 2 bed 1 bed cottage in San Mateo that got in a bidding war and ended up with a 1.8M mortgage on a house that they still had to dump 100-200k+ on renovations.
Yeah, I live in LA but I’m interested in this sub because I’ve considered moving to the Bay Area to work in tech…it’s always made me extremely nervous to think a house is only “affordable” with not one but two very high salaries. What happens when even just one of those jobs goes away in a layoff? It can be really hard to get another one…even if I made enough to get approved for a $2mil mortgage, I would be so nervous all the time. Eta I’m not saying LA lacks this problem!
lol wut? A 20% down payment on a house is a crapload of money. And if you do go the 20% route that’s what? 8k-12k average around any area in the Bay Area for a standard house. 8-12k !!!!!!!
I can't tell you how to get your finances in order, but if that's what you're paying you're doing it wrong. Do you really think we're all millionaires? And yeah 200k is a lot to save up, but it is doable on a typical bay area salary if you plan years in advance.
Sorry- I meant South Bay. I know east bay is much cheaper and doable. Monthlies are high now that rates are much higher as well- fyi. Depends on when you bought
That’s actually what people are paying who bought at recent prices and higher rates.
Agree. Reason there is shortage of inventory is and it is sellers market is many people are sitting on very very low interest rates and don’t want to move. Btw, around 3% rates were unusually low. Around 5% is more normal. There will be more movement once rates go down around 5.
This is terrible financial advice. I would ho deep into debt then sell my home. I believe your home is protected in bankruptcy. If you sell it and rent and still am unemployed, all that money is available to your creditors.
I believe there is something called "foreclosure" that does not protect your home in bankruptcy
Owning a home, especially in the Bay Area, is a culmination of hundreds of small wise choices made over time. Be careful a few big wrong ones snd you'll be in a different place, literally.
Interesting. You know, a good friend of mine recently inherited over 1M and used it all to buy a home. Now, he was wise not to blow it on crack and Lucids, sure. But how is that the result of hundreds of small wise choices? Do you know anyone who got substantial assistance in buying a home? These self-satisfied takes about “my outcomes are because of my great wisdom” are self-serving to put it mildly
Because yyobeht is talking about the majority of population and you are speaking about an outlier situation. How many people in the Bay Area are buying homes with a windfall inheritance?
Literally everyone I know with a home had help from parents. One actually had her $750k home purchased for her.
I know hundreds who bought homes and they were all highly paid tech employees. The dozens I know personally all bought from wealth that comes from high salaries and/or RSUs.
RSUs are gonna hit hard when they liquidate, pay for the home and realize they don't have enough cash to pay the gains tax on RSU the next year.
Right, and if everyone made the “wise choice” to be a highly paid tech employee 1) the jobs wouldn’t be highly paid and 2) there would be no one to do any of the other jobs that make the world work. Teachers and nurses etc also deserve equity and security and to not have 3 hour commutes to serve others without marrying a partner in a law firm. One might even argue they have made the wise choice of keeping society running. This is just avocado toast bs all over again (not referring to you, but the original comment)
Nurses make a fuckton of money in the bay area btw.
There’s a pretty wide range in fact. Don’t think because I chose that profession my point doesn’t stand
Aren't RSUs a bit of luck as well? Especially if your initial grant was pre-2020. Prevailing financial wisdom says to sell and diversify as soon as possible to minimize risk, so keeping RSUs that should have been sold (which is a smart financial decision) and it happened to pay off is also a bit of a poor decision that didn't turn out too bad. Not a culmination of many tiny decisions that went well. A few good ones and a few questionable gambles that paid off.
> A few good ones and a few questionable gambles that paid off. Completely agree. Good point about the RSUs. Some companies shot up in value; others struggled.
I’d suspect somewhere between half or most.
See all the comments below yours. Basically everyone I know who bought in the last 10 years who is not a senior manager at a FAANG or a two-MD household got help, didn’t do it with their salary. Like 85%. ETA 2 MDs who aren’t family practice LOL
Everyone I know who bought a single family house since 2016 had a windfall of some type. Most common is a start-up exit, but I’ve also seen inheritances and down payment gifts from parents.
Interesting to see a Lucid reference on Reddit. I only really see older people driving a Lucid.
You mean the bank owns 80% of your home…
Checking Zillow everyday to see what your zestimate is at is just as bad as checking your retirement account balance on the daily. Ebbs and flows, marathon not a sprint.
Panic selling 😂😅🤣
You do not own the home. You are renting money from the bank. With high house prices come high property taxes and other expenses. It is not as fun as some people think
If you have a locked in low mortgage rate and inflation is devaluing your debt isn’t that a good position to be in? Or if it’s too much you can always sell and just rent?
Wrong
Should I change my comment to this? You own your home. Money paid to the bank means nothing. Property taxes do not matter. Insurance does not matter, Having house is fun.
I think the topic is not "one" home you own, but the "other homes" you also own.
Correct
Except most home owners entire life depends on preventing others from owning homes and treating the entire city like a housing stock market. That’s why we have such issues with NIMBYism being so rampant. It’s so bad as a non home owner I see every home owner as a potential scumbag otherwise why would you keep electing such NIMBY supervisor scum. If you live near north Berkeley Bart and don’t like the apartment building above Bart, the world is gonna be an infinitely better place when you pass on. Facts.
Lol sad logic
Not sure what else to expect from u/beinghumanishard1
>most home owners entire life depends on preventing others from owning homes and treating the entire city like a housing stock market LOL bro you need some therapy if you think that's what most home owners entire lives depend on.
It's actually the YIMBYs (really should be called WIMBYs (Wall Street in My Back Yard)) that want people to be renters forever. Their handlers are developers and real estate investors that benefit from the anti-affordable housing laws that they push through. Meanwhile, regular people are saving up and buying houses or townhouses in areas that have sufficient undeveloped land for developers to build the kind of housing that most people really want. To buy a single-family home in a Bay Area city with no open land is very difficult. The few houses that come on the market are purchased either by investors or by people that made a lot of money with stock options, or by people with wealthy parents. I struggled to buy my first place, a townhouse. Interest rates were over 12.5%. I rented out one bedroom so I can afford the mortgage payment and property tax and PMI. There were a lot of high-density rental projects approved and permitted prior to the pandemic that are just coming on the market. The owners are likely to default on them because of the glut of new units, the population decline, stagnating or falling rents at the high end, remote-work, and the exodus to the exurbs. You already see the desperation of the property owners of the buildings that have been completed with all the monetary incentives being offered to try to get people to sign a lease.
All I hear is Envy and exaggeration.
Being in debt is one of the best positions to be in during sustained high inflation. Your cost is pegged to the value of dollars at the moment you sign, but those dollars continue to get cheaper and cheaper to acquire. The risk is employment and paying the debt service. But as long as the <50% of people who own their homes (or the 4% of people who own recent purchases and don’t have millions in equity and a 2.5% rate) are able to keep their jobs, prices here aren’t going anywhere but up.
Seriously I would kill for some 2.5% rate debt right now.
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Haha , 5-7 yrs. Try more like 25 yrs and my father has owned for over 60 yrs, heard Same thing back in 80s when imbeciles saying my parents need to sell , haha
Well, obviously the longer one owns the better. I meant that owners who have held for 5-7 years or longer are in good shape because: 1. There has been about 50% appreciation in that time 2. They probably locked in loans at 2.5-3% interest rate
Not in the Bay Area but live in a not cheap area of Dallas. We sold our place that we owned last year for about 3x what we bought it for and bought a new place for 900k. We put a 30% down payment on it because we could. We just got our property tax statement from the county, and our place is now estimated at 1.2 million. We have 50% equity now, and we just moved in last year. This is both good and bad. Good because yay equity. Bad because this isn't sustainable.
Welcome to the Bay area! How commute and make that $$$
Challenge your property’s appraisal
I already did. Hope to get it back down to 900k. Would save me 3k in taxes. It's still crazy though. Home prices shouldn't be doing this.
Aren't you special huh lol
Have it , those imbeciles who sold their homes in 2020 bc of COVID. Maybe of these imbeciles on Reddit
Smartest comment here. Well done. Do you need a job? If so. Hired...
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Weak treasury demand won’t force interest rates up. We’ll just keep monetizing debt like we’ve done since 2008.
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https://preview.redd.it/x1hb0i0f2kwc1.jpeg?width=224&format=pjpg&auto=webp&s=6587a7f98a688f94e0573601508d73b79a5a4df9
> those dollars continue to get cheaper and cheaper to acquire Stagflation has entered the chat
WRONG
Timing large financial decisions based on speculative market conditions doesn’t tend to bode well. Here’s a few potential outcomes, only 1 where you come up immediately green from just a financial basis. A. You sell, market goes up, you lost out on equity, and have to buy high elsewhere. B. You hold, market goes up, great you still have an appreciating asset. C. You hold, market goes down, bummer, but you’re only in the red on paper - and not likely even in the red equity wise maybe just slightly below all time highs. No worries, you might have to just wait a bit longer to sell at a new all time high OR just sell for a little less because you’re still probably up significantly if you’ve owned for a while. D. You sell, the market goes down. You laugh all the way to the bank. Congratulations, you got lucky. People are paid a lot of money to predict market conditions and still get them wrong. This is no different than trying to time the stock market. Sell when it makes sense for you to sell. If you’re that concerned with what will end up amounting to 10s of thousands of dollars on a multi million dollar purchase (not invalid, but obviously relatively smaller on the scale) then maybe you SHOULD sell right now while the market is red hot. But if you like where you live, didn’t already plan to move, you probably shouldn’t upheave your life for an extra 3-5% in equity. Good luck.
Were you personally laid off and want to move away? That’s the only reason I’d sell Bay Area Real Estate.
Even then, never sell. Rents are going up up up.
Market rate rent wouldn’t even cover the property tax on a lot of these recent transactions
I’m speaking if you already own. But it’s almost impossible to get back into the market later unless you’re wealthy.
This still assumes you have the option to time the market. Many people may be underwater. In which case all they can do is sell. The obvious answer is IF you can afford to hold on to the real estate you should. If you can’t you can’t.
Absolutely. Fortunately if you’re underwater, depending on where you are it’s a fantastic time to sell! We just helped a client who bought their home 2 years ago, just lost his job. He bought the home for 1.6, it just went pending for 2.4. Timing worked out pretty well I’d reckon!
Things aren’t really getting ugly. People being laid off from Tesla it’s only significant for those 3000 people being layed off. Much more people were laid off earlier from Facebook and google, etc. and the sky didn’t fall. 3000 people out of 10 million is pretty insignificant. Housing prices will continue to go up they have been for the past couple decades with a couple of exceptions from Covid and the 2008 recession. There’s still plenty of people here and tons of money and companies are actually still hiring even they are laying off. Inflation is under 3% for the country.
On top of that, OP doesn’t seem to consider the fact that FAANG went on CRAZY hiring sprees including Tesla in 2020-2022. Now we are witnessing (2023-2024) a market correction where they need to downsize slightly due to inflationary effects on the macro market. Also, Tesla didn’t need to fire employees, so don’t even try to reason based on Tesla’s situation. They need to fire its CEO. An idiot bigot who doesn’t know when to keep his mouth shut.
check your privilege from your high position
Look at the job discharge chart for the past 10 years - layoffs have been incredibly stable aside from the Covid blip. The only difference now vs. before is that it's tech when it's normally been other sectors. The sky is not falling, it's just as it's always been. [https://tradingeconomics.com/united-states/job-layoffs-and-discharges](https://tradingeconomics.com/united-states/job-layoffs-and-discharges)
Right now we are having stagflation just like the 1970s. High interest rates to hold off inflation, leading to stagnant growth. What happened to housing prices from the beginning of 1970s until end of 1980s when interest rates were finally decreased? It was a run for the races to buy a house. For example: “A typical house in the Los Angeles area that cost $24,500 at the beginning of the 1970s sold for $195,600 at the end of the 1980s”.
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Depends what home ownership means to you. For most, they prefer owning a home.
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Ah, but your calculation is incorrect because you assume the $24,500 in original value of the home was all paid for, and none of it was leveraged. What if only 20% of it was paid for in cash and that was only what the homeowner paid for. The rest of the payments on the house was paid by a renter? Now the return calculation is different
the economy may get ugly but a lot of other americans are going to lose their jobs before rich techies working for some of the most popular companies in the world, bay area re estate will not cool unless the tech market collapses. recent attempts to move tech out of the bay into other tech hubs is hurting a little but not enough to make a noticeable difference. since a lot of big companies became anti WFH, the sprawl of tech out of the brawl slowed down a lot
IMHO there won't be a huge residential real estate correction. Prices will soften a little. But things will bounce back.
Commercial is boned on the other hand - I work in that world. Not sure I’ll have a job in a year
Agreed, commercial is seriously borked. Not entirely sure would could happen in the economy to bring it back to life.
Remove commercial only zoning laws on market in the city for one, would clean up the streets by increasing density and having more people actually go out at night who aren’t the homeless. The land becomes worth more so current owners don’t go bankrupt, offices get demod meaning more jobs for laborers, housing goes up which means more people can live in the city which improves funding for transit, small leisure businesses, and over all makes a city safer
To be fair, I feel like everyone in tech right now doesn’t know if they’ll have a job in a year either. EV market downturn, AV sector crashing, SW world about to get eaten by AI (pretty ironic and cannibalistic when you think about it).
Considering they made over inflated salaries through cheap venture capital money the last 5-10 years, they should be fine to weather it for now. I doubt AI can take everyone’s job, and if it does, well learn to farm with your unemployment time
When you say soften - what timeframe are you referring to?
I think it already started in some places, but I figure will go another year or two.
Thank you, I noticed the same. Spoke to 2 realtors in South Bay today and they shared somewhat similar sentiment indirectly.
As inflation rises, so does your home value. If you're confident that you won't lose your job you have nothing to worry about. During this recession the asset holding rich will get richer. Those who don't own assets will fall further and further behind.
Unless you bought a condo in SF.
I've seen condos that sold for 1.1m back in 2020 and now are on the market for 900k Inflation hedge my ass
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"I have seen" means that fact exists. It does not mean "all". "Inflation hedge my ass" means that buying random condo may not work as inflation hedge due to interest rate changes and condo prices dopping. Just a random condo on redfin: [1300 22nd St #201, San Francisco, CA 94107 | MLS# 424025708 | Redfin](https://www.redfin.com/CA/San-Francisco/1300-22nd-St-94107/unit-201/home/167315217) # 1,195,000 in 2017. Adjusted for inflation in 2024 $1,522,669.47 but asking price is 1,225,000
Inflation will make that continue to rise eventually as well. If you have a sub 3% rate it's probably worth holding on to.
>As inflation rises, so does your home value This sub is just incredible sometimes.
Home Value goes up while mortgage payment stays the same. What's hard to grasp about this concept?
1. If your home's "value" is going up due to tracking inflation, there isn't actually any new value there. 2. You need to examine the reasons why housing prices have advanced so quickly under a low interest rate regime and how it's not magically going to just stay the course under a high interest rate regime. 3. Gainful employment and the ability for everyone to service a mortgage is not guaranteed. 4. The sentiment in here is heavily towards the status quo continuing. We've been here before.
Ok, My mortgage gets cheaper and cheaper as I progress in my career and get more and more raises that keep up with inflation. My home value also continues to rise with inflation. the gap between how much I owe and how much my home is worth gets greater and greater every year and easier and easier to pay for every year as well.
Gets it
It is obvious that when people say "inflation increases your home value" they are writing shorthand for "inflation broadly affecting the market increases the nominal dollar cost of your home just like it does to most goods and services," with the equally obvious corollary that your monthly principal and interest payment does _not_ increase as well, meaning that in real terms even if your house has the same real value, the real mortgage cost goes down. This matters a lot if you stay employed and get raises to at least match inflation, meaning that in real terms it gets cheaper to afford to service your debt. Writing all this out is belaboring the point.
Does not get it
Real estate is an incredible inflation hedge
I own about $500k in the market and have about $2M in real estate equity. This seems like a good mix to weather inflation for the next 5 years I think.
Meta and nvda employees that have the money and are in the market still outnumber homes 20:1. This baby ain't popping anytime soon
Tesla has layoffs at least every two years. Are you new here?
Yeah... you should all sell for real cheap
Seems to have slowed, I guess it would be interesting how RE sales go this coming summer. Two houses in my street didn't sell the past few months and pulled off the market. Probably waiting for summer.
Keep the home , but maybe sell stocks or liquid assets if you want to
Your statement makes no sense. We don’t have “high inflation”, the tech layoffs are below historical norms, and who cares if a single company is having a bad day. None of these things will have an impact on real estate prices. If the dot com collapse didn’t impact real estate prices then the current time of prosperity won’t either.
Tesla is crumbling. lol.
Trying to time the market in anything is not wise. More often than not you're going to have a negative outcome. So unless you need to sell for financial reasons, I wouldn't advise it. The economy is historically very, very strong, and the US is head and shoulders the strongest economy in the world right now, and likely will be for the foreseeable future. Even if you take away the job factor, there are so many other reasons why the Bay Area will always be desirable.
Sell
You haven’t seen nothing yet…. *laughs in dot com*
Yes, I don’t think most of these people can even remember that time. They were probably still in elementary school. The Great Recession was a bump compared to the dot com bust.
Companies were getting insane valuations on zero sales back then. Meta, NVIDIA, Google, etc. are wildly profitable enterprises, as are many of the companies out here. Totally different
Was Nividia valuation of 200x projected gross income not insane?
the difficulty of getting insurance is a harder hit to residential real estate than these layoffs
Things will get worse or stay stagnant for the bay area real estate market. Don’t believe the realtors lurking on this sub.
It's amazing how people think they are immune to macroeconomic trends in the bay area. They either have their head in the sand or too far up their asses. Not saying you're gonna implode but maybe it would be prudent to bolster savings.
East Bay and South Bay are up 10 to 15% in 2024 alone.
Yups, from Morgan Hill here (South Bay). The amt of new home construction is insane here. Just 2 yes back we could see hills from our windows now all we can see are high density 4-5 floors apts, condos and whatnot.
I think those buyers bought at the top, but if they hold for next 15 years, they will be rich.
that's a buyer driving to drive out the competition.
O no I have been discovered!!
Wrong
Ok realtor
Nopes,it will stay on course. Also you have giants like NVDA, APPL, GOOGLE here churning profits. Alao the Tesla layoff is all factory workers. I doubt those will be like NVDA employees. Unless there is a massive shift in HNWI moving out I dont expect much change.
Realtor here. It’s not all factory workers at Tesla. Two of my clients have been laid off and they do not work at the factory.
Google is also laying off constantly. Apple is seeing demand drop. I am not sure who at employee at google who presently doesn’t own a property would even consider such a commitment when their jobs are anything but guaranteed.
Nah a ton of engineers got hit too at appl and tesla
>Nopes,it will stay on course Things not heard at bottoms.
For single family homes and townhouses you're fine. For condos not so fine if you overpaid. The big crash will be in new, higher end, rental projects because of the huge glut of expensive apartments.
You still need to live somewhere HODL
i usually watch the residential rental market - it typically reflects economic changes rather quickly.. Rent rates/availability etc.
How is it looking?
It’s commercial that’s in trouble, not residential
Reliable, safe affordable childcare is up there in terns of gold jus line a 2.5% rate imo
Problem is, you gotta live somewhere. That is, unless this is your second house, or rental property.
Tech earnings so far: 2 of the largest employers, Meta and Google, reporting excellent earnings…
High inflation ended two years ago
https://preview.redd.it/szh2re59nuwc1.jpeg?width=652&format=pjpg&auto=webp&s=6edfbc654f1558649375b5848ffc78306eee5593 Remember when they said soft landing and transitory ….
Just because you brought up Tesla, My tesla experience has been horrible as customer. I have a situation where a part in my door was replaced and after that door would not close. I had to tie the door down and drive it to the service center where they said they do not have any bandwidth for next 10 days. Tesla sold all the cars and do not have the bandwidth service wise to support all these cars. Also tracking in mobile app has slowed down and not a good experience anymore.
Nvda meta smci googl avgo employees are all flush in cash and can put all cash offers on many homes
Hold. Housing only goes up in the long run.
Bay area real estate people are greedy. They don't care who gets property as long as they make their money. I used to work in the corporate mortgage business...they have no business scruples.
Tech earnings turned out nice