Bay area housing market

[2legs2wheels]

Have always been a renter but started to look for the first house. However have concerns that this might be a bubble. What do you guys think?

Also any advice on areas (school district is highest prioirty) are appreciated. I am currently looking at San Ramon (or mid east bay like Fremont).

As usual, turning to the BARF crowd wisdom for advise

 

[mercurial]

Doesn't look like the bubble before, lots of the demand component is foreign buyers with lots of cash. Tech people also have real money. Interest rates are not going up in the near future.

That being said, the local housing market is pretty hot and global economic growth is sluggish at best,I don't think a 10-15% correction is impossible. But when it will happen, is anyone's guess.

 

[Reli]

San Ramon isn't a good place for a first home........All you'll get for your money is a lame townhome. You could get a real house for the same price in San Leandro.

 

[UDRider]

Doesn't look like the bubble before, lots of the demand component is foreign buyers with lots of cash. Tech people also have real money. Interest rates are not going up in the near future.

That being said, the local housing market is pretty hot and global economic growth is sluggish at best,I don't think a 10-15% correction is impossible. But when it will happen, is anyone's guess.

It will be interesting to see what happens when foreign investors panic, for whatever reason (like no water, and agro business crashing), and flood the market, which will probably cause local peeps to start panicking too.

 

[EEEliminator]

Interested to see what happens when interest rates start to climb.

If you can afford a house in San Ramon, I would go for it.

 

[Yakoo752]

It will be interesting to see what happens when foreign investors panic, for whatever reason (like no water, and agro business crashing), and flood the market, which will probably cause local peeps to start panicking too.

First you have to ask why are they buying here before you try and think about what would cause them to leave

 

[UDRider]

First you have to ask why are they buying here before you try and think about what would cause them to leave

Park their money in something "safe"?

 

[Ogier le Danois]

Doesn't look like the bubble before, lots of the demand component is foreign buyers with lots of cash. Tech people also have real money. Interest rates are not going up in the near future.

That being said, the local housing market is pretty hot and global economic growth is sluggish at best,I don't think a 10-15% correction is impossible. But when it will happen, is anyone's guess.

I believe, this bubble, like any other, will deflate.

I also believe it will deflate in a more controlled and less disasterous way this time around.

Rising interest rates will moderate prices.

 

[2legs2wheels]

San Ramon isn't a good place for a first home........All you'll get for your money is a lame townhome. You could get a real house for the same price in San Leandro.

Schools => big reason in favor of San Ramon! I live near San Leandro now and know the place pretty well.

 

[2legs2wheels]

Interested to see what happens when interest rates start to climb.

If you can afford a house in San Ramon, I would go for it.

Why do you say go for it? Any specific reasons?

First you have to ask why are they buying here before you try and think about what would cause them to leave

Would appreciate if you talk a bit more about this point (why are they buying here). I do not have insight but you may...this is what I love about the Barf collective wisdom

 

[Blankpage]

I know exactly whats going to happen but don't have time right now to discuss in detail. Let me get back to this thread in Fall of 2020.

 

[kevin 714]

Yes it's s bubble

 

[Sharky]

San Ramon isn't a good place for a first home........All you'll get for your money is a lame townhome. You could get a real house for the same price in San Leandro.

I would buy a smaller house in a more desirable location versus a larger one in a less desirable locale. I took a giant hit on my Concord house when the market crashed and it took 7+ years to come (almost) back. Similar houses in Walnut Creek rebounded much quicker and did not take nearly as big of a hit.

But hey, feel free to by a 1500 square foot house in San Leandro for $500K. When the market corrects in a few years, you'll be locked in it for a decade.

 

[Yakoo752]

Would appreciate if you talk a bit more about this point (why are they buying here). I do not have insight but you may...this is what I love about the Barf collective wisdom

In my neighborhood it's predominately outside Chinese buyers. They are paying all cash on $2-3M homes. Why? From my understanding there are a few things going on...

1) China has made a lot of millionaires in the last few years
2) A weakening Yen
3) Education/College for their children - I've heard something about an expedited immigration piece for children whose parent's invested $1M in property - they also get in-state rates...
4) US is a safe place to put $$$
5) Real Estate is even safer

Yes it's s bubble

This - when those outside dollars dry up, who is going to be paying the lofty premiums?

 

[2legs2wheels]

I would buy a smaller house in a more desirable location versus a larger one in a less desirable locale. I took a giant hit on my Concord house when the market crashed and it took 7+ years to come (almost) back. Similar houses in Walnut Creek rebounded much quicker and did not take nearly as big of a hit.

But hey, feel free to by a 1500 square foot house in San Leandro for $500K. When the market corrects in a few years, you'll be locked in it for a decade.

Good advice, thank you.

Yes it's s bubble

Can you elaborate on why you think so?

I know exactly whats going to happen but don't have time right now to discuss in detail. Let me get back to this thread in Fall of 2020.

Cant afford a time machine but wisdom of crowds seems to be usually on the mark.

 

[2legs2wheels]

In my neighborhood it's predominately outside Chinese buyers. They are paying all cash on $2-3M homes. Why? From my understanding there are a few things going on...

1) China has made a lot of millionaires in the last few years
2) A weakening Yen
3) Education/College for their children - I've heard something about an expedited immigration piece for children whose parent's invested $1M in property - they also get in-state rates...
4) US is a safe place to put $$$
5) Real Estate is even safer



This - when those outside dollars dry up, who is going to be paying the lofty premiums?

Well many of these reasons look like the outside Chinese buyers are locked in for long term and there is a lower sell off risk. Am I reading this correct?

 

[HappyHighwayman]

Yes it's s bubble

It's not bubble. There is far more demand than supply, the economy is doing pretty well, there are lots of jobs, and simply not enough houses. People can afford to bid more than people who make less money.

People who keep saying they're "waiting for the bubble" NEVER BUY when the price declines. They're just big talkers. Sure it might dip a little, but SF bay real estate in the long run is just going up. I'm not guaranteeing people will make money, but if you buy a house to live in for the long run you'll likely do ok. It costs me less to live in my house than to rent an apartment.

It's a bubble when something is selling far above it's value, and stuff is selling for its value. Also, when someone pays cash for a house or has a super low interest rate a crashing market doesn't screw them over and doesn't make them have to sell or give up./

 

[Dubbington]

Have an idea bedroom wise? Square foot of house?

3/2 detached in San Ramon will be $750k starting at the low end.

I personally dont feel the 'bubble' will burst anytime soon. Heard 5-15% increase each of the next 5 years.

Jobs are here, schools are great. Interest rates are low. Funding is strict. Stock market is volatile. What would cause the bubble to burst? If rates go up, things will taper off but not go down. The sub $600k market will stay hot for awhile.

How about a $1.1 million in San Leandro :wow It does include a rentable inlaw unit, but still, thats $$$$ for San Leandro.

https://www.redfin.com/CA/San-Leandro/325-Dutton-Ave-94577/home/1905628

 

[Yakoo752]

Well many of these reasons look like the outside Chinese buyers are locked in for long term and there is a lower sell off risk. Am I reading this correct?

It's a bit early to determine but that's the feel I get as well.

 

[Dubbington]

Yes it's s bubble

Is the said bubble continuing to float up or nah??