Perks of the Bay Area housing market: (San Francisco, Vallejo: condos, houses)

[aslowdodge]

Originally Posted by Ruth4Truth

Pix bought in Vallejo, which reports say is in the process of being "discovered" as the last outpost of cheap housing on the Bay. Pix made a pretty smart move. Daring, but smart.

The only problem is that if there is a drop in real estate, outlying areas get hit pretty badly and are the last to recover.

[HappyinCali]

Dommsdayers coming in 3 2 1....

Look, the market is not going to keep going up indefinitely. It will correct and then it will start going up. The way it has been since the 50s. Here are some facts

- the reason 2008-2010 was so jarring is because it happens extremely rarely. It hadn't happened in decades. Yet people keep referring to it as if that's the standard. The standard recession is much more shallow and less impactful.
- San Francisco is cheap on a variety of metrics when compared to cities like Tokyo, Hong Kong, NYC, London, Sinapore, Paris etc. Global buyers looking for a place to park cash still find SF attractive. LA even more so.
- Bay Area RE is not driven by 25 year olds working at VC financed companies. It is driven by wealthy foreign investors and people who are mid-level execs working at big tech. If you think that Google and Facebook will not be around then I LOL @ you

Finally,

the vast majority who say that will buy when "the bubble bursts" won't. The "bubble" will not burst when the economy is doing well. And when the economy tanks, and you see your friends and family start getting laid off, everyone will be too worried about being next and the last thing you will do is drop a major % of your savigs on a house that's going down in value.

That's how human nature is. That's why you couldn't give stocks or houses away in 2008-2010

[BurnInTheMil]

Originally Posted by HappyinCali

Dommsdayers coming in 3 2 1....

Look, the market is not going to keep going up indefinitely. It will correct and then it will start going up. The way it has been since the 50s. Here are some facts

- the reason 2008-2010 was so jarring is because it happens extremely rarely. It hadn't happened in decades. Yet people keep referring to it as if that's the standard. The standard recession is much more shallow and less impactful.
- San Francisco is cheap on a variety of metrics when compared to cities like Tokyo, Hong Kong, NYC, London, Sinapore, Paris etc. Global buyers looking for a place to park cash still find SF attractive. LA even more so.
- Bay Area RE is not driven by 25 year olds working at VC financed companies. It is driven by wealthy foreign investors and people who are mid-level execs working at big tech. If you think that Google and Facebook will not be around then I LOL @ you

Finally,

the vast majority who say that will buy when "the bubble bursts" won't. The "bubble" will not burst when the economy is doing well. And when the economy tanks, and you see your friends and family start getting laid off, everyone will be too worried about being next and the last thing you will do is drop a major % of your savigs on a house that's going down in value.

That's how human nature is. That's why you couldn't give stocks or houses away in 2008-2010

If you KNOW you're in a position with a company that you won't get laid off, wouldn't it be smart to invest at a time when nobody else will/can?

If the economy tanks again, I know I'll be fine, and will gladly drop some change on a home. Not in the Bay Area of course, as it's stupid to, but elsewhere

[HappyinCali]

Originally Posted by Greg10556

If you KNOW you're in a position with a company that you won't get laid off, wouldn't it be smart to invest at a time when nobody else will/can?

If the economy tanks again, I know I'll be fine, and will gladly drop some change on a home. Not in the Bay Area of course, as it's stupid to, but elsewhere

2008-2010 says no. Of course, there are people who go against the trend and they profit significantly.

Most go with the trend and lose or stay put and are always waiting for the next correction.

Why is the Bay Area stupid? The BA is a real estate paradise. It has massive restrictions which significantly limit the number of new housing. In SF, there will literally NEVER be another single family home built. Condos - yes, but limited. SFR - no.

My parents own a house in a booming city in the south. In 15 years they have seen very little appreciation because every free inch around their once quiet area is now built with new subdivisions. Zoning laws are free for all. New supply is constanly coming online, so why buy a used house if you can buy new?

Now THAT's a terrible area to buy in.

[silverkris]

Originally Posted by HappyinCali

2008-2010 says no. Of course, there are people who go against the trend and they profit significantly.

Most go with the trend and lose or stay put and are always waiting for the next correction.

Why is the Bay Area stupid? The BA is a real estate paradise. It has massive restrictions which significantly limit the number of new housing. In SF, there will literally NEVER be another single family home built. Condos - yes, but limited. SFR - no.

My parents own a house in a booming city in the south. In 15 years they have seen very little appreciation because every free inch around their once quiet area is now built with new subdivisions. Zoning laws are free for all. New supply is constanly coming online, so why buy a used house if you can buy new?

Now THAT's a terrible area to buy in.

Exactly. in 2008-2010 - the very stable, well established neighborhoods in the Bay Area did not experience a significant dip in RE prices - they stayed pretty stable, and went up when conditions improved.

Limited supply will ensure that in the long term, the RE market in the SF Bay Area will continue to appreciate. Those who are hoping for a big crash are going to be disappointed.

[BurnInTheMil]

Originally Posted by HappyinCali

2008-2010 says no. Of course, there are people who go against the trend and they profit significantly.

Most go with the trend and lose or stay put and are always waiting for the next correction.

Why is the Bay Area stupid? The BA is a real estate paradise. It has massive restrictions which significantly limit the number of new housing. In SF, there will literally NEVER be another single family home built. Condos - yes, but limited. SFR - no.

My parents own a house in a booming city in the south. In 15 years they have seen very little appreciation because every free inch around their once quiet area is now built with new subdivisions. Zoning laws are free for all. New supply is constanly coming online, so why buy a used house if you can buy new?

Now THAT's a terrible area to buy in.

A lot of people, including myself would much rather make good $$ while in this area and "cash out" to buy elsewhere. Spending a million bucks on a single family home here, that elsewhere in some nice metro areas are $200K-$400K makes more sense to me.

Of course everyone is different, but that's my input/opinion.

[HappyinCali]

Originally Posted by Greg10556

A lot of people, including myself would much rather make good $$ while in this area and "cash out" to buy elsewhere. Spending a million bucks on a single family home here, that elsewhere in some nice metro areas are $200K-$400K makes more sense to me.

Of course everyone is different, but that's my input/opinion.

That's very fair. I do believe in the cash out philosophy, too and I have discussed it with my wife. We make very good money, but I wouldn't be comfortable retiring early in the Bay Area. If you are somehow in the ball park of retiring early in the Bay Area, you are able to retire extremely comfortably in 90% of the country and 95% of the world, so that decision makes a lot of sense.

[BurnInTheMil]

Originally Posted by HappyinCali

That's very fair. I do believe in the cash out philosophy, too and I have discussed it with my wife. We make very good money, but I wouldn't be comfortable retiring early in the Bay Area. If you are somehow in the ball park of retiring early in the Bay Area, you are able to retire extremely comfortably in 90% of the country and 95% of the world, so that decision makes a lot of sense.

Totally agree.

I'm only 25 so the "cash out" isn't exactly here yet. But my wife and I both make decent money as well, and will be moving next year with my company, as I have received a promotion. Luckily, my pay goes up a little more, and all the cities we can move to are cheaper COL. It's a win win

[evening sun]

15k on paper, is worth the paper it's written on.

[likealady]

Originally Posted by Greg10556

A lot of people, including myself would much rather make good $$ while in this area and "cash out" to buy elsewhere. Spending a million bucks on a single family home here, that elsewhere in some nice metro areas are $200K-$400K makes more sense to me.

Of course everyone is different, but that's my input/opinion.

I would rather make good money and buy real estate here and see significant return later on. If all goes well, it'll be a nice sum of money to stick into savings when we retire.