Bay area housing crash?

Amazon / Eng
bayaround

Go to company page Amazon Eng

bayaround
May 12, 2020 14 Comments

I am not sure but basing this on a few important observations. Apparently, all major lenders have suspended non confirming and super confirming loans. There are atleast 3 loan officers who confirmed this news. Borrowing money for the kind of home prices in Bay area will be mostly impossible. This is leading to a slowdown on demand. Coupled with uncertainties, furloughs, and layoffs, the demand will be even lower. Companies are finding working remote is fine and infact more effective (Twitter announcement to let employees work remote forever) will further questions why not live better elsewhere than in expensive but low quality homes in Bay. Houses here are anyway overpriced, so this could be a correction. Thoughts?

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TOP 14 Comments
  • Google
    iamtherefo

    Go to company page Google

    iamtherefo
    Very likely. California is staying in lockdown at least until fall (well, LA announced today, but the rest will follow most likely). This will decimate the state economy. Even though FAANG might not be affected directly by the CA economy, the market is flooded with the engineers from other companies who were let go. This will impact salaries.
    May 12, 2020 2
    • Apple
      elon➡️tx

      Go to company page Apple

      elon➡️tx
      La is extending the lockdown because 50% of all Cali cases occur there. Doesn’t mean entire state should stay locked
      May 12, 2020
    • Google
      iamtherefo

      Go to company page Google

      iamtherefo
      Most populated areas likely would. And often most populated = most taxes, higher incomes. So locking up big cities is enough for the collapse, no one really care about Shasta county.
      May 12, 2020
  • A crash is unlikely, there are a fair number of people making cash offers.

    Refinancings are up. People are borrowing against one house to buy another.

    Let’s wait until we see a reduction in listing prices before claiming that houses are overpriced and headed for a crash.
    May 12, 2020 2
  • SAP
    gbbu68

    Go to company page SAP

    gbbu68
    Bofas asking for min 25% down. Wf and chase are asking for 12 months safety deposit....
    May 12, 2020 1
  • Cisco
    ojaytnn55

    Go to company page Cisco

    ojaytnn55
    You won’t find out about this on Blind
    May 12, 2020 0
  • Apple
    NIoR10

    Go to company page Apple

    NIoR10
    Keep in mind pricing in a market is comprised of both supply and demand. Demand is 100% without a question going down. There are less qualified buyers right now. The supply has not changed. Meaning more people aren’t forced to sell homes and in fact due to covid fewer people are moving to avoid the disease right now so they list their own homes less. So nothing is happening to pricing until supply changes as well I bet.
    May 12, 2020 1
    • Amazon / Eng
      bayaround

      Go to company page Amazon Eng

      bayaround
      OP
      Supply is definitely tight, but given wfh options, visa uncertainties, job losses, unaffordability due to reduced income, supply could go up. Supply also seems to be artificially tight due to covid lockdown and once things ease up, folks sitting on the sidelines will bring in houses for sale. We also don't see a lot of foreclosures due to government protection, but as covid lockdowns ease out, those will hit the market adding to supply.
      May 12, 2020