Housing Market- what’s going to happen
I don’t know much about understanding housing markets even though I do own a place in SF and looking to buy a slightly bigger place to start a family. I’ve been house hunting on and off for 3 years. In 2014 I almost bid on a place that was going for $1m. I decided not to and now the houses in that area are $1.2-$1.3. It keeps creeping up! The way Silicon Valley companies are growing and google building another office in San Jose and Facebook growing their presence in Sf and all this other stuff, are prices still going to go up? It’s insane, the new townhouses being built in Sunnyvale are starting at $1.3 for a TOWNHOUSE. So how does this work? With companies growing like crazy, will prices just keep going up? I can’t imagine these townhouses are eventually going to hit $1.5! Is that even possible? Or will there be a crash somehow? The housing crisis in 2008 was because of banks giving out loans easily but now that they are conservative and people are obviously somehow able to afford these prices, I don’t understand how the prices could drop. I’m afraid of buying now and the housing market crashes. Any idea? Sorry if this is a stupid question; I really want to understand.
If you're long-term minded, buying is the way to go.
If the pool of buyers is still there the prices won’t drop. Eventually I anticipate more expansion of tech outside of the valley. Housing costs drives wages higher for them.
There hasn't been a crash in the valley during your lifetime. Until transportation drastically changes (e.g. functioning hyperloop) it's hard to imagine supply ever catching up to demand.
I wouldn’t buy into this exuberance too much. I was house hunting during the last housing bubble in 2006. I just knew in my bones that prices were fucked up and something was wrong because even engineers like myself could barely afford it. Everyone said that it’s just supply and demand and the economy is growing so buy now or be prices out forever. I didn’t buy. It didn’t made sense. Every intuition I had told me this wasn’t right. It wasn’t until after the crash that the reasons for the crash because clear as day. Fast forward to today and I’ve already bought and sold a few homes. I have that same gut feeling again that this isn’t right. Granted the economic fundamentals are different this time. It’s not driven by fraud and subprime loans. It is supply and demand only and hiring is strong. However, this isn’t sustainable by any means. Just because people are putting real money down on homes doesn’t mean there isn’t a bubble. People were putting real money into the tulip trade as well. Didn’t prevent it from crashing. Prices will get to a certain point and buyers will say fuck it. It might stabilize and plateau rather than go down. But it can also go down as well. Lastly, most of our wealth for down payments comes from stock awards and investments from the stock market. When that crashes, so does our purchasing power. In sort. Yes. Prices will come down. I don’t know when, and timing the market is something we’re all horrible at. But this gut feeling that something is wrong with housing and changes will come are usually correct.
The recent hikes might also be due to the tax bill that will impact housing (buyers and sellers) negatively so people that have been wanting to sell are coming forward with their listing pretty aggressively. That's the case in palo alto atleast.
nobody can predict correctly, but it is highly unlikely for prices to drop at all, since all the companies in bay area are growing like crazy. Just buy whatever ur budget safely allows.
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