Topic: Bay Area Real Estate in Free Fall ?
Walking around my neighborhood (Mountain View) to get some exercise today, saw house a For Sale sign and flyers.
Printed on the flyers was a price of $560,000. This was crossed out with a blue pen, and $539,000
written in.
Looks like prices dropping quickly now - don't know how long this will last.
Almost no one is buying at this point.
I think many of the people selling now are not desparate for money, but do want to sell. They aren't out of money. Instead, it seems many had planned retire to the Sierras or Oregon or somewhere, and may already have bought their vacation / retirement house. Now, after a few really good years of stock options & bonuses, one or both of them get laid off or offered early retirement.
So why stick around and let the value of the house drop ?
I think we will see more of this, and prices continuing to drop.
People are still leaving the Bay Area, so I think prices keep dropping until at least December/January.
Another Bay Area note: Many people from Pacific Rim countries bought houses in the Bay Area as investments, and ways to get wealth into a secure place. Don't know if they are selling yet, but some of these place (which were usually rented ) had very good locations, etc. The investors 'overpaid' for prime property which could be sold easily and would tend to hold it's value - sort of like high quality collector coins.
One thing to keep in mind is that we may be in a deflationary environment for a number of years. This is likely to mean salary cuts, unpaid vacation, etc. Unless your income is recession and deflation proof, figure on meeting the payments with about a 10% salary cut.
Normally, the advice to buy as much house as you can afford is pretty good. I sometimes wish we had bought a little better house.
I don't think these are normal times.
Most of the time, I am very glad I did not max out on the house, so the mortgage payment doesn't kill me.
Enjoy looking around... |
