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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Wyätt Gwyön who wrote (69468)1/6/2007 2:27:16 AM
From: 8bitsRead Replies (1) of 306849
 
<<<<market in the Bay Area is fairly varied in terms of supply/demand dynamics -- 8bits

i have heard that kind of thing. but i think it will all go down horribly nonetheless. my understanding is Bay Area volumes are down 25-30% YoY, on very slight price increases. this is a classic precursor to a price drop.--Wyatt

Exurbia SF Bay Area is definitely falling (Tracy, Brentwood, etc) --8bits

it makes sense that the less desirable areas will fall first, just as they rose last. but they are just the canaries in the coal mine. the rest of the Bay Area, and California as a whole, will also be decimated (in the modern sense, not the Latin "one-tenth" sense).-- Wyatt>>>

As much as I would love to see real estate in the SF Bay Area fall to 1994-95 levels I don't see it happening too soon barring a really big event: Prop 13 gets rescinded (won't happen this decade..), interest rates go to double digits (The Chinese and Japanese seem to not want this but who knows..)

The San Francisco to San Jose corridor is adding very little new housing stock. Rents are rising (albeit in some areas from a rather low cap rate..) and job listings are definitely increasing. San Francisco went from a population of 776,733 in 2000 to an estimated 798,680 now. But only 1200 new condos and townhouses were built last year (and that was a pretty robust year....) (And as for Single family homes.. fewgettaboutit..) (Also note in 2000 there was huge pent up demand for housing in SF...) A fairly high percentage of the people I worked with tended to put down fairly large down payments. (20% to 50%) IE not as likely for people to walk. No doc, no down payment loans seemed much more common in exurbia and Sacramento. (If anyone has any figures on the percentage of sub prime no down payment loans by California counties I would love to now...)

Not saying we won't see a collapse in prices, but at this point for most areas (not all) of the SF to San Jose corridor I am only anticipating a drop (nominal) of around 1% to 3% a year. As for some areas of Oakland (aka lower crackland..) and San Leandro.. that's a different story. I basically had a 3x gain in 6 years. I don't believe that is sustainable.
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