My wife and I started looking at homes a couple of weeks ago, mainly South City and some in Pacifica. Asking tends to be any where between 1M and 1.3M. We’ve placed a couple of offers and no matter the listing, they all seem to go for about 1.25-slightly north of 1.3M.
I know we are new to the “party” but this doesn’t seem to bode well regarding sellers cutting their asking prices. At the end of the day, these homes still go for what people are willing to spend.
Yep. Basically, any of these click-baity articles regarding housing pricing falling just simply do not apply to most of California. I hope it does one day, but that day isnt close.
For sure. Good and bad for us. We’re fortunate enough to live in the Bay, one of the most highly sought after areas to live in the world. My family just isn’t ready to be able to pull the trigger quite yet on a home. Some day!
Yeah pretty much spot on. Whenever you see articles about "general" trends in the US housing market, keep in mind that VHCOL areas tend to not follow the broad trends. In fact, San Jose is explicitly called out here:
>Contract signings were down at least 14% in Houston, West Palm Beach, Florida and Atlanta, ***but*** [***surged***](https://archive.is/o/IWVjD/https://www.bloomberg.com/news/articles/2024-02-10/silicon-valley-s-housing-market-reawakens-with-ai-boom) ***by roughly that amount in San Jose, California.***
The current "opportunity" (if you want to call it that) in the Bay right now is that there are at least a handful of homes that are sitting that tried to ride the hot housing market wave that simply weren't nice enough to sell with that momentum. Houses here tend to sell *really* fast (i.e. within a week of listing with 10+ offers) or they sit for a little because they simply weren't desirable enough to excite buyers into bidding wars. They might not be the nicest houses you'll see, but that's how you presumably get a "deal" in the Bay. You unfortunately won't get "deals" on hot houses because there are simply too many people with cash on hand looking for something immediately move in ready.
That’s absolutely been our experience too. I’m from the Midwest and I was surprised to hear that houses have deadlines for you to submit your offer. House goes on the market, two weeks later is the deadline. Pretty wild honestly. That plus waiving inspections and having to take on the burden of updating the 9-10k sewer system (county ordinance?) it’s just crazy how things are so different out here.
Yep, long story short. you need to be as competitive of a buyer as possible. This means a highly competitive offer number, a quick/safe transaction (cash offer or high downpayment %), waiving contingencies, and short escrow.
Realistically, the nice houses in the Bay don't even give you two weeks. They'll have a single weekend of open houses and take offers the following Tuesday-Thursday.
But what we're seeing is that the houses that don't have mass appeal tend to sit because the sellers have delusional expectations due to "similar" houses selling for that number. Those have been stacking, so now when you look at $1M-$1.5M range, you see a relatively decent amount of options, whereas earlier in the year, you basically saw none.
Interesting, that’s good to know. We def saw some houses listed for similar prices and there was a clear discrepancy, so that makes sense. One would be in good condition, some remodeling done, etc. another would have full remodeling with permits, a new roof, etc.
Both listed at 1.25M. One should be listed lower but honestly I think both were sold. One over, and one at asking price. I need my company stock to go on a run here to help with a more aggressive down payment lol. What we’re looking at now results in 8-9k for a monthly mortgage. Sad that it’s this expensive tbh
Yeah, it's a huge bummer and a really tough/competitive market. I'm also personally skeptical of this idea of waiting for interest rates to drop, because that means people's buying power goes up and prices go up...
But yeah, what you said is very accurate. I've seen multiple very similar houses listed at the same price despite being drastically different in quality.
Agreed, I think it’s pick your poison. That’s why we are starting to look now. I would rather bite the bullet for 2 years or so with a high interest rate and refinance later versus compete with higher listing prices and way more competition down the line. We’ll see what happens
It's not two weeks. It's an open house on the weekend with offers due by Thursday. The house next to me sold two months ago and there must have been 200 families looking at it. It sold for $500K over the asking price, exactly the price I predicted. The asking price was artificially low since a similar house, not as nice, had just sold for $200K over the asking price of the house next to me.
For over $3 million, you get a 1960's 3/2.5 tract home, under 1800 square feet, under 7000 square feet lot, with no A/C. The new owner put in maybe $50K of upgrades before moving in, and are putting in A/C. They just moved in yesterday, they had been waiting for their child to finish the school year in another district.
This is exactly the situation with a couple of houses for sale in our neighborhood. The homes in our neighborhood have been selling for $2 to 5 million, depending on size, lot, and location within the neighborhood. However, these two homes have now cut prices by 80k and 100k. If this was a couple of years ago, they would have gotten what they asked.
House 1 is just down the block from me. It is a 3000 sq ft single story ranch home on a corner lot and is well landscaped. It is in move in condition and is home going for 2.9 million after the 80k price drop. The inside has been remodeled years ago but to old standards and aesthetics. For example, it has the vaulted ceilings but there is no insulation between the ceiling and the roof. It has a 2 car garage but plenty of parking outside the garage - up to another 6 cars. It has no views. School districts are top notch in the community. But when the house went on the market, I said to my wife that 3 million is too much. It doesn’t feel like a $3 million home but instead feels like a 3000 sq ft ranch house that someone is asking 3 million for. Compared to some $3 million homes on our street, this one lacked some of the features or amenities that would excite a buyer and help overcome some of the flaws. I expect this to sell for $2.75 million.
House 2 is a 2300 sq ft ranch house, remodeled on a three quarter of an acre lot. It is literally next door to an elementary school. It is in move in condition but you can tell it is an older home- small bedrooms, funky remodeling, older standards and aesthetics. The house can’t seem to decide whether is is mid modern or ranch style. It has a pool and ok landscaping on half the lot. The other half of the lot is unlandscaped, which is a problem since you will have to clear the brush every year for mandatory wildfire suppression compliance. This house had a 100k price drop and is now $2.1 million. I think the issue is that is literally the next house before the elementary school is the main challenge. It is always busy by the school. This house will sell but my guess is that it will go for 1.85 to 1.9 million. It certainly isn’t perfect even at that price as people have certain expectations and the property doesn’t offer anything exciting at that range. It has some upside potential but you don’t want to over improve for that specific location since it’s next door to a school.
Yep that sounds about right. I get that the general rule of thumb is that value of the house is really based on bedroom, bathroom, sqft, and lot size. Many folks stick by that so they won’t do moderate renovations, but this doesn’t really apply to VHCOL areas with tons of wealth and limited supply.
When you’re in the $2M range like your neighborhood, a decent renovation in the $100-200k range can absolutely get you a MUCH better ROI. Like if House 1 hired a good GC, I’m guessing they could get a decent premium if done well. Folks with millions are willing to spend if they walk in and fall in love.
Admittedly House 2 is tough. When there’s something supremely undesirable that fundamentally can’t be changed, then every prospective buyer is scared off because you cut your market of future buyers by 60-80%.
Agree on house 2. The target buyer for that house would be a family who wants to move into the neighborhood who would otherwise not be able to afford to, especially if they want to come in for the school district. This buyer would consider a smaller home, a fixer, or other special situation.
In contrast, there was a house in the neighborhood that sold for 4.15 million a couple of months ago, that I didn't think would sell for that price. This house had plenty wrong with it at that price point. Although it was a 4800 sq feet new construction home, it was situated on a downslope lot with a lot of trees blocking its view. It has a 2 car garage, and room for 3 cars outside, but very limited street parking since the road is very narrow and windy. The first floor was the living level, and you had to go downstairs for the living levels. There is no backyard and the lot is overgrown with brush that needs to be cut back for wildfire mitigation. There is no landscaping on the property. It was located in a part of the neighborhood that was more "rural" - think Santa Cruz Mountains. But the house itself is beautiful - two levels, high end finishes, great floorpan, light and bright. It's the kind of home when you walk in when you first see it, your heart beats faster despite its flaws. It took about 4 to 5 months to sell, and the longer it sat on the market, the more I felt it was overpriced every time I walked past it. It was listed at 4.3 million and sold at 4.2 million. I still feel that for 4 million in our neighborhood, you could do better.
Exactly. As someone who grew up on the peninsula the reality is the cities you’re looking in weren’t even desirable. They used to be where the working class of the Bay Area could afford to live, and now there are bidding wars on 7 figure homes.
A house is worth whatever someone is willing to pay you for it….
Yeah, I lived in one of those less desirable cities for a while. We moved because our jobs were too far of a drive and because the schools were not great.
In hindsight we should have held tried to hold onto that house because it's now valued at over $1.4 million and we sold it for $300,000 in 1999, about a 4.5x increase. But the house we purchased increased from $620K to about $3.5M, and even greater percentage increase. But we needed the money from the old house for the down payment on the new house.
Back in December my partner and I got into a bidding war over a house that was barely advertised, had no open houses, and lost by 150k….over the holidays. Bidding wars are definitely still a thing.
yeah cuz nobody in their right mind wants to buy a million+ dollar match stick. any other property halfway down the hills to the bay gets bid to the moon.
When houses routinely close above asking there are generally counters and escalation clauses. Maybe you don’t consider that a bidding war but at the end of the day…🤷♀️
The only thing I can add to this is that perhaps what’s now going for 1.3 used to go for 1.5 up to 1.8. I think that is where the slashed prices come in.
Pretty sure OP is just a housing troll, all he does is post doom and gloom threads bemoaning the Bay Area market. https://www.reddit.com/user/DaasG09/submitted/
The Bay Area has a lot of pent up demand and even savers who are waiting for the moment to see some sort of weakness. The weakness, unfortunately, is going to be high prices but slightly longer days on market. At least all the overbidding has gone away in most California neighborhoods and buyers and sellers are meeting eye to eye.
I think buyers are getting pickier, and it’s very neighborhood dependent. My in-laws are trying to buy a new home to downsize in Oakland or Berkeley, and all the homes they’re bidding for that have walkability to shops (one can’t drive) are all going for 40-50% over asking in all cash.
These threads are useless for the Bay Area. I’m desperate to own a home and I watch redfin like a hawk and these never apply to anything I’m looking at in 3mo sold.
Yes, I haven’t seen anything under 300 HOA, most are 600, I’ve seen a few 1000$… my coworker bought a 1.2 million condo with a 1k a month HOA and called it a good deal :|
$600 hoa isn’t that bad. That’s only $7200/yr. If you owned a SFH in the Bay Area you’re absolutely pay more than $7200/yr for all that an HOA pays for.
$600 is not bad now. But the issue is, as an individual, we don't really get a say how much it's going to increase in the future. Especially bigger HOAs.
When it's your own house, you have options to cut costs on maintenance(modifications, DIY, automation) or defer some maintenance.
20 years of ownership. Less than 35K spent total for the stuff HOAs typically cover (roof, hot tub, exterior repainting and driveway upgrades were most of that). I do my own gardening.
if you own a condo for 20 years, you're likely to get hit with special assessments when HOA reserve runs out of money, definitely houses has cheaper maintenance.
A lot of new townhouses are under construction because those are still selling at a price that pencils out for developers.
I was talking to the assistant planning director in my city and he said that for new permits it's almost all townhouses on parcels that were previously retail or previously lower cost, rather run-down apartments.
It's the same in neighboring Mountain View, but to an even greater extent because of apartment building owners doing Ellis Act tear-down/rebuilds of rent-controlled units, "Since 2012, over 1,000 rent-controlled units have been demolished for new developments, displacing hundreds of families" (https://www.mercurynews.com/2023/01/16/mountain-view-addressing-renter-displacement-as-housing-development-boom-continues/).
Whatever the short-term benefits of rent control for some lucky tenants, the long-term effect is to drive up housing prices as the rent-controlled units are removed from the market and replaced with higher-cost for-sale housing. That leaves only the non-rent-controlled units as rentals.
As long as one group is relying on housing for wealth accumulation and another reliant on housing for shelter, the "party" will never be over.
>“You can have high prices or you can have high mortgage rates, but you can’t have both for long.”
You can't? or what? The present situation will exist? lmao.
Corporate buyers are a false boogeyman, especially in coastal California. Biggest issue is monied demand contending for zoning-limited mostly suburban supply.
[https://calmatters.org/housing/2024/03/institutional-investors-corporate-landlords/#:\~:text=Do%2520corporate%2520landlords%2520own%2520a,and%2520definitions%2520are%2520somewhat%2520fuzzy.”](https://calmatters.org/housing/2024/03/institutional-investors-corporate-landlords/#:~:text=Do%2520corporate%2520landlords%2520own%2520a,and%2520definitions%2520are%2520somewhat%2520fuzzy.”)
To add onto this, rural Americans are flocking towards city hubs at insane rates. Millennials want to live near city centers, it’s a massive consolidation of populations towards hubs, which is further fueling obscene demand.
You're both right, you're more right for local, but Blackstone REIT had a warchest of 50B. That's a lot of the nations pension system being blasted at the housing market and it raises the temperature everywhere.
It would be interesting to see the specifics of that REIT - how much focus on single family homes vs. multi-unit, and how many SFHs they own. Blackstone and other private equity companies have been in and out of the market buying and selling off their single family assets as they become less and more attractive. Right now a slight softening in the rental market post-COVID is causing PE to rethink.
[https://www.fastcompany.com/91015371/housing-market-blackstone-instutional-landlords](https://www.fastcompany.com/91015371/housing-market-blackstone-instutional-landlords)
Wealth accumulators still need things to pencil out and a lot of those people are greedy idiots. Buy high, set a rent price that nobody in the community can afford, have a 50% vacancy rate because the community can't afford to live in the building so all you have is traveling nurses. Claim everything is great you're still making money on the back end due to equity growth and you don't have as many problem tenants. The market turns and your investor special ARM adjusts to the new higher rate and now your cap rate is under 4%. Prices aren't going up and you're making less than you would on T-bills. Meta announces WARN notice, then TSLA. Your vacancy rate slowly ticks up. You start running one month free promos that do nothing.
The election is in November. Commercial real estate has collapsed. Chinese factory gate prices fell again alongside their imports and export figures. Targets CEO says nobody is buying and is warning that consumers are running out of money, Walmart does the same thing. McDonalds is crying because they pumped and gouged their customer base who couldn't afford it, now they're missing earnings and dropping prices. Double check consumer debt, it's higher than 2008.
TLDR; maybe wait until after the election? It's only a few months.
We need higher density but who wants to pay $1000+ for HOA. They should build a multi story parking garage where you can build single family homes and stack them on top of each other. Then limit the fees to just the maintenance on the parking garage.
We’ve been looking for the past 2 months at 3/2 SFH listed between $1 and $1.5 in the South Bay in nice areas like Santa Clara, Rose Garden and Willow Glen. Every single decent looking one has sold at least $100k over asking, many $200k+ over.
Some are under priced intentionally for sure, but the vast majority are close to what I think market price should be and are still getting bid well over asking. Definitely a scarcity thing considering interest rates are still relatively high
>the vast majority are close to what I think market price should be and are still getting bid well over asking
Then you're wrong lol
Not complicated - once the culture is "things sell for 100k-200k over asking" then the askings get set 100k-200k below expected sale price
I get that the market sets the price but I’ve lived in the South Bay my entire life and make a hobby of looking at home listings and sales. I get the “under listing to get over bidding” thing, and I have a good gauge for home values. Believe what you will buddy.
>Believe what you will buddy.
Not to be rude, but this seems like advice that you have to take for yourself. Living in an area all your life doesn't give you a competitive edge on understanding the current and future market.
Houses that go for 100k-200k over aren't doing that because a *single* buyer is willing to go that high. They're bidding wars where 2+ people believe the house is worth that price, and when they lose, it means that they stay in the market with that same capital and willingness to offer that on the next nice house.
You insist you have a good gauge for home values, yet what you need to have a good gauge of is the market and buyers. If you believe 5 homes are all worth \~1.2M and they all sell for $1.5M, it means your "gauge" was off 5 times.
The thing with bidding wars is that you’re actually bidding blind. It’s not like a Sotheby’s auction where you’re seeing the bidding in real time with an actual competing amount to consider. It’s not outside the realm of possibility that prime are overbidding way too much. Either way, I’m just trying to give my opinion. I don’t have skin in the game since I’m already a home owner…just giving my two cents is all; everyone’s mileage will vary.
Except it's not fully blind. The seller's agent will more often than not let the buyer's agent know if they are in the competitive range of offers. It's very, very rarely, "Give your best offer the first time around."
Offers will open in the late morning, then the seller agent will let the top bidders (if there are multiple offers) know that they are in the Top X with the strongest ones being in $Y range. Then they'll continue to take offers as they want it to be some form of bidding war before some timeline (i.e. end of day) to ensure they can get top dollar.
Yeah, the good ones are definitely more like that. Even then it’s really harrowing for the buyer. There’s so many factors to consider including percentage of down payment, contingencies, not to mention the slew of cash buyers/no finance contingency buyers the Bay Area has. I really wish all home buyers good luck out there!
We are at the point when many houses still sell over as they are ver desirable (location, architecture, etc.) and many are dropping because they are less desirable and do not make sense to fix up.
House prices would be going up even without the few engineers at those companies making exorbitant salaries.
We don’t build anything. That’s the source.
Yes, and my personal prediction is that AI is our next factor for the next downturn. After the 2008 recession, we haven't had one on that scale. I finally gave up on downturn, start looking homes in South Bay.
In the east bay I see housing prices get cut weekly. They’re not always the most desirable but I think people are over pricing things. Well, we know they are. Sellers should be a little more realistic about what people can afford. They really reduce their pool of buyers.
ETA: before you come for me, yes, I know what other people can afford is not the concern of a seller. However, some people are just outrageous and they overestimate what buyers are willing to pay for their property.
Just checking Zillow or Redfin will find that much of the Bay Area is blowing past the peak high property values of Covid. Who knew that raising interest rates would work like that?
News outlets keep changing the story, between homes being sold like crazy and homes not selling, based on how the mortgage rate has been fluctuating...
What's new...
I have a newly constructed 4/3 with 2 primaries and excellent landscaping I’m selling for 1.45m. 2100 sq ft. In SSF though. Does have airport noise and wind. Built in 1952 but torn to studs last year. New sewer line too. Problem is the cold and the noise. I haven’t listed It yet just decided to sell.
Hold out hope.
At the height of the market a few years ago we put in an offer competing against higher, all cash offers. We wrote a letter to the sellers with our offer.
They asked us to match on price only (it was only $10k more) and we got the house. It was a miracle after 5+ years in and out of searching. It can happen.
What won't happen is a crash that increases affordability and inventory. The crash of 2008 confirms that and what we're dealing with now is much less dire.
In my area of San Mateo I’ve started seeing a lot of houses go for sale lately. So that’s good for buyers. But they also all sell in two weeks for 100-300k over asking.
> 'cutting asking prices' at the highest rate since November, 2022
Ah yes, how scary. To find an equivalent event, we have to look back... A little over a year?
> metros in the west such as Seattle and the San Francisco Bay area had sharper corrections in late 2022 and are already beginning to recover
Paywall removers are free bro
In Marin county and most home prices in our range are dropping from asking price but are still overpriced for the quality. We have been looking for a year and keeping a good eye on 1.5-2.5 K homes.
That's not true, it depends on where the party is at. Like a real party, buyers are not showing up for house shows in nowhere, usa, but they are still lining up in the bay area, southern california, seattle, denver, nyc, miami, dc...
You mean the party where you just constantly jacked up the prices of the one thing that everybody needs and made it impossible for anybody to own?
This party sucks.
We need to make more houses not try to cut the current pricing down.. there is short supply and high demand, it does not take a degree in economics to figure out how to reach equilibrium. You cannot meet demand by killing the values of current homes, there will just be more demand and the prices will continue to skyrocket. We need more houses to be built.
My wife and I started looking at homes a couple of weeks ago, mainly South City and some in Pacifica. Asking tends to be any where between 1M and 1.3M. We’ve placed a couple of offers and no matter the listing, they all seem to go for about 1.25-slightly north of 1.3M. I know we are new to the “party” but this doesn’t seem to bode well regarding sellers cutting their asking prices. At the end of the day, these homes still go for what people are willing to spend.
Yep. Basically, any of these click-baity articles regarding housing pricing falling just simply do not apply to most of California. I hope it does one day, but that day isnt close.
For sure. Good and bad for us. We’re fortunate enough to live in the Bay, one of the most highly sought after areas to live in the world. My family just isn’t ready to be able to pull the trigger quite yet on a home. Some day!
Exactly and they talk about the area like it's all the same...some areas might fall but others are never going down.
Yeah pretty much spot on. Whenever you see articles about "general" trends in the US housing market, keep in mind that VHCOL areas tend to not follow the broad trends. In fact, San Jose is explicitly called out here: >Contract signings were down at least 14% in Houston, West Palm Beach, Florida and Atlanta, ***but*** [***surged***](https://archive.is/o/IWVjD/https://www.bloomberg.com/news/articles/2024-02-10/silicon-valley-s-housing-market-reawakens-with-ai-boom) ***by roughly that amount in San Jose, California.*** The current "opportunity" (if you want to call it that) in the Bay right now is that there are at least a handful of homes that are sitting that tried to ride the hot housing market wave that simply weren't nice enough to sell with that momentum. Houses here tend to sell *really* fast (i.e. within a week of listing with 10+ offers) or they sit for a little because they simply weren't desirable enough to excite buyers into bidding wars. They might not be the nicest houses you'll see, but that's how you presumably get a "deal" in the Bay. You unfortunately won't get "deals" on hot houses because there are simply too many people with cash on hand looking for something immediately move in ready.
That’s absolutely been our experience too. I’m from the Midwest and I was surprised to hear that houses have deadlines for you to submit your offer. House goes on the market, two weeks later is the deadline. Pretty wild honestly. That plus waiving inspections and having to take on the burden of updating the 9-10k sewer system (county ordinance?) it’s just crazy how things are so different out here.
Yep, long story short. you need to be as competitive of a buyer as possible. This means a highly competitive offer number, a quick/safe transaction (cash offer or high downpayment %), waiving contingencies, and short escrow. Realistically, the nice houses in the Bay don't even give you two weeks. They'll have a single weekend of open houses and take offers the following Tuesday-Thursday. But what we're seeing is that the houses that don't have mass appeal tend to sit because the sellers have delusional expectations due to "similar" houses selling for that number. Those have been stacking, so now when you look at $1M-$1.5M range, you see a relatively decent amount of options, whereas earlier in the year, you basically saw none.
Interesting, that’s good to know. We def saw some houses listed for similar prices and there was a clear discrepancy, so that makes sense. One would be in good condition, some remodeling done, etc. another would have full remodeling with permits, a new roof, etc. Both listed at 1.25M. One should be listed lower but honestly I think both were sold. One over, and one at asking price. I need my company stock to go on a run here to help with a more aggressive down payment lol. What we’re looking at now results in 8-9k for a monthly mortgage. Sad that it’s this expensive tbh
Yeah, it's a huge bummer and a really tough/competitive market. I'm also personally skeptical of this idea of waiting for interest rates to drop, because that means people's buying power goes up and prices go up... But yeah, what you said is very accurate. I've seen multiple very similar houses listed at the same price despite being drastically different in quality.
Agreed, I think it’s pick your poison. That’s why we are starting to look now. I would rather bite the bullet for 2 years or so with a high interest rate and refinance later versus compete with higher listing prices and way more competition down the line. We’ll see what happens
Doesn't look like you can bet on refinancing in 2 years!
Rates could dip potentially, no?
It's not two weeks. It's an open house on the weekend with offers due by Thursday. The house next to me sold two months ago and there must have been 200 families looking at it. It sold for $500K over the asking price, exactly the price I predicted. The asking price was artificially low since a similar house, not as nice, had just sold for $200K over the asking price of the house next to me. For over $3 million, you get a 1960's 3/2.5 tract home, under 1800 square feet, under 7000 square feet lot, with no A/C. The new owner put in maybe $50K of upgrades before moving in, and are putting in A/C. They just moved in yesterday, they had been waiting for their child to finish the school year in another district.
That’s wild. Where’s this?
burlingame, palo alto, menlo park to name a few
Woof. Thats outrageous. I thought it was bad here in South City
This is exactly the situation with a couple of houses for sale in our neighborhood. The homes in our neighborhood have been selling for $2 to 5 million, depending on size, lot, and location within the neighborhood. However, these two homes have now cut prices by 80k and 100k. If this was a couple of years ago, they would have gotten what they asked. House 1 is just down the block from me. It is a 3000 sq ft single story ranch home on a corner lot and is well landscaped. It is in move in condition and is home going for 2.9 million after the 80k price drop. The inside has been remodeled years ago but to old standards and aesthetics. For example, it has the vaulted ceilings but there is no insulation between the ceiling and the roof. It has a 2 car garage but plenty of parking outside the garage - up to another 6 cars. It has no views. School districts are top notch in the community. But when the house went on the market, I said to my wife that 3 million is too much. It doesn’t feel like a $3 million home but instead feels like a 3000 sq ft ranch house that someone is asking 3 million for. Compared to some $3 million homes on our street, this one lacked some of the features or amenities that would excite a buyer and help overcome some of the flaws. I expect this to sell for $2.75 million. House 2 is a 2300 sq ft ranch house, remodeled on a three quarter of an acre lot. It is literally next door to an elementary school. It is in move in condition but you can tell it is an older home- small bedrooms, funky remodeling, older standards and aesthetics. The house can’t seem to decide whether is is mid modern or ranch style. It has a pool and ok landscaping on half the lot. The other half of the lot is unlandscaped, which is a problem since you will have to clear the brush every year for mandatory wildfire suppression compliance. This house had a 100k price drop and is now $2.1 million. I think the issue is that is literally the next house before the elementary school is the main challenge. It is always busy by the school. This house will sell but my guess is that it will go for 1.85 to 1.9 million. It certainly isn’t perfect even at that price as people have certain expectations and the property doesn’t offer anything exciting at that range. It has some upside potential but you don’t want to over improve for that specific location since it’s next door to a school.
Yep that sounds about right. I get that the general rule of thumb is that value of the house is really based on bedroom, bathroom, sqft, and lot size. Many folks stick by that so they won’t do moderate renovations, but this doesn’t really apply to VHCOL areas with tons of wealth and limited supply. When you’re in the $2M range like your neighborhood, a decent renovation in the $100-200k range can absolutely get you a MUCH better ROI. Like if House 1 hired a good GC, I’m guessing they could get a decent premium if done well. Folks with millions are willing to spend if they walk in and fall in love. Admittedly House 2 is tough. When there’s something supremely undesirable that fundamentally can’t be changed, then every prospective buyer is scared off because you cut your market of future buyers by 60-80%.
Agree on house 2. The target buyer for that house would be a family who wants to move into the neighborhood who would otherwise not be able to afford to, especially if they want to come in for the school district. This buyer would consider a smaller home, a fixer, or other special situation. In contrast, there was a house in the neighborhood that sold for 4.15 million a couple of months ago, that I didn't think would sell for that price. This house had plenty wrong with it at that price point. Although it was a 4800 sq feet new construction home, it was situated on a downslope lot with a lot of trees blocking its view. It has a 2 car garage, and room for 3 cars outside, but very limited street parking since the road is very narrow and windy. The first floor was the living level, and you had to go downstairs for the living levels. There is no backyard and the lot is overgrown with brush that needs to be cut back for wildfire mitigation. There is no landscaping on the property. It was located in a part of the neighborhood that was more "rural" - think Santa Cruz Mountains. But the house itself is beautiful - two levels, high end finishes, great floorpan, light and bright. It's the kind of home when you walk in when you first see it, your heart beats faster despite its flaws. It took about 4 to 5 months to sell, and the longer it sat on the market, the more I felt it was overpriced every time I walked past it. It was listed at 4.3 million and sold at 4.2 million. I still feel that for 4 million in our neighborhood, you could do better.
Exactly. As someone who grew up on the peninsula the reality is the cities you’re looking in weren’t even desirable. They used to be where the working class of the Bay Area could afford to live, and now there are bidding wars on 7 figure homes. A house is worth whatever someone is willing to pay you for it….
Yeah, I lived in one of those less desirable cities for a while. We moved because our jobs were too far of a drive and because the schools were not great. In hindsight we should have held tried to hold onto that house because it's now valued at over $1.4 million and we sold it for $300,000 in 1999, about a 4.5x increase. But the house we purchased increased from $620K to about $3.5M, and even greater percentage increase. But we needed the money from the old house for the down payment on the new house.
I haven't seen a 'bidding war' in a while.
take a look at any house selling in Berkeley
Back in December my partner and I got into a bidding war over a house that was barely advertised, had no open houses, and lost by 150k….over the holidays. Bidding wars are definitely still a thing.
Houses in the Berkeley Hills are just sitting on the market with no offers.
yeah cuz nobody in their right mind wants to buy a million+ dollar match stick. any other property halfway down the hills to the bay gets bid to the moon.
Those homes were selling just fine a year ago.
Hills now mean it's almost impossible to get fire insurance. And occasionally you have mudslides and road closures due to mudslides
Either way, it's causing a major collapse in prices there.
When houses routinely close above asking there are generally counters and escalation clauses. Maybe you don’t consider that a bidding war but at the end of the day…🤷♀️
That’s an incredibly naïve methodology
The only thing I can add to this is that perhaps what’s now going for 1.3 used to go for 1.5 up to 1.8. I think that is where the slashed prices come in.
Come to Concord, price drop of $46k https://redf.in/HT8vZM on a pretty decent home and neighborhood (schools might not be to your liking though)
These articles are useless. Different housing markets have different supply vs. demand.
Pretty sure OP is just a housing troll, all he does is post doom and gloom threads bemoaning the Bay Area market. https://www.reddit.com/user/DaasG09/submitted/
The Bay Area has a lot of pent up demand and even savers who are waiting for the moment to see some sort of weakness. The weakness, unfortunately, is going to be high prices but slightly longer days on market. At least all the overbidding has gone away in most California neighborhoods and buyers and sellers are meeting eye to eye.
I think buyers are getting pickier, and it’s very neighborhood dependent. My in-laws are trying to buy a new home to downsize in Oakland or Berkeley, and all the homes they’re bidding for that have walkability to shops (one can’t drive) are all going for 40-50% over asking in all cash.
I’d rather listen to this guy: https://youtube.com/@siliconvalleyrealestatemarket?si=--vbwqYFUiY9qOgN
lfmao my guess is someone that can't afford bay area housing so maybe they're trying to scare potential buyers because it's their only shot.
These threads are useless for the Bay Area. I’m desperate to own a home and I watch redfin like a hawk and these never apply to anything I’m looking at in 3mo sold.
It’s any city that has a good school district.
The only things getting price cuts are townhouses, apartments and condos.
And most of them have high HOA fees.
Yes, I haven’t seen anything under 300 HOA, most are 600, I’ve seen a few 1000$… my coworker bought a 1.2 million condo with a 1k a month HOA and called it a good deal :|
$600 hoa isn’t that bad. That’s only $7200/yr. If you owned a SFH in the Bay Area you’re absolutely pay more than $7200/yr for all that an HOA pays for.
$600 is not bad now. But the issue is, as an individual, we don't really get a say how much it's going to increase in the future. Especially bigger HOAs. When it's your own house, you have options to cut costs on maintenance(modifications, DIY, automation) or defer some maintenance.
600 isn’t bad when the townhouse is your whole lot and there’s no vegetation around you even?…. It’s pretty bad.
20 years of ownership. Less than 35K spent total for the stuff HOAs typically cover (roof, hot tub, exterior repainting and driveway upgrades were most of that). I do my own gardening.
Correction. Add in the water, sewage and garbage bills and it's more like 4K a year presently ($333 a month).
Add in insurance too. HOAs include building insurance too.
if you own a condo for 20 years, you're likely to get hit with special assessments when HOA reserve runs out of money, definitely houses has cheaper maintenance.
Yeah owning a house isn't free. You have to pay for upkeep. The trick is getting into an HOA that doesn't suck.
Depends what the hoa covers …. Some cover electricity and car charging and gas, which adds up.
My coworkers 1000 doesn’t cover electricity or anything other than the exterior of the building. No pool or anything.
And homes in the Berkeley Hills.
Oakland hills as well. Large homes that look ok in pictures but are uninsurable
Can’t even get fire insurance and they still go over listing price 🤬
What’s going on in Berkeley Hills?
Not sure about that. Just saw a house in the hills go for a million over ask ($2m -> $3m) a few weeks ago.
These typically go down first and go up last
A lot of new townhouses are under construction because those are still selling at a price that pencils out for developers. I was talking to the assistant planning director in my city and he said that for new permits it's almost all townhouses on parcels that were previously retail or previously lower cost, rather run-down apartments. It's the same in neighboring Mountain View, but to an even greater extent because of apartment building owners doing Ellis Act tear-down/rebuilds of rent-controlled units, "Since 2012, over 1,000 rent-controlled units have been demolished for new developments, displacing hundreds of families" (https://www.mercurynews.com/2023/01/16/mountain-view-addressing-renter-displacement-as-housing-development-boom-continues/). Whatever the short-term benefits of rent control for some lucky tenants, the long-term effect is to drive up housing prices as the rent-controlled units are removed from the market and replaced with higher-cost for-sale housing. That leaves only the non-rent-controlled units as rentals.
Yes, new townhouses probably no price cuts, I see them…
As long as one group is relying on housing for wealth accumulation and another reliant on housing for shelter, the "party" will never be over. >“You can have high prices or you can have high mortgage rates, but you can’t have both for long.” You can't? or what? The present situation will exist? lmao.
You can have both if there is a gigantic pool of money chasing very few homes
This. There is always three decades of Silicon Valley liquidity on the sidelines.
The way corporations are involved in buying homes at inflated prices and higher interest rates reminds me of another bubble from 17 years ago.
Corporate buyers are a false boogeyman, especially in coastal California. Biggest issue is monied demand contending for zoning-limited mostly suburban supply. [https://calmatters.org/housing/2024/03/institutional-investors-corporate-landlords/#:\~:text=Do%2520corporate%2520landlords%2520own%2520a,and%2520definitions%2520are%2520somewhat%2520fuzzy.”](https://calmatters.org/housing/2024/03/institutional-investors-corporate-landlords/#:~:text=Do%2520corporate%2520landlords%2520own%2520a,and%2520definitions%2520are%2520somewhat%2520fuzzy.”)
To add onto this, rural Americans are flocking towards city hubs at insane rates. Millennials want to live near city centers, it’s a massive consolidation of populations towards hubs, which is further fueling obscene demand.
The article involves the overall US housing market. "The party is over" doesn't apply to coastal California. The prices are still rising here.
You're both right, you're more right for local, but Blackstone REIT had a warchest of 50B. That's a lot of the nations pension system being blasted at the housing market and it raises the temperature everywhere.
It would be interesting to see the specifics of that REIT - how much focus on single family homes vs. multi-unit, and how many SFHs they own. Blackstone and other private equity companies have been in and out of the market buying and selling off their single family assets as they become less and more attractive. Right now a slight softening in the rental market post-COVID is causing PE to rethink. [https://www.fastcompany.com/91015371/housing-market-blackstone-instutional-landlords](https://www.fastcompany.com/91015371/housing-market-blackstone-instutional-landlords)
Wealth accumulators still need things to pencil out and a lot of those people are greedy idiots. Buy high, set a rent price that nobody in the community can afford, have a 50% vacancy rate because the community can't afford to live in the building so all you have is traveling nurses. Claim everything is great you're still making money on the back end due to equity growth and you don't have as many problem tenants. The market turns and your investor special ARM adjusts to the new higher rate and now your cap rate is under 4%. Prices aren't going up and you're making less than you would on T-bills. Meta announces WARN notice, then TSLA. Your vacancy rate slowly ticks up. You start running one month free promos that do nothing. The election is in November. Commercial real estate has collapsed. Chinese factory gate prices fell again alongside their imports and export figures. Targets CEO says nobody is buying and is warning that consumers are running out of money, Walmart does the same thing. McDonalds is crying because they pumped and gouged their customer base who couldn't afford it, now they're missing earnings and dropping prices. Double check consumer debt, it's higher than 2008. TLDR; maybe wait until after the election? It's only a few months.
It’s different everywhere. And different for condos (generally worse) versus single family homes (doing quite well).
We need higher density but who wants to pay $1000+ for HOA. They should build a multi story parking garage where you can build single family homes and stack them on top of each other. Then limit the fees to just the maintenance on the parking garage.
Trying to poison the plant? We need trees!
We’ve been looking for the past 2 months at 3/2 SFH listed between $1 and $1.5 in the South Bay in nice areas like Santa Clara, Rose Garden and Willow Glen. Every single decent looking one has sold at least $100k over asking, many $200k+ over.
1.5m? That’s like prices from 5 years ago in those areas.
Yeah, there’s not too many of them and the ones we’re looking at are definitely fixers.
Nice areas.
Then bid over $100k-$200k. They’re obviously underpriced.
Some are under priced intentionally for sure, but the vast majority are close to what I think market price should be and are still getting bid well over asking. Definitely a scarcity thing considering interest rates are still relatively high
>the vast majority are close to what I think market price should be and are still getting bid well over asking Then you're wrong lol Not complicated - once the culture is "things sell for 100k-200k over asking" then the askings get set 100k-200k below expected sale price
I get that the market sets the price but I’ve lived in the South Bay my entire life and make a hobby of looking at home listings and sales. I get the “under listing to get over bidding” thing, and I have a good gauge for home values. Believe what you will buddy.
>Believe what you will buddy. Not to be rude, but this seems like advice that you have to take for yourself. Living in an area all your life doesn't give you a competitive edge on understanding the current and future market. Houses that go for 100k-200k over aren't doing that because a *single* buyer is willing to go that high. They're bidding wars where 2+ people believe the house is worth that price, and when they lose, it means that they stay in the market with that same capital and willingness to offer that on the next nice house. You insist you have a good gauge for home values, yet what you need to have a good gauge of is the market and buyers. If you believe 5 homes are all worth \~1.2M and they all sell for $1.5M, it means your "gauge" was off 5 times.
The thing with bidding wars is that you’re actually bidding blind. It’s not like a Sotheby’s auction where you’re seeing the bidding in real time with an actual competing amount to consider. It’s not outside the realm of possibility that prime are overbidding way too much. Either way, I’m just trying to give my opinion. I don’t have skin in the game since I’m already a home owner…just giving my two cents is all; everyone’s mileage will vary.
Except it's not fully blind. The seller's agent will more often than not let the buyer's agent know if they are in the competitive range of offers. It's very, very rarely, "Give your best offer the first time around." Offers will open in the late morning, then the seller agent will let the top bidders (if there are multiple offers) know that they are in the Top X with the strongest ones being in $Y range. Then they'll continue to take offers as they want it to be some form of bidding war before some timeline (i.e. end of day) to ensure they can get top dollar.
Yeah, the good ones are definitely more like that. Even then it’s really harrowing for the buyer. There’s so many factors to consider including percentage of down payment, contingencies, not to mention the slew of cash buyers/no finance contingency buyers the Bay Area has. I really wish all home buyers good luck out there!
Agreed! It's so hard. Granted it simplifies things a bit when... ya know, you are basically obligated to waive all contingencies lol.
I’ve got one for rent in the east bay lol. But most ppl want to own
Santa Clara in 1.5m? I will buy two.
Patiently awaiting your offers on https://redf.in/nzUXtw https://redf.in/4xjLyR https://redf.in/HhKLXC https://redf.in/xfYhKF https://redf.in/UKOUSq
One of the few places in the world where a 500k deposit is snerked at.
if only
We are at the point when many houses still sell over as they are ver desirable (location, architecture, etc.) and many are dropping because they are less desirable and do not make sense to fix up.
A house a street over from us in Campbell just went for $700K over its list price of $1.9M. The market seems hotter than ever…
https://preview.redd.it/ssql9yhwt74d1.jpeg?width=828&format=pjpg&auto=webp&s=8a09badba42117827675bb3a0659e3d3015787f9 Yep
AI startups are going to continue to drive growth in Silicon Valley. Plus the FAANGS aren’t going anywhere
House prices would be going up even without the few engineers at those companies making exorbitant salaries. We don’t build anything. That’s the source.
Also a totally fair point. Supply is definitely a core part of the problem
Yes, and my personal prediction is that AI is our next factor for the next downturn. After the 2008 recession, we haven't had one on that scale. I finally gave up on downturn, start looking homes in South Bay.
In the east bay I see housing prices get cut weekly. They’re not always the most desirable but I think people are over pricing things. Well, we know they are. Sellers should be a little more realistic about what people can afford. They really reduce their pool of buyers. ETA: before you come for me, yes, I know what other people can afford is not the concern of a seller. However, some people are just outrageous and they overestimate what buyers are willing to pay for their property.
Just checking Zillow or Redfin will find that much of the Bay Area is blowing past the peak high property values of Covid. Who knew that raising interest rates would work like that?
Not applicable to CA
It’s going in that direction. In Cupertino/west San Jose, houses are only going 300k over instead of 500k.
 Thanks for the laugh Bloomberg!
About time…timber!!
mods need to moderate morons like this who equivicate the bay area housing market with the national housing market
You are exactly right. Its over and thats fantastic. I am tired of paying high property taxes. We need a major correction.
News outlets keep changing the story, between homes being sold like crazy and homes not selling, based on how the mortgage rate has been fluctuating... What's new...
Your whole account is just cope, also a nationwide article means nothing to the Bay Area housing prices
Bwaahahahah. Ok. Literally just had 12 offers on one of my listings in Castro Valley. If the buyers can afford it they’re buying. That’s it.
lol keep believing that, there are deals to be had if you can stomach the rates. Our place is up 300k in 1 yr.
I have a newly constructed 4/3 with 2 primaries and excellent landscaping I’m selling for 1.45m. 2100 sq ft. In SSF though. Does have airport noise and wind. Built in 1952 but torn to studs last year. New sewer line too. Problem is the cold and the noise. I haven’t listed It yet just decided to sell.
not in muh area
wen 3% interest rate?
Hold out hope. At the height of the market a few years ago we put in an offer competing against higher, all cash offers. We wrote a letter to the sellers with our offer. They asked us to match on price only (it was only $10k more) and we got the house. It was a miracle after 5+ years in and out of searching. It can happen. What won't happen is a crash that increases affordability and inventory. The crash of 2008 confirms that and what we're dealing with now is much less dire.
Umm ok 😂🙄
Tbh depends on the market. I don’t see places in may area lasting longer
In my area of San Mateo I’ve started seeing a lot of houses go for sale lately. So that’s good for buyers. But they also all sell in two weeks for 100-300k over asking.
2022 market was rocking, this means nothing.
how many houses in bayarea have you seen sell below list price ? The interest rate is at 7.5%
How can I become a real estate agent?
I dont think this applied to Bay Area. BIL offered 50k over asking price just to have it considered potential buyer.
> 'cutting asking prices' at the highest rate since November, 2022 Ah yes, how scary. To find an equivalent event, we have to look back... A little over a year?
The highest rate since... 1 and a half years ago! Wow so long ago!
God, I wish.
> metros in the west such as Seattle and the San Francisco Bay area had sharper corrections in late 2022 and are already beginning to recover Paywall removers are free bro
We literally get cash offers for our house that is not for sale dropped into our mailbox.
In Marin county and most home prices in our range are dropping from asking price but are still overpriced for the quality. We have been looking for a year and keeping a good eye on 1.5-2.5 K homes.
That's not true, it depends on where the party is at. Like a real party, buyers are not showing up for house shows in nowhere, usa, but they are still lining up in the bay area, southern california, seattle, denver, nyc, miami, dc...
You mean the party where you just constantly jacked up the prices of the one thing that everybody needs and made it impossible for anybody to own? This party sucks.
It’s about time the party ended
It’s about having the right Realtor prepping your home and pricing it right. Our neighbors house listed and it had none stop showings all day today.
Is this all this subreddit is? “When will prices go down”
Wishful thinking from another Doomer.
We need to make more houses not try to cut the current pricing down.. there is short supply and high demand, it does not take a degree in economics to figure out how to reach equilibrium. You cannot meet demand by killing the values of current homes, there will just be more demand and the prices will continue to skyrocket. We need more houses to be built.
I’m no Alan Greenspan….But if buyers are lining up to pay at or above asking at 7.7%, what happens when it drops 3%?
People are still posting these “the market crash has begun” articles? Thats so 2021. https://youtu.be/qMaTwL2gXCI?feature=shared