patrick.net

Bad timing. That's what it is. There are people out there with enough cash, who don't care if they are overpaying. 1 listing and 10 buyers lined up with huge cash leverage, what do you expect? bidding frenzy! Your only hope is a recession which could happen in a year or two, IMO. You will know, keep an eye on those job reports.

Feel free to buy it any time, then flip to an investor for 2X, 3X, or 4X down the line.

Home prices are rapidly decoupling from being tied to wages, which means folks with SERIOUS money are willing to pay a TON for a house in order to rent it out in perpetuity.

We're talking Big Bang type of appreciation in the future.

Square lost over $100k per employee this past year (~$100 million). Not really a sustainable business model (though it's likely they will be taken over at some point). Ask yourself if we've seen this movie before.

meetyaks says

there is still so much overbidding happening.

Just looked at the overbids on some houses in a high-priced Bay Area town I had bookmarked 4-8 weeks ago. Range was $0-30K, average was probably $10-15K at most (one was bought at asking, a couple were $5K or $6K). It's not like some of the ones I saw previously that had $70K overbids (way underpriced was what I thought, and I was right). For the peak of buying season, you'd think the overbids would be higher, no?

Some percentage of Bay Area housing prices is based on the stock market, and the stock market hasn't been as unilaterally up as it was last year. Tech in particular hasn't been doing as well lately, although some of the bigger stocks rebounded a bit from the steep drops.

Meetyaks says:
I dont know where people are getting money, there is still so much overbidding happening. I feel like I am priced out forever, will it ever change in bay area?

It's probably a minority with a lot of money.
I'm sorry you are getting outbid.

corntrollio says

Just looked at the overbids on some houses in a high-priced Bay Area town I had bookmarked 4-8 weeks ago. Range was $0-30K, average was probably $10-15K at most (one was bought at asking, a couple were $5K or $6K). It's not like some of the ones I saw previously that had $70K overbids (way underpriced was what I thought, and I was right). For the peak of buying season, you'd think the overbids would be higher, no?

What is the "high-priced" town?

Maybe these are the kinds of sales the OP is referring to:
Listed for $1.3M, sold for $1.5M
http://www.redfin.com/CA/Santa-Clara/101-Kellogg-Way-95051/home/1593217

Listed for $1.275M, sold for $1.51M
http://www.redfin.com/CA/Santa-Clara/313-Lester-Ct-95051/home/1470370

Listed for $1.08M, sold for $1.45M
http://www.redfin.com/CA/Sunnyvale/1122-Castleton-Way-94087/home/1547774

I dont know where people are getting money, there is still so much overbidding happening. I feel like I am priced out forever, will it ever change in bay area?

If you are looking for a new construction 4000sqft on at least an acre 5/3 SFR in a riff raff free neighborhood somewhere between Sunnyvale and SSF not too close to caltrain or a freeway at a price point comperable to a fixer upper cottage in Stockton then yes, I suspect you may be looking a while.

If however you are willing to drop a few million in cash on a run down eichler in west oakland or Richmond and you don't mind the house stradling a majoe vault nor dodging the occasional stray bullet and being propositioned by nasty looking streetwalkers I'm sure you won't have any problem finding your dream home.

It all depends on what you want and how much you can bleed for it.

ch_tah2 says

What is the "high-priced" town?

Danville -- but I regularly look at Peninsula/South Bay and certain East Bay towns (Lamorinda, Danville, Pleasanton). For a while, I was seeing a lot of shitty inventory trying to go for the prices of the better houses, but the inventory has seemed of slightly better quality in the last few weeks. Not sure why that is.

ch_tah2 says

Maybe these are the kinds of sales the OP is referring to:

Listed for $1.3M, sold for $1.5M

http://www.redfin.com/CA/Santa-Clara/101-Kellogg-Way-95051/home/1593217

Listed for $1.275M, sold for $1.51M

http://www.redfin.com/CA/Santa-Clara/313-Lester-Ct-95051/home/1470370

Listed for $1.08M, sold for $1.45M

http://www.redfin.com/CA/Sunnyvale/1122-Castleton-Way-94087/home/1547774

Those were largely underpriced relative to market in order to incite bidding. I'd note that the last one is the most surprising, because the first two are in Fremont Unified.

Some Sunnyvale places have sold at asking recently:

http://www.redfin.com/CA/Sunnyvale/957-Bryant-Way-94087/home/1549995

corntrollio says

Those were largely underpriced relative to market in order to incite bidding. I'd note that the last one is the most surprising, because the first two are in Fremont Unified.

Some Sunnyvale places have sold at asking recently:

http://www.redfin.com/CA/Sunnyvale/957-Bryant-Way-94087/home/1549995

The first two may have been a little underpriced, but not $200k. The third one is absurd to me. I don't disagree that some sell for list, but a large number that I've watched have sold for $100k-$200k over list. And if you compare similar sales to a year ago, and it's just amazing how much things are going up. Compare prices to 2010/2011, and it would make a person trying to buy now throw up.

http://www.redfin.com/CA/Sunnyvale/1348-Turnstone-Way-94087/home/1547782
Turnstone and Castleton are essentially the same street - 600 more sq ft, but smaller lot for Turnstone, $850k versus $1.45M

corntrollio says

Danville

Danville truly is a special place. I love the Iron Horse trail and use it to train for half marathons (not planning to do a full one ever!).

ch_tah2 says

http://www.redfin.com/CA/Sunnyvale/1348-Turnstone-Way-94087/home/1547782

Turnstone and Castleton are essentially the same street - 600 more sq ft, but smaller lot for Turnstone, $850k versus $1.45M

You can't really say those are comparable. Turnstone doesn't look like it has been renovated since 1967. Also, the bigger lot makes a big difference at this level -- 6K vs. almost 10K is material.

I don't disagree that South Bay prices have increased (possibly unsustainably) since 2011 or so, but trying to say that specific comparison is apples-to-apples is misguided.

From an owner-occupier point of view, I think the answer depends on where you think rents are headed. As it stands, the insane prices are matched by insane rents (at least on the SF Peninsula). The cost of renting and the cost of buying are pretty evenly matched at the moment.

I was renting a 2 bedroom place 2 years ago for $1700/mo. Now it is going for $3500/mo., more than double. The price to rent it has gone up more than the price to buy it in the past few years, thus it is actually a better deal to buy it now than before. However, if rents plummet then you lose if you buy.