patrick.net

I noticed that agent types have been returning to social activities in the last several months.

Could be seasonal, but I think there something more to it. Especially when it extends into January.

My feeling is that prices are going up in 2014 significantly. Normally prices drop in the winter, but they have instead actually gone UP this winter. Inventory is at an all time low (under 1 mo inventory) and demand is high. Also, rents are very high and support higher prices - the cost of renting is generally not cheaper than buying now, unlike during the bubble when it was over 2x cheaper. These are not good signs if you are hoping prices are going to flatten or drop.

Well last week I saw three homes (short sales) hit the market here in the south bay area last week. The asking prices were significantly lower than I've seen in quite a while. They went pending within a few days so they were not pricing errors.

I have also seen small houses on cramped lots in not particularly good areas with mediocre schools go pending with what I'd have thought were crazy stupid high asking prices.

In addition I've noticed a few houses which have gone pending a few times keep coming back to the market.

Pending does not mean a sale.

The "bigger idiot" theory breaks down when there is an infinite supply of idiots. Welcome to worldwide real estate.

In 0BC, if you lived to be 40, you were a senior citizen. Now, it's normal to live that long and beyond.

So normal CAN change.

Seems that as long as these markets are the objects of capital flight and international money laundering, the investment effect will continue.

The cosmopolitan world crooks don't care if the market crashes, it is just the vig for getting at least some of their money into safe havens.

Here's one house I'm tracking in my town.
http://www.redfin.com/CA/Berkeley/1521-Berkeley-Way-94703/home/1682640
Note the 2007 sale price: $688k
It's currently listed at $589k, but I'm betting it'll go higher (desperate times and all). And speaking of desperate times, I'll note the original financing was by HSBC and National City. Kinda smells like a 7/1 ARM recasting... Makes you wonder how many more of these gems are out there.

Remember, great bay area weather is only a recent thing. It only started getting good in 1996, and people are only now catching on to it.

exfatguy says

Remember, great bay area weather is only a recent thing. It only started getting good in 1996, and people are only now catching on to it.

???

rooemoore says

???

Oh yeah. How foolish of me to forget. In 1995 we got 2 feet of snow in downtown Oakland. Yeah. Back then it snowed every year. The the weather got more better.

If demand is so high, why isn't anyone selling and cashing out?

cash out for what? stocks? bonds? cash?

There was a thread about a year ago from Greg fielding that last year was a great time to sell, umm, no its not. There's plenty more upside for the next 3 years.

SFace says

cash out for what? stocks? bonds? cash?

Larger, cheaper more comfortable houses somewhere else. Like Paso Robles or St Helena. Still has nice coastal CA weather but a much more laid back lifestyle. More house bang for the buck too.

Or tulips.

This time is different!

meetyaks says

In the areas I am looking, listing prices are at least 10% higher compared to last September (4month ago). Is it real? Can it sustain? Any advice is appreciated.

There are no signs of things cooling down in the Pleasanton-Danville-Walnut Creek stretch. We're seeing 15-20 offers on 800K homes that aren't under-priced.

Can it sustain? As long as the inventory stays microscopic and buyer-demand is high, expect the rally to continue.

exfatguy says

If demand is so high, why isn't anyone selling and cashing out?

That's the real question... normally when prices rise, more people are enticed to sell, but that's not happening here. My guess is that too many people have had their mortgages modified enough to never want to move, regardless of the selling price. That, or everyone is waiting for the top ;)

gregpfielding says

exfatguy says

If demand is so high, why isn't anyone selling and cashing out?

That's the real question... normally when prices rise, more people are enticed to sell, but that's not happening here. My guess is that too many people have had their mortgages modified enough to never want to move, regardless of the selling price. That, or everyone is waiting for the top ;)

The reason people aren't selling is they have refinanced to a super-low rate mortgage, and they have low property taxes locked in. Plus, rents are high. So, unless they plan to move out of California, selling would only increase their costs. I've thought about selling myself, but I can't make the math work right now.

Heraclitusstudent says

Says the man who said that by 2020 "we're screwed".

He is gonna sell his Concord empire in 2019. :)

SFace says

cash out for what? stocks? bonds? cash?

There was a thread about a year ago from Greg fielding that last year was a great time to sell, umm, no its not. There's plenty more upside for the next 3 years.

And then 3 years after that, and after that, and after that. Please pass the kool-aid, you have had enough.

JFP says

The reason people aren't selling is they have refinanced to a super-low rate mortgage

This is a huge part of our supply problem and will probably be the legacy of loan modifications.

gregpfielding says

JFP says

The reason people aren't selling is they have refinanced to a super-low rate mortgage

This is a huge part of our supply problem and will probably be the legacy of loan modifications.

Current rates are still not high enough to prevent a "move up" buyer to consider such a move even if they managed to previously refi to a much lower rate. The more substantial issue would probably be a property tax increase that they would incur.

Purely hypothetical, what happens, if Google, Apple, FB.... goes belly up.

"Any signs of Bay area market cooling down?"

The market stalled and cooled off quite a bit after the 1%+ increase in interest rate in the summer. Looks like things are starting to heat up again in the last couple of weeks. Looking at the current housing inventory and the market trends, there's a high probability that it will be a seller's market this Spring & summer.