patrick.net

This says the Housing Bubble is collapsing.

zzyzzx says

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/1m7bzxh/stuck_in_a_house_we_dont_want/

Stuck in a house we don’t want
My husband and myself bought our first home a couple of years ago. We thought we wanted a townhouse but have since discovered we want a yard and no HOA. We bought our town house for way more than it was worth due to lack of knowledge and quite honestly we were shocked we were even able to buy a home. We were overly excited and jumped quickly. We paid 375000 for the thing. We went out! Our mortgage is ridiculous. We have put it on the market and it didn’t move. Lots of people came and looked but it’s priced too high, we are upside down. I feel so defeated and stupid. What can I do? Please can anyone help me?

Too bad there isn't gap insurance for houses . . .

WookieMan says

Tax free gain as the tenant pays down the principle if you lived in it 2 of the last 5 years.

True. I am glad to see you finally used the term "tax free" correctly.

zzyzzx says

We bought our town house for way more than it was worth due to lack of knowledge and quite honestly we were shocked we were even able to buy a home.

This is why I hate easy money. Whether it be cars or houses, good old "How-Much-A-Month" clowns drive up prices for everyone. Easy loans also drove college costs out of sight.

The_Deplorable says

This says the Housing Bubble is collapsing.

EBGuy says

https://wolfstreet.com/2025/07/24/inventory-of-new-single-family-homes-spikes-to-highest-since-2007-in-the-south-well-past-housing-bust-high-sales-prices-drop/

Homeloaners better wise up and drop them prices!

Full story: https://x.com/michael_wiebe/status/1837257325759058259

The problem is most times the landlord of the older more affordable apartment raises the rent up to almost parity with the new apartments many times without doing any renovations.

ForcedTQ says

The problem is most times the landlord of the older more affordable apartment raises the rent up to almost parity with the new apartments many times without doing any renovations.

How? Wouldn't the addition of new apartments put downward pressure on prices? If new apartments and worn old apartments have a similar price, wouldn't the tenants opt for the new place?

That may be the case if there was no pent up demand waiting to occupy, but in areas where there are still people living multiple families to a house or apartment or multiple people per room, there is unsatisfied demand that will gobble up that supply at the right price point.

It really comes down to government regulations and greed. Greed has to be looked at and how it is supported. If you want to get insanely rich and quickly, all you need to do is control the supply of something society needs.

ForcedTQ says

The problem is most times the landlord of the older more affordable apartment raises the rent up to almost parity with the new apartments many times without doing any renovations.

In places where building is severely restricted like the SF bay area yes. Otherwise no.

ForcedTQ says

That may be the case if there was no pent up demand waiting to occupy, but in areas where there are still people living multiple families to a house or apartment or multiple people per room, there is unsatisfied demand that will gobble up that supply at the right price point.

Did you read this? https://x.com/michael_wiebe/status/1837257325759058259

Because that is exactly what is happening in Austin right now.

ForcedTQ says

The problem is those people that live in the high cost places will not easily/readily be willing to sell at a lower price …. Even if the market tanks so long as they have their source of income….

According to the response of an AI query I made, only between 3% to 4% of existing homes are bought/sold in the Bay Area each year. It means that the huge majority of homes have been owned for a long time. I will use mine in SJ as an example. I looked it up on one of the ®eal Estate websites. According to that web site, the value is $1.1 M, down from about $1.4 M at the peak in 2022 (*).

Provided I haven't been serially refinancing to extract equity, if I want to sell to relocate to a cheaper place I am not going to care if I've "lost" 300k equity that I really didn't have anyway. I will just sell at the lower price. This is the typical seller who didn't serially take out equity with new loans. I've known a few of them who sold and moved to the Sierra Foothills or Central Valley over the years. They didn't care so much about catching the exact Peakest Best Price.

I pay attention to the homes in my neighborhood that sell. It's mostly the same ones. Recent buyers selling, to "flip", or more often I think, to get out from the burden of the super high mortgage payments and tax bills of their recent purchases. Most of the other 97% or so of the homes don't change hands except for the occasional retiree I mentioned in the previous paragraph.

(*) There was a contributor to this blog who wanted you all to know that he was from our Cool And Hip Bay Area, as his handle was "BayArea" with a picture of the Golden Gate Bridge. He shared that he bought a place in the leafy suburban paradise Tri-Valley in 2022, ("bought at the peak") and then didn't contribute to the blog any more. So we don't know how it turned out for Mister BayArea.

CA 1978 Prop 13 sounds like helping homeowners pay property taxes based on purchase price. The downside is, all homeowners are stuck in their own houses!
Without new young families with kids, schools can’t survive.
I fought on nextdoor app since for a decade the dark cloud are on the way for the entire areas with school closures. Most thought I was crazy.
Look around, it is happening now as most cities are becoming retirement communities.
You go around and find out the 4, 5 bedrooms houses left with one or two old people!
They are meant for young families and raise their kids and send them to neighborhood schools. Not too many young people can move to Bay Area or other metro area in CA and pay higher prices and taxes.
Most homeowners are now counting on floating people in rental apartments to keep their schools open to keep their home values intact!
At some point CA must revoke Prop 13 and truck loads of its derivative laws and join the rest of the country to make CA great again!

Blue says

I fought on nextdoor app since for a decade the dark cloud are on the way for the entire areas with school closures

That had to do with collapse in families.

Blue says

truck loads of its derivative laws and join the rest of the country to make CA great again!

No way.

You don't seem to be aware the seniors can transfer their Prop 13 valuation ONCE. The new property has to be valued at or below the property that they are selling. My parents did that.

Blue says

The downside is, all homeowners are stuck in their own houses!

Not really. They can sell, they'll just lose their Prop-13 tax assessment. And that's not exactly true anyway because if they buy another less expensive home, they can "transfer" their assessment to the newly purchased home. They're not stuck: they have options.
Blue says

You go around and find out the 4, 5 bedrooms houses left with one or two old people!

Yes, during the pandemic I delivered for meals on wheels to many such clients.

Blue says

They are meant for young families and raise their kids and send them to neighborhood schools.

Yup. That's why I hope the prices will drop by half, so local kids can buy and have their own kids. Because of the insanely high prices due to low inventory turnover, a drop in value by half will mean most of the Old Folks will still have a gain, and likely still above the max-married-couple half million exclusion gain.

But rentiers like iwog and Eman won't allow that drop to happen. They'll swoop in and buy the dip to expand their Rental Empires to exploit even more folks of modest means.

MolotovCocktail says

Blue says

I fought on nextdoor app since for a decade the dark cloud are on the way for the entire areas with school closures

That had to do with collapse in families.

I doubt unless you see similar things in other states for comparison.
The biggest dent of prop 13 comes actually from businesses though.

Blue says

I doubt unless you see similar things in other states for comparison.

Sorry pal, but I was born and raised in San Jose. One of my elementary schools I attended in 1978 - 1980 was shut down in the 1990s. Not enough kids in the district. Last I heard it was rented out to a child care company.

That was way back then. More have since been shut down. Same reason. Almost everyone I went to school with bailed. Too unaffordable even back then when a $300k house was a shocking number.

Some may have reopened because of the surge in H1Bs and illegals over the past 20 years tho. The ones that weren't torn down.

Blue says

"CA 1978 Prop 13 sounds like helping homeowners pay property taxes based on purchase price."

And that enables the people of California to control their taxes.

"At some point CA must revoke Prop 13 and truck loads of its derivative laws and join the rest of the country to make CA great again!"

No. The 30 year old Housing Bubble needs to collapse.

Also, need to look at the data for total state taxes collected per capita and state expenses per capita. Compare that to the other states. Betcha CA is in top 5 in both. That means the problem isn’t going to be fixed with higher property taxes, that just increases your rent payment to the government….

We give away far too much in benefits programs to illegals and bullshit programs. Need to reign all that garbage spending in!

The_Deplorable says

Blue says

No. The 30 year old Housing Bubble needs to collapse.

Prop 13 is one of the major one in home prices apart from so many other factors.
Snake oil Prop 13 was dead on arrival as per the design. If I remember correctly, within 4 years Mello-Roos taxes were introduced to tackle prop 13 tax offset!
No state suffered because lack of a law like Ponzi scheme prop 13 which created unnatural environment and it’s consequences.
Again the real benefits goes to business at the expense of the rest by paying highly unequal and lowest property taxes. Their ill effects are seen on the rest of the economy through indirect means.

The origin of pro 13 came from rich people in LA area who don’t want to pay taxes that goes to schools while sending their kids to private schools!

The_Deplorable says

Blue says

"CA 1978 Prop 13 sounds like helping homeowners pay property taxes based on purchase price."

And that enables the people of California to control their taxes.

"At some point CA must revoke Prop 13 and truck loads of its derivative laws and join the rest of the country to make CA great again!"

No. The 30 year old Housing Bubble needs to collapse.

I’m not so sure it’s a bubble. Obviously plenty of people are still buying homes. I think we’re watching a bifurcation in the economy. It’s becoming more apparent. Society is best when everyone can participate. Even poor people need affordable to them housing.

Even smart and responsible people can be very short sighted.

I'm on an entrepreneur subreddit and I came across a post where the OP was bitching about people not wanting to work hard and build businesses. Instead, his words, they want to sit at a desk and be internet millionaires. While he's not entirely wrong, what he misses is 1. He's a 4th generation farmer. Think about that. He was born into a lifelong job that most people can only dream of having. You have to think about that for a moment. That farm was built over 3 generations before he got it. And 2. All new things are built from scratch. Many people only have their wits and labor to produce something so, yes, the internet has helped tremendously.

GNL says

Even smart and responsible people can be very short sighted.

I'm on an entrepreneur subreddit and I came across a post where the OP was bitching about people not wanting to work hard and build businesses. Instead, his words, they want to sit at a desk and be internet millionaires. While he's not entirely wrong, what he misses is 1. He's a 4th generation farmer. Think about that. He was born into a lifelong job that most people can only dream of having. You have to think about that for a moment. That farm was built over 3 generations before he got it. And 2. All new things are built from scratch. Many people only have their wits and labor to produce something so, yes, the internet has helped tremendously.

out here lots of farmers who are 2nd and 3rd generation. inherited business and everything organized and streamlined years ago. they don’t complain here.

Fortwaye says

out here lots of farmers who are 2nd and 3rd generation

Where is out here?

B.A.C.A.H. says

Where is out here?

Everywhere.

MolotovCocktail says

I was born and raised in San Jose. One of my elementary schools I attended in 1978 - 1980 was shut down in the 1990s. Not enough kids in the district. Last I heard it was rented out to a child care company.

That was way back then. More have since been shut down. Same reason

Where in SJ was your school? A retired employee from the elementary school I attended in East SJ in the 1970's told me that the student population is less than half what it was at its peak about 20 years ago. It's happening all over the Bay Area, schools dying out. At least in some measure this balances the challenge of recruiting new teachers to a region with insane living cost.

As far as I know, Branham HS in San Jose is the only school that reopened when child population picked up. And that reopening was in the year 1999.

MolotovCocktail says

Almost everyone I went to school with bailed. Too unaffordable even back then when a $300k house was a shocking number.

Me too. I have more SJ Homies living in the Central Valley and Sierra Foothills than here in the Bay Area.

MolotovCocktail says

Some may have reopened because of the surge in H1Bs and illegals over the past 20 years tho.

Some new Santa Clara Unified District schools opened up in the mostly-below-sea-level former wetlands of the SF Bay where massive multifamily communities have recently been built for the H-1s. I've walked through some of those neighborhoods. You can walk for a long time before seeing another non-Indian. And that non-Indian will be a Chinese, not a haolie, not a Latino. I've walked past cricket games (never a baseball / softball game) and Bollywood Style group dancing. Feels like I'm in the concrete canyons of Mumbai, with more pleasant weather and sanitation.

The wave of illegals or legal-migrants who take up residence in SJ are all working age adults who pack like rats in the less expensive shabbier places (like my neighborhood). They don't have the time, space, nor resources for kids. This is why the school districts where such kids would have attended are in a tightening enrollment death spiral worse than the other districts that also face similar demographic trend.

Prop-13 or not, the high price of owning/renting here is turning SJ and the Bay Area into an Old Folks Home.

B.A.C.A.H. says

Where in SJ was your school?

That was Calero Elementary. There were two other schools within a couple of miles of it. I went there for grades 5-6. Had to be bussed from 6 miles or so away. Stipe Elementary, where I attended K - 4, was a lot closer. I even walked home two or so times. But because Calero was losing kids and development of housing near Stipe was taking off, they bussed us.

Holy Shit, they turned it into an alternative high school:



We are an alternative school of choice. We are not a continuation high school.

Calero High School offers a comprehensive, college prep education (A-G curriculum) in a nurturing, small school learning environment. We provide opportunities for credit recovery, career pathways and college readiness.

And Stipe is still open. It is a STEM k-6. WTF? STEM?

Woop...Woop...the Case/Shiller finally went down. It dropped .3% from the prior month.

For those expecting a big drop in prices, do you think it will be slow like over the course of a decade or do you think it will be quick ???

https://fred.stlouisfed.org/series/CSUSHPISA

Misc says

For those expecting a big drop in prices, do you think it will be slow like over the course of a decade or do you think it will be quick ???

Like good sex: start slow, then speeds up.

MolotovCocktail says

Holy Shit, they turned it into an alternative high school:

When the gyms were closed during the pandemic I got my cardio walking all over the city. I remember walking past that school. I was surprised the sign said ESUHSD. I thought I knew all the schools in that district, which I attended back in the day. When I got home I looked at the web site, to figure out this is a sort of a Continuation School (not really a traditional high school). Your post jogged my memory a bit. Today i went back to check out the website.

In a sense, this school is part and parcel of the tsunami of declining enrollment due to demographic changes.

The fact that they make a point of saying they're not a Continuation School, belies the reality. The district's Continuation School is Foothill, on the other side of town. Calero is not a "Continuation School". It's an "Alternative School".

Since the district, - even lower performing schools in the (formerly) rough neighborhoods, stress AP classes, advanced math like calculus and beyond, etc, the not-so-challenging course offerings shown on Calero's website are for "at-risk" students. Not at risk of being back in the juvie (that's Foothill), but "at risk" of not getting a diploma. The website has the feel of school for dropouts who did not have behavior problems, to "come back" to get their high school diploma, with not-so-challenging classes.

I think it's indicative of the declining enrollment trend because the district wants those dropouts back to capture state dollars that are based on enrollment. The "alternative school" provides a setting without the pressure of the nowadays' curricula and expectations. If a drop out gets the GED without attending class in the district, the district doesn't get the state funding.

Glock-n-Load says

"I’m not so sure it’s a bubble."

If the average price of a house exceeds three-times the average income then
you are looking at a housing bubble. Alan Greenspan (then Fed Chairman)
deliberately started this bubble.
That is another reason why the Fed needs to be abolished.

The_Deplorable says

If the average price of a house exceeds three-times the average income then
you are looking at a housing bubble. Alan Greenspan (then Fed Chairman)
deliberately started this bubble.

Here in SJ it's 10x.

B.A.C.A.H. says

Fortwaye says

out here lots of farmers who are 2nd and 3rd generation

Where is out here?

Gods Country, Idaho

Fortwaye says

B.A.C.A.H. says
Fortwaye says

out here lots of farmers who are 2nd and 3rd generation

Where is out here?

Gods Country, Idaho

Are you one of the participants who relocated away from the LA area?

If yes, if you're willing, please share a summary of it: what you like, what you don't like, overall satisfaction of the move, how locals treated you.