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SF Bay Area is Stubbornly Sticky (for now)410
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2007 Mar 5, 1:10pm 21,390 views 190 comments
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How much of the "bubble" is media induced ? I have seen realtors criticizing the press for blowing the bubble out of proportion, therefore causing would-be buyers to wait it out. This may be true but it works the other way too. How much air was blown by the press about "soaring" "sky-rocketing" prices . Now the media is "tumbling" "crashing" "bursting bubbles" on house prices. What my point is that the same press that hypes house prices is also the same press that bashes house prices. They make house prices sound like some kind of national calamity or something. I believe this bubble has been created, inflated, and burst -- by the media more so than anything else. It would explain why so many uneducated folks are making stupid financial decisions. -- Saw it on T.V gotta have one.
MVRenterHopefullyBuyer stated:
"For the same money I hope to buy a condo in MV, I could be probably buying a house in less desirable part of the Bay Area. I decided not to do that, as I think risks of downfall are greater as compared to PA or MV."
I would prefer a condo in MV over a house out in the boondocks anytime. But that is because I absolutely hate driving and I believe in living in the same vicinity as your job. Not being an expert myself, I have heard that condos have less stability with prices in comparison to a house. But PA and MV would really have to become turds before anything shook down too far. Most of the people that have bought there are well off to start with in comparison to further out places. But I would still question this investment in a condo comparison to a house -- even a house out in turd-land. I wonder in the LONG RUN which investment would yield a higher percent of upward or downward. Just a thought.
LosAltos Renter - You make excellent point. Im a native. I too concur on 'What has changed ?" The amount of hype and misinformation regarding SV is beyond nausea. LOL. I find plenty of people with 10 years of experience earning 100K unable to buy.
We will correct in big way.
MVRenterHopefullyBuyer-
As a corporate accountanting/finance, i worked in F500 and startups (2 IPOs). I seen boom and busts reaching back since the decades. Even in 1999, for every IPO we had 4-5 other firms that went belly up and were purchased for pennies on the dollar. Employees were let go. Thats nearly 80-90% failure rate. Today there are more M&A activity and very few IPOs. I highly doubt due to SOX and stock option curbs we will see the madness we had 1999. It doesnt make when you look at the fundementals and what the local business leaders say.
Fact is we have the same employed workforce today as we did back in 1990-91 around 810-820K. As costs increase many local business ship jobs out or fail completely due to competition.
Silicon Valley leaders to lobby lawmakers
Survey says housing prices, red tape threaten economy
10% "correction" is a far cry to get back to our historical averages and stable employment. IMHO, we will need more near 50%. 750K for a 1000 sq condo is nonsense beyond any reason. I sorry for if I sound harsh, but this is not Manhatten and never will be.
If we are not carefull we are more likely to find ourself, as Larry Ellison said .. 'More like Detroit'. You may like him or hate him. But Larry put out 3 employers out of business, Peoplesoft, Siebel, Hyperion. There are many more CEO's out there that think like that. The only way our economy can prosper to have sustainable and reasonable growth.
I wish you luck.
http://realtytimes.com/rtcpages/20070309_lowervalues.htm
Bay Area prices back up.......
Fremont_renter --- very very good points. But I strangly feel RE prices may correct much quicker than in prior bust. Gut feeling! I wont be suprised.
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Something I posted on my blog SF Bay Area Housing Bubble Battle. The bottom line: The Bay Area has annoyingly and persistently sticky downwards house prices. Recent threads here have pointed out cases of buyers actually getting into bidding wars again. It's not all that surprising when considering the current job market in the Bay Area and how that affects market psychology. There's some economics behind "unpredictable prices" too. But I conclude that in the end even market psychology always gives way to fundamentals.
And the longer our prices remain stuck the greater the risk of a dramatic shock, as things suddenly and dramatically come unstuck. Like the recent rumblings on the Hayward fault, pressure can only keep building up so long until even the most earnest of wishing won't make it all just go away.
--Randy H
#housing