Driving from Mission Dolores to Noe on Sunday, i saw over a dozen different “Open House” signs for houses for sale. On one corner, a block from the park, there was literally an open house sign on each corner. Baroo? Walking around on Monday, i saw a bunch of For Sale signs. And then today, two more popped up on my way to work. What on earth is going on? It’s October, not May. I’ve never seen so many For Sale signs in this city, let alone a bazillion in my shi-shi neighborhood.
Now, i don’t know shit about housing markets except that San Francisco’s is terrifying and that it costs a lot more to buy than to rent on a monthly basis, even if you can get a 20% downpayment together.
Are things actually erupting? I always thought the bubble conversation was bullshit. But what is going on? Why are there soooo many houses for sale?
It could be that a lot of poeple think the prices are crazy high and they want to cash out.
I’m guessing two things:
1. People fear that there will be a bubble, and want to cash out now. Personally I expect not so much a bubble bursting, as a flattening out… prices remaining level, or perhaps dropping just a little.
the other option:
2. cost of living has gotten high enough that people are leaving for cheaper pastures. We’ll have to watch and see which it is.
I don’t know much about bubbles, bursting or other. I do know that my friends who have their houses on the market are not seeing the same amount of buyer action that was seen a year ago.
Maybe some people have advance knowledge of the next big earthquake and want to move to Arizona or Iowa or some other relatively stable locale?
If there was a bubble and it was bursting, I think you just helped it along its way…
Well, the sooner you pop a bubble, the better. This past recession wouldn’t have been much milder if Greenspan had actually popped the bubble when he said “irrational exuberance” back in 1996.
Did you see the nytimes article a few weeks back about how in certain major metros (NY and SF in particular) it’s often now more cost-effective to rent than buy? Suddenly, I don’t feel like such an eejit.
fling93: This past recession wouldn’t have been much milder
Er, I meant “would have been much milder”
dare I hope? do any of the houses look fun to live in?
dare I hope? did any of the houses look fun to live in?
Haven’t you heard? North Dakota is all the rage. Lots of land, cheap homes, and no hipsters.
Wendy – they’re still obnoxiously expensive so i haven’t bothered.
David – i doubt i could burst any bubble.
I suspect that it’s all of those interest-only loans coming back to bite people. With that type of loan, you usually have to start paying on the principal after 5 years so your mortgage payments shoot up from 2k to 8k a month.
I’m surprised to see so many houses on the market, too. The real test will be seeing how many houses are on the market in november/december, which are usually the slowest months since people don’t like to move their families during the holidays. If people still have the ‘For Sale’ sign hanging then things are rough.
One thing I’m noticing as I go through the MLS listings right now: there is a lot of cheap property for sale in the 15th & Guererro area.
Insanely cheap.
Think it might have to do with Valencia Gardens nearing completion?
a similar situation is happening here in my home of seattle. the avergecost of a house is $500,000 dollars and rent for a studio begins typically at $600, and that is for a piece of shit in a bad neighborhood. there are alot of homes for sale because everyone is running to the suburbs because it is alot cheaper. i now live in the suburbs myself for the same reason.
the bubble is bursting, you gotta be crazy think that the over priced market in the Bay Area would hold up, in reality a home going for $750,000 is only really worth $600,000, if that, some people are selling now to cash out before the market goes down, on what ever equity they earned by people overbidding on homes, also some are selling because their low 4% ARMs apr’s when they first obtained their loan are rising to 6% and will probably go up, and can’t afford to pay a $3000 or more a month payment not in including tax, ins. and maintenance/repair on the home and other necessities. I think in the next year the market will go down 10%, or maybe more and home prices and also rent will look a little better, last note, renting is a better option if you could afford a $3000 note, rent for $1500 or give or take and bank the rest, no tax, ins. or maintenance/repair costs if you rent. What do you think about that?
I really can’t imagine a soft landing. I’ve don’t
own a car, don’t have kids, and make low six
figures. Buying the cheap condo in a nasty area of
San Francisco would be a big stretch. Atleast a
stretch if I ever intend to pay it off and don’t get
a time bomb loan like everyone is these days.
Things will have to fall alot before I’m going to
buy, and I’m alot better off financially than
most.
My prediction the “experts” are going to be
completely astounded by the depth of the crash.
Its not going to be a few percent dip or
stagnation, its going to be a panic,
only growing as the time bomb loans come due
30%-60% price drop.
All the safety’s which in the past preventing
housing crashs are off. Absurd loans with time
bomb terms given to inexperienced speculators.
Its like buying stock on margin, you can’t ride
out a stock market crash, your forced to sell.
Thats whats going to happen with the ARMs.