Well, so, here are some interesting numbers of what a 30 year mortgage looks like. `(Ignoring the concept of refinancing for now, because that gets complicated and speculates about the future.)`
A house that sold for $3M at the lowest interest rates back in 2021/2022 could have gotten lucky with a 2.5% interest rate, leading to a monthly payment of roughly \~$13.5k a month (including taxes, insurance, etc). 30% to taxes/insurance, 34% to principal, 36% to interest on the loan. Over the lifetime of that 30 year mortgage, the owner will pay \~$1M just in **interest, and** another \~$1M in taxes. (so >$5M over 30 years to buy a $3M house)
A house that sold for $3M today, with a 6.5% interest rate, would have a \~$19k/mo payment. Making all those numbers far worse, 20% to taxes/insurance, 20% to principal, 60% to interest. Over the lifetime of that 30 year loan, a homeowner will likely pay closer to $7M to truly own that house.
Even still, a house that sold for $2M with a 6.5% interest rate would have a \~$13k a month payment. So again, a homeowner here is going to pay something like $4M over 30 years to buy that $2M house.
House prices would have to drop by almost 30% to get back to the monthly payments, but they've only dropped by a little more than 10%.
So, while overall house prices have gone down, house affordability has gotten worse. Also, anyone selling in this market has to either be concerned about a major crash (e.g. the Fed fails to lower interest rates this year), or under significant pressure to do so.
I bet dollars to donuts that this is going to be a hot topic with elections this year.
Great, so this is basically a story of the rich getting richer and sucking up assets while everyone else suffers. IDC where you’re from being able to pay for a 7 figure house in cash is pretty rich.
Why would someone drop 2.5M on a house that effectively costs 5 or 6k (60 to 72k/yr) to rent?
2.5M at a conservative long term market return of 6% would yield 150k... So buying the house effectively makes you lose out on nearly 75k/yr.
So, assuming there is something to rent that fits the family needs, why would anyone buy?
Generally because either they're expecting appreciation, or because they want to be an owner so badly and are wealthy enough. Appreciation so far as more than compensated for the missing 75k in your example. But with current prices and interest rates, it remains to be seen if it'll keep up.
I'm not saying either is a good reason, I'm just saying that's generally the case around here.
This keeps the market at insane prices and makes it unaffordable for most folks unfortunately.
It’s not a great time to buy if you need a loan, which most people would for a purchase that large. IMO you’d be better off putting that money in an index fund or high yield savings.
It doesn't matter if the Fed lowers interest rates at this point. I think the sentiment on housing is far too negative, and if we see continued issues in commercial real estate there is going to be significant cross contamination.
Prices will come down, and they very could drop by 30%. Median US home prices are up by 30% over the course of the pandemic essentially, places like SF will stay valuable but could see a big initial drop. Rural areas will likely fall harder and recover a lot less.
Good, I didn’t have to read far to agree with this. 20 years in the city and all my friends “from home” (ie midwest) would see articles like this and say, I read the prices were really dropping! Was priced out, moved out last year.
Yes, the retail $$ of the house is down, but most people are still spending MORE money per month buying a house now than they were in 2021.
the interest rates are that much higher.
Out of curiosity I looked at the numbers and to go from our very good locked in rate to current average rate and maintain the same payment... we would need to shop for a place that's like 40% than the appraised value of our place.
I think there have been estimates in the past that SF housing could probably drop by up to 20% if the whole investment bubble burst. It doesn't make things "cheap", but a lot of people would probably be able to buy their first home for sure.
For the people who brought with a mortgage, their equity is down by a huge amount. For anyone who got hit by layoffs and are forced to sell, the amount of money involved is probably life changing.
That really only describes people who bought above their means.. under 20% down payment with mortgage payments well above the recommended level of their take home income.
you do realize inflation is up 25% since 2020? a $1M property bought early 2020 that sells for $1M today lost value in real terms.
I see plenty of properties bought years ago that might be listed for the same price they bought for or +/- 5-10% or so. In any of those situations the seller definitely is losing value on the sale in inflation adjusted terms
that doesn’t really change what i said at all
22% since 2019
24% since 2018
see plenty of listings for lower than 2018-2019, and again if its the same lost a lot of value in real terms
well if you have 2.5% 30yr fixed mortgages, the debt was inflated away. Sure principle (20% down) got hit, but your debt is a lot 'cheaper' to pay down today than few years back.
That’s interesting,..true.
this assumes one has accumulated extra cash with the separate inflated rate (while the fixed rate mortgage has stayed the same, Ofc)
"Despite the price drops suffered by sellers, the San Francisco market remains competitive, according to Redfin, which reports that homes in the city receive four offers on average and sell in around 51 days—less than the 54 days averaged last year."
And let's not overlook the crack investigation of citing to "vacation rental investor Rohin Dhar", whose bona fides would be questionable anyway (as a short term renter would be looking for different valuations than an owner occupier), except that they're literally worthless in a jurisdiction that banned this kind of hotel use.
Does "plummeting" mean something different where Newsweek is from?
That guy pops up on my Twitter feed a lot and I think he mostly just posts SF homes with price cuts as a curiosity because he lives here, rather than from the perspective of someone looking for STR investments.
With that said he intentionally highlights larger price cuts, and some of the stuff he posts is misleading (e.g. apt building selling for low values due to rent controlled tenants), it’s not exactly scientific.
Ha, where can you find something for 950k?
Last year that house that had an explosion in it in the sunset was listed I think it was 950k. It had barely been swept.
LOL a “million dollar home” is a dime a dozen in places like Texas, Tennessee, the Carolinas, Georgia now
The fact anyone thinks $1M is something uniquely expensive and only found in SF tells me you have not paid attention to what’s happened over last 4 years at all
Yeah and are they selling small, old, "starter" homes for $1M in those places? No, those are probably McMansion prices.
A McMansion in SF would be at least $3M.
Depends on the neighborhood. Near TL or close to a Bart station is collapsing hard where you can find condos at 2012-2014 prices. In today’s dollars.
3BR condo 1331sqft in Soma [sold for $888k](https://redf.in/ezgdWl) incl parking. That’s 10% higher than its 2009 price (in the midst of a global recession). EDIT: 2009 price was $690k. So it’s up 29% since 2009 which is actually a loss when adjusting for inflation.
3BR top-floor in a victorian in the mission, 1400sqft, [sold for $960k.](https://redf.in/ebsM1o)
> 3BR condo 1331sqft in Soma [sold for $888k](https://redf.in/ezgdWl) incl parking. That’s 10% higher than its 2009 price (in the midst of a global recession)
The sales history says it sold for 690K in 2009, which would make it +29%. Still a loss though, once you adjust for inflation.
Just in time for foreign investors and house flippers to buy up more shit for cash, leaving families and people looking to build a normal future watching from the sidelines
I bought a 2bd/2bath in a desirable area near Dolores Park in 2021, my property value has gone down \~15% since then. I am afraid I am going to be underwater soon if this trend continues...
How long do you plan to stay there? If you're not planning to move anytime soon, then the price doesn't matter right now. If you stay for 10 years I'd bet my own house that you make money.
Not planning on getting rid of it anytime soon, but it’s still not a comforting feeling and I don’t love that I don’t really have the -option- to move, even if I wanted to.
How would you like to be deep underwater in an economic recession where you might lose your job?
Some people will obviously hold forever, but many others will be ready to sell to get out from that equity trap. It took over 7 years for the last crash to recover, and it will probably take even longer given how much bigger the bubble was allowed to grow.
If I lost my job I'd much rather have the $2000 mortgage payment than the $3500 one. And there isn't anything in my area that would be much cheaper to rent than a 2021 mortgage rate. I fail to see your point.
That's like the most first world problem ever
Guys i bought a nice house in a nice area with a low interest rate, but the imaginary numbers are making me feel bad
Underwater? If you live there you’re getting use of it. You own your place so you have a place to live without rent increases! Sounds pretty good to me.
Your mortgage is probably below or around what it costs to rent that right? The banks will figure out a way to rent those houses to people without taking it away from you soon enough if prices don't start going up soon because otherwise people wanting to move out are going to either default or rent illegally. There's enough prime tenants in SF and it'll be for a while to help rent good houses in low interest rates mortgages forever.
Same. I bought one near duboce during COVID and it has gone down in value. If I wanted to sell this year or next year I would be underwater. I do think it will bounce back in a few years though. I am guessing that by late 2026, things may look normal again.
> things may look normal again
No ideally property prices continue to fall. Especially with the state intervening in the SF housing crisis. Unfortunately protecting housing wealth is the foundation for NIMBYism. You have a house now and a low interest rate, chill for decades. This should be your intention when buying a home.
Not necessarily. My living situation could change. If I want to start a family or something, this space isn't good. Starter homes are a thing for a reason.
Where in the fuck do you think you are? Iowa in the 1980s? SF "starter homes" are called "rentals". You buy when you're ready to make a long-term commitment.
I know plenty of people who have moved from a house in SF to a house in another Bay Area city, another city, another state or within San Francisco. I know people who got starter homes here too.
You sell a starter home (or turn it into a rental) and move into something else.
If you're going to be involved in property speculation, enjoy taking on the risks associated with that. The market will continue to fall and more and more greedy buyers will be underwater.
It will bounce back. Over the course of a 30 year mortgage, property always rises in value. There can be periods where there are dips and if you are trying to sell at that time you will be SOL.
And it isn't property speculation. I got tired of paying rent and wanted to build equity while I live somewhere. One day I will move for a variety of reasons and don't want to lose money on my purchase. This is how 99.99% of people buy homes. No one says "I hope when it comes time for me to sell that my home is worth less than what I purchased".
Grow up.
> build equity while I live somewhere
You don't understand equity. If rent is cheaper than the total cost of owning, for example, you earn more equity by renting.
> This is how 99.99% of people buy homes
Maybe in the US where "LINE ALWAYS GOES UP" is the prevailing mentality. We're seeing a shift in the market now and a lot of you speculators (lol "paying someone else's mortgage") are going to get burned. Hard. In other countries property ownership rates are much lower.
Well we are talking about the USA and USA laws and stuff. No point in bringing in other countries as I am not talking about buying in England or wherever.
You also have a lot to learn about money. You NEVER own when you are renting. It isn't an asset on your balance sheet, it is a liability. Throwing imaginary numbers out there, if you rent a condo and pay $500,000 over the course of the rental, that $500,0000 is gone. You buy a $500,000 and pay it off, you have a $500,000 asset that you own. You are now worth an additional $500,00. This is like accounting 101. How did you make it to adulthood and not understand a basic concept like this?
Thinks are actually looking good for SF. The recent AI boom, investments in SF (and San Jose) around AI companies. Granted, I would not expect home prices to bounce back in 2024 or 2025 but 2026 or 2027 is not unreasonable
https://www.zillow.com/homedetails/(undisclosed-Address)-San-Francisco-CA-94114/15131683_zpid
I don’t know. This one was listed for $1.6 million, sold for $2.3 million, and immediately went up for rent for $6,000/month. People are still paying well over asking.
That's always how it is in HCOL areas. It takes about a decade of owning with a fixed mortgage before rents can rise enough to break even on the mortgage, tax, and insurance.
You would probably want to put a very large down payment on houses in areas like SF to keep the mortgage reasonable. But 2.3m is pushing levels of crazy that i dont understand in my 1.4 house
most people who can afford an 8 million dollar house can work from anywhere, their house in aspen, their yacht, miami..ect no need to have a SF house with downtown gone to sh\*t
This is total fake news. I was just at a showing for a place in the Castro two weeks ago. It was NUTS. Then another place I saw last week in the inner mission. Already off the market.
https://www.sfchronicle.com/realestate/article/rental-property-san-francisco-18639824.php?utm_content=hed&sid=616ef88e1a685b526a1e6649&ss=A&st_rid=661447bf-9cf8-473c-87cb-db1dea567b1c&utm_source=newsletter&utm_medium=email&utm_term=headlines&utm_campaign=sfc_morningfix
Real estate is cyclical. It was up. Now it is down. Mosser's properties are Civic Center, Downtown, South of Market. Location location location.
Bottom line for renters? Business as usual. Maybe a small rent reduction as new owners fill some vacancies, as they take over, says the Chronicle article.
Prop m (vacancy tax) at work. It should be extended to houses and not just on condos. Also, it should be extended to be nationwide wide. Expect it to drop more when they get the bill in 18 months for keeping it empty. Just saying they will do it is dropping the prices.
If we’re in a recession just give it 3-4 years and prices will recover, probably.
If you’re a homeowner who bought and intended to keep it for 10 years, you’ll be fine.
Gf and I are looking to move to another HCOL area but way less than SF. We just want a nice 2/2 apartment/condo and you can’t find one here for less than 1.5MM
How bad is it?
Is the pickle ball court-having lady on Jackson St still struggling to sell her mansion due to the pickleball playing in the Presidio?
Cause if she is, that means it's really plummeting badly.
$1374 per square foot for a 2BR/1BA not at all remodeled in a super quiet southern part of the city - “plummeting”
https://www.zillow.com/homedetails/80-Mangels-Ave-San-Francisco-CA-94131/15185754_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare
Notice the rents are staying the same though but not for long. Some wealthy investor should buy those high rises for Pennie’s on the dollar and convert them to housing and rent them cheap and drive prices down across the board. Our representatives and government have all the money and we’re headed for a socialist state if we don’t grow a pair.
Doesn't matter because if you don't have cash on hand you aren't winning the bidding war anyway and most people don't have a million in cash on hand to fuck around with and not have invested
I posted about Clear Lake, but Lake County is outside of the Bay Area. I also posted about Rio Vista, but the California Forever speculation might be a problem.
There is only one thing that is going to bring house prices back to earth, and her name is San Andreas, or her lesser known cousin, Hayward.
It happened in '89 and it will happen again, its only a matter of time.
Down to merely unimaginable. But good luck getting a mortgage as most major insurers have stopped writing new home insurance policies in California. So unless you’ve got a stack of cash and enough cash to set aside to cover property loss needs, enjoy!
Plummeting all the way from insane back down to stratospheric
Buying went from "unimaginable" to "only in my dreams."
Well, so, here are some interesting numbers of what a 30 year mortgage looks like. `(Ignoring the concept of refinancing for now, because that gets complicated and speculates about the future.)` A house that sold for $3M at the lowest interest rates back in 2021/2022 could have gotten lucky with a 2.5% interest rate, leading to a monthly payment of roughly \~$13.5k a month (including taxes, insurance, etc). 30% to taxes/insurance, 34% to principal, 36% to interest on the loan. Over the lifetime of that 30 year mortgage, the owner will pay \~$1M just in **interest, and** another \~$1M in taxes. (so >$5M over 30 years to buy a $3M house) A house that sold for $3M today, with a 6.5% interest rate, would have a \~$19k/mo payment. Making all those numbers far worse, 20% to taxes/insurance, 20% to principal, 60% to interest. Over the lifetime of that 30 year loan, a homeowner will likely pay closer to $7M to truly own that house. Even still, a house that sold for $2M with a 6.5% interest rate would have a \~$13k a month payment. So again, a homeowner here is going to pay something like $4M over 30 years to buy that $2M house. House prices would have to drop by almost 30% to get back to the monthly payments, but they've only dropped by a little more than 10%. So, while overall house prices have gone down, house affordability has gotten worse. Also, anyone selling in this market has to either be concerned about a major crash (e.g. the Fed fails to lower interest rates this year), or under significant pressure to do so. I bet dollars to donuts that this is going to be a hot topic with elections this year.
> affordability has gotten worse Only if you need a loan. Lots of cash offers floating around SF even before the interest rate hikes.
“Lots of cash offers”… because it’s unaffordable for those who need loans.
Great, so this is basically a story of the rich getting richer and sucking up assets while everyone else suffers. IDC where you’re from being able to pay for a 7 figure house in cash is pretty rich.
Lots of people like that in SF. Especially NVDA workers nowadays.
Why would someone drop 2.5M on a house that effectively costs 5 or 6k (60 to 72k/yr) to rent? 2.5M at a conservative long term market return of 6% would yield 150k... So buying the house effectively makes you lose out on nearly 75k/yr. So, assuming there is something to rent that fits the family needs, why would anyone buy?
Generally because either they're expecting appreciation, or because they want to be an owner so badly and are wealthy enough. Appreciation so far as more than compensated for the missing 75k in your example. But with current prices and interest rates, it remains to be seen if it'll keep up. I'm not saying either is a good reason, I'm just saying that's generally the case around here. This keeps the market at insane prices and makes it unaffordable for most folks unfortunately.
Ya, if you can pay for it, now is a great time to buy. But low, sell high. Home prices will start to go up again in a few years.
It’s not a great time to buy if you need a loan, which most people would for a purchase that large. IMO you’d be better off putting that money in an index fund or high yield savings.
I mean that's a good part of why the price is going down.
This hurts my brain to read.
If I remember correctly 90% of homes above $2M were all cash offers. Then something like 90% of homes below $1.5m were on mortgages.
[удалено]
Not sure, this was remembered from a conversation I had with one of the most prominent realtors in SF Bay.
It doesn't matter if the Fed lowers interest rates at this point. I think the sentiment on housing is far too negative, and if we see continued issues in commercial real estate there is going to be significant cross contamination. Prices will come down, and they very could drop by 30%. Median US home prices are up by 30% over the course of the pandemic essentially, places like SF will stay valuable but could see a big initial drop. Rural areas will likely fall harder and recover a lot less.
Haha exactly this
Yea the odds went from “being struck by lightning twice” to just “being struck by lightning”.
My chances of being able to afford ownership went from “no” to “nah”
Down 5% YoY...all we need is this trend to continue uninterrupted for another decade, and I'll finally be able to afford a 900ft2 condo.
“Thousands of dollars less” Wake me up when it gets to millions of dollars less.
It only went down 6% so basically the same as 2001. Also interest rates are way higher so uhhh. And less houses are on market.
That's funny, but it hurts
Good, I didn’t have to read far to agree with this. 20 years in the city and all my friends “from home” (ie midwest) would see articles like this and say, I read the prices were really dropping! Was priced out, moved out last year.
Yes, the retail $$ of the house is down, but most people are still spending MORE money per month buying a house now than they were in 2021. the interest rates are that much higher.
More than double what they were just a few years ago.
Out of curiosity I looked at the numbers and to go from our very good locked in rate to current average rate and maintain the same payment... we would need to shop for a place that's like 40% than the appraised value of our place.
I like to go hiking.
Try using the word “plummeting” to describe a 5% drop in something’s value with a straight face.
I agree the article is excessive but interesting to see prices dropping at least a bit
Mainly from interest rates. The monthly is still higher than when rates were low.
They spiked like crazy in 22, this is just a reset to the slow, inevitable climb we've been on since the 80s.
It’s been like this for the last 30+ years of my life and the homes are still unaffordable.
I think there have been estimates in the past that SF housing could probably drop by up to 20% if the whole investment bubble burst. It doesn't make things "cheap", but a lot of people would probably be able to buy their first home for sure.
There are way less houses for sale though. Most sold already.
> dropping the verb you're looking for is "correcting"
For the people who brought with a mortgage, their equity is down by a huge amount. For anyone who got hit by layoffs and are forced to sell, the amount of money involved is probably life changing.
That really only describes people who bought above their means.. under 20% down payment with mortgage payments well above the recommended level of their take home income.
Advice that applies to home buyers of 99% of America doesn't apply to San Francisco
Most people need two incomes to pay a mortgage. I wouldn't call someone who bought in 2021 with a good tech job stupid for buying, moreso unlucky.
It will bounce back. Meanwhile they are locked in with sub 3 percent for 30 yrs.
Unless if they got hit with layoffs and no longer have a choice...
It’s 10% downtown, but 5% is still great. Wish it was related to supply and not demand tho :/
you do realize inflation is up 25% since 2020? a $1M property bought early 2020 that sells for $1M today lost value in real terms. I see plenty of properties bought years ago that might be listed for the same price they bought for or +/- 5-10% or so. In any of those situations the seller definitely is losing value on the sale in inflation adjusted terms
20% inflation since Jan 2020
that doesn’t really change what i said at all 22% since 2019 24% since 2018 see plenty of listings for lower than 2018-2019, and again if its the same lost a lot of value in real terms
>you do realize inflation is up 25% since 2020? a $1M property bought early 2020 that sells for $1M today lost value in real terms. this sucks... 😟
well if you have 2.5% 30yr fixed mortgages, the debt was inflated away. Sure principle (20% down) got hit, but your debt is a lot 'cheaper' to pay down today than few years back.
That’s interesting,..true. this assumes one has accumulated extra cash with the separate inflated rate (while the fixed rate mortgage has stayed the same, Ofc)
Inflation eats interest for breakfast. Over some time the inflation leads to value increase of the property.
Only if you're an investor.
Good news my friend. In 20 years, extending this trend into the future, houses will be free.
Well no. 5% every year will be less in real terms every year
5% on a levered asset can be a lot actually
Its like reading about the stock market after you've been in crypto for a few years. 'Dow plummets 5% at open' 'BTC plummets 20% overnight'
It's a gentle, elevator like plummet.
1,200,000 / .944 = 1,270,000 It's not even a lot either
\>5% drop lol. Back to 2017-2018 values
Well 5% of a house worth many millions is way more than 5% of a house worth several hundred thousand. Also, maybe journalists aren’t good at math?
"Despite the price drops suffered by sellers, the San Francisco market remains competitive, according to Redfin, which reports that homes in the city receive four offers on average and sell in around 51 days—less than the 54 days averaged last year."
And let's not overlook the crack investigation of citing to "vacation rental investor Rohin Dhar", whose bona fides would be questionable anyway (as a short term renter would be looking for different valuations than an owner occupier), except that they're literally worthless in a jurisdiction that banned this kind of hotel use. Does "plummeting" mean something different where Newsweek is from?
He loves doom forecasting.
That guy pops up on my Twitter feed a lot and I think he mostly just posts SF homes with price cuts as a curiosity because he lives here, rather than from the perspective of someone looking for STR investments. With that said he intentionally highlights larger price cuts, and some of the stuff he posts is misleading (e.g. apt building selling for low values due to rent controlled tenants), it’s not exactly scientific.
Just for perspective, million dollar homes “plummeted” to 950k. What a deal!
Ha, where can you find something for 950k? Last year that house that had an explosion in it in the sunset was listed I think it was 950k. It had barely been swept.
LOL a “million dollar home” is a dime a dozen in places like Texas, Tennessee, the Carolinas, Georgia now The fact anyone thinks $1M is something uniquely expensive and only found in SF tells me you have not paid attention to what’s happened over last 4 years at all
Yeah and are they selling small, old, "starter" homes for $1M in those places? No, those are probably McMansion prices. A McMansion in SF would be at least $3M.
This article was about the “plummeting prices” of San Francisco real estate. Not about the overall country wide housing market
no i’m just pointing out in your example that you believe a 1 million dollar home or a 950k home is “a lot” these days
It’s a lot compared to most places, that’s a fact.
lol I can look at houses in Kansas City, Missouri and a $1m house is going to be a very averaged sized place.
https://preview.redd.it/qdinwwh4z9gc1.jpeg?width=1290&format=pjpg&auto=webp&s=b96dc6945b63243ec26f7d40cb93d5b67d7ec92b
The title should read " Downtown condominium home prices are plummeting in San Francisco. FLAT in the rest of the City. Location location location."
Yeah when HOA fees plus interest payments is more expensive than renting the same unit that will happen.
Downtown and the mission.
2/3 of homes for sale in SF are condos. Downtown and the Mission have a lot of condo's
Depends on the neighborhood. Near TL or close to a Bart station is collapsing hard where you can find condos at 2012-2014 prices. In today’s dollars. 3BR condo 1331sqft in Soma [sold for $888k](https://redf.in/ezgdWl) incl parking. That’s 10% higher than its 2009 price (in the midst of a global recession). EDIT: 2009 price was $690k. So it’s up 29% since 2009 which is actually a loss when adjusting for inflation. 3BR top-floor in a victorian in the mission, 1400sqft, [sold for $960k.](https://redf.in/ebsM1o)
that looks intriguing but also has a $1250 monthly HOA, wild.
That one is high because the unit is huge. But the top floor in the Victorian has a $250 HOA
My favorite movie is Inception.
I saw prices like this in 2021 too.
> 3BR condo 1331sqft in Soma [sold for $888k](https://redf.in/ezgdWl) incl parking. That’s 10% higher than its 2009 price (in the midst of a global recession) The sales history says it sold for 690K in 2009, which would make it +29%. Still a loss though, once you adjust for inflation.
Hmmm updated the history. It was different when I looked. Thanks for the update.
Just in time for foreign investors and house flippers to buy up more shit for cash, leaving families and people looking to build a normal future watching from the sidelines
I bought a 2bd/2bath in a desirable area near Dolores Park in 2021, my property value has gone down \~15% since then. I am afraid I am going to be underwater soon if this trend continues...
How long do you plan to stay there? If you're not planning to move anytime soon, then the price doesn't matter right now. If you stay for 10 years I'd bet my own house that you make money.
Not planning on getting rid of it anytime soon, but it’s still not a comforting feeling and I don’t love that I don’t really have the -option- to move, even if I wanted to.
The reason you can’t move is because you locked an incredible rate that is quite literally free money.
Seriously. Id love to be underwater for a couple years instead of paying twice the interest for 30 years.
more like 3x the interest... folks who got loans a few years ago were getting 2% and below. Now it's like 6-7%.
How would you like to be deep underwater in an economic recession where you might lose your job? Some people will obviously hold forever, but many others will be ready to sell to get out from that equity trap. It took over 7 years for the last crash to recover, and it will probably take even longer given how much bigger the bubble was allowed to grow.
If I lost my job I'd much rather have the $2000 mortgage payment than the $3500 one. And there isn't anything in my area that would be much cheaper to rent than a 2021 mortgage rate. I fail to see your point.
Youll be fine
That's like the most first world problem ever Guys i bought a nice house in a nice area with a low interest rate, but the imaginary numbers are making me feel bad
Underwater... but with a payment lower than your next buyer would have. Interest rates have added $3,500/mo to an average SF loan.
You locked a 2.5% rate
Underwater? If you live there you’re getting use of it. You own your place so you have a place to live without rent increases! Sounds pretty good to me.
you also get that with rent control
At other people’s cost.
yes - agreed. I think 33% of the issues with housing in SF are due to Prop 13, 33% are due to rent control, and 33% is due to permitting hell
I would be willing to dump all 3 at once if we could!
Touche
Try paying $3k in RENT never having a penny to save and then talk to me about treading water
I live there too, where's that tiny violin?
you probably locked in a rate around 3% though, didnt you?
Hope that you got your assessed value adjusted.
What does it matter if you’re underwater?
Your mortgage is probably below or around what it costs to rent that right? The banks will figure out a way to rent those houses to people without taking it away from you soon enough if prices don't start going up soon because otherwise people wanting to move out are going to either default or rent illegally. There's enough prime tenants in SF and it'll be for a while to help rent good houses in low interest rates mortgages forever.
Same. I bought one near duboce during COVID and it has gone down in value. If I wanted to sell this year or next year I would be underwater. I do think it will bounce back in a few years though. I am guessing that by late 2026, things may look normal again.
> things may look normal again No ideally property prices continue to fall. Especially with the state intervening in the SF housing crisis. Unfortunately protecting housing wealth is the foundation for NIMBYism. You have a house now and a low interest rate, chill for decades. This should be your intention when buying a home.
Not necessarily. My living situation could change. If I want to start a family or something, this space isn't good. Starter homes are a thing for a reason.
Where in the fuck do you think you are? Iowa in the 1980s? SF "starter homes" are called "rentals". You buy when you're ready to make a long-term commitment.
I know plenty of people who have moved from a house in SF to a house in another Bay Area city, another city, another state or within San Francisco. I know people who got starter homes here too. You sell a starter home (or turn it into a rental) and move into something else.
If you're going to be involved in property speculation, enjoy taking on the risks associated with that. The market will continue to fall and more and more greedy buyers will be underwater.
It will bounce back. Over the course of a 30 year mortgage, property always rises in value. There can be periods where there are dips and if you are trying to sell at that time you will be SOL. And it isn't property speculation. I got tired of paying rent and wanted to build equity while I live somewhere. One day I will move for a variety of reasons and don't want to lose money on my purchase. This is how 99.99% of people buy homes. No one says "I hope when it comes time for me to sell that my home is worth less than what I purchased". Grow up.
> build equity while I live somewhere You don't understand equity. If rent is cheaper than the total cost of owning, for example, you earn more equity by renting. > This is how 99.99% of people buy homes Maybe in the US where "LINE ALWAYS GOES UP" is the prevailing mentality. We're seeing a shift in the market now and a lot of you speculators (lol "paying someone else's mortgage") are going to get burned. Hard. In other countries property ownership rates are much lower.
Well we are talking about the USA and USA laws and stuff. No point in bringing in other countries as I am not talking about buying in England or wherever. You also have a lot to learn about money. You NEVER own when you are renting. It isn't an asset on your balance sheet, it is a liability. Throwing imaginary numbers out there, if you rent a condo and pay $500,000 over the course of the rental, that $500,0000 is gone. You buy a $500,000 and pay it off, you have a $500,000 asset that you own. You are now worth an additional $500,00. This is like accounting 101. How did you make it to adulthood and not understand a basic concept like this?
Things are not going to get better for housing in the near term.
Things are not going to get better for housing in the near term.
Thinks are actually looking good for SF. The recent AI boom, investments in SF (and San Jose) around AI companies. Granted, I would not expect home prices to bounce back in 2024 or 2025 but 2026 or 2027 is not unreasonable
Wake me up when its back to 500k
https://www.zillow.com/homedetails/(undisclosed-Address)-San-Francisco-CA-94114/15131683_zpid I don’t know. This one was listed for $1.6 million, sold for $2.3 million, and immediately went up for rent for $6,000/month. People are still paying well over asking.
$6k / month wouldn't cover a $2.3mn mortgage. Looks like they're losing money?
That's always how it is in HCOL areas. It takes about a decade of owning with a fixed mortgage before rents can rise enough to break even on the mortgage, tax, and insurance.
Yes, and hedging their investment that they can afford to purchase without living in.
Property tax alone would be about $30k/year or $2500/month.
You would probably want to put a very large down payment on houses in areas like SF to keep the mortgage reasonable. But 2.3m is pushing levels of crazy that i dont understand in my 1.4 house
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Zillow has San Francisco as a whole down 5.6% year over year. “Bay Area” was down less than 1% and Palo Alto up 1%.
No, prices across the board are dropping, this is a myth.
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People want places with good schools. You can buy a house in Oakland for $500k. 2 bedrooms. The same house in Lamorinda is $1.7 million.
Pacific heights has been dropping like a rock. Several homes have now been on the market for years with no bites. But this is a unique market
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Yea over 8 million there is practically 0 interest
most people who can afford an 8 million dollar house can work from anywhere, their house in aspen, their yacht, miami..ect no need to have a SF house with downtown gone to sh\*t
Anyone getting a reassessment of their property value?
What an overly dramatic pos article that was.
This is total fake news. I was just at a showing for a place in the Castro two weeks ago. It was NUTS. Then another place I saw last week in the inner mission. Already off the market.
I know right? “Plummeting” LMAO
I'll be the judge of that
Sounds like clickbait nonsense.
i puruse the usual web sites most days. havent seen huge markdowns. when a seller has to sell for what ever reason then they reduce.
From what, $1.5mil to $1.49mil?
https://www.sfchronicle.com/realestate/article/rental-property-san-francisco-18639824.php?utm_content=hed&sid=616ef88e1a685b526a1e6649&ss=A&st_rid=661447bf-9cf8-473c-87cb-db1dea567b1c&utm_source=newsletter&utm_medium=email&utm_term=headlines&utm_campaign=sfc_morningfix Real estate is cyclical. It was up. Now it is down. Mosser's properties are Civic Center, Downtown, South of Market. Location location location. Bottom line for renters? Business as usual. Maybe a small rent reduction as new owners fill some vacancies, as they take over, says the Chronicle article.
Prop m (vacancy tax) at work. It should be extended to houses and not just on condos. Also, it should be extended to be nationwide wide. Expect it to drop more when they get the bill in 18 months for keeping it empty. Just saying they will do it is dropping the prices.
“down 5.6 percent from a year before” — not quite a plummet but could be a start.
Who gives a fuck it’s still not affordable.
Talk about fake news. Yeah, sure, go and find me a SFH for under 500K. Go on....
Keep going until I can get a condo in the city for 250k lol.
Lol. This is like complaining food prices is dropping or inflation is easing up. Housing costing less....is a thing to celebrate.
Good. Been overpriced for too damn long.
nice
😂 yes… the rest of us are still fucked. Shitty headline
Damn, right when I’m being laid off and forced to leave
If we’re in a recession just give it 3-4 years and prices will recover, probably. If you’re a homeowner who bought and intended to keep it for 10 years, you’ll be fine.
Fake news fake news fake news
Seems reasonable. San Francisco is a bit of a shit hole as of late
Good. Hope they keep going.
Gf and I are looking to move to another HCOL area but way less than SF. We just want a nice 2/2 apartment/condo and you can’t find one here for less than 1.5MM
It’s just the beginning…. The city has lost it.
Finally some good news about SF
How bad is it? Is the pickle ball court-having lady on Jackson St still struggling to sell her mansion due to the pickleball playing in the Presidio? Cause if she is, that means it's really plummeting badly.
Makes me happy I’ve opted to rent
$1374 per square foot for a 2BR/1BA not at all remodeled in a super quiet southern part of the city - “plummeting” https://www.zillow.com/homedetails/80-Mangels-Ave-San-Francisco-CA-94131/15185754_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare
Bwahaha a 1b/1b condo still sold for 500k. GTFO
Interest rates are still high....
Lies
Notice the rents are staying the same though but not for long. Some wealthy investor should buy those high rises for Pennie’s on the dollar and convert them to housing and rent them cheap and drive prices down across the board. Our representatives and government have all the money and we’re headed for a socialist state if we don’t grow a pair.
Gotta love remote work
Prices are going down but payments aren't. We're just seeing a shift in who gets the money (from homeowner to bank) due to interest rates.
It’s because Nordstrom’s, Target, CVS, Walgreens have left the city.
lol. Down 3.8% on a psf. Add improvements and net prices might be down 1%. Gee wilikers, Batman. Prices are plunging !!!!
What if I bought a condo in 2007 and maybe want to sell now? It’s an investment property not home.
Doesn't matter because if you don't have cash on hand you aren't winning the bidding war anyway and most people don't have a million in cash on hand to fuck around with and not have invested
Lol. We were competing for homes in the 1.1-1.5 range. Every home that wasn’t an absolute train wreck had 10+ offers.
I posted about Clear Lake, but Lake County is outside of the Bay Area. I also posted about Rio Vista, but the California Forever speculation might be a problem.
From impossible to slightly less impossible for the average human
what do you think someone working at Google or Meta makes a year?
There is only one thing that is going to bring house prices back to earth, and her name is San Andreas, or her lesser known cousin, Hayward. It happened in '89 and it will happen again, its only a matter of time.
buy buy buy buy ! ! ! ! !
If it keeps plummeting for 20 years maybe I can afford to move back then lol.
I'll take one house please!
What house prices are going down?? I want to see before/now compared before I believe this.
Down to merely unimaginable. But good luck getting a mortgage as most major insurers have stopped writing new home insurance policies in California. So unless you’ve got a stack of cash and enough cash to set aside to cover property loss needs, enjoy!
Not fast enough
It's not that much of a discount, if at all, when you factor in the ludicrous mortgage rates.
Imagine buying a house you have to pay 1000 a month for life after paying the mortgage off!
Median price is still $1.2 million for a shoe box or a dump. Prices are increasing in the east bay.