It’s Beginning to Look A Lot Like

2006 in the real estate world

This is a great residential real estate market. But only for sellers, commissioned salespeople, sales-priced based municipalities and the others in the industry that are busy.

San Francisco

If you are a buyer right now, look back 10 years. It is a mirror image of today. Credit is getting easier with the “help” of non-qualified mortgages. The new name for subprime in 2016/7. These are loans for those that can’t get real mortgages especially if you are buying a place that you are not living in.

The rates and fees on these loans are high, even double digit high. And the writing is on the wall. These values cannot be sustained. Besides all the unpredictable fallout from massive budget cuts, rewriting of rules to take away safeguards with incomes not being able to rise to meet the costs, we are set to fall from these levels within a year.

It’s time to think Macro before Micro.

If you are thinking of buying, think hard. Instead of focusing on the house, focus on the macroeconomics of the area you intend to live in. Will there be jobs at good wages, will the schools be funded, will the stores that I need be there. Will the environment have clean air and water, is the food safe.

Think about 2, 5, 10 years from now. What factors will affect long term stability of a neighborhood or a region.

SILLYCON VALLEY and SAN FRANCISCO

We all know that Facebook, Alphabet, Apple, etc. are here along with a zillion startups. Housing prices have steadily gone up because the area is desirable, the jobs are there, there is great food, good weather, a major city for sports, arts and entertainment. The hiking trails, the golf courses and other outdoor venues make this area very desirable.

But (here comes the but), the travel ban imposed by Homeland Security added to the ICE visits, the HB1 restrictions and the lack of funds coming this way plus the entire cost of living or setting up a business will slow things down.

It may not be directly noticeable at first because it takes people about a year to realize that the problems are there. Other than me, I doubt any real estate agent will tell you not to buy because you may lose value.

On the other hand, rents are down just slightly here. That can help make a transition to a new home better. Rent. Feel the area out. You can always buy when the time is right.