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I'm really not expecting to see a significant drop in home prices at least until close to the end of the year. While some vacation rentals owners might have li

by k3oni 6y ago

I'm really not expecting to see a significant drop in home prices at least until close to the end of the year. While some vacation rentals owners might have listed their properties for sale they are doing it pricing those close to the current market value based on other properties for sale in their respective area. We're looking for a vacation home and i'm monitoring the prices in a few areas pretty close, but i don't think we'll do anything until the start of 2021. Remember you need surplus to drive price down. Also keep in mind that the foreclosure process is currently on hold, once this opens again we'll be able to get a closer look at the impact all the closures had/have on the RE market.

jdhn 6y ago
Agreed. There may be short term movements, but like you said, we’ll see the full effect once the courts reopen and things start moving again.
xoxoy 6y ago
I’m seeing 50 homes under $1M in San Francisco listed in last 30 days. That’s much more in that price range than I recall seeing in a very long time
- 3fe9a03ccd14ca5 6y ago
  In places like SF you might see more sales because people are afraid to rent these homes. They may never get any rent and it would be very hard to evict a tenant because of local laws and policy.
- k3oni 6y ago
  Also to keep in mind that RE markets are regional. SF/NYC for example are out of bounds when it comes to this. Question is what is the actual value for each property, they might be under 1M but it might just be that that's their actual value, just more ppl trying to sell now.
- squnch 6y ago
  Single family homes? Or condos?
  - TimSchumann 6y ago
    At that price in SF proper, I can't imagine it's anything but town homes, condos, and the like.
    - bradlys 6y ago
      There are a decent amount of row houses that go for sale under $1m in sf proper. They aren’t in nice areas or worth buying except as investment/rental properties. I don’t see many people buying them. It’s mostly investors. Most single family homes I see with home owners moving in are closer to $2-3mil.
- dcolkitt 6y ago
  One thing to keep in mind is that SF is a very high-income/high-price metro. Whereas the stimulus and unemployment boost is not adjusted for cost-of-living. Therefore we'd expect places like SF to see the least support from the stimulus.
- refurb 6y ago
  Listing prices can be a bit deceiving. Usually real estate agents play with listing prices - to get a bidding war going, they'll price well below market price. It's not unusual to see overbids of 20-30%.
  - greedo 6y ago
    That's what my agent claimed when setting our asking price. We sure didn't see a bidding war. The benefits to the agent for a lower price is in conflict with what the homeowner wants. For example, a $10K diff in sale price is $350 for the listing agent, and $9650 for the homeowner. So of course agents will push for low prices to get a quick sale. Of course, there are many times that a seller wants a quick sale (moving etc). But often it's in the seller's best interest to be a bit more patient and price it at market.
    - jlbnjmn 6y ago
      Yup. Sold our house in January using Redfin. Best realtor we've dealt with and saved 2%. Also watch out for realtors saying you need upgrades and recommending contractors. They likely are getting a kickback, and by boosting the listing price their commission goes up. You end up with the same proceeds, IF it sells as fast, and you had to front the upgrades. The incentive structure for realtors is whack. At a minimum, the commissions could be tiered instead of continuous.
      - poulsbohemian 6y ago
        I don't know your location, I am not a lawyer, this is not legal advice, YMMV, but: In most locales, a kickback like you are describing is illegal and can be reported to your state's real estate commission. If you believe that your agent is acting in bad faith, you should at least find a different agent if not report them. In many cases, smart upgrades can yield significant returns. Not all agents who recommend upgrades are trying to con you, many are providing market-aware prudent advise to help you maximize your return. As an agent, I think it is good that tech and other competitive forces are entering the field. That said, commissions often get pointed to as a "problem." Here's the deal: If you believe your house will sell within a range of say, +/- $20K, then the agent's job is to try to get you to the top of that range. 2% in my market, for an average house works out to about $6K. If I can get you an extra $10K+ that you wouldn't have gotten by FSBO or similar, that's where I'm adding value as an agent and that's why commissions exist.
- deleted 6y ago
  [deleted]
arethuza 6y ago
I had a quick look at Edinburgh - which has 7000+ Airbnb properties and I the number of properties for sale doesn't look unusually high and there are still a few ~£1million pound two/three bedroom flats which seems a bit optimistic even the best of times! I don't think there will be any real pressure for 3 to 6 months until the economy actually restarts properly and property transactions actually start happening again.
- amiga_500 6y ago
  AirBnb landlords are going to first all flood back into the long-term rental market (yearly renewals). Many came from there but didn't do the math on maintenance so migrated to airbnb for "gold". Rents in long-term will drop due to unemployment / increasing supply, then many will become forced sellers. As these hit prices will drop and everyone else will be caught in this wave.
  - ghaff 6y ago
    Furthermore, while it can probably be overstated, it wouldn't be surprising to see a fair number of people--perhaps mostly renters because they can pick up and leave more easily--who have second thoughts about city living. Why risk living in close quarters if this may be a recurring pattern and pay a premium for doing so. Not so much the Bay Area but there are a lot of cities where you can get a lot more space for a lot less money by moving out to even a fairly close-in suburb.
    - electricEmu 6y ago
      Only time will tell for certain but the preemptive measures places like Seattle have taken appear to be paying dividends. Living in rural Texas is much more concerning than living in Seattle during COVID19. As for space, cities have lacked space for as long as cities have existed but people continue to migrate for the opportunity. I wouldn't be surprised if housing prices drop from short-term rentals reentering the market as single-family homes or long-term rentals. The decision is not so clear cut.
rcpt 6y ago
Or land value goes up because of the money printer
- amiga_500 6y ago
  It won't in real terms, unless the USA establishment really have lost their minds. Output is going to be down for a significant time, that feeds into land prices. Add in WFH from anywhere, and the next leg is down.
  - rcpt 6y ago
    > in real terms The amount of land stays fixed while the amount of money changes. Other products can change their supply but land stays fixed. It's reasonable to believe that land will become relatively more expensive imo. Looks like it's not a guarantee though https://www.caracaschronicles.com/2018/05/03/once-the-safest-bet-against-hyperinflation-real-estate-loses-value/ https://www.caracaschronicles.com/2018/05/03/once-the-safest... fwiw I hope land prices plummet here they are already insane https://wolfstreet.com/2019/07/12/changes-in-house-prices-rents-and-household-incomes-since-1960-in-the-us-by-region-and-major-metro/ https://wolfstreet.com/2019/07/12/changes-in-house-prices-re...
    - amiga_500 6y ago
      Real terms refers to the price vs wages.

by k3oni 6y ago

jdhn 6y ago

Agreed. There may be short term movements, but like you said, we’ll see the full effect once the courts reopen and things start moving again.

xoxoy 6y ago

I’m seeing 50 homes under $1M in San Francisco listed in last 30 days. That’s much more in that price range than I recall seeing in a very long time

3fe9a03ccd14ca5 6y ago
In places like SF you might see more sales because people are afraid to rent these homes. They may never get any rent and it would be very hard to evict a tenant because of local laws and policy.
k3oni 6y ago
Also to keep in mind that RE markets are regional. SF/NYC for example are out of bounds when it comes to this. Question is what is the actual value for each property, they might be under 1M but it might just be that that's their actual value, just more ppl trying to sell now.
squnch 6y ago
Single family homes? Or condos?
- TimSchumann 6y ago
  At that price in SF proper, I can't imagine it's anything but town homes, condos, and the like.
  - bradlys 6y ago
    There are a decent amount of row houses that go for sale under $1m in sf proper. They aren’t in nice areas or worth buying except as investment/rental properties. I don’t see many people buying them. It’s mostly investors. Most single family homes I see with home owners moving in are closer to $2-3mil.
dcolkitt 6y ago
One thing to keep in mind is that SF is a very high-income/high-price metro. Whereas the stimulus and unemployment boost is not adjusted for cost-of-living. Therefore we'd expect places like SF to see the least support from the stimulus.
refurb 6y ago
Listing prices can be a bit deceiving. Usually real estate agents play with listing prices - to get a bidding war going, they'll price well below market price. It's not unusual to see overbids of 20-30%.
- greedo 6y ago
  That's what my agent claimed when setting our asking price. We sure didn't see a bidding war. The benefits to the agent for a lower price is in conflict with what the homeowner wants. For example, a $10K diff in sale price is $350 for the listing agent, and $9650 for the homeowner. So of course agents will push for low prices to get a quick sale. Of course, there are many times that a seller wants a quick sale (moving etc). But often it's in the seller's best interest to be a bit more patient and price it at market.
  - jlbnjmn 6y ago
    Yup. Sold our house in January using Redfin. Best realtor we've dealt with and saved 2%. Also watch out for realtors saying you need upgrades and recommending contractors. They likely are getting a kickback, and by boosting the listing price their commission goes up. You end up with the same proceeds, IF it sells as fast, and you had to front the upgrades. The incentive structure for realtors is whack. At a minimum, the commissions could be tiered instead of continuous.
    - poulsbohemian 6y ago
      I don't know your location, I am not a lawyer, this is not legal advice, YMMV, but: In most locales, a kickback like you are describing is illegal and can be reported to your state's real estate commission. If you believe that your agent is acting in bad faith, you should at least find a different agent if not report them. In many cases, smart upgrades can yield significant returns. Not all agents who recommend upgrades are trying to con you, many are providing market-aware prudent advise to help you maximize your return. As an agent, I think it is good that tech and other competitive forces are entering the field. That said, commissions often get pointed to as a "problem." Here's the deal: If you believe your house will sell within a range of say, +/- $20K, then the agent's job is to try to get you to the top of that range. 2% in my market, for an average house works out to about $6K. If I can get you an extra $10K+ that you wouldn't have gotten by FSBO or similar, that's where I'm adding value as an agent and that's why commissions exist.
deleted 6y ago
[deleted]

arethuza 6y ago

I had a quick look at Edinburgh - which has 7000+ Airbnb properties and I the number of properties for sale doesn't look unusually high and there are still a few ~£1million pound two/three bedroom flats which seems a bit optimistic even the best of times! I don't think there will be any real pressure for 3 to 6 months until the economy actually restarts properly and property transactions actually start happening again.

amiga_500 6y ago
AirBnb landlords are going to first all flood back into the long-term rental market (yearly renewals). Many came from there but didn't do the math on maintenance so migrated to airbnb for "gold". Rents in long-term will drop due to unemployment / increasing supply, then many will become forced sellers. As these hit prices will drop and everyone else will be caught in this wave.
- ghaff 6y ago
  Furthermore, while it can probably be overstated, it wouldn't be surprising to see a fair number of people--perhaps mostly renters because they can pick up and leave more easily--who have second thoughts about city living. Why risk living in close quarters if this may be a recurring pattern and pay a premium for doing so. Not so much the Bay Area but there are a lot of cities where you can get a lot more space for a lot less money by moving out to even a fairly close-in suburb.
  - electricEmu 6y ago
    Only time will tell for certain but the preemptive measures places like Seattle have taken appear to be paying dividends. Living in rural Texas is much more concerning than living in Seattle during COVID19. As for space, cities have lacked space for as long as cities have existed but people continue to migrate for the opportunity. I wouldn't be surprised if housing prices drop from short-term rentals reentering the market as single-family homes or long-term rentals. The decision is not so clear cut.

rcpt 6y ago

Or land value goes up because of the money printer

amiga_500 6y ago
It won't in real terms, unless the USA establishment really have lost their minds. Output is going to be down for a significant time, that feeds into land prices. Add in WFH from anywhere, and the next leg is down.
- rcpt 6y ago
  > in real terms The amount of land stays fixed while the amount of money changes. Other products can change their supply but land stays fixed. It's reasonable to believe that land will become relatively more expensive imo. Looks like it's not a guarantee though https://www.caracaschronicles.com/2018/05/03/once-the-safest-bet-against-hyperinflation-real-estate-loses-value/ https://www.caracaschronicles.com/2018/05/03/once-the-safest... fwiw I hope land prices plummet here they are already insane https://wolfstreet.com/2019/07/12/changes-in-house-prices-rents-and-household-incomes-since-1960-in-the-us-by-region-and-major-metro/ https://wolfstreet.com/2019/07/12/changes-in-house-prices-re...
  - amiga_500 6y ago
    Real terms refers to the price vs wages.