When I look at Real Estate Markets across the Bay Area it becomes clear that it’s about the economy. Both local and worldwide. People need housing, they want their kids to go to good schools and have a chance at a good life. Real Estate purchases are subsidized both by the MID and by rates that are divorced from any kind of risk premium.
And where else can you put your money? The stock market? Precious metals? Bonds? Treasuries? For very good reason many people are leery of all of these as investments. Look at the areas with rising prices (Go to “Zipskinny”). Notice the median income and education levels.
Then take a look at the areas and price tiers that DON”T have rising prices. Bifurcation, societal change happening before our eyes.
When I look at my little pond in Sonoma County and think about the unemployment levels, the kinds of jobs being created here (Low paying service jobs) and the demographics of buyers this bifurcation becomes very clear.
Lots of people retire here with money, there will be continuing demand for the kind of homes they want, quite a few of those people like the area and eventually will want to downsize to a smaller home in the area in a “Nice” area. But there will be fewer people who can afford to buy on the low end. Until prices for basic housing drop. Rents are even more sensitive to income changes than single family homes are, which will hurt people who paid too much for SFR to rent out.
Genuinely fine homes ( Priced in the $1.25MM and up range) on good land are cheaper than they have been for a decade, at best guess this year or next will be the bottom for this category. As to all the rest, tell me the city or town and the type of property and I’ll give you my best guess.