whats your guess on how long before will housing be affected?
Hedge funds are buying lots of real estate, Single Family Homes included [0] [1] [2]
It's a flight to safety, and with jobs moving to cities, millennial preferences with them, and restrictive zoning/NIMBY, real estate is the perfect landing place.
[0] http://www.motherjones.com/politics/2013/11/wall-street-buyi...
[1] http://dealbook.nytimes.com/2014/06/27/investors-who-bought-...
[2] https://newrepublic.com/article/112395/wall-street-hedge-fun...
First, a friend of mine made a bit of extra cash by driving u-haul trailers and trucks back to the bay area. He did this on a case by case basis by showing up at the various u-haul places and offering his services. Generally they would rent him the equipment for "free" and pay him expenses plus a small fee when he returned with the item. Personally I don't think it covered the mileage on his truck but he enjoyed the drives.
Second, a lot of storage places "filled up" with excess inventory from people who rent furniture. I'm not sure if they learned their lesson and now have a warehouse standing by or what.
Third people who had some runway would hang around looking for new/different work for a reasonably long time, so the impact on their freeing up housing was diffuse.
And finally, the impact on traffic was the most notable. Improvment projects that had added efficiency in the dot com boom were now over provisioned for the traffic they carried. It was actually pretty reasonable to drive up and down Highway 101 and I-x80 at "rush hour."
Anecdotally, a significant number of houses that had been built on spec in my neighborhood, and took bids in 1999, fell out of escrow in 2001 before they could be occupied. One sat unoccupied for 5 years. Because the company that owned it could not sell it for what they paid and they were unwilling to take on the expense/complication of leasing it out. That would be harder to happen, the primary reason the houses fell out of escrow is that the down payments were in "stock" which became worthless. And the lack of liquidity in this downturn means that fewer people could sell their equity to fund a down payment and eventual balloon payment. My "test case" is the set of new houses that were built at the corner of Iowa and Taffe in Sunnyvale. They seem to have similar timing.
I still have the whiteboard. Those things are stupidly expensive.
This is overall though, not what people are offering now.
I'm in the market and don't see rents coming down, but SF-proper inventory I'm looking at (more industrial "PDR" / mixed-use) is all many months old, so unsure if prices will come down soon to make them move.
http://www.paragon-re.com/Luxury_Homes_Market_Cools_Affordab...
It's still early, though. Their March 2016 market report is inconclusive on what's happening with prices. However, this could really put the lie to the people who believe that indiscriminate building is the solution to high rents. Folks are likely to find out that when developers overbuild at the high end, they don't just keep building and let the new units go for a steal -- they stop building entirely.
And then they'll stop. Then who will buy?
See how that works?
Housing and rents in the Bay are unsustainable. You'd have to have a lot more highly paid professionals than we do to support these values over the long term. I don't see that happening. Already a lot of developers are looking for jobs outside of the Bay Area.