How do you arrive at 40%? The peninsula has never experienced such a drastic decline since.. ever.
Even through the dotcom bubble and 2008 financial crisis.
Even through the dotcom bubble and 2008 financial crisis.
$1.5m @ 2.50% yielded a ~$6k/mo P&I payment last year
$868k @ 7.25% yields a ~$6k/mo P&I payment currently.
The price of this theoretical home need to drop ~40% to result in the same monthly payment. Home prices won't drop until people are forced to sell and widespread layoffs are just the catalyst necessary.
Outside of SV, I expect you'll see such a drop.
Point being, if most of those cash offers are really a 30-year mortgage in a trench coat, the peninsula might slump very quickly in the near future.
But just like any market the prices may not be connected to those fundamentals. It depends on expectations.
But yes, the perfect storm was always going to be rates going up and a recession and if this isn't the perfect storm then what is. Well, my house is up 40% since I bought it exactly two years ago so I think I'll survive (I knew I was taking some risk). [EDIT: Not in the Bay Area]
"And you'll have a yard without committing to a 3 million dollar investment!"
Oh well, back to patching the grout on my dilapidated million dollar shithole condo..
Maybe I'm misunderstanding, but it kinda looks like a national forest or something when you drive along 280
One of the perks of living in Silicon Valley; you can get out of the office and go hiking or biking in nature
https://lao.ca.gov/1995/010195_calguide/cgep1.html
Edit:not in SV, but the real estate prices probably felt it