SF Bay Area Housing Prices Suffer Largest OneMonth Drop On Record

Buying & Selling Real Estate
4yFollow

SF Bay Area Housing Prices Suffer Largest OneMonth Drop On Record

Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

Looks like some markets are begining to feel the effects of higher interest rates, a "non-recession" recession, and loss of confidence in the job market. I'm sure it's just temporary & will heal like pulling a scab off your face, but it will sure look ugly.

--------------------------------------------

In fact, housing prices in the nine-county region suffered their largest one-month drop on record, falling 7% from May to June, with median prices of existing single-family houses dropping from $1.5 million to $1.4 million, according to the , citing the California Association of Realtors.

"From this point on we probably won’t see another record price, at least for this year, for either the Bay Area or for the state," said Oscar Wei, deputy chief economist with the California Association of Realtors, who noted that it's uncommon to see such a sharp decline in June - which is typically the busy summer home-buying season.

1Reply
230 views

Most Popular Reply

Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
4y

San Francisco is a cyclical market. It has large run ups, then receeds a little, then large run ups again. Always been that way.

[email protected]301-893-4635Podcast Guest on Show #192
District Invest Group545 Reviews
WebsiteView Page
7Reply
See this reply in the discussion

38 Replies

Jump to latestLatest
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    4y

    @Account Closed I too am watching this stuff with great interest but... the median Bay Area house price is still way, way, way above what it was in 2015 or 2010.  So I don't know what it means for it to fall slightly...

    1Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    4y

    Failing city, not indicative of national market in my view

    [email protected]
    Harpoon Capital515 Reviews
    WebsiteView Page
    6Reply
  • Osazee Edebiri
    Realtor · San Jose, CA · Member since 2015 · 318 posts · 154 votes
    4y

    Tells me it's a good time to buy.

    Just like that very short dip our Bay Area market had at the very beginning of the pandemic

    1Reply
  • Account Closed
    OP
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    4y
    Quote from @Robin Simon:

    Failing city, not indicative of national market in my view

     The study covers 6 counties. But yes, San Fran is a very failed city. I used to love visiting, now I don't want to step over human feces and drug needles or get shot or stabbed.

    9Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Quote from @Account Closed:
    Quote from @Robin Simon:

    Failing city, not indicative of national market in my view

     The study covers 6 counties. But yes, San Fran is a very failed city. I used to love visiting, now I don't want to step over human feces and drug needles or get shot or stabbed.


    same with LAX Seatac PDX same issues unfortunately.  
    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    2Reply
  • Osazee Edebiri
    Realtor · San Jose, CA · Member since 2015 · 318 posts · 154 votes
    4y
    Quote from @Jay Hinrichs:
    Quote from @Account Closed:
    Quote from @Robin Simon:

    Failing city, not indicative of national market in my view

     The study covers 6 counties. But yes, San Fran is a very failed city. I used to love visiting, now I don't want to step over human feces and drug needles or get shot or stabbed.


    same with LAX Seatac PDX same issues unfortunately.  
    Hence why a lot of people moved to the suburbs during the pandemic, especially with work from home.
    4Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Quote from @Osazee Edebiri:
    Quote from @Jay Hinrichs:
    Quote from @Account Closed:
    Quote from @Robin Simon:

    Failing city, not indicative of national market in my view

     The study covers 6 counties. But yes, San Fran is a very failed city. I used to love visiting, now I don't want to step over human feces and drug needles or get shot or stabbed.


    same with LAX Seatac PDX same issues unfortunately.  
    Hence why a lot of people moved to the suburbs during the pandemic, especially with work from home.

    3 to 7 years ago it was all about walk score  now you hardly ever hear it mentioned.. I know for us we are building 90 homes in the suburb of Portland right now ( Canby) and its just exploded and almost half of my buyers are moving from inner city.. the empty nesters they have tired of the social issues.  On top of that at least in PDX many of the fine dining resturants that attracted folks from the suburbs have closed and opened in the suburbs  my little city of Lake Oswego has seen about 5 of the top PDX resturants relocate to new commerical developments no longer have to drive down town. Kind of nice really
    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    3Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    4y

    San Francisco is a cyclical market. It has large run ups, then receeds a little, then large run ups again. Always been that way.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    7Reply
  • Osazee Edebiri
    Realtor · San Jose, CA · Member since 2015 · 318 posts · 154 votes
    4y
    Quote from @Russell Brazil:

    San Francisco is a cyclical market. It has large run ups, then receeds a little, then large run ups again. Always been that way.


     I would assume most metropolitan areas look like this. Although as a person who has lived in the Bay my whole life except school, I would say you know the world has truly gone to sh*t if the San Jose market crashes. Every up and down I watch and it seems untouchable.

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    4y
    Quote from @Osazee Edebiri:
    Quote from @Russell Brazil:

    San Francisco is a cyclical market. It has large run ups, then receeds a little, then large run ups again. Always been that way.


     I would assume most metropolitan areas look like this. Although as a person who has lived in the Bay my whole life except school, I would say you know the world has truly gone to sh*t if the San Jose market crashes. Every up and down I watch and it seems untouchable.


     Neither of the 3 major metro areas on the east coast I invest in look like this. DC, Boston, Charlotte. I also know that NYC does not look like that...NYC though you can basically overlay a stock market chart onto the housing chart and it looks pretty similar.

    Other markets that do look like San Francisco's cyclical nature would be Phoenix and Las Vegas.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    1Reply
  • Osazee Edebiri
    Realtor · San Jose, CA · Member since 2015 · 318 posts · 154 votes
    4y
    Quote from @Jay Hinrichs:
    Quote from @Osazee Edebiri:
    Quote from @Jay Hinrichs:
    Quote from @Account Closed:
    Quote from @Robin Simon:

    Failing city, not indicative of national market in my view

     The study covers 6 counties. But yes, San Fran is a very failed city. I used to love visiting, now I don't want to step over human feces and drug needles or get shot or stabbed.


    same with LAX Seatac PDX same issues unfortunately.  
    Hence why a lot of people moved to the suburbs during the pandemic, especially with work from home.

    3 to 7 years ago it was all about walk score  now you hardly ever hear it mentioned.. I know for us we are building 90 homes in the suburb of Portland right now ( Canby) and its just exploded and almost half of my buyers are moving from inner city.. the empty nesters they have tired of the social issues.  On top of that at least in PDX many of the fine dining resturants that attracted folks from the suburbs have closed and opened in the suburbs  my little city of Lake Oswego has seen about 5 of the top PDX resturants relocate to new commerical developments no longer have to drive down town. Kind of nice really

     Congratz on the 90, definitely have my sights set for those kind of goals. The city's will eventually get their acts together for the Bay I am mainly speaking to SF, then Oakland. Let's not forget there is this statistic that says SF has the most billionaires living in it in the world. (People seem to debate whether that includes pinnsula cities.)

    These are places people want to live, how long it takes to correct or at least make better who knows.

    1Reply
  • Osazee Edebiri
    Realtor · San Jose, CA · Member since 2015 · 318 posts · 154 votes
    4y
    Quote from @Russell Brazil:
    Quote from @Osazee Edebiri:
    Quote from @Russell Brazil:

    San Francisco is a cyclical market. It has large run ups, then receeds a little, then large run ups again. Always been that way.


     I would assume most metropolitan areas look like this. Although as a person who has lived in the Bay my whole life except school, I would say you know the world has truly gone to sh*t if the San Jose market crashes. Every up and down I watch and it seems untouchable.


     Neither of the 3 major metro areas on the east coast I invest in look like this. DC, Boston, Charlotte. I also know that NYC does not look like that...NYC though you can basically overlay a stock market chart onto the housing chart and it looks pretty similar.

    Other markets that do look like San Francisco's cyclical nature would be Phoenix and Las Vegas.


     That's interesting, aside from NY what makes the cities similar and different in their cycles?

    0Reply
  • Jack Seiden
    Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes
    4y

    I’m seeing the the same the thing in the DC area. I sold a flip in March for 735k, same block a rowhome that’s an exact comp is sitting at 660k, Which depending on what it eventually sells for would represent a 10-15% drop. Seeing that all over D.C. proper, the suburbs less so maybe 3-5% off peak.

    1Reply
  • Jim Spatzenfeld
    Investor · NorCal · Member since 2015 · 282 posts · 240 votes
    4y

    So now it’s only 1.4 million instead of 1.5 million for an old rotten 3BR / 1 bath shack along the freeway? Let me take 5 please, or no, make it a dozen, it’s a heck of a deal!

    0Reply
  • Osazee Edebiri
    Realtor · San Jose, CA · Member since 2015 · 318 posts · 154 votes
    4y
    Quote from @Jim Spatzenfeld:

    So now it’s only 1.4 million instead of 1.5 million for an old rotten 3BR / 1 bath shack along the freeway? Let me take 5 please, or no, make it a dozen, it’s a heck of a deal!

    This makes me think of when they use to say “ride the dip” in relation to crypto.
    0Reply
  • Mike Dymski
    Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    4y

    All the talk on the forums that the housing market is immune to much higher interest rates, a recession, and coming off government action induced asset values is unrealistically optimistic.  And, yes, we are in a recession...forget about all the GDP and technical noise.  The question now this the depth...and stagflation.  Fed actions drive asset values.  End stop.  We have a debtism economy not capitalism.  The housing market has a lot of mitigants, most notably low supply, which will only be exacerbated by higher rates because people can't move.  But, the housing market is not immune.

    I am building a hybrid apartment/hotel; so, I am moving forward with a large investment because I feel it's a good opportunity and feel there are opportunities at all points in the cycle.

    5Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Quote from @Osazee Edebiri:
    Quote from @Russell Brazil:

    San Francisco is a cyclical market. It has large run ups, then receeds a little, then large run ups again. Always been that way.


     I would assume most metropolitan areas look like this. Although as a person who has lived in the Bay my whole life except school, I would say you know the world has truly gone to sh*t if the San Jose market crashes. Every up and down I watch and it seems untouchable.


     YUP i was raised in cupertino lived for years in Palo Alto and the Napa Valley so from one end of the Bay Area to another.. your graph is very accurate as I was selling real estate or lending in the Bay Area in those years. The early 90s downturn though was the worst of it. some high end properties suffered 50% crash.. from 88 to 89 highs.. EArthquate and the war took its toll.  It sucks if you have to sell in one of the troughs unless you buy in the trough as well.  I sold Palo Alto in 92 ish in the trough but still sold for over double what i paid for in it mid 80s and bought in napa in the trough house was 2 years old and I bought it for 20 to 25% less than the folks. then it doubled and sold it in 01 and we were in a mini trough but bay area or at least Silverado was not really affected but i got a screaming deal on my PDX home that then doubled etc etc. 

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    0Reply
  • Jon Martin
    Member since 2022 · 1k+ posts · 1k+ votes
    4y

    I'm not sure why this is even worth causing a stir about? The highs leading up to this were absurdly high because of all of the factors we've been discussing for years (printed money, inventory, high paid workforce, etc), plus you had a lot of sellers listing with aspirational prices and bidding wars that pushed selling prices into unrealistic territory. With that mind, in combo with rapidly rising rates and a down stock market, is a 7% drop from super high prices even surprising? 

    You also have to take market psychology into consideration, which is often out of wack from the fundamental health of a market. People drastically change their behavior and often make rash decisions when there is an abrupt change of circumstances, especially when it comes to finances. That is exactly what we are seeing, which is perfectly normal and likely irrelevant when looked at from a 3-5+ year perspective. 

    1Reply
  • Account Closed
    OP
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    4y
    Quote from @Jon Martin:

    I'm not sure why this is even worth causing a stir about? The highs leading up to this were absurdly high because of all of the factors we've been discussing for years (printed money, inventory, high paid workforce, etc), plus you had a lot of sellers listing with aspirational prices and bidding wars that pushed selling prices into unrealistic territory. With that mind, in combo with rapidly rising rates and a down stock market, is a 7% drop from super high prices even surprising? 

    You also have to take market psychology into consideration, which is often out of wack from the fundamental health of a market. People drastically change their behavior and often make rash decisions when there is an abrupt change of circumstances, especially when it comes to finances. That is exactly what we are seeing, which is perfectly normal and likely irrelevant when looked at from a 3-5+ year perspective. 

     Your Comment: "I'm not sure why this is even worth causing a stir about?"

    Because it's positive news and we can use whatever good news we can get. ;-)

    It's like "today it's 103 degrees in Phoenix and we're happy because it could be 112 and probably will be 112 again in the next few days, but for now, it's lower than it was and lower than it will be".

    2Reply
  • Gargi Keeling
    Rental Property Investor · santa cruz county, CA · Member since 2016 · 37 posts · 10 votes
    4y

    @Mike Hern Yep, I'll be watching this closely since I live and invest in the area. I'm hoping the rents will come back up since I took a hit during the pandemic. I'm still struggling with getting contractor resources to fix up my rental. I'm hoping with the recession that I'll get more chances to hire people to actually do the work.

    0Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Osazee Edebiri:

    Not to mention the hundreds of thousands that just leave period every year :-)


    0Reply
  • Osazee Edebiri
    Realtor · San Jose, CA · Member since 2015 · 318 posts · 154 votes
    4y
    Quote from @Bruce Woodruff:
    Quote from @Osazee Edebiri:

    Not to mention the hundreds of thousands that just leave period every year :-)



     Haha, I don’t know about 100’s of thousands.

    0Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Osazee Edebiri:

    Yep - About 200+k net every year from Cali......

    0Reply
  • Naveed Q.
    Investor · Brentwood, CA · Member since 2012 · 139 posts · 53 votes
    4y
    Quote from @Bruce Woodruff:
    Quote from @Osazee Edebiri:

    Yep - About 200+k net every year from Cali......


     But still continues to grow.

    "Despite headlines of tech workers moving and companies relocating, California and New York maintain the top locations for company formation, which has largely not changed over the past five years. Surprisingly, as this bucks the narrative of the downfall of Silicon Valley. yet even with the tech workforce dispersing. San Francisco is still the major innovation center— perhaps helped in part by declining residential and commercial rents."



    California showed its economic power last year by attracting no less than 97 billion dollars of venture capital investments, coming from a total of 396 deals.


    Source: https://www.airswift.com/blog/...

    Source: https://www.svb.com/globalasse...

    0Reply
  • Osazee Edebiri
    Realtor · San Jose, CA · Member since 2015 · 318 posts · 154 votes
    4y
    Quote from @Bruce Woodruff:
    Quote from @Osazee Edebiri:

    Yep - About 200+k net every year from Cali......

    So my research says it's about 650,000 that actually left, but about 440,000 move in. So we yes about 210,000 net.

    TBH, I think that makes sense giving how some of the major metros are running the cities, but I also think about the benefits vs the negatives. I would say for the majority of people I hear leave, most want to move back but find the cost to come back prohibitive or a reduction in the quality they had prior to leaving. People who do really well leaving are people who already made it here in Cali for example like @Jay Hinrichs in this thread.

    Not an exact science, but when people move just assuming life will automatically be better because the cost of living is lower, that typically doesn't work out. 

    My cousin moved to Florida, hated it. He moved back, took him awhile to get restablished. Now he has a home in Concord and he and his fiancé are working with me to get their investment portfolio up, here in California.

    I actually see a number of number of friends move on Facebook and the majority of them come back. A trend I have been seeing for years.

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free