For those who dont believe we turned the corner...more evidence

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y

diane,,, maybe... maybe not... its not like there is a huge amount of new construction in the area.. so you still have that ole supply demand thingee going on.. not nearly enough housing for too many people even without adding anyone.. vacant office space like I said is pretty common in most areas simply because of lag time and production time..  these buildings are not erected as build to suits very often its build it and they will come.. now if your an investor in one of the PPM's or syndications that owns some of this see through real estate then maybe you have something to worry about.. Time will tell of course.

And I don't see how being next to the levi stadium really makes that much difference in appeal.. folks work during the week 9ers play on Sunday... although it will boost the local bar and restaurant business on game days.. I know when I used to have my season tickets at the stick .. the local bars and delis etc did well on game day other wise it was just daily routine..

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  • Daria B.
    Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
    9y

    how? The article speaks of vacancies and no growth. What am I missing ?

    0Reply
  • Travis Dawson
    Investor · Moscow, ID · Member since 2017 · 107 posts · 76 votes
    9y

    Way too small of a sample area to make any concrete predictions about the market as a whole. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Diane G. whats your point you think this will equate to a deep softening in the SFR space ?

    pretty common in the commercial world though.. given the lead time it takes to get permits and build these out.. ... Now Jobs report would be the key indicator I would think .. not vacant over built commercial by commercial speculators.

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  • Diane G.
    OP
    CA · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    @ Jay Hinrichs

    I see this as a demand issue....To me, this is another indicator that business/job has max out, at least in Silicon Valley.... With the softening of jobs, I am hoping the RE price will soften too.... Make sense? 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    diane,,, maybe... maybe not... its not like there is a huge amount of new construction in the area.. so you still have that ole supply demand thingee going on.. not nearly enough housing for too many people even without adding anyone.. vacant office space like I said is pretty common in most areas simply because of lag time and production time..  these buildings are not erected as build to suits very often its build it and they will come.. now if your an investor in one of the PPM's or syndications that owns some of this see through real estate then maybe you have something to worry about.. Time will tell of course.

    And I don't see how being next to the levi stadium really makes that much difference in appeal.. folks work during the week 9ers play on Sunday... although it will boost the local bar and restaurant business on game days.. I know when I used to have my season tickets at the stick .. the local bars and delis etc did well on game day other wise it was just daily routine..

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    Diane,   speaking of Levi's  don't be confused with basketball and Baseball stadiums.. they play 41 and 81 home games reprectivly on all different days and times big BOON to local merchants.. Football not so much..

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  • Diane G.
    OP
    CA · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    Jay - American Parkway is a PRIME office location, mostly A+ office buildings...used to be always fully occupied...That is pretty alarming if you compare now to before.... 

    Separately, my ex boss at previous company has been out of a job for close to a year now... he was sr finance director making 300K... My ex ex boss at the company prior to that has been out of a job for close to 1.5 years now... She was sr. finance director as well making $300K too....Then there was my neighbor who was a communication director at Kaiser lost her job about  1 year ago, still looking.....

    I guess my point is that things are really maxing out here in Silicon Valley....

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    Diane,,,,, OK  will watch and see.... although like I said commercial A+ or other wise goes vacant all the time companies move ... companies fold companies start again... Lets just watch and see what happens.. sometimes its a self full filling prophecy .

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  • Hersh M.
    Engineer · Carlsbad/San Diego · Member since 2014 · 285 posts · 97 votes
    9y

    @Diane G. Coincidentally I came across the exact same article earlier today while researching commercial RE space. I am not sure how much of it applies to residential space. 

    @Jay Hinrichs You are in CRE space, right? I heard there is a tsunami of CRE loans coming due this year with potential to cause (mini?) crash. Whats your take on CRE space with rising delinquencies and all these loans coming due?

    About overbuilding, I see tons and tons of brand new office building  as well as rental apartment units either newly launched over last 1 year or under construction everywhere I drive around Sunnyvale, Milpitas, etc. I dont have a reference to compare it to, but if you ask me, it definitely seems like oversupply here. (Even the road infrastructure here cant handle such a high influx of new people assuming all of that gets leased/rented) Now if demand is high, then it wouldnt matter but if demand takes a hit with economy, that could spell some trouble atleast short term. Last few weeks have been bad for tech stocks and markets are pretty smart. BTW, are you involved in any of the construction here in the valley? 

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  • Account Closed
    Professional · Brooklyn, NY · Member since 2017 · 624 posts · 147 votes
    9y
    Originally posted by @Diane G.:

    http://www.businessinsider.com/silicon-valley-is-b...

    Waiting is hard, but I am more and more convenced that it is going to be worthwhile....

    @Diane G. A drop of 50% in commercial leasing activity between 2015 and 2017 may be cause to look further into what is happening within the space and not necessarily evidence that the economy generally is heading toward or in a recession. Also Yahoo was recently sold to/bought by Verizon so wouldn't put much weight on how any scrapped plans within Yahoo is being indicative of the state of the economy. Prices however both in real estate and in equities have been growing almost steadily last few couple of years that everyone is expecting a correction that just may result in it.

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  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    We are closer to a top than a bottom but usually real tops blindside people.  It is usually not something that most see coming.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Hersh M. I am not in the CRE space I have owned some commercial and its a niche.. and I have experienced personally the long term vacancies ergo I would no longer be in that business.. because of what your seeing now.

    my frame of reference really is as a land developer and home developer.. I know what the lead times are for these projects usually years.. so when they are approved it was years ago and everything was booming by the time they are finished you miss the market.. its the risk these Commercial developers take.. there is rarely equilibrium  there is usually too much or too little.  Other than areas of the country were the city up and moved on you and the neighborhood went way down.. so commercial moves to newer fancier areas.. but in land constrained west coast cities.. it usually gets a facelift if its old.. or demo'd and rebuilt.. its not like you see out east were it just gets abandoned and left to rot.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch

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  • Diane G.
    OP
    CA · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    @ Russell Brazil, @ mike fletcher

    let me put it this way.... I bought all my holdings on short sale or foreclosures in the last cycle, 

    bought a timeshare in Northstar for $16K from the previous owner who paid $119K about 8 years earlier

    bought a SFH for $350K from the previous owner who paid $600K about 5 years before .. this is actually a foreclosure via BOA

    bought a condo for $635K from someone who paid $700K a few years earlier

    bought another condo for $680K from someone who paid $800K before....

    So, if I can draw any conclusion - wait is worthwhile when things just don't make sense...

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  • Diane G.
    OP
    CA · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    If waiting 5 years can get me a C class MFH in phoenix for half of the price today, guess what, I think it is worth waiting..... Just for LOl... Not sure if I will go Phoenix again...

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Diane G.  One thing your missing dear is that when you bought all of these it was the best buying opportunity of the last 40 years... the only time that there was as good or better was about 1990 to 1992  when you had 50% devaluation on some SF and prime bay area assets....

    so from that point on it took another16 years and a world crisis to set up your good buys.. ( although I really like the Northstar one I like Northstar a lot) but you time shares are historic for being able to buy pennies on the dollar in any market.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    Life is pretty short to think about investing 5 years into the future, which is a large percentage of someones life span.  I bought plenty of properties at the bottom of the market crash, but that was likely a once in a lifetime opportunity. The last time there was a large scale decline in prices in my DC market before that was after the 1968 DC riots. 

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  • Rahul Bhatt
    Fremont, CA · Member since 2015 · 289 posts · 63 votes
    9y

    riginallyy @Diane G.:
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  • Diane G.
    OP
    CA · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    @ rahul bhatt - no, i am not selling any of my properties.... I am looking to buy more... In theory, one can argue that it makes the most sense to sell now and buy back later.... However, with tenants in there, it is a LOT of work to try to sell... So i am good, not selling....

    Over the last 10 years, I have saved up some more and am in a position that I can potentially buy more...

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  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    A approaching decline will be preceded by many scattered signs that most will not connect together. This may or may not be one of those signs.

    Waiting may be smart, lucky or a mistake. At this point in time waiting may pay big dividends or be a minor blip in your time lines.

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