Bidding war in SF east bay area

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Bidding war in SF east bay area

David Song
Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes

Just offered for a friend on a run down SFR in fremont's nile district.

37286 3rd St. Fremont

List price: $750K

His offer: $869K

This house (1500 sf) needs complete rehab, and is right next to a school.

Here is the response from the listing agent.

Offers received in total, 28.

3 offers over 1 million dollars

3 offers 950-1 million

2 offers 900-950

13 offers 850-900

3 offers 800-850

3 offers 750-800

1 offer under 750


Mass exodus from CA? Are you kidding me?

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Cherisse B.
Member since 2020 · 27 posts · 27 votes
5y

I literally just made a post about the Miami Mayor billboard in San Fran. Miami may be clean across the country, but it could be the next frontier. (Maestro cue, "Bienvenidos a Miami" by Will Smith!)

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  • Brian Garlington
    Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    @David Song      Preach!!!!!!!!!!!!

    5Reply
  • Daniel Machado
    Investor · Sacramento · Member since 2021 · 18 posts · 21 votes
    5y

    @David Song I have friends in Oakland experiencing similar bidding wars. Rents may have fallen but people are prioritizing more space in East bay and single family homes.

    4Reply
  • Cherisse B.
    Member since 2020 · 27 posts · 27 votes
    5y

    I literally just made a post about the Miami Mayor billboard in San Fran. Miami may be clean across the country, but it could be the next frontier. (Maestro cue, "Bienvenidos a Miami" by Will Smith!)

    10Reply
  • Malgorzata SadowskaPro Member
    Real Estate Agent · Miami, FL · Member since 2017 · 506 posts · 205 votes
    5y

    If any of our Bay area (or anywhere in the country) need info on Miami - feel free to connect. I post a lot too :)

    2Reply
  • David Song
    OP
    Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
    5y

    @Daniel Machado The bidding war in hayward, union city, fremont, and some other east bay cities are going beyond my belief. The demand exceeded supply by a large margin. At the lower end of the price range, over bidding by at least 100K is normal. On the peninsula, some cities have no supply at all (e.g. foster city). All houses are sold within 1-2 weeks.

    Rents may have come down in SF city, and some peninsula areas, but prices are going to break record this year. For those gurus predicting a crash due to forebearance, that is unlikely to materialize.

    3Reply
  • Gary Mendelson
    Member since 2021 · 1 post · 1 vote
    5y

    Yes, the exodus is real. I went to a local U-haul to install a hitch on my car and there were only three trucks for rent on their lot. And even those three were already reserved. I asked them where are all of the rental truck, they said they all were taken by people leaving the state and left in other states. It takes some time to bring them back. I don't think though that the people who are leaving would be among those taking part in these bidding wars with over a mil. offers. Even my relatives left for NC. And they would be literally the last people to leave this state, like 100%.

    1Reply
  • Vincent Fontela
    Member since 2021 · 2 posts · 1 vote
    5y

    Whether the "exodus" is real or not, with the overpopulation of the Bay Area, I still think the supply-demand is still high. That being said, do any of you guys recommend holding or selling? 

    0Reply
  • Justin Thorpe
    Member since 2020 · 437 posts · 675 votes
    5y

    @David Song

    There is no mass exodus! Most have simply moved from one Bay Area locale to another. That’s why you see the bidding wars in suburban communities.

    One of my SF tenants in pacific heights who just hit IPO gold is moving to a new construction community in Fremont. He is paying $2.4m for the place. I listed my place out and got an overwhelming response mostly from out of state people moving in. It was crazy!

    As for the Miami, Austin blah and blah, that’s more noise vs action. My Austin buddies have been in contact with me and have stated desire to move back one day. They also know that the longer they wait the harder it will become to afford a roof in the bay.

    To me Miami’ looks like the most desperate guy at the party and those billboards are super weird. Everyone criticizes SF but everyone wants to be SF lol!!!

    1Reply
  • Darius Ogloza
    Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    5y

    What @David Song is observing in the East Bay is happening in Marin.  We just put in a $965,000 all cash, no contingencies, 15 day close offer on a fixer in Mill Valley listed for $899,000 and were told that ours was the 13th best offer out of 20 received.  People are leaving the city for the suburbs, which makes perfect sense after so many have been forced to entertain their young children in 800 square foot apartments, cook on apartment sized stoves and share elevators with strangers during a pandemic.  If anyone out there is dreaming of an exodus from the Bay Area so large they will be able to swoop in and buy a condo on Russian Hill for what you pay in Cincinnati or Pittsburgh - forget about it.  

    5Reply
  • Justin Thorpe
    Member since 2020 · 437 posts · 675 votes
    5y

    @Darius Ogloza

    I am a landlord in SF and NYC. Both cities have started to see an uptick in rental activity. NYC in particular.

    Yesterday JP Morgan issued a client note stating they see the pandemic dissipate in the next 40 - 80 days as vaccine supplies rise dramatically.

    I think cities are in a coiled spring mode right now and will make a mega comeback in the summer. Of course the bay suburbia will continue to see solid momentum. What won’t and will end up being a standing joke will be all these “exodus stories” and how city X, Y and Z are are seeing a massive influx of Bay Area migration etc.

    Times are changing. Every business, town, city and state that was banking its fortune on the pandemic lingering around through eternity may have to pare down their hopes!

    4Reply
  • Jeffrey Davis
    Realtor · Miami, FL · Member since 2020 · 20 posts · 29 votes
    5y

    LOL! This may be my favorite BP thread ever. Thanks for sharing the great info/real experience about investing in the Bay Area.

    My family can be an American case study of the great migration OUT of Cali. Brother=moved to NV with Tesla. 2nd brother moved to Austin TX. Sister moved to Seattle WA. I moved to DC, and now live in Miami FL. Mom is about to list SoCal house and move to Washington. Dad is holding it down on a million dollar ranch estate in San Diego with view of the ocean.

    I love CA. California has everything every other state has, only better. But if you are an investor, you gotta follow the numbers. The numbers are here in Florida, especially with some exciting new projects under way that will attract Big Tech.

    Business Insider Article from Nov 2020:

    (https://www.businessinsider.co...)

    "Amid the coronavirus pandemic, many are ditching giant hubs like New York City and San Francisco and looking to shack up elsewhere...
    The 25 cities that scored the highest are scattered across 10 states, all of which are either clustered in the South or the West. Texas leads the list, appearing six times; Florida is close behind, with five cities ranked among the top 25."

    BP Article from 2017

    WH RankLarge CitiesWH ScoreP/R Ratio
    1Austin, TX59.8814.06
    2Charlotte, NC55.4511.62
    3Denver, CO54.3615.82
    4Seattle, WA52.6521.25
    5Nashville, TN51.3812.26
    6San Jose, CA50.6422.22
    7Miami, FL50.0112.16
    8Oakland, CA48.9918.68
    9San Francisco, CA48.9823.51
    10Raleigh, NC48.8712.69
    6Reply
  • Sattir Bitti
    Member since 2020 · 56 posts · 24 votes
    5y

    @David Song

    Same in other areas of East Bay. Each property is going to pending in a week and as you noted at least 100-150k above asking price. Low interest rates added with $$$ in stock gains leading to cheap money. $100K over price is just 20-25k out of pocket, when stock market goes up it's a very small amount for employees in startup and companies with stocks.

    2Reply
  • Joanne Tsai
    Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes
    5y

    @Justin Thorpe

    Hi Justin,

    Do you have any data to suggest that NYC rental activity is up? My tenant is moving out in the summer to TN, I’m contemplating to look for new tenants or to sell it.

    Thanks!

    0Reply
  • Iris Y Tang
    Realtor · Western MA · Member since 2020 · 13 posts · 3 votes
    5y

    WOW! Bidding war indeed!  Similar here in Western Massachusetts!

    0Reply
  • David Song
    OP
    Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
    5y

    @Justin Thorpe

    The rent did go down on the peninsula. I had a 1 bedroom for rent last month. The previous rent was $2100, and I had to drop to $1800 to finally get some qualified tenants. This kind of thing never happened before.

    There are quite a few vacancies in San Mateo, some are advertising for 1st and last month free. That is what drives rents down.

    Once some apartment rents are down, tenants in other apartment will try to relocate to those cheaper units and further drives down the rent. There are quite a bit of turnovers right now.

    However, if the Covid situation is controlled in the coming few months, with the help from the vaccine, there should be less of vacant units and the rent might return to pre-covid level quickly. Just a guess.

    To the contrary of rent price, housing price surged quite a bit in the last 1-2 months, both on the peninsula and particularly in east bay. 

    0Reply
  • Sandra Regnell
    Rental Property Investor · Vancouver, WA · Member since 2014 · 68 posts · 37 votes
    5y

    @David Song mass exodus of the working class. It will be like Manhattan.

    3Reply
  • David Song
    OP
    Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
    5y

    @Darius Ogloza

    Exodus from CA, maybe true to some degree, did not really affect Bay area housing price. I knew a few people who left for Florida, Texas, and Las Vegas. All of them regretted dearly. Some of them sold their house in east bay and moved out, and was never going to be able to afford the same house that they sold 10 years ago. 

    There are two categories of people that move into CA:

    1. New employees hired from high tech companies: usually highly educated, well paid. Those folks will have company paid relocation benefit and have no problem bidding on a house. 

    2. New immigrants: those folks are hard working people trying to find jobs here, that pays better than other areas. They are the workforce in the bay area, and are typically renters.


    There are a few main categories of people that move out of CA:

    1. Retirees: They do not need to work and choose to sell their million dollar house and retire comfortably somewhere else. They may move to FL, TX, or other cheaper regions.

    2. People who can not afford the rent here: Those are people who are middle class people and who are struggling with the high cost of living here. I have a few tenants who are contemplating moving to TX, however, they have not moved yet and are still trying to survive here in Bay Area.

    3. People who choose to move out, based on tax considerations and other business and employment opportunities elsewhere, or remote work.

    The people who moves in typically are higher income earners and can bid on houses. People who moves out are mostly renters and did not have enough houses for sale. Therefore, the so called mass exodus actually did not create a larger housing supply for the new comers, but to the contrary, did not stop the dramatic reduction in supply. The reduction in supply directly caused the surge in housing prices.

    8Reply
  • Benjamin Goodman
    Investor · Boston, MA · Member since 2018 · 45 posts · 31 votes
    5y

    @David Song so one person bought a ridiculously over-priced piece of property and 27 people left for Miami, Austin and Seattle 🤔

    6Reply
  • AJ Smith
    Rental Property Investor · Oakland, CA · Member since 2020 · 11 posts · 15 votes
    5y

    @David Song $1800 for a 1bed in the Penninsula??!? I’m renting 1beds in Deep East Oakland for $1975.

    1Reply
  • David Song
    OP
    Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
    5y

    @Benjamin Goodman for the 27 families that was outbid, most will likely stay due to job. My friend is working in Fremont so he can not move.

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    5y

    Last month I see a ruined property in San Jose. List for $600k. My bid is $400k. Sold for $900k :)
    Oakland 6 room commercial listed for $1.2. Condition: almost ruined.

    I'm thinking of letting go my duplex.

    1Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    5y

    Problem with Miami is: Miami market is much more expensive  relative to the median income compare with Bay Area median/house payment. 

    Mass Exodus of working is not right also, working class in bay area is typically making 90k/year. They can still rent $2000 easily and if they have down, they can afford $800k houses. My buddy that worked in USPS just buying 900k houses. 

    1Reply
  • Hernando Quintero
    Investor · San Francisco, CA · Member since 2020 · 31 posts · 22 votes
    5y

    San Francisco is currently a renter’s market and I don’t see this changing anytime soon. The suburbs will be the first option for those desperate for space WFH. But , only those who are ok with paying 1 million plus for a house. The rest ( great majority) will go to cheaper states where assets/taxes ase cheaper.

    1Reply
  • Brian LarsonPro Member
    Investor · San Jose, CA · Member since 2018 · 313 posts · 230 votes
    5y

    @David Song - Lots of people leaving but even more coming / staying.  I think your reasons for the strong prices are spot on.

    "There are two categories of people that move into CA:

    1. New employees hired from high tech companies: usually highly educated, well paid. Those folks will have company paid relocation benefit and have no problem bidding on a house.

    2. New immigrants: those folks are hard working people trying to find jobs here, that pays better than other areas. They are the workforce in the bay area, and are typically renters.

    There are a few main categories of people that move out of CA:

    1. Retirees: They do not need to work and choose to sell their million dollar house and retire comfortably somewhere else. They may move to FL, TX, or other cheaper regions.

    2. People who can not afford the rent here: Those are people who are middle class people and who are struggling with the high cost of living here. I have a few tenants who are contemplating moving to TX, however, they have not moved yet and are still trying to survive here in Bay Area.

    3. People who choose to move out, based on tax considerations and other business and employment opportunities elsewhere, or remote work."

    4Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    5y

    One thing people outside bay area not easy to understand is the tech engineer starting salary these days is $130k. When husband and wife is working, household income is usually greater than 250k and they can afford by mortgagage law to buy 1 mil house.

    1 mil house and lower those days is sold to working class or multi family that contribute together, there're also more affordable city within bay area like in north bay where you can still buy house for 300-400k.

    Most immigrant will not leave bay area as it's the only area in planet earth that can provide such fantastic income. 

    3Reply
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