All Forum Posts by: Account Closed

Great points from Jay, the CA residential BP historian. We can test these West Coast port theories as well. If this newer history is true then Seattle with major Asian influenced ports would have same progress. Yep Seattle is right up there as well. How about Vancouver, Canada? Samething. Asians are contributing massively to everything west coast REI folks, position for it.

@Account Closed  as one that was born and raised in the bay area and been in the real estate industry all my life there started in 1975 personally my dad in 1965.  You have a few things at play there that just cant be recreated in most other markets in the world... 

One is geographic there simply is not any land to build on.. so that creates a supply side issue.. 

TWO who was to know it was to become silicon valley and engineer central with super high wages.. I mean even BART janitors back in the late 70s were making 60k a year... I know I had clients that were such.

Three  weather is some of the finest in the world

so when you take supply side   HUGE wages and marry those you has escalation in prices..

Now I grew up in Cupertino my parents paid 32k for their home in 1969... you probably paid the same amount or there abouts for the same type of home all over america... well today its north of 2 million.. that same home in most other parts of America is no where near that.. some other high priced markets it might hit 1 million for 2,400 sq ft 3 and 2 on 6k sq ft lot.. in other parts of America it might only sell for 50 bucks a foot.

So growing up when they hit 100k we thought NO WAY NO how could they go any higher  LOL.

when you talk other parts of the country the same demographics , geographics and job situation just is not the same.

then you throw in all the Asian buyers, all the Buyers from India  and those folks Cherish real estate like no others. So this is what you have.. I can't say whether it will continue up or not.. but i certainly don't predict it coming back down unless there is a major major calamity..  And to be fair that did happen in 1989 with the Loma Prieta Earthquake and the first iraq war... property values in many parts of the SF bay area dropped 20 to 50% in the coming years but came back in 3 to 5 years and made new highs and has continued to do so.. 

So in my mind High tech would have to relocate  Google facebook Intel Genentec and a host of others would have to decamp for values to crash.

The other thing i see traveling all around the country like i do ( and I will be in Indy next 3 days FYI)... is you have a surplus of very old housing.. that simply does not exist in most west coast venues.. age is much newer.  

Now I do like that saleforce moved to Indy that has created opps for us in the areas we work.. and I think you will continue to see this in these mid west rust belt cities.. 

But I agree with you on a major point those buying D and D disguised and marketed as C class are in for a rude awakening over time.  those properties in my mind are ONLY appropriate for locals that can run them and stay right on top of them.. that message I have been consistent with from day one when I got on BP 3 years ago.

One tiny little factor with the Asian REI influence....they work so hard to get, they never sell. That property will not be for public sale ever, ok maybe in an emergency. It is another snowball effect. It is not like the Mexicans from Mexico are far behind either. Is is not a sell later deal for them either. Only a stupid American would sell their CA RE.

 Didn't you know Matt, we are all going to live to 380 years old. No point in being a real estate investor. We should all just put all our money into a Vanguard index fund, sit around being super frugal and miss out on life experiences for 30-40 years.. and by the time we are 65-70 we will have $800K.. then we could just "Use the 4% rule" and pull out $35K per year to live on. Sounds swell, doesn't it?

Not each market and submarket on earth has the same economic factors and supply and demand constraints.

 Some areas are flat some are not. This area example below does not look flat to me.

 Forever is a bit of a long time line:) Has China been growing since 5000 BC? I guess yes. I get your point still.

 Have to respectfully disagree with your blanket statements. There is a big difference between what SHOULD BE and what IS.

The long-term trend being flat what you speak of, that may be true for Indy, or for the entire USA as a whole (although that is also technically false, for the USA RE values have slightly outpaced inflation), but real estate is LOCAL.

Why should an investor pay attention to other places which they are not invested in? Makes zero sense. Its like saying "Well I am invested in Russian stocks, but ya know the USA bond market shows this, and psychology states blah blah" Not useful.

The person flipping houses in Hawaii, buying timberland in Oregon, or buying rentals in the Bay Area doesn't care if the long term trend in Detroit was 0% or the entire USA was 3.5%.

I don't agree. And I don't think this is even useful. I don't care about a "majority".  I don't invest in a majority. I invest in growing markets.

I don't disagree. My average returns are made up of 12-20% cash flow and 5-15% appreciation. Cash flow I feel I can project at 90-95% accuracy prior to buying and appreciation at much lower accuracy, but I believe that if I'm buying and market that is experiencing significant population and job growth, my properties will appreciate.  If they don't, I'm still fine.  Diversification of return is an added risk mitigation.

In re to "past appreciation"... I probably agree, but not always.  it depends if the variables driving demand and limiting supply continue... if so they likely will continue experiencing appreciation over time.  But appreciation is a result, not an ingredient.