All Forum Posts by: Sam Josh

I agree, the 1% rule won’t help you in the Bay Area. The only word of caution is you are buying now when prices have run up close to 30% over the past 12 months and more than doubled over the last 5 years. I personally have my doubts if there will be much appreciation moving forward over the next 3 - 5 years. So run your numbers at 20% redux in value and rents and see if they still work for you. Basically make sure you have a good margin of safety. Long term (10 - 20 years), your investment in this area is safe and will be worth more. How much? Who knows. I bought my first in Sunnyvale in 2004 for 700k, little did I know it would be worth 600k in 2009 and 2m in 2018. As for mobile homes, mine was close to one but those homes have disappeared and new development has taken over.

There are articles about RE slowdowns. For example, the condo market in NYC, the broader housing market in London and price compression in Toronto. Not sure if that indicates to a start of a broader slowdown or just a peak.

We saw similar trends in SF. Rents went down in 2017 and pretty much stayed flat. Home prices have however risen during this time by almost 20%. I think the former was due to supply of new rental condo units and renter fatigue with high prices and people choosing not to live in the city but explore other options in neighboring Oakland etc. where rents are relatively cheaper. The latter is due to the wealth effect as we have seen a tight job market in tech, more IPOs and acquisitions of startups plus record highs in stocks of local tech companies. Of course not to mention investors (large and foreign). In 2018 alone average home prices in SF have risen by 200k reaching 1.6million, crazy when you think of how fast interest rates have risen during the same time.

Is there any way to know : The average down payment as a percent of purchase price made on residential properties by Area (state, region, county ideally) and how is that trending on owner occupied vs investment properties say over the last 36 months. The average loan to value ratio across the US residential market (by state, region, county). And what is the trend on that over the last 36 months for owner occupied vs investment properties Also is there a way to know what percent of mortgage payments are late (by state, region, county) and how that is trending over the past 36 months on owner occupied vs investment properties. Investors can only kill the market if they are investing beyond their means. The answer lies in data. Where is the data :) ??

Investors maybe! RE investors, likely not. To cause a recession we need something big, like a sovereign nation going bankrupt or a big bank or financial institution going bust because of a bad loan poro

I think the time has come where people who sell investment advise on real estate should be bound by a code of ethics and be subject to significant disclosures of their own investments. At this time it’s a wild Wild West our there and there is no way to verify who is authentic and who is not. I personally can’t fathom why anyone who would pay $30k for some obscure course.

I guess if the market stays depressed or shows signs of breaking down the ball will be back in the government’s court to reconsider the foreign buyer tax and if that is repealed or reduced, it is likely to prop up the market again maybe? Overall I am hearing signs of market slowdowns in some hot beds like London, NYC (condos), Sydney and Toronto. Not sure if this is the beginning of the unwinding or just a blip.

At this time any optimism on Richmond (or east Oakland or Stockton) is pegged to the continued expansion of the tech industry, rapid creation of new tech jobs, double digit growth in home prices in central and desired areas. I think if Tech continues to boom, there is a spillover opportunity for gentrification in Richmond or Oakland. As such kind of talk boils up, my memory goes to 1999, when the world was salivating over Morgan Hill and Coyote Valley in South San Jose. This in anticipation that those areas will be the spillover beneficiaries of tech growth. Yup the infamous Cisco campus story etc!!! Unfortunately that did not happen and those areas were hurt quite bad in the first recession and then the Great Recession. Of course they have come back over the past 3 years. So even if one took a long view back in 1999, one had to be very patient to see results. So a lot of stars need to align to have Richmond shine and gentrify. Remember even today an overwhelming part of Oakland is yet to be gentrified. So it looks like a long road that sits on the back of a sustained boom.

How correlated is the local market to higher rates. Isn’t it more dependent on overseas cash buyers?

I wonder if Richmond would even be a conversation topic if the rest of the Bay cools down or slumps. Isn’t a bet on Richmond really a bet on the average Bay Area Home price to keep growing double digits and this bring Richmond or Vallejo in the conversation?