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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsSan Francisco housing market near bubble risk....Majority of Bay Area renters plan to leave
San Francisco housing market near bubble risk according to UBS report. Majority of Bay Area renters plan to leave. (full headline)
http://www.doctorhousingbubble.com/san-francisco-real-estate-mania-ubs-renters-leaving/
The San Francisco housing market is the most overvalued market in the United States. People over inflate the market because tech is sexy and cool and many are chasing the next Google, Amazon, or Facebook. Everyone wants to strike it rich with as little work as possible. And what better way to do that than in real estate? In San Francisco the typical crap shack will cost you $1.2 to $1.5 million. The response from many housing cheerleaders is the typical logic you see in manias hey, someone paid for it! You also get similar stories from the tulip bubble, dotcom bubble, and other bubbles where the justification for higher prices is simply that some other sucker paid for it at that level. And there is now signs that we may be in a rental bubble in the Bay Area. 83 percent of renters surveyed in the Bay Area said they plan on leaving. Tie that in with the UBS Global Real Estate Index showing that San Francisco is dangerously close to bubble territory and you have indicators that something is rotten in SF.
Some people understand the business cycle and the waves that ripple through our economy. The housing market and economy has been booming since 2009. People forget that recessions happen. And now that we have added millions of renter households with higher rents, what happens when that next correction hits? While you can sit in a home and let it flow into foreclosure like many did during the housing crisis, there is a smaller window for renters should cash flow issues occur.
It is rather clear that San Francisco real estate is in a bubble. Even conservative UBS is showing that prices are inflated:
(see graphic above)
But our neighbors to the north in Canada are taking it to another level with their housing bubble. It is nutty how obsessed people are with real estate in the Bay Area. People are drinking the Kool-Aid by the gallons. For those that own, you have a confirmation bias occurring and who could blame them? If you owned a piece of crap house and suddenly Zillow gives you a $1.5 million Zestimate why wouldnt you believe it? I suppose you should never ask a barber if you need a haircut.
Renters clearly think something is wrong since many are voicing their displeasure and have plans on leaving:
(rest at link)
stopbush
(24,396 posts)entry level jobs at fast food joints and retail locations. If those people cant afford to live near where they work, who does those jobs? People living 100 miles away who somehow can afford to commute 100 miles a day to earn $12 an hour in the service industry so a rich person can still get their morning McMuffin in SF for under $4? I dont think so.
What are the other options? Paying someone $30 an hour ($62k a year) to work at McDs so they can afford to live in the city? That will never happen.
CountAllVotes
(20,874 posts)They sold and left leaving their crap houses behind at a large profit.
Can't blame 'em.
Paying $10K a year in property taxes in a dump is not worth it!
Henry Krinkle
(208 posts)Any plans on how to fix, resolve that major fuck up?
CountAllVotes
(20,874 posts)The foundation is built on landfill as it is now the Millennium Tower of Pizza!
Great deal! $5,000,000 will buy you a new sinking pile of garbage!