All Forum Posts by: Brian Singh

@Justin Thorpe . For las vegas market. The situation is bad as the jobs have just dissipated and you cant work from home for those jobs.

However , the market has not crashed and median prices have actually risen. Go figure.

However, later in the year is when we will see a bad price correction. Since there is no foreclosure or eviction, things are on Ice. One sign that things are not good that we see now is , inventory it has increased 50% vs pre covid.

the pent up demand is starting to vane so when foreclosures start, $ 600 extra employment end. We should start to see the real market dynamics. In general $1 million and above market is freezing . Below 250k shelter is doing all right.

The virus is here until a vaccine come, we now know , no work around that except get it and recover.

@Tracey Robinson . Thanks for the input , I picked walnut creek as a suburb as you mentioned .

I pick this house as its on the median of the market so no outliers . It looks the same as menlo park. It seems right now prices in bay area have corrected to 2017 level. So anyone who bought a house after 2017 is losing money.

Most listing I see are have same prices drops in walnut creek too. This one sold for 450K in 2018. 

Interesting. 
This property looks like a typical buy and sell in two year investment to save cap gains. Its been updated and in menlo park so any facebook employee would be crazy to not buy it. Lets track this one and see where it ends. This will give us a good data point on Work remotely scenario.

Last time in 2018 it got an offer in a week. This round not sure if the seller can break even on a perfect property.

Just wanted to get a sense of what people are seeing in Bay area and what they think will happen after a few month. Also wanted to see if I am being too negative on bay area and forecasting a 10-15% price drop.

The reason I see a 10 to 15% drop by April 2021 is

1. The virus and unemployment

2. Start-up layoffs

3. H1B ban for next 2 years effectively

4. Tech work from home or anywhere going main stream.

The area I am using as bench marks are

1. San Fran

2. Mountain view

3. Fremont

4. Walnut creek.

Very different demographics in all four and they together represent the Bay area as a whole quite good with the issues highlighted above.

I will write in more details when people write about  their opinion on the points I raised.

I hold no solid stance one way or the other, just want people who are actually investing there give their side of the analysis, so I see if I am thinking correct.

Rents have dropped over 10% for two months now, are property prices next ?

@Kevin Knight look at your risk /reward. Will waiting cause you harm. FOMO is a dangerous siren . Will there be renters to rent , if renters go down and property goes up, will you get the rent you want.

Who are your renters. Think it thru and good luck.

Let us know if you buy how much discount you got.

@Amit M. that is why work remotely is a game changer. Before you had to decide between your career and work life, now the math is 10% pay cut.

But we have bigger trends to worry about

1. Unemployment in general . We are higher than we were during the great recession and then home prices fell 35% .  This is Bay area unemployment chart

2. Start-up lay offs. These are what caused the boom here and bust now. over 24,000 high paying jobs lost in SF area since march in start-ups . You won't see these numbers on CNBC.

Hope this help in you deciding to hold or sell your properties in bay area. I always rented here as Bay area never made sense to me.

@Pete Panci

For house hacking a duplex or triplex is the best option. you live in one unit and collect rent for the other 1-2 units. That way you will live for free and they will pay the mortgage.

SFH are not that good for house hacking unless building equity is your main goal.

So for the loan, I have heard that VA loans are not the best in terms of rate and points, but its 0% . So if the math works and you dont have the 5% down , then go for VA .

I would find a property in South Vegas or Henderson (above your 225K range) , Near Nellis bases is the best area in Vegas for cash-flowing properties in your price range , BUT if you are ok with the area and can find army buddies to rent to.

The go to the bank and VA with an exact property, that will teach you everything. Getting pre-approval and then going will not be such a good learning experience.

As they teach you in the forces. you practice for war.

The more you sweat in training the less you bleed in war.

Good luck

I would wait until I see two things happen as they are artificially holding the market

1. Extra unemployment $ and PPP loans run out. Then we will see the true economic impact. Right  now you can run your business at 30% capacity since labor is free. Ppl can spend easy since unemployment is more than their real jobs ??

2. Mortgage forbearance runs out, then the defaults will pile up.

I think there is pent-up initial demand and stupid money FOMOing out, right now. It should be over in a month or so.

@Parth Choudhary Totally agree with your point, moving from SF is risky if you lose your job . So people who are not top performer or have long tenure they may not.

I would say from my personal experience , middle management who play politics,  and IC who are connected to the managers they need to be there , right now they having a hard time justifying their jobs.

 
but a lot of people are moving to satellite offices for some time. The reason ppl had to be there at the office was facetime.

So all the good and cool people will leave and all the people who cannot find a job if they lose the job they "somehow" got will stay and keep sucking the corp dry. Kinda like the movie "parasite "

We all will "lose" our jobs one day. The fear can trap you or set you free.
One of my reasons to build out my rental property units is to make sure when that happens, it will make no difference to me.  will I not work after that most likely not, I like what I do  but I want to do what I want not work for a paycheck. 

Here some data that should help.

According to the poll 47% of bay area people want to leave. Now they have an option.

No more start-up millionaires going to happen in the next 3 years , so buying and hoping for appreciation that happened in 2017-2018 should be out too.

https://sanfrancisco.cbslocal....

I am moving to Vegas to invest there. So I am one of those moving from the bay area.