All Forum Posts by: Sid Naik

@ Saj that is what happened in the last recession of 2008-2009 . i meant a 10-20% drop in rents . If there are no jobs rents will also correct .

in above example of $1 million  300-400 . maybe 500 was a bit high .

@Diane totally agree with your thoughts . I am waiting for bay area to correct . In fact I am thinking of selling my SFH in Fremont next year which I believe should be very close to peak if we don't see decline . What are your thoughts on it ? Why not have more cash available for the next buying opportunity ?

To others what is the point  of buying now  ? lets say i buy 1 mil now in bay area with 30% down and i am -1000$ in cash per month which will go to -1500 if we get into a recession . i will have to ride it out  for 5-6 years till i get to break even point on price . 

lets assume best case  scenario is we see a correction in 3 years . pls don't tell me it will double from here :-)  . So why buy at 1 million which will go up by 25% and then correct to by 30% to 910 . ur still left with cashflow deficit of $1500 .

Want to check what bay area investors are doing right now ? I have been buying real estate in 2009-14 here and it has been a great ride so far . however since we are close to a peak , at least that is what i am thinking is there a point in buying real estate now ? it may appreciate even for a couple of years more but then its going to stagnate and correct . so why block your cash , instead wait for the correction which may be 5-6 years away and buy at that time . well  you can flip but you have to be lucky and hope that the next 2 years are good for appreciation but  I doubt if someone can exactly point the RE peak . Pls note this post is pertaining to bay area real estate only and not to rest of the county .

Any thoughts ? 

@ Diane G

I am in the same boat as you . bought my first property at the peak in bay area in 2005 and then more in 2009,12,14 .

Its been a good ride so far since i have held on to my properties. however since we are approaching a peak what is point in buying now .  lets take a best case scenario where we have not even peaked and is equivalent of  2004 ( in last cycle) . so unless u buy in napa or sfo within 2 years or 3 it is going to stagnate and then start correcting . might as well wait with your cash to buy when it corrects which might be 5-6 years from now . unless u think u can time it exactly and flip /sell in 2 years whatever that period is . which is almost impossible to predict . I am going the cash route .

Diane G. Real Estate Investor from Sunnyvale, California

Diane G. Real Estate Investor from Sunnyvale, California

to your point i did check even the past rent correction which was in 1990 which again was foretelling the next real estate downturn . I think what we have to watch now is if the rent correction in 2016 continues  in  jan or feb 2017. if the drop continues then going by history we are looking forward to a drop in prices  as well.

Amit I agree Rent did not drop much .. but that was the only time rents dropped as you can see in the chart . Any time rents have dropped  ( lot or not much ) it has been followed by real estate correction . going from 1994 to 2016 .