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Bay Area home sales slip to 9-year low

Original post made on Sep 28, 2019

Home sales in the Bay Area hit a nine-year low during the month of August, according to new data released Thursday by financial services firm CoreLogic.

Read the full story here Web Link posted Saturday, September 28, 2019, 9:00 AM

Comments (8)

5 people like this
Posted by Gary
a resident of Sylvan Park
on Sep 28, 2019 at 11:36 pm

In Mtn. View, the median home (for sale) price last month was $1,735,000 according to Zillow - down some from a year ago. The lack of sales hurts mostly middlemen such as real estate agents and brokers. Homeowners generally want prices to keep rising. It is better for the community and the economy that demand is reduce and supply is increased. Bidding up housing prices transfers wealth but produces, for example, little renovation. It misallocates resources.

2 people like this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Sep 29, 2019 at 12:26 pm

The Business Man is a registered user.

Both the passage of AB 5 and the pending activation of AB 1482 is going to have a big change to the Mountain View economy.

As it is well known more than 50% of the tech workers in the valley are NOT employees but Alternate Work Forces or Temps, Vendors, and Contractors.

The new AB 5 does not excempt tech workers unless they are "state" licensed engineers. Anyone with IT certifications do not qualify becasue they are Vendor Sponsered Honoraries. Thus there is going to either be a massive relocation of workers, or they are going to be out of a job if these companies refuse to transistion them to employees. Thus the demand for housing is going to see a significant decrease in the area.

AB 1482 will make it so any home or apartment building older than 2004 with be capped regarding rent increases. Thus any owner of more than 10 units in the state of California is going to sell them off to get below the 10 unit threshold. The buyers will not just buy them for the asking price but demand a significant price reduction. So this will further depress the prices of homes in the state.

THe coupling of these new issues are going to make the demand ans suplly status change significantly. Most likely giving buyers control of the market. This has been forseen by realtors and there has been a significant decrease in realtor license renewals in the state. That is becasue lower prices mean lower commissions.

This is just the beginning.

6 people like this
Posted by Not in our 'hood
a resident of Cuesta Park
on Sep 30, 2019 at 5:51 am

Over the past two months there has been a continuation of the norm for our area: Open house on Sunday, Sale pending sign put up the following Thurs. That's if they have an open house at all. Some sell right after the "Coming soon" sign is put up.
I guess it's not all the same everywhere. Gee, go figure ;)

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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Sep 30, 2019 at 7:01 pm

The Business Man is a registered user.

Just another bit of information to consider regarding the current market.

UBS just issued a new report assessing the current state of evidence that the housing in this area is at risk of being a bubble. It is called UBS Global Real Estate Bubble Index

The report can be found here (Web Link)

As far as ranking goes the San Francisco area is number 10 in the list of 24 with an index of 1.15 which was determined as OVERVALUED. A fair value was in the range of -.5 to +.5. If you use the difference of the top of the fair to the index that is a difference of .65. Which is in fact 130% of the fair index. Which means that it could be said that the current market is paying at least 30% too much for the fair value of the properties in this area.

Thus when the housing correction hits, these properties will likely lose 30% of their value.

13 people like this
Posted by Same as it ever was
a resident of Old Mountain View
on Oct 1, 2019 at 6:04 am

Same in the 60's and 70's and 80's.
This area has always been "Over valued" in comparison with pretty much anywhere, but when 5 people are trying to buy the same house they don't tend to care much for macro trends.
It may not always be as hot of a market, but the peninsula will always be "Over valued" when people try to quantify it.

2 people like this
Posted by Over valued
a resident of Bailey Park
on Oct 1, 2019 at 12:20 pm

The reason for the over value is that the bay area offers high paying jobs, great innovation from entrepreneurs, moderate weather and great schools. A great combinations unavailable in other areas. Plenty of ups and downs since the 60's but eventually upward.

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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Oct 1, 2019 at 6:45 pm

The Business Man is a registered user.

In response to Over valued you said:

“The reason for the over value is that the bay area offers high paying jobs”

Such jobs that are greater than 50% contractors that are about to go by bye after Jan 1, 2020 based on AB 5. The truth is that these workers will be dropped like an old habit and those jobs will be outsourced out of state. This is going to make a big dent in the picture you draw. You also said:

“great innovation from entrepreneurs”

Another area that is questionable. Just look at outfits like Theranos and others that promise innovation and in fact don’t, and in many cases outright cheat. This area depends on contractors and not employees. Tus that is not going to be on a firm foundation. You said:

“moderate weather and great schools.”

Really, I thought the most common criticism in California is the poor performance of the education systems.

You are correct in stating the history regarding “Plenty of ups and downs since the 60's but eventually upward.”

BUT the current RADICAL change in labor laws and the eventual passage of AB 1482, and inclusionary housing requirements are all going to be a MAJOR change. The history you describe does not take into account such a combination of events like this.

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Posted by Bob
a resident of North Whisman
on Oct 2, 2019 at 12:39 pm

How much of the decline is due to lower Chinese demand, due to both the trade war and the recession in China? When a family member’s place sold here a couple of years ago four of six bidders were Chinese LLCs and the bidding quickly exceeded the ability of the two American couples bidding to stay in. The realtor advertised the place heavily into China.

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