Expected 4-year change in SF house prices: -25.9%

[drscott]

Panic! Futures markets predict 4-year decline in metro SF house prices of 25.9%.

I don't really think this is likely, despite the pretty good prediction record of other futures markets. But it could easily happen in outlying areas like Stockton and Modesto which had been riding high on subprime loans and spillover from the Bay Area's market.

We might be in the market sooner than we thought, so I wouldn't mind seeing a little depreciation....

Comments

[foodpoisoningsf.livejournal.com]

The fires in SoCal are going to completely reset the housing and home-building markets down there.

[pagerbear.livejournal.com]

You can probably get a bargain on the house pictured.

[dr-scott.livejournal.com]

It's not like they weren't warned. Brushy hillsides aren't good places for wooden houses in California. Set up special fire protection districts with high taxes to pay for the necessary preventative measures (and the high cost of saving houses when there is a fire.) Exposure of the true economics of exurbia would then squelch development in dangerous terrain.

While I hope damage is minimized, I also hope the usual "spread the cost to everyone in the state (country, world)" will be stopped before the politicians make it so. Note Florida's effort to nationalize their hurricane insurance liability.

[rfrench.livejournal.com]

I find it really hard to believe this will hit the peninsula. I doubt if there were that many subprime mortgages on million dollar+ homes bought by Google retirees. Decent houses in Sunnyvale are still selling within a few days of being put on the market.

[dr-scott.livejournal.com]

The picture's from a story about a guy going berserk with a bulldozer in Britain...

[dr-scott.livejournal.com]

I agree with you in the near term. But the high prices are based on no supply and psychology; it's possible the horrible things happening in less favored parts of the region will negatively impact buyer psychology. At some point markdowns in Fremont, say, might start to impact what Sunnyvale buyers will pay.

[pagerbear.livejournal.com]

If a human being did that to my house, I might have to go berserk myself. With a 2x4. On his cranium.

[cjsmith.livejournal.com]

Note Florida's effort to nationalize their hurricane insurance liability.

Yeah, I'll trade 'em for earthquake insurance... on a home in one of the pricier areas in the States. What a deal.

[fuzzygruf.livejournal.com]

You could always purchase that steal across the street from me. Views into my living room. Just imagine!

[dr-scott.livejournal.com]

Well, that's worth a million, at least!

[but seriously -- I have this dream of being walking distance from the gym, so your neighborhood is less likely...]