October 14th, 2017

The land of the permanent renter:  More single family homes are now rentals with households moving less.

There has been a massive trend towards renting.  The vast majority of household growth since the housing bubble imploded has been with rental households.  I know this is hard to believe for Taco Tuesday baby boomers but this is simply the new reality.  And all of those investors that bought up single family homes for rentals are living it up.  There are now a few major changes impacting the housing market – many more single family homes are rentals and many more renters are staying put.  In other words, many are not looking to buy and builders realize this.  There is now a large category of permanent renters since many people live and work in more expensive metro markets.  Short of forking out an insane amount of money to live in say San Francisco, people are opting to rent.  The proof is in the numbers.

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October 2nd, 2017

San Francisco housing still in manic phase:  Dump that is “uninhabitable” with fire damage has pending offer at $1.4 million.

Well being back in the Bay Area I realize once again how delusional people have become when it comes to chasing unicorn startups and all things real estate.  I ran into multiple people and it seems like everyone is talking about real estate.  Some of these people were showing me “deals” on apps like Zillow or Redfin on their phones.  “This place with some work can then be flipped in a month for a $200,000 profit.”  Why work when you can speculate on housing?  The housing market is now in cult status and this psychological territory isn’t new.  We don’t have to dig deep into historical texts and read about Florida real estate in the 1920s but need only look at the 2000s.  San Francisco is out of control.  And of course you have insulated mindsets from many that work in tech or the financial sector since they feel that money or an app can solve all of life’s challenges.  Today we take a look at a home worthy of the crap shack title in San Francisco.

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September 19th, 2017

Getting out of San Francisco:  83 percent of Bay Area renters plan to leave the area before settling down.

San Francisco real estate continues to operate in a land of full on self-indulged delusion and pseudo-tech worship.  I travel to the Bay Area and San Francisco often and the amount of self-delusion when it comes to real estate is amazing.  You will find all of these convoluted justifications as to why a crap shack should sell for $1.5 million and when some other chump takes the jump, they use this as some sort of reinforcement of their real estate buying acumen.  You are the amazing market timer and they are the fool (at least that is the thought process).  I’ve seen this with couples in the area where two professionals have sound financial judgment but then a kid is thrown into the mix and all hell breaks loose.  “Well I don’t want my kid living in a rental!” or “I want them to have a piece of real estate when I turn over and pass on” as if your kid wants to chase the same Full House rat race.  People are mistaking luck with skill but that is part of human nature.  And a recent survey found that 83 percent of Bay Area renters are planning on getting out of the area to settle down.

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September 8th, 2017

California Dreaming – More than a third of California households have virtually no savings.

A lot of people do not equate California with poverty.  You certainly don’t think of poverty when you look at real estate values in places like San Francisco even though the homeless issue is right in your face.  The reality is that most people do not live lavish lifestyles.  In fact, a new report highlights that more than one-third of California households have virtually no savings.  These households would not have the ability to live at the poverty level for three months if one paycheck in the household was lost due to a job loss.  You also have more than 2 million young adults living at home with their parents since the rent is too high.  This isn’t the California that is presented in Hollywood movies.

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