Housing Bubble?

[Fernando]

MSN

These Bay Area ZIP codes have the hottest — and coldest — housing markets right now​

The start of spring usually brings a rush of home sales — and higher prices. This year is little different, with several Silicon Valley ZIP codes seeing significant jumps in home values in just the past six months.

In particular, multiple ZIP codes in and near west San Jose have seen their typical home values jump by more than 3% from September 2024 to March 2025, the highest rates among the 200 largest Bay Area ZIP codes, according to data from real estate company Zillow. The trend highlights how Silicon Valley’s price growth remains seemingly unaffected by elevated mortgage rates and stock market turbulence.

The result is a geographically striking dichotomy: Prices are up across the relatively affluent South Bay and Peninsula, while prices in the East and North Bay are stagnant or even down.

Values in multiple Oakland ZIP codes continued to tumble by 3% or more over the past six months. Elsewhere in the East Bay, the trajectory was even more striking: Home values in the 94595 ZIP code in Walnut Creek, which includes Saranap and insurance-strapped Rossmoor, dropped by more than 5%.

In general, the Bay Area’s highest-priced homes have seen their values increase much faster than their entry-level counterparts, which are more common in the East Bay. Real estate agents have attributed this dynamic to high mortgage rates, which have kept first-time home buyers out of the market, decreasing demand for lower-priced properties.

Meanwhile, wealthy buyers continue to compete for luxury homes. Many are flush with cash from the stock market’s performance in recent years — and because of its current volatility, are especially motivated to move capital to other assets.

“People who have a decent amount of money, they’re not relying on the interest rates as much,” said Mavis Delacroix, a Piedmont real estate agent with Compass. “The interest rates go up, (and) they don’t care — they have a bunch of cash.”

REMINDS ME OF THE GREAT RECESSION WHEN PRICES IN SILICON VALLEY DIDN'T DROP AS MUCH AS THE CRASH IN THE LOWER INCOME CITIES IN BAY AREA.

 

[glenn walker]

I think the Villages in Florida are a nightmare waiting to happen. High insurance costs--- Hoa dues and folks who are dying faster than geezers wanting to move in.

It may take a few more years but I think the luster of moving into humidity hell, living among old people in golf carts is not going to be what the next group of seniors envision as heaven. The good part most have no mortgages but future prices could drop substantially.

 

[Fernando]

I heard condos in Florida have been dropping because of the high assessments.
Must be hard for appraisers to analyze the condo buildings especially sufficient reserves in budget.
I heard Fannie has 100+ condo developments which are on blacklist.
Hate to be a Floridian appraiser doing condos with prices continually falling.

 

[bnmappraisal]

I heard condos in Florida have been dropping because of the high assessments.
Must be hard for appraisers to analyze the condo buildings especially sufficient reserves in budget.
I heard Fannie has 100+ condo developments which are on blacklist.
Hate to be a Floridian appraiser doing condos with prices continually falling.

Special Assessments are definitely having an impact, especially here in my area (Tampa Bay/specifically along the beach communities)
The positive side of the coin, though, is that people still want to live along/on the beach.
Market is definitely seeing an impact

 

[bnmappraisal]

Hate to be a Floridian appraiser doing condos with prices continually falling

Why? It's just the market, not us personally.
I've done many private/non lending assignments with these affects on the market value.
Once you explain to your client, and they understand what's going on, it is just another assignment.
But many don't explain the "WHY" factor and I'm sure that's what makes some appraisers "afraid" to touch these assignments (lending or non-lending)

 

[Fernando]

Why? It's just the market, not us personally.
I've done many private/non lending assignments with these affects on the market value.
Once you explain to your client, and they understand what's going on, it is just another assignment.
But many don't explain the "WHY" factor and I'm sure that's what makes some appraisers "afraid" to touch these assignments (lending or non-lending)

Do you spend time analyzing the budget of the condo projects for subject and comp projects.
Too much work and should charge premium.

As an investor, I can recall three condo projects here which I avoided because of the high assessments.
Their prices were below the average and difficult to find lenders.
It was best for me not to invest in bad managed condo project/builders which led to high assessments which could still go higher in future.