Silicon Valley's housing crisis, in one sentence

Re:Silicon Valley's housing crisis, in one sentence by shostack on Tuesday June 07, 2016 @05:56PM (#11858283)

For more recent buyers I'll bet the market value piece is pretty high on the list. If you bought in the last couple of years while things have been increasing, you want to see that trend increase. If suddenly prices drop because there's a ton more dense housing (which also impacts the other desirability factors of the neighborhood), you could easily be underwater on your $1M+ mortgage.

Given the amount of money at stake for said buyers, I can't say I entirely blame them for voting in their financial interests when the alternative might be a very bleak financial outlook, a decent chance of increased crime, traffic, etc.

It simply isn't a black and white issue.

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Re:Silicon Valley's housing crisis, in one sentence by rconti on Tuesday June 07, 2016 @06:47PM (#11858623)

I bought in the last couple of years while things have been increasing. You're right, I'd rather not be underwater, but I can stomach it or I wouldn't have bought.

But you're making a huge logical jump to say that building housing could magically slaughter my house value and that I'd be underwater because of it.

I'm worried about being underwater because of a recession or cyclical trends or tech jobs wholesale abandoning the area, or any number of things.

The LAST thing I worry about is housing being built so fast that it'll tank the value of my house. It simply won't. If there's enough continued demand for housing, by all means, build, build, build. It means neighborhoods will get more vibrant. I see no scenario where building will tank my house value (short of building and THEN a recession).

I don't think people worry about growth hurting their home value. I agree with others here that they worry about the impact on what THEY value in their neighborhood, but most people aren't looking to sell their primary residence so a temporary slowdown in the growth rate of the equity is simply not on their radar as an important matter.

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Re:Silicon Valley's housing crisis, in one sentence by shostack on Tuesday June 07, 2016 @09:04PM (#11859296)

Mind if I ask if this is your "forever home" or close to it? I'll bet there's a hefty divide in whether or not people are worried about it going underwater based on their outlook for how long they intend to live there.

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Re:Silicon Valley's housing crisis, in one sentence by zippergz on Tuesday June 07, 2016 @06:04PM (#11858336)

I’ve owned several houses. The more recently I bought, the LESS I care about the value of the house. It’s just numbers on paper. Money isn’t at stake until I’m trying to sell, which I’m certainly not looking to to do if I just recently bought.

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Re:Silicon Valley's housing crisis, in one sentence by shostack on Tuesday June 07, 2016 @06:12PM (#11858396)

Depends on where you are in life financially, the market you're in, and whether this is your first purchase.

If you bought recently, you probably had some sense that the market was a bit out of whack, but may have decided it was the right decision for other reasons. That doesn't make most people any less concerned about the future value of their house, particularly if they know they are not buying into their "Forever Home" and will one day need to sell and move elsewhere.

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Re:Silicon Valley's housing crisis, in one sentence by arebop on Tuesday June 07, 2016 @06:14PM (#11858414)

It seems you are an unusual case [http://www.pewresearch.org/2009/02/19/oneinfive-homeowners-f...].

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Re:Silicon Valley's housing crisis, in one sentence by rconti on Tuesday June 07, 2016 @06:48PM (#11858633)

The bay area is also an unusual case. Somehow I don't think anyone's worried about CURRENTLY being underwater on their mortgage here, and I don't think anyone worries about housing growth happening so fast that it drives their values DOWN.

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Re:Silicon Valley's housing crisis, in one sentence by Johnny555 on Tuesday June 07, 2016 @08:31PM (#11859178)

I would expect it to be the other way around -- the more recently you bought (especially in the over-inflated Bay Area market), the more you need to worry about ending up underwater in your home value.

If you bought 20 years ago, even if a fire burnt down your house, it's likely that the land alone would give you a healthy profit. If you bought 2 years ago, a significant downturn in the market could leave you underwater.

Few people plan to sell their home shortly after buying it, but a market downturn could leave you without a job and you can't afford to move elsewhere for a job if you can't afford to take a loss by selling your house for less than your mortgage.

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