
Zillow 2020 Urban-Suburban Market Report - Reedx
https://www.zillow.com/research/2020-urb-suburb-market-report-27712/
======
dang
I believe this thread from a couple days ago was based on the same report:
[https://news.ycombinator.com/item?id=24164128](https://news.ycombinator.com/item?id=24164128)

------
dmode
Just FYI, people have seen headline numbers in this Zillow report for SF
market. But it is misleading. The overall housing market in Bay Area is
actually stronger than pre-COVID [1] Even within SF, prices in condos are
dropping but SFH are rising. So the narrative is people are moving from dense
units to units with more space within the same MSAs. Which makes sense for me,
as it allows people to WFH 2-3 days a week, and be in good school districts,
while still commuting to office a few days

[1]
[https://www.sfchronicle.com/business/networth/article/North-...](https://www.sfchronicle.com/business/networth/article/North-
Bay-home-markets-sizzled-in-July-SF-showed-15490651.php)

~~~
nostrademons
Even with those caveats the narrative is complex. _Some_ condo prices are
dropping, but I'm also seeing some 3BR condos _listed_ (not necessarily
selling) for $1.6-1.7M, which is about $300K over what they were a couple
years ago. Also, with the conventional COVID narrative you'd expect that
houses in the hills or away from civilization would do better - but many of
those houses (some in very prestigious locations like Saratoga or Los Altos
Hills) are going for < $2M and sitting on the market for 6-8 months, while
prices are rocketing up in Mountain View and it's getting hard to find a SFH
for < $2.7M, even if it's on a tiny 6-8K ft^2 lot.

It also looks like both inventory and prices are rising, which is
contradictory to standard economic theory but would make sense if we're
nearing a market top.

~~~
usaar333
> while prices are rocketing up in Mountain View and it's getting hard to find
> a SFH for < $2.7M, even if it's on a tiny 6-8K ft^2 lot.

Well, it's hard to find a home on such a large lot period (size is relative).
Newer SFH tend to be built on 2k-3k square feet lot sizes and go for $1.5M to
$2M (Mountain View median is $1.8M actually).

Prices generally have been going down in Mountain View
([https://www.zillow.com/mountain-view-ca/home-
values/](https://www.zillow.com/mountain-view-ca/home-values/)) and remain
considerably below their mid 2018 peak. (And still remain a bad deal relative
to renting, but that's another story)

~~~
1DRACOSEA8
Size is absolutely not relative. Size in California and the rest of the
country is measured in feet. That said, I single out this comment to prove the
obvious abuse of the English language.

------
wgjordan
From the article, data seems to show sellers flooding the market in San
Francisco:

> In San Francisco, list prices have fallen 4.9% year over year and inventory
> has risen 96% with a flood of new listings.

> When comparing the principal city to its surrounding suburbs, the San
> Francisco metro area does break the mold. Higher levels of inventory, up 96%
> YoY following a flood of new listings during the pandemic, are sitting on
> the market in the city proper, a significantly larger jump than the
> surrounding suburbs.

> In San Francisco [...] the softening is clear as sellers inundate the market
> and buyers have not changed their pace to match — newly pending sales in the
> city are up only 1.7% YoY.

~~~
twblalock
San Francisco was one of the tightest real estate markets in the country for
years. Even doubling inventory doesn't make it a buyer's market.

~~~
refurb
Not only that, but listings plummeted with Covid. I'd be interested to see how
the cumulative inventory compares to this time last year.

If all those people who were going to sell in March, April and May just
delayed until now, you'd see a big jump in inventory, but the overall number
of homes changing hands might not have changed.

------
iav
I live in NY and created my own version of the case-Schiller price index just
for Manhattan. The July 2020 index shows a 10% YoY decline in condo prices,
which is worse than a 6% decline in Q2. Please see my analysis for backup:
[https://github.com/ivoytov/manhattan/blob/master/NYC_price_i...](https://github.com/ivoytov/manhattan/blob/master/NYC_price_index.ipynb)

~~~
benjiw33
Great analysis.

------
epistasis
The media has a huge bias to push a dominant narrative, and it's hard for
actual data to get through.

So the early, and false, narrative about population density posing an
insurmountable challenge to preventing disease spread got a ton of play. Now,
when it's clear that density is not driving spread, it will be rare to see a
news article countering that narrative.

I also think that reports like this Zillow data will not see nearly as much
media attention as the initial truths reports about people fleeing cities.

Same with the "techies are all leaving SF" stories; I'll wait for actual data
before listening to the narrative that serves the interests of a huge
factional divide in SF.

~~~
ISL
From TFA: _" In San Francisco, list prices have fallen 4.9% year over year and
inventory has risen 96% with a flood of new listings. This divergence of
active inventory is not evident in cities like Miami, Los Angeles, Washington,
D.C., and Seattle."_

I'm not in San Francisco, but if we were to experience a doubling of inventory
here in Seattle, it would be evidence of a big shift in the market. We
neighbor-visited an open house on our block in the autumn that was attended by
at least a person a minute during the half-hour that we were there.

The article is _super_ interesting for its incongruence with local anecdotes,
but it would also suggest that the "techie exodus" in SF has some roots in
reality.

~~~
twblalock
One thing people seem to forget is that leaving SF doesn't mean leaving the
Bay Area. A lot of the people leaving SF are going to end up in the
surrounding cities, which were always cheaper and considered more boring than
SF. Now that SF is locked down, all of the Bay Area is equally boring, so you
might as well live in San Mateo and cut your rent in half.

~~~
bradlys
> live in San Mateo and cut your rent in half

I think that's stretching... It's still very expensive in the burbs due to
their proximity to big tech companies. I am not seeing rent be half in the
peninsula compared to SF.

~~~
chucknthem
Yeah definitely not San Mateo, but east bay will do that. My realtor says her
business in SF and the peninsula is drying up, but east bay is hotter than
ever.

------
ryanSrich
To me there's nothing really surprising here. Prices in SF are down just 5%.
The pandemic is a massive negative economic event. You would think it would
impact markets like SF much stronger (50%+ drops in value considering the
insanely high prices), but that just goes to show how in demand living there
is. I also don't see any companies leaving, so why would residents leave? Just
because of remote work? I don't buy it.

Additionally, it seems there's some underlying mechanism sustaining the
economy from completely collapsing. Whether it's just a factor of time, or
something else I don't understand. But the stock market is sustaining, and the
housing market seems to be even improving in certain areas.

The bottom has to fall out from under this thing at some point, but who knows
when. Impossible to tell.

~~~
aidenn0
Right now assets valuations are sustained at least partly because the wealthy
still have wealth to inveset and There Is No Alternative(TINA).

If you don't buy stocks, bonds or real-estate, the only other option is to
hold cash. Holding very large amounts of cash can be inconvenient for various
reasons. Gold is often proposed as an alternative, but it's value is already
quite high, and it's an _inflation_ hedge, while recessions tend to be
_deflationary_.

The fact that the majority of US taxpayers got a big check, and are expected
to get a second one soon is also a boost to the economy. However, mortgage
delinquencies more than doubled this past quarter, so we are getting close to
the point where foreclosures will happen, which will lower the prices of real-
estate.

~~~
claydavisss
Gold investors (like myself) assume that The Fed can only stimulate further in
order to stave off deflation...but (crucially) with _no_ hope of raising rates
later, even in the face of the inevitable resulting inflation.

A rise in rates would simply crater everyone who has come along with The Fed
so far - virtually all consumers and corporations holding high levels of debt.
In such an environment of obvious inflation and Fed paralysis, gold could go
much, much higher.

~~~
valas
How do you invest in gold?

~~~
aidenn0
I don't know how GP does, but if you don't trust certificates:

[https://www.jmbullion.com/kilo-pamp-suisse-gold-cast-
bar/](https://www.jmbullion.com/kilo-pamp-suisse-gold-cast-bar/)

------
frankbreetz
I have been greatly surprised by home prices since the start of the start of
the pandemic. Back then I thought for sure prices were going to drop. Right
now I am thinking home prices haven't dropped because of combination of
mortgage forbearance and the quick drop of interest rates. I do wonder what
the effect will be when the mortgage forbearance runs out. I would imagine
there would be a backlog of delinquencies that would flood the market.

~~~
acituan
Indeed foreclosures are the lowest in _15 years_ because “as the federal
government has banned lenders from pursuing most delinquent loans until at
least the end of August 2020” [1]

[1] [https://www.worldpropertyjournal.com/real-estate-
news/united...](https://www.worldpropertyjournal.com/real-estate-news/united-
states/irvine/real-estate-news-2020-foreclosure-filings-report-coronavirus-
impact-on-home-foreclosures-in-2020-attom-data-solutions-foreclosure-reports-
ohan-antebian-12055.php)

~~~
scrumbledober
This is the biggest factor. It will be very interesting to see what happens
starting next month if the ban is not extended.

------
ProfessorLayton
While 2020 has certainly shown me that anything can happen, this is feeling
eerily similar to Great Recession in SF/Bay area, where housing prices didn't
bottom out until 5 years from their peak [1]. The economic devastation that's
happening is _not over_, but many signs point to this one being considerably
worse than the last one.

While SF looks like it's doing pretty well now, prices did drop ~25% during
the last recession, and they didn't recover until ~2013 [nominally]. Remember,
a home that fell by 1/4 in price needs to appreciate by ~1/3 to be back in
square one, which is considerable and shows that even the hottest markets are
not immune from downturns.

SF has certainly recovered from much worse, and long term it will recover just
fine, but for many the appeal of the city currently missing, and will continue
to be missing for a not-insignificant amount of time. The price-to-rent ratio
is currently widening as rentals continue to flood the market, as many are not
finding the SF-premium worth it at the moment. All these downward pressures
will surely [imo] put significant downward pressure on SF housing.

The wild card here is the Gov't, which has allowed many to put their mortgage
on forbearance, and because of that I'd expect the real price movements to
happen after that. However, that only applies to conforming loans, and not
jumbo loans, which are on a case-by-case basis.

One more thing — with a grain of salt because I don't have a better source —,
while this report says _list_ prices have fallen 4.9% yoy, that's still 5%
above _contract_ prices [2].

[1] [https://www.bayareamarketreports.com/trend/san-francisco-
hom...](https://www.bayareamarketreports.com/trend/san-francisco-home-prices-
market-trends-news) [2] [http://socketsite.com/archives/2020/08/400-percent-
more-redu...](http://socketsite.com/archives/2020/08/400-percent-more-reduced-
listings-on-the-mls-in-san-francisco.html)

------
duxup
Folks really desperate to find patterns and all but I think it is going to
take a while to really "know" anything.

------
kehphin
Zillow's conclusions seem wildly inaccurate for Boston - it is most definitely
a buyer's market. Time to sell has increased drastically across all price
ranges. Price cuts are rampant as well. I've seen apartments listing at 1.1m
in April finally just sell this month in the low 900s. So take the report with
a grain of salt!

~~~
dionidium
I made an offer on a home in Providence this month and it is most definitely a
seller's market. Inventory is very low, properties do not last long, and
(after watching the market closely all summer) we eventually made an offer
substantially above asking.

------
tinyhouse
First, take everything Zillow says with a grain of salt. Sure, they have the
data, but they are not objective. Not saying they are lying, but they might
not show the full picture. (edit: I must say the post seems very detailed and
looks like they put a lot of effort into it. Maybe I should read it first...)

The trend seems to be rent prices are dropping in all major cities but home
sale prices are not. In fact they are even going up. In my opinion it's too
early to tell. Remote work would have a big impact on where tech workers live.
But it would take some time until it starts to negatively impact home sales.
People who move to new cities usually don't buy houses right away. Many of
those people who were supposed to move to SF/NYC/Boston in the next year and
potentially compete for houses in the next 5 years might now go elsewhere.

~~~
gpapilion
I agree with this largely. More importantly we won’t know the full impact of
anything for another 6 months. There haven’t been foreclosures, or evictions
yet.

------
notacoward
I love how this is a national survey, and none of the first three threads even
acknowledge that it was about anything but San Francisco. Very HN of you all.

------
michaericalribo
No doubt Zillow’s data must be fascinating and deep and extensive.

In general, I’m curious about how an individual could use this type of data to
their own benefit—to “game the system,” as it were, by surfacing / finding
“outliers”, by which I mean properties that are renting / selling far below
their “market-calibrated” price.

Then again, I guess developing that into a product is (ostensibly) the entire
job of an analytics PM somewhere like Zillow...

Still, we (collectively) are close to it being straightforward to scrape this
data, train a model, and score new listings as they come in. The tools are all
there, the tooling to orchestrate it off-the-cuff for personal use is still a
bit far off.

~~~
ISL
One reality of liquid markets is that, whenever someone discovers an edge, it
is (generally) only viable for a limited time. Either the original observer
arbitrages the advantage into oblivion or multiple observers notice the same
thing and do so together.

A more-reliable way to go is to determine whether a particular property is
selling for less than it is worth _to you_. If it is, and there isn't a better
option, hit it.

~~~
gen220
From what I see, as a compulsive zillow-with-24hr-filter-scout, the market is
a lot less liquid than one might believe. There are a _lot_ of economists' $20
bills laying around. (Especially during COVID, but also generally). Even some
$100 bills. And they almost always sit on the market for at least 12, if not
24 hours.

My explanatory theory is that people who are very interested in getting great
deals on apartments are also the same kind of people who sign long-term
leases.

IMO, the biggest barrier to arbitrage, that allows these good deals to float
on the market for several days, is that _most people_ are _not_ interested in
pouncing on an apartment that's come on the market <8 hours ago. Breaking your
lease (the rental market equivalent of "selling", a requirement for "selling
up") is just way too expensive.

Brokers (the people who are ostensibly paid to arbitrage) are also not super
interested in getting their client the best arbitrage deal, because their
commission will usually come out lower.

All this to say: next time you're moving, consider hounding zillow in the
mornings and evenings every day, with a 24hr filter, in the 5-6 weeks prior to
your move. Your patience will usually be rewarded.

~~~
gruez
>Brokers (the people who are ostensibly paid to arbitrage) are also not super
interested in getting their client the best arbitrage deal, because their
commission will usually come out lower.

AFAIK it works the other way around. The commissions might be say... 10%
lower, but if you save time (by not having to maintain the listing and attract
buyers), you can more than make up for it in volume. This was covered by
freakomics a while ago
[https://youtube.com/watch?v=aFYlgqv3T-w](https://youtube.com/watch?v=aFYlgqv3T-w)

~~~
ISL
I believe that GP was referring to buyer's brokers. In their case, if the
client pays more, their commission grows. Furthermore, if they can close
quickly, by making a higher offer or purchasing something that isn't quite the
right deal, the buyer's agent _increases_ volume, leading to the same effect.

------
rtlfe
Looks like not much has changed yet, but I'm still really interested to see
how things are different 5-10 years from now. If big tech companies like
Facebook actually follow through with shifting large numbers of tech workers
to fully remote, there could be a lot less demand for housing in tech cities,
which could lead to big drops in home prices, which could cause tech companies
to pay less.

------
ycombonator
New neighbor with two young kids is from Portland. He told me he picked up and
left in less than 20 days.

~~~
tjr225
Whatever is going on is not restricted to coastal cities. We bought a cheap
house in a college town in Michigan last year. Within 24 hours of listing it
10k over what we bought it for we had an offer.

I suspect low inventory in certain price points as well as low interest rates
are driving people to buy whatever they can.

~~~
lotsofpulp
Also, being able to buy a house while you have an income in case you are
predicting an increased chance of being terminated in the future.

Once you’re in a house, being removed from it due to missing mortgage payments
is much less stressful than trying to secure housing when you have unstable
income.

~~~
crazyjncsu
Your whole comment seems insane to me.

Do you actually think like this yourself? Or are you just positing that others
do?

You do realize that foreclosure has very negative long term consequences?

You do realize there are available forms of housing for every income bracket
that allow you to live within your means?

~~~
lotsofpulp
When you apply for a mortgage loan, having a steady income is one of the
requirements for getting approved for the loan.

Suppose you are planning to move into a home soon. It's worth jumping in ASAP
while you still have consistent income to show on your W-2 and loans are still
being handed out. You can worry about making ends meet afterward (and doing
odd jobs if you have to), but the hardest part is getting qualified for the
mortgage.

The alternative is you keep renting, and then your income disappears. Now,
it's hard to find rental housing because landlords ask for your W-2 and
paystubs also, and you have few protections as a renter not paying their rent
versus a homeowner not paying their mortgage. And mortgage payments and rental
prices are not far off from each other in any market with half decent economic
prospects.

Also, as history has shown, the US government will always go to bat for asset
owners in order to prop up asset prices, and leave non asset owners out to
dry.

------
mmaunder
Seattle suburbs are an extremely hot sellers market right now.

