Once the most expensive in the country and now people can not leave fast enough! San Francisco Real Estate Crashes and it still has a long ways to go. Enjoy! Add me on insta @ThisisJohnWilliams
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San Francisco Real Estate Market Crashes! This area was once the most expensive place to rent in the entire nation and now it is heading into a no mans land. All due to the closures, high costs of living, high CA taxes, the ability to work from home and more.
We are seeing rents dropping by over 31% so far. This is such a substantial sum. An apartment that was one renting for $3,000 per month earlier this year is now renting for $2,000 per month. I believe that rents will continue to fall for the above mentioned reasons.
In addition crime has increased 75% so far and that is with stimulus and unemployment funds made available to tens of millions of Americans. When those funds dry up we will begin to see real pain and shock to the market as well as much further crime and random attacks.
This will further drive people to suburban areas and safer communities where the high income earners feel safer to walk the streets and enjoy their life.
The real question is now with sales tax revenue dropping over 34% so far this year how will the city be able to maintain their hygiene problem as the city is known as a public toilet.
Having lost 34% in sales tax revenue it will make things that much harder for the city to accommodate their welfare and city programs. They will need to drum up the cash and revenue from other sources, but where? The only other revenue drivers that come to mind are business owners and landlords. Most of the businesses are leaving and most of the landlords are greatly struggling.
I believe we will begin to see a real estate crash in expensive real estate markets such as San Francisco, Los Angeles and New York City.
Many investors here buy properties for 3-4-5% annual returns and those figures were based on 2019 and early 2020 rents. With substantial price reductions we will see many landlords go under and go bankrupt.
This is a very unfortunate part of business. The chain of events to follow will educate and teach many investors some very hard lessons and those lessons are especially true with bank debt and leverage.
I believe the investors that do well going forward will be the ones that are light on debt, have cash and are very conservative.
What are your thoughts with San Francisco Real Estate? Do you think that rents can drop even more than 31%?
That is the trillion dollar question. If they drop another 30% you might see me looking for deals and investing in deals there as I believe long term San Francisco will be a great real estate investment. On the short term however we will likely go through a challenging ten plus years.
Drop your comments below!