Those scenarios seem few and far between. If it is a family home that has been owned for at least a decade in the bay area, then it has increased in value dramatically since it was bought, and no matter what kind of mortgage they have, they will have plenty of equity. If it was bought recently, then they probably don't have HELOCs or other instruments that would put them at risk, so the market value should be irrelevant to their financial situation.
I can't see how a market price decrease of a house that one owns, or has a mortgage on, could bankrupt someone or cause them to be evicted. The worst thing that could happen is for they homeowner to go "underwater", but even then, as long as they continue to pay their monthly mortgage payments, they get to keep their house.
Keeping in mind that these are not tech types with the associated salaries, you can’t see how a market price decrease could bankrupt or evict someone? Mkay
How does the market price falling for someone's house lead to them getting evicted? It's not going to make their mortgage payments go up, nor their taxes. I guess if they stop paying their mortgage because it's underwater, the bank would eventually evict them, but if they can afford the mortgage they could just keep paying it, the price will likely grow in the future as land values go up with increased density.
There is some short term risk that if someone needs to sell their house for some reason, they will get less money for it. Home equity loans won't give you as much money at that time either. But neither of these factors should cause evictions.
We're not talking about repealing Prop 13 in this discussion (which is another law which many YIMBYs want repealed, but if areas were up-zoned at least there would be one path to relieve the pressure on housing availability).
No, I don’t see it. But I’m open to the idea that I am missing something.
Maybe they have an ARM mortgage, and are planning to refinance just before the adjustable period begins, and are worried they won’t be able to get new financing if the home value is significantly lower than the remaining principle? That would be easily solved by refinancing now into a fixed mortgage, but maybe they can’t afford the increased monthly payment that would cause?
That’s the only scenario I can think of, and it seems unlikely to affect many Bay Area homeowners, given the incredible rise in prices recently.
If you understand how a market price decrease would cause a homeowner to be evicted, please explain it.
I am actually in favor of building more housing. But I think that doing so will (on top of prices already being projected to fall) put further downward pressure on house prices.
To think that this is a rosy story for everyone with no losers is a fairy tale.
I believe that the already squeezed, non-tech, middle class of the Bay Area will suffer at the expense of new, younger tech workforce (and incidentally play into the hand of the actually wealthy tech leaders who are some of the biggest proponents). If you choose not believe that, then please provide a historical example of where deflationary pressure on house prices have been a boon for the existing working/middle class that own houses anywhere.
I realize that this is not a popular opinion among the HN crowd, which obviously skews young and tech, but it certainly is the opinion/anxiety that I hear expressed on the ground in the Bay Area among non-tech families. Are they delusional and should simply welcome lower house prices? Are their wealth and security something that must be sacrificed for the greater good? Maybe.
But I am very suspicious of some of the tech leader pushing this. It’s obviously great for them if they can pay their employees less because rent is lower.
> I am actually in favor of building more housing. But I think that doing so will (on top of prices already being projected to fall) put further downward pressure on house prices.
> To think that this is a rosy story for everyone with no losers is a fairy tale.
> I believe that the already squeezed, non-tech, middle class of the Bay Area will suffer at the expense of new, younger tech workforce (and incidentally play into the hand of the actually wealthy tech leaders who are some of the biggest proponents). If you choose not believe that, then please provide a historical example of where deflationary pressure on house prices have been a boon for the existing working/middle class that own houses anywhere.
I never said that a decrease in housing prices would be good for non-tech homeowners. I just contested your claim that it would lead to them being evicted.
I can't see how a market price decrease of a house that one owns, or has a mortgage on, could bankrupt someone or cause them to be evicted. The worst thing that could happen is for they homeowner to go "underwater", but even then, as long as they continue to pay their monthly mortgage payments, they get to keep their house.