High end housing is getting shellacked. From Wolf Richter at wolfstreet.com:
In California overall, prices dropped year-over-year, as sales collapsed, supply more than doubled. No dear, this isn’t just a seasonal dip.
San Francisco and Silicon Valley are now in the solid leadership role of the housing bust playing out in California with sales collapsing and prices heading south from the peak in April at an astonishing pace.
Just about everything that could come together came together. After a two-year outflux of workers due to working from anywhere, there came the collapse of the startup and crypto scenes, starting in 2021 and continuing unabated, leading to the early entries into my pantheon of Imploded Stocks. In early 2022 came the spike in mortgage rates. In mid-2022 came the downturn in employment at Big Tech. By that time, the Fed had been hiking its policy rates relentlessly, and Quantitative Tightening had kicked off. This was punctuated over the past two months by the chaotic dismantling of the workforce at Twitter and its ecosystem.
Local budgets have fallen into deep deficits – though most are still flush with cash from the pandemic funds received from the federal government and the state.
Vacant office space that is on the market for lease and sublease continues to balloon, while landlords have started to file for huge reductions in assessment values to lower their property taxes, which is going to cut revenues further.