A data scientist sells home in March 2021 — Should you do it too ?

MakeChoice.org
3 min readApr 27, 2021

Ok guys, now it’s official — We sold our single family house on March 26'th 2021

What, What did you do , You crazy — house market goes up and up , These are the feedback I get from my friends for all good reasons

Let me clearly articulate why I sold it :

  1. Housing market is a function of people’s confidence. Thanks to multiple stimulus, the dead man is walking and people feel confident enough to buy residential real estate — not only in bay area, however all across country

Below is a projections from none other than US Government on how things would look like in next few years. Right now in 2021 we are sitting on top of cliff even by my conservative estimates. Honestly, I have acrophobia — which means scare of heights. As the economy opens up, I believe the reality would strike, which in turn would lower confidence and hence house prices

2. California exodus

We are seeing a huge exodus of people leaving bay area. In simple supply chain words, it means future demand would decrease

3. Interest rates

If you are wondering that why suddenly in 2020 people started buying homes and that too when there is COVID-19, If you look at chart below for last 7 years — you would get your answer. Now that we are back to “normal” levels, I would expect market to come back — there is a thing called mean reversion, google it

Government is trying to emulate Japan’s monetary policy, socialism at best. Yes, government “saved” lot of people last year at the expense of many “smart” people who could not innovate with new business models.

4. Case Shiller index

The index has gone parabolic in last few months coming to a crucial point — Right now it’s around 30% higher than the real estate peak in 2007. Remember, the market went down by 30% in last real estate downturn. Is 30 a magic number ?

What do you think should be done?

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