Maybe it won't spread.....said in the most sarcastic way.

More bad housing news out of California: San Francisco Bay Area June home sales plummet as prices surge.

I'm a huge housing bull, but what I've been seeing lately makes my eyes grow large. It's time for a pull back. I was curious where "the surging prices" were happening. Because I think that is temporary.

I was sort of curious how the cities around me were faring. My city is definitely in price reduction territory.

Silicon Valley proper is still holding up. In Fremont the average time on market is still 9 days. No markdowns. But they are set to bring a new development on line relatively soon. We will see how long that holds up because it's pretty massive.

However, once you get into the bedroom communities, there are a lot of markdowns. I didn't check them all, but I checked the next city inland, and the next one after that. Both have price reductions on a lot of stuff. These are also the communities where you have to spend hours on the freeway to get home these days. People working in my town are commuting an hour and a half to get to my bedroom community. It's normally a 30 minute trip.

The other thing that is really perplexing is the general makeup of new construction in all of these cities. I haven't really been paying attention to it much before, but a lot of cities including my own are putting up a lot homes on the really high end. There is a crazy amount of 3000+sq feet inventory coming on which is sort of your more high end buyer. This segment of the market seems to be showing a lot of build up because of this.  And of course, these houses generally take longer to sell. You just kinda need a big family or absurdly large furniture.

So I guess McMansions are back. I don't care one way or another about McMansions, but during the housing crash everyone said we would never see those again. And yes, the definition of a McMansion is anything over 3000 square feet. Google it.

What really made me start paying attention to this is my city let a developer tear down a school. I'd never seen happen before. They promptly started putting up houses. But I just found out those houses are like 3000 square feet and that neighborhood is slightly run down for that type of construction. Most of the other houses are half the size. It isn't a bad neighborhood, but if I'm spending money on a house that size you don't want to look across the street and think - clean yo shit up.

Of course,  the neighborhood got a huge gift because all of their house prices just went up, and they can fix their places up now and feel like they can get a return on it. It's just an odd place to put big houses though.