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Excellent graph showing SF Bay Area still in housing bubble


By Patrick   Follow   Tue, 6 Mar 2012, 5:51am PST   37,189 views   141 comments   Watch (1)   Share   Quote   Permalink   Like (2)   Dislike  

Clearly prices can come down a lot more and still be above the inflation rate.

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adarmiento   befriend   ignore   Sun, 12 Aug 2012, 12:45pm PDT   Share   Quote   Like   Dislike     Comment 102

Everybody that I know that knows the SF Bay area say housing will never correct like it has done for the Washington DC area, Florida, Nevada, Arizona, etc. because everybody wants to move to San Francisco. So they consider San Francisco the exception because of several factors such as being gay-friendly, having a great climate, and being a job engine for technology companies.

B.A.C.A.H.   befriend   ignore   Sun, 12 Aug 2012, 1:23pm PDT   Share   Quote   Like   Dislike     Comment 103

lostand confused says

but when you buy a home for 700-900k or even higher, you are stuck with high property taxes too. For this job market, mid 300s is right for most areas

Yep. In the tech department that I work in, most of those coworker engineers' property tax bills are higher than my family's entire housing cost.

CDon   befriend   ignore   Mon, 13 Aug 2012, 12:30am PDT   Share   Quote   Like   Dislike     Comment 104

E-man says

thomaswong.1986 says



eventual prices fall back !


The key question is, how long would we have to wait? are we still alive by then to see those prices?

Even worse, how much higher will the trendline be when they finally "revert to the mean"?

Imagine the 1994 buyer in San Jose who stumbled across that chart. He would see the trendline then at 200K, yet San Jose still at 250K and conclude "San Jose is gonna crash, I will wait it out".

Imagine too he stubbornly clung to his prediction that SJ would "revert to the mean" and refused to buy in 1995, 96, 97, followed by his horror as prices exploded upward 1998 and beyond, causing him to wait even further.

Finally, even if they did magically "revert to the mean" today, SJ would fall to 300K. Meaning at the end of the day, our poor guy would refuse to buy at 250K, rent for 18 years waiting for prices to fall, and then buy at 300K.

freak80   befriend   ignore   Mon, 13 Aug 2012, 12:36am PDT   Share   Quote   Like   Dislike     Comment 105

B.A.C.A.H. says

Yep. In the tech department that I work in, most of those coworker engineers' property tax bills are higher than my family's entire housing cost.

Which is f***ing crazy. How can those tech companies afford to do business in those areas? At what point does "nice weather" become "not worth it."?

Hawaii has nice weather.

dunnross   befriend   ignore   Mon, 13 Aug 2012, 12:50am PDT   Share   Quote   Like (3)   Dislike     Comment 106

CDon says

Finally, even if they did magically "revert to the mean" today, SJ would fall to 300K. Meaning at the end of the day, our poor guy would refuse to buy at 250K, rent for 18 years waiting for prices to fall, and then buy at 300K.

Yes, except the recession in the 90's was nothing at all, like what we are experiencing now. That was just a small bump in the Roaring Boom of the post WWW-II era. What we have now is a multi-generational depression, a complete paradigm shift.

dunnross   befriend   ignore   Mon, 13 Aug 2012, 12:54am PDT   Share   Quote   Like   Dislike     Comment 107

adarmiento says

So they consider San Francisco the exception because of several factors such as being gay-friendly, having a great climate, and being a job engine for technology companies.

1. San Francisco is gay-friendly, but people-unfriendly.
2. City climate sucks. There is no summer in San Francisco. If you move away from the city, then it becomes not only people-unfriendly, but gay-unfriendly, as well.
3. Jobs here are too much skewed towards the high-tech, ie. non-diversified like the other places.
4. Most of the people I spoke to in cities like Chicago, think San Francisco is one of the worst cities for life, and have no intentions of moving here. Only people who live in San Francisco think it's something special.

B.A.C.A.H.   befriend   ignore   Mon, 13 Aug 2012, 1:35am PDT   Share   Quote   Like   Dislike     Comment 108

freak,

I don't think its about the weather.

Lotsa people come here from all over the USA and all over the world. Some of them like rootvg, dunross, patrick, Randy H post here. They are all making some kind of trade off or sacrifice to pay for the expensive housing here.

Maybe we can read some remarks from them about why "The Bay Area Is So Special", since they are the ones who've voted with their feet.

jahreigns   befriend   ignore   Mon, 13 Aug 2012, 3:04am PDT   Share   Quote   Like   Dislike     Comment 109

What is the medium income in Bay Area? What can people afford at about 80K a year fixed rate? There are microclimates in the Bay Area. San Fran, Berkeley, and Palo Alto, for instance, are areas of wealth concentration. Plus there is very little home development. On the other hand, there area areas, like Richmond or Vallejo, that have very low prices but are not so desirable. I suspect that many people do not want to move to the far out areas because of commute time. One last note: I've seen whole empty neighborhoods with no "for sale" signs. It appears many homes are not being placed onto the market. At the end of day, what can people afford?

pazuzu   befriend   ignore   Mon, 13 Aug 2012, 6:04am PDT   Share   Quote   Like (2)   Dislike     Comment 110

"1996..." Not a bad time to buy.

2012: Extremely poor time to buy in most bay area locations.

FunTime   befriend   ignore   Mon, 13 Aug 2012, 7:56am PDT   Share   Quote   Like (1)   Dislike (1)     Comment 111

dunnross says

San Francisco is gay-friendly, but people-unfriendly.
2. City climate sucks. There is no summer in San Francisco. If you move away from the city, then it becomes not only people-unfriendly, but gay-unfriendly, as well.
3. Jobs here are too much skewed towards the high-tech, ie. non-diversified like the other places.
4. Most of the people I spoke to in cities like Chicago, think San Francisco is one of the worst cities for life, and have no intentions of moving here. Only people who live in San Francisco think it's something special.

After almost thirteen years of living in San Francisco, I disagree with three of your four points.

1. The friendliest people I've ever met, I've met in San Francisco.
2. If you love temperatures during June to August that require air conditioning, you will not love San Francisco temperatures during those months. If you love wearing jeans and a tshirt during the day and throwing on jacket in the later evening, you will love San Francisco weather during those months.
3. No data on which to base an opinion. I'd be interested to know what data resulted in your suggestion. I'm thinking surely you don't form opinions based purely on interviewing friends.
4. Since you provided no survey results and I'm thinking your point is based on acecdotes, I'll match every one of your anecdotes with stories of the envy expressed by people telling me San Francisco is their favorite city of all the cities they've visited on Earth.

I don't know what compels me to respond to posts like yours, but I just find San Francisco to be freaking amazing and different in most of the ways I'd want a city to be different.

Randy H   befriend   ignore   Mon, 13 Aug 2012, 8:25am PDT   Share   Quote   Like (1)   Dislike     Comment 112

Funny thing is that back in 1996, which was when I first moved to Silicon Valley, people were warning us that it was "a terrible time to buy". Luckily, back then I did the research and determined it was pretty clearly a rent-v-buy parity situation and looked [then] to be at the end of a 5-6 year slump.

When the dot-com bubble started heating up many of us knew it. It wasn't like it was any secret there was a bubble forming. The real estate prices were also going up, and I recall lots of people then thinking things would correct back to 89, 81, or even 72 prices. I remember surfing netcom and reading Usenet groups full of people who were "certain" that prices were headed back to 72 pricing, based on irrefutable fundamentals.

My only point is it's no comfort to be right if you have to wait half your life to get there. There have been at least 3 parity periods between 72 and now in Bay Area real estate, and if you bought during any of those you have done just fine. Of course, there will be some old coot who'll hold out renting until he's 77 years old who'll come out crowing about how "he knew all along" if the day comes that everything comes tumbling down.

Just beware that predicting the future is a very dicey business.

FunTime   befriend   ignore   Mon, 13 Aug 2012, 9:23am PDT   Share   Quote   Like   Dislike     Comment 113

Randy H says

Of course, there will be some old coot who'll hold out renting until he's 77 years old who'll come out crowing about how "he knew all along" if the day comes that everything comes tumbling down.

...and will have been financially independent since age 50. In other words, will not have needed a job to pay bills.

lostand confused   befriend   ignore   Mon, 13 Aug 2012, 10:41am PDT   Share   Quote   Like   Dislike     Comment 114

96 was different. Now, technology allows the same job to be done in India, Costa Rica or the Phillipines. There is no growth industry -yet. The finances for many folks are in tatters and ruined. The future looks increasingly dismal and bleak.

Now something can come in and turn it upside down-but do the current prices justify that maybe?

Even the war mongers are acknowledging that you have to cut medicare to fund the war machine.

Randy H   befriend   ignore   Mon, 13 Aug 2012, 10:52am PDT   Share   Quote   Like   Dislike     Comment 115

I know plenty of financially indpendent people in their 40s and 50s living in houses which they paid off in the 1990s-early 2000s. Waiting for doomsday is irrelevant when it comes to good financial planning.

Randy H   befriend   ignore   Mon, 13 Aug 2012, 10:54am PDT   Share   Quote   Like   Dislike     Comment 116

Then why am I scrambling to re-shore every tech job in my division possible right now? India is not economically advantageous and China represents too much IP risk.

B.A.C.A.H.   befriend   ignore   Mon, 13 Aug 2012, 4:09pm PDT   Share   Quote   Like (1)   Dislike     Comment 117

Fun,
sorry I am a lifelong Bay Arean, I gotta agree with dunross, BayAreans in general and 'Friscans in particular are rude. It's not an -in-your-face-rude, though. It's an aloofness rude.

JodyChunder   befriend   ignore   Mon, 13 Aug 2012, 4:13pm PDT   Share   Quote   Like   Dislike     Comment 118

B.A.C.A.H. says

Fun,
sorry I am a lifelong Bay Arean, I gotta agree with dunross, BayAreans in general and 'Friscans in particular are rude. It's not an -in-your-face-rude, though. It's an aloofness rude.

It might have to do with 1 in 10 Americans being so horribly depressed. At least 1 in 10 are taking anti-depressants.

JodyChunder   befriend   ignore   Mon, 13 Aug 2012, 4:16pm PDT   Share   Quote   Like   Dislike     Comment 119

Randy H says

know plenty of financially indpendent people in their 40s and 50s living in houses which they paid off in the 1990s-early 2000s. Waiting for doomsday is irrelevant when it comes to good financial planning.

I am one such financially independent asshole, and I still say you're playing down the bad moon that's a rising.

CrazyMan   befriend   ignore   Mon, 13 Aug 2012, 4:28pm PDT   Share   Quote   Like (1)   Dislike     Comment 120

When people in New York say fuck you, what they really mean is have a nice day.

When people in the Bay Area say have a nice day, what they really mean is...

Randy H   befriend   ignore   Tue, 14 Aug 2012, 12:12am PDT   Share   Quote   Like   Dislike     Comment 121

Youre A Liar says

A 20 year old paid off a house in 1991? Seriously? You're deluded.

Lots of late 20s/early 30s paid off their homes and/or bought them with all cash in the mid 90s. Perhaps you weren't around then...

Randy H   befriend   ignore   Tue, 14 Aug 2012, 12:13am PDT   Share   Quote   Like   Dislike     Comment 122

Remember, decent 3BR homes on the peninsula were between $300K-$400K then, and the average stock pop for a dot-commer was closer to $1mm. I probably know close to a doze folks who were smart enough to take half their winnings and plop them down either on a new house or to pay off their existing house.

Danaseb   befriend   ignore   Tue, 14 Aug 2012, 12:18am PDT   Share   Quote   Like (1)   Dislike (1)     Comment 123

gotta concur with the sentiment that San Franciscans, and most bay areans are up their own ass. Honestly as world class cities go, and I've been to many real ones such as London, Hong Kong, Madrid, Paris; you name it, I rate SF lower than Portland Oregon. Idle time is the root of all culture and Bay Areans are far far too busy working overtime for their mega mortgages.

FunTime   befriend   ignore   Tue, 14 Aug 2012, 2:15am PDT   Share   Quote   Like   Dislike     Comment 124

B.A.C.A.H. says

sorry I am a lifelong Bay Arean, I gotta agree with dunross, BayAreans in general and 'Friscans in particular are rude. It's not an -in-your-face-rude, though. It's an aloofness rude.

I bet you'd like some of the lifelong SFers on my block. Three generations on the same street. Regular people who just happen to live here and, maybe, chose to stay because they inherited their parents' houses.

Who knows, maybe I'm the same as the people you describe. I've not found generalities about big places to work. I think I can find the same kind of people you describe in Palo Alto? ; ) Some people are just weird.

FunTime   befriend   ignore   Tue, 14 Aug 2012, 2:16am PDT   Share   Quote   Like (1)   Dislike     Comment 125

Danaseb says

I rate SF lower than Portland Oregon.

Portland is awesome! I lived there for almost four years and lived in the NW for almost ten. I've just found I'm happier when I see the sun more than not. Maybe a result of growing up in Colorado.

FunTime   befriend   ignore   Tue, 14 Aug 2012, 2:17am PDT   Share   Quote   Like (2)   Dislike     Comment 126

Danaseb says

gotta concur with the sentiment that San Franciscans, and most bay areans are up their own ass.

Well hopefully you've all seen the South Park episode with that theme, because that shit was hilarious!

The111   befriend   ignore   Tue, 14 Aug 2012, 10:30am PDT   Share   Quote   Like   Dislike     Comment 127

This graph is now 18 months old. Is there any similar data being maintained currently?

dunnross   befriend   ignore   Tue, 14 Aug 2012, 3:09pm PDT   Share   Quote   Like   Dislike     Comment 128

FunTime says

Since you provided no survey results and I'm thinking your point is based on acecdotes, I'll match every one of your anecdotes with stories of the envy expressed by people telling me San Francisco is their favorite city of all the cities they've visited on Earth.

You've just proven my point #4:

>> 4. Only people who live in San Francisco think it's something special.

You live in San Francisco, don't you?

B.A.C.A.H.   befriend   ignore   Tue, 14 Aug 2012, 3:22pm PDT   Share   Quote   Like (1)   Dislike     Comment 129

Fun,

I am a lifelong resident of San Jose, except for a couple of months of sharing a rental home in Sunnyvale with some coworkers.

I've known lotsa oldtime San Franciscans over the years, most of them that I've known migrated out of The City to raise their kids in the suburbs. Including even descendants of Gold Rush Era Cantonese immigrants. Quite a few came down to San Jose and other places around the Bay in the 1950's and 1960's when they started having kids. Left the grandparents and any childless uncles/aunts back in The City. I agree, those old-time San Franciscans are friendly people like New Yorkers.

But over the decades S.F. has morphed into a kid-less (one of the lowest kid population per 100K in the U.S.) self-absorbed family-unfriendly, unfriendly kind of a place. World-class place to visit like a tourist or go to the shows or whatever, though.

dunnross   befriend   ignore   Tue, 14 Aug 2012, 4:09pm PDT   Share   Quote   Like   Dislike     Comment 130

FunTime says

If you love wearing jeans and a tshirt during the day and throwing on jacket in the later evening, you will love San Francisco weather during those months.

There isn't a single day in the year where you can wear a t-shirt in san francisco. September is the warmest month of the year, and it only gets as high as 70, which is definitely, not t-shirt weather.

BoomAndBustCycle   befriend   ignore   Tue, 14 Aug 2012, 4:25pm PDT   Share   Quote   Like   Dislike     Comment 131

dunnross says

CDon says

Finally, even if they did magically "revert to the mean" today, SJ would fall to 300K. Meaning at the end of the day, our poor guy would refuse to buy at 250K, rent for 18 years waiting for prices to fall, and then buy at 300K.

Yes, except the recession in the 90's was nothing at all, like what we are experiencing now. That was just a small bump in the Roaring Boom of the post WWW-II era. What we have now is a multi-generational depression, a complete paradigm shift.

So what is the point in fighting against the inevitable economic destruction you predict!? Do you really think simply not buying a home is going to save anyone in these doomsday scenarios of yours?

dunnross   befriend   ignore   Tue, 14 Aug 2012, 7:53pm PDT   Share   Quote   Like   Dislike     Comment 132

BoomAndBustCycle says

So what is the point in fighting against the inevitable economic destruction you predict!?

I am not predicting anything. The depression is here and now. The FED has thrown everything into trying to save the economy, with ZIRP policy, 2 rounds of QE, Operation Twist, etc, but has not been able to create any jobs or prop up consumer spending. Every post-recession recovery since the 80's has produced less and less jobs, but, this last one, has trumped them all. The recovery has barely started, and we are already headed into a new recession.

BoomAndBustCycle says

Do you really think simply not buying a home is going to save anyone in these doomsday scenarios of yours?

No, that's just one of the ways one can protect oneself against the depression. Other ways is the preservation of capital by keeping a portfolio balanced with cash and precious metals.

Danaseb   befriend   ignore   Tue, 14 Aug 2012, 8:44pm PDT   Share   Quote   Like   Dislike     Comment 133

i think i can sum of the sentiments of many here; would love the bay area and SF in particular if it wasn't soo $%^&ing overpriced. At least downtown Vancouver knows our pain, yes i grew up here but traveled enough to know how absurd it is.

dunnross   befriend   ignore   Wed, 15 Aug 2012, 2:27am PDT   Share   Quote   Like   Dislike     Comment 134

Danaseb says

i think i can sum of the sentiments of many here; would love the bay area and SF

But this totally ignores the sentiments of many on this blog who agree that:

1. People live everywhere, and for every person who lives somewhere, he is voting with his feet. For him that place is special.
2. For the past 5 years, there was a net outflow of residents out of the Bay Area. Obviously, all those people were voting with their feet.
3. San Francisco and BA has its pros and cons, just like any other place. There is absolutely nothing special about this city, only that some people who live there, think it is special.

FunTime   befriend   ignore   Wed, 15 Aug 2012, 3:17am PDT   Share   Quote   Like (1)   Dislike     Comment 135

dunnross says

There isn't a single day in the year where you can wear a t-shirt in san francisco.

You've posted average data and written the phrase "single day" so hopefully you see the error in the connection between what you've written and the information you've provided.

I get your point, though. There' s only about a month a year where you'd walk around all day in San Francisco in a T-shirt and risk serious sunburn. About half those days are 80s F and above and about half are mid-seventies and above. Definitely depends on what part of San Francisco too. I live on Potrero Hill, so have a particularly sunny view of the weather. My first place was on the West side of Twin Peaks, so I've also experienced the heavier fog of the area and they are very different.

FunTime   befriend   ignore   Wed, 15 Aug 2012, 3:21am PDT   Share   Quote   Like   Dislike     Comment 136

dunnross says

You've just proven my point #4:
>> 4. Only people who live in San Francisco think it's something special.
You live in San Francisco, don't you?

I do, but I disagree. I was trying to make a point with the same thinking as yours. I'm sharing stories about what people who don't live in San Francisco have said to me, the person living in San Francisco.

dunnross   befriend   ignore   Wed, 15 Aug 2012, 4:57am PDT   Share   Quote   Like   Dislike     Comment 137

FunTime says

I do, but I disagree. I was trying to make a point with the same thinking as yours. I'm sharing stories about what people who don't live in San Francisco have said to me, the person living in San Francisco.

Could it be that you, having lived in San Francisco, just filtering out any negative San Francisco reviews, and only responding to the positive ones? Or just, maybe, the people you talked to live in some awful place, like Afganistan. I know most of the people I meet here, who are perfectly satisfied with the Bay Area are all from 3rd world countries like Vietnam and Mexico, but hardly any Europeans like it.

FunTime   befriend   ignore   Wed, 15 Aug 2012, 5:23am PDT   Share   Quote   Like   Dislike     Comment 138

dunnross says

Could it be that you, having lived in San Francisco, just filtering out any negative San Francisco reviews

Oh, no, I'm not saying I only hear positive reviews. I grew up in rural Colorado, where people think, at best, you'll turn gay if you go to San Francisco! So I'm familiar with negative views of San Francisco.

One of the people I have in mind, when I write what I've written here, lived in Munich. He dreamed of moving to San Francisco and finally was relocated by his company. He and his wife have now lived in San Francisco five years and seem to really celebrate their opportunity to be here. He and others seem to think San Francisco has a desirable aspect of European cities. I've not traveled to the European continent much having only visited Rome, Amsterdam, Athens, Munich, Dublin, and Galway, so I'm not sure why they think that about San Francisco. That also seems to be an opinion held, though, by colleagues in Rome, Milan, Stockholm, London and Nuremberg.

thomaswong.1986   befriend   ignore   Wed, 15 Aug 2012, 8:20pm PDT   Share   Quote   Like   Dislike     Comment 139

It wasnt expensive in the past... why anyone would thing we should be overpriced is weird to say the least...

Below are May 1997 prices..http://archive.dqnews.com/AA1997BAY06.shtm.. factor in inflation and income growth.. we are looking at 30-40% higher prices today..
that would mean prices below would range within the forecast below with actual recent prices at July 2012

as you can see Contra Costa / Solano are just right with 1997 prices + inflation (40%)
Sanoma isnt too bad, but like the chart above stll indicates... others need to still correct. With 40% the numbers may be over-optimistic. You may need those Facebook options after all to skyrocket to buy any home at the median. I would discount Marin ... old money doesnt need income...LOL! Santana is doing just fine!

.............................Actual ..Frcst..Actual Delta + Over - Under priced
Alameda... ............$219 $306 $385 .....78
Contra Costa .......$225 $315 $308.......-7
Marin .....................$357 $499 $660 ......160
Napa ......................$170 $238 $372 ......134
San Francisco ......$289 $404 $565 .......160
San Mateo .............$324 $458 $714 .......260
Santa Clara ...........$302 $422 $618 .......195
Solano ....................$149 $208 $188.........-21
Sonoma ...................$210 $294 $320 ........26
Bay Area ...................$258 $361 $421 .......60

1sfrenter   befriend   ignore   Thu, 16 Aug 2012, 7:40am PDT   Share   Quote   Like   Dislike     Comment 140

Danaseb says

Idle time is the root of all culture and Bay Areans are far far too busy working overtime for their mega mortgages.

Just go to Dolores Park any weekday in the middle of the day. It's a party all day long as long as the sun is shining.

coriacci1   befriend   ignore   Sat, 18 Aug 2012, 1:53am PDT   Share   Quote   Like   Dislike     Comment 141

Those are renters in Dolores Park. The ones whose over priced apts have been spliced and diced to fit as many techie turds as possible. Dolores Park is the rec room for all those without personal space, at $1000 a room a month a pop!

Repeal prop 13!
Ubber tax absentee cutthroat landlords!
Vacancy control now!

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