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Excellent graph showing SF Bay Area still in housing bubble

By Patrick   Follow   Tue, 6 Mar 2012, 1:51pm   27,917 views   141 comments
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Clearly prices can come down a lot more and still be above the inflation rate.

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1. rootvg Follow Befriend (8) 1 threads 792 comments Danville, CA Premium

   62   12:24pm Thu 8 Mar 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   FunTime says wthrfrk80 says It wasn't so great if you were black, of course. Or a woman. Or from Japan or Germany. My mom is sixty eight and said the late fifties/early sixties were a dream come true. Grandma ran their grocery store and Grandpa was an electrician. Kids got off school and worked in the store at night. Life couldn't have been any better.

2. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

   63   12:39pm Thu 8 Mar 2012   Share   Quote   Permalink   Like (4)   Dislike (1)   Protected   FunTime says Or a woman. Or from Japan or Germany. My whole family is of German ancestry. We had no problems. Even my Grandpa who came here in the 50's with a thick accent had no problems. Even though he fought for the Germans in WWII. He was the one who taught me how to properly fold and respect the American flag, by the way. Pretty amazing when I think of it, considering that same flag was on the planes bombing the shit out of his homeland. Women were treated better then since they were seen as future wives and mothers; not just sex objects. The whole "sex is just recreation" concept had not yet gone mainstream. Cooking, cleaning, and taking care of a family at home had not yet been scorned by an angry bitter minority. As if sitting for 40+ hours a week in a cube farm is somehow more glamorous and fulfilling.

3. rootvg Follow Befriend (8) 1 threads 792 comments Danville, CA Premium

   64   12:45pm Thu 8 Mar 2012   Share   Quote   Permalink   Like   Dislike   Protected   wthrfrk80 says FunTime says Or a woman. Or from Japan or Germany. My whole family is of German ancestry. We had no problems. Even my Grandpa who came here in the 50's with a thick accent had no problems. Even though he fought for the Germans in WWII. He was the one who taught me how to properly fold and respect the American flag, by the way. Pretty amazing when I think of it, considering that same flag was on the planes bombing the shit out of his homeland. Women were treated better then since they were seen as future wives and mothers; not just sex objects. The whole "sex is just recreation" concept had not yet gone mainstream. Cooking, cleaning, and taking care of a family at home had not yet been scorned by an angry bitter minority. As if sitting for 40+ hours a week in a cube farm is somehow more glamorous and fulfilling. I came across some class photos from my mom's Catholic grade school years and I have to say, those kids look happy.

4. FunTime Follow Befriend (3) 38 threads 801 comments San Francisco, CA

   65   4:16pm Thu 8 Mar 2012   Share   Quote   Permalink   Like   Dislike (2)   wthrfrk80 says Women were treated better then since they were seen as future wives and mothers; not just sex objects. I've quoted this here, so you can again read what you wrote. I see a connection between sex, wives, and mothers. Do you? Here's how your sentence reads to me, "Women were treated better then since they were seen as future wives and mothers, not just wives and mothers."

5. FunTime Follow Befriend (3) 38 threads 801 comments San Francisco, CA

   66   4:19pm Thu 8 Mar 2012   Share   Quote   Permalink   Like   Dislike (1)   I have to admit I'm fairly new to trolling and the number of smart people on patrick.net has me thinking I'm constantly being subtly, smartly trolled.

6. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

   67   4:25pm Thu 8 Mar 2012   Share   Quote   Permalink   Like (3)   Dislike (1)   Protected   Should I have said "objects of pleasure" instead of "sex objects"? I was trying to make a distinction between two very different attitudes men can have toward women: an attitude of genuine love, or a very different attitude of selfish lust.

7. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

   68   8:23pm Thu 8 Mar 2012   Share   Quote   Permalink   Like   Dislike   wthrfrk80 says China in 2012 = Japan in 1989. Same kind of asset-bubble driven economy. China will have a "lost decade" just like Japan...except with potential civil unrest and violence. I dont see any industry we lost to Japanes companies ever come back. Have you ? Fact is Japaense companies are still a global powerhouse and still compete with US companies and have doubled-tripled in size compared to us.

8. FunTime Follow Befriend (3) 38 threads 801 comments San Francisco, CA

   69   10:29pm Fri 9 Mar 2012   Share   Quote   Permalink   Like   Dislike   wthrfrk80 says an attitude of genuine love I would argue women are not genuinely loved by men until they are paid the same for the same job" etc, etc, in the midst of life we are in debt etc."

9. curious2 Follow Befriend (5) 31 threads 2,246 comments Premium

   70   3:38pm Sat 7 Apr 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   wthrfrk80 says The 50s were great... We didn't have people telling us that our very existence is destroying the planet. We weren't morbidly obese or hooked on anti-depressents. Mixed reaction to this comment. The 50's in America may have seemed enjoyable for some but not others, and a lot of what happened at that time was in fact very bad for the planet. It was a terrible time for the people who got paralyzed by polio, or drafted to Korea and maimed in that war. It was also a difficult time to be gay, or in any way a potential target of McCarthyism. News reels of duck-and-cover drills don't look fun, and Arthur Miller's books Focus and The Crucible sound a more credible cautionary note compared to the gauzy mists of nostalgia. The issue with nostalgia is, we tend to remember the good and either forget the bad or blur it; the 50's seemed better compared to the mostly worse 30's and 40's, but I wouldn't go back to any era prior to the present, and besides we can't go back to the past anyway. I definitely agree though with the observation about obesity and anti-depressants. President Eisenhower (also a German American btw) warned against the rising military industrial complex, to no avail. That has now been overtaken by the medical-industrial complex (ObamaCare) and big agribusiness (subsidized corn syrup). Studies show exercise works better than any anti-depressant, and costs nothing, but that's the issue: the policies that get enacted are the ones that cost the most $ and deliver the least value, because the sellers share the profits with the politicians. The people end up victims of the political machines, caged in cube farms and then intubated in hospitals, like a scene from The Matrix.

10. delete this account Follow Befriend 34 comments

    71   2:39pm Mon 16 Apr 2012   Share   Quote   Permalink   Like   Dislike   Fwiw, the chart that leads up this thread is misleading and inaccurately titled. It is simply bogus to conclude that it represents what actually happened to overall prices in any area during the periods represented. Why? Because the data represented from the FHA only includes conforming loans. So, in any year that the conforming loan limit went up faster than actual home prices, the graph will simply catch the new larger number of properties that would have previously been financed as a non-conforming loan. A Sunnyvale house that in 2000 sold for $500K would probably not have been included in the data owing to an underlying conforming loan limit of $379,050. But that same house being resold for $500,200 in 2003 would have been financed with a conforming loan which would now be recorded as included in the data. Viola, highly skewed data! So the chart is going to loosely track whatever happens to the conforming limit and really only represents what is happening in a given area where only a small minority of the home prices exceed limits that would price them into conforming loans. Hmmm, I've tried to upload a chart that shows the conforming limits over the same period and I never seem to get anything after clicking Upload Image. Well, I tried....

11. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    72   11:32pm Tue 8 May 2012   Share   Quote   Permalink   Like   Dislike   delete this account says Fwiw, the chart that leads up this thread is misleading and inaccurately titled. It is simply bogus to conclude that it represents what actually happened to overall prices in any area during the periods represented. No, not bogus at all. Prices have spiked from just 1997 to 2000, even though LT fundementals didnt support that.. JOBS. After 2000 ? totally irrational! Born, and raised in Sunnyvale, so dont make SU sound like its Bel Aire or something.. its not! Take a step back and look what prices were for decades... Yes! it a fucking bubble all right!

12. BayArea007 Follow Befriend 1 comments

    73   12:07am Mon 11 Jun 2012   Share   Quote   Permalink   Like   Dislike   Fed will keep rates low for a vey long time as they realize increasing rates will have a negative impact on housing. They will continue trying to re-inflate the housing market over the next decade. Unfortunately, I need a house, have a baby on the way, and have to face the fact that my wife wants a house. I would rather rent, but renting a 4 bedroom house in nice area in the Bay, probably runs 4-5K per month. A 700K+ loan interest only 3% interest loan + taxes - minus the tax break make the decision to buy a relatively easy one. I agree with many of your comments - job market sucks and the recovery is a myth. Every US President, whether Obama or Romney wants to govern in an interest low environment.

13. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    74   1:07am Mon 11 Jun 2012   Share   Quote   Permalink   Like   Dislike   Helloeeze says If houses decline to the level of inflation, my home in San Jose will be worth 50,000 more than I bought it for in 1989. Seriously. And yet that is how it works..even go back to the 89 peak and correction.

14. pazuzu Follow Befriend 6 threads 198 comments

    75   12:48pm Thu 14 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike   By the time this thing is over all our minds are going to blown how low prices are at the bottom. Dumbest time in the history of the world to go into debt for decades so you can think you "own" a house.

15. rootvg Follow Befriend (8) 1 threads 792 comments Danville, CA Premium

    76   12:53pm Thu 14 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   pazuzu says By the time this thing is over all our minds are going to blown how low prices are at the bottom. Dumbest time in the history of the world to go into debt for decades so you can think you "own" a house. But, if your mortgage is the same as rent and you're getting the tax incentives you weren't getting before (important when your household gross is close to $300K) and your utility bills are half of what they were in the rental... ...it makes sense. And, it was a fixer priced ~$100K less than everything else around it. That's why we're already being approached to refi at no cost, only having lived here a few months. That's the only scenario in which it would make sense and that's why we bought. Otherwise, I would have stayed with the rental.

16. duckhead Follow Befriend 3 threads 81 comments

    77   2:04pm Thu 14 Jun 2012   Share   Quote   Permalink   Like   Dislike   “and your utility bills are half of what they were in the rental...” That’s an extremely rare circumstance, in fact it sounds like bullshit unless the place you were renting was much larger than what you bought, or something was wrong with it, in which case your rent vs. own comparison is also bullshit. Either way having to factor in the gross overpayment of utilities in a rental shows just how far one has to reach to make the case for buying.

17. rootvg Follow Befriend (8) 1 threads 792 comments Danville, CA Premium

    78   2:11pm Thu 14 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   duckhead says “and your utility bills are half of what they were in the rental...” That’s an extremely rare circumstance, in fact it sounds like bullshit unless the place you were renting was much larger than what you bought, or something was wrong with it, in which case your rent vs. own comparison is also bullshit. Either way having to factor in the gross overpayment of utilities in a rental shows just how far one has to reach to make the case for buying. It's rare but it's real. I just got last month's bills. I'm looking at them. We made out like bandits, mostly because of the location and the tax advantages. Whether or not you think that's fair is up to you but the numbers are what they are.

18. rootvg Follow Befriend (8) 1 threads 792 comments Danville, CA Premium

    79   2:48pm Thu 14 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   wthrfrk80 says FunTime says Or a woman. Or from Japan or Germany. My whole family is of German ancestry. We had no problems. Even my Grandpa who came here in the 50's with a thick accent had no problems. Even though he fought for the Germans in WWII. He was the one who taught me how to properly fold and respect the American flag, by the way. Pretty amazing when I think of it, considering that same flag was on the planes bombing the shit out of his homeland. Women were treated better then since they were seen as future wives and mothers; not just sex objects. The whole "sex is just recreation" concept had not yet gone mainstream. Cooking, cleaning, and taking care of a family at home had not yet been scorned by an angry bitter minority. As if sitting for 40+ hours a week in a cube farm is somehow more glamorous and fulfilling. I have a friend in Ohio who was raised old school Italian and he still looks at women as future wives and mothers. He evaluates potential girlfriends with that same set of criteria.

19. rootvg Follow Befriend (8) 1 threads 792 comments Danville, CA Premium

    80   2:52pm Thu 14 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   wthrfrk80 says rootvg says Peter Schiff said the Chinese would flood in here to invest all those Dollars we've given them over the past twenty years. He was right. They said the same thing about the Japs in 1989. Remember the final episode of "Newhart" where the whole town sells out to a Japanese RE tycoon and Joanna is wearing a kimono? China in 2012 = Japan in 1989. Same kind of asset-bubble driven economy. China will have a "lost decade" just like Japan...except with potential civil unrest and violence. I loved that episode, especially where Suzanne Pleshette shows up in the final scene.

20. rootvg Follow Befriend (8) 1 threads 792 comments Danville, CA Premium

    81   3:52pm Thu 14 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   FunTime says My wife has made the same or more money than me for years. The only time I heard about it was during flight training. You burn some bucks doing that.

21. Call it Crazy Follow Befriend 229 threads 2,779 comments

    82   4:50pm Thu 14 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   rootvg says I have a friend in Ohio who was raised old school Italian and he still looks at women as future wives and mothers. He evaluates potential girlfriends with that same set of criteria. I thought the criteria was when you get a new girlfriend, you look at her mother, and expect your girlfriend will look like her mother in 30 years....

22. rootvg Follow Befriend (8) 1 threads 792 comments Danville, CA Premium

    83   4:53pm Thu 14 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   Call it Crazy says rootvg says I have a friend in Ohio who was raised old school Italian and he still looks at women as future wives and mothers. He evaluates potential girlfriends with that same set of criteria. I thought the criteria was when you get a new girlfriend, you look at her mother, and expect your girlfriend will look like her mother in 30 years.... That's what my father told me. My mother-in-law smoked and took a lot of prescription drugs, none of which my wife does so would one think she'll fare much better. My mother-in-law is also in a nursing home in her seventies and I've had flight instructors who were almost that old.

23. New Renter Follow Befriend (3) 13 threads 2,219 comments San Jose, CA Premium

    84   9:26pm Thu 9 Aug 2012   Share   Quote   Permalink   Like   Dislike   Protected   The chart only goes to Q1 of 2011 - is there an updated version available?

24. iwog Follow Befriend (48) 274 threads 12,555 comments 47 male Lafayette, CA Premium

    85   9:29pm Thu 9 Aug 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   New renter says The chart only goes to Q1 of 2011 - is there an updated version available? In two months, this chart will show a new post-crash, post 2009 high.

25. mell Follow Befriend (5) 55 threads 1,316 comments Premium

    86   9:59pm Thu 9 Aug 2012   Share   Quote   Permalink   Like   Dislike   Protected   BayArea007 says Fed will keep rates low for a vey long time as they realize increasing rates will have a negative impact on housing. They will continue trying to re-inflate the housing market over the next decade. Unfortunately, I need a house, have a baby on the way, and have to face the fact that my wife wants a house. I would rather rent, but renting a 4 bedroom house in nice area in the Bay, probably runs 4-5K per month. A 700K+ loan interest only 3% interest loan + taxes - minus the tax break make the decision to buy a relatively easy one. I agree with many of your comments - job market sucks and the recovery is a myth. Every US President, whether Obama or Romney wants to govern in an interest low environment. Why do you need/want 4 bedrooms - 2 1/2 or 3 should be plenty, no? You can get that for $2500 or less in decent SF residential neighborhoods.

26. E-man Follow Befriend (31) 34 threads 2,549 comments San Jose, CA Premium

    87   10:19pm Thu 9 Aug 2012   Share   Quote   Permalink   Like   Dislike   Protected   Patrick, Based on the graph you provided, do you seriously believe that home prices in SF & SJ will come down to the mid $300k in the future?

27. Randy H Follow Befriend (5) 44 threads 4,602 comments Los Altos, CA Premium

    88   10:24pm Thu 9 Aug 2012   Share   Quote   Permalink   Like   Dislike   Protected   Prices will not come down to the mid $300Ks. In many areas that was the previous low following the Loma Prieta slump which didn't really start rebounding until 95-96.

28. Randy H Follow Befriend (5) 44 threads 4,602 comments Los Altos, CA Premium

    89   10:26pm Thu 9 Aug 2012   Share   Quote   Permalink   Like   Dislike   Protected   Logarithms are your friend.

29. thomaswong.1986 Follow Befriend 15 threads 2,845 comments

    90   11:18pm Thu 9 Aug 2012   Share   Quote   Permalink   Like   Dislike   Randy H says Prices will not come down to the mid $300Ks. In many areas that was the previous low following the Loma Prieta slump which didn't really start rebounding until 95-96. The declines in the Bay Area had very little to do from Loma Prieta.. we had an earthquake.. not much of a big thing for many... Now talk about what happened to the tech industry during the same period ? $300K.. in CA it sure can happen! and plenty of sunshine without the high markup! Southland Home Sales Up From Year Ago; Median Price Climbs to $300K(DQNEWS) http://www.dqnews.com/Articles/2012/News/California/Southern-CA/RRSCA120717.aspx

30. thomaswong.1986 Follow Befriend 15 threads 2,845 comments

    91   11:27pm Thu 9 Aug 2012   Share   Quote   Permalink   Like   Dislike   E-man says Based on the graph you provided, do you seriously believe that home prices in SF & SJ will come down to the mid $300k in the future? Why would it not ? All the reasons people cite for high Bay Area prices during the bubble were also true in expanding economy of 70s and 80s and yet it fell back to long term trends. Since 2000 our economy has contracted and the same time we saw prices skyrocketed for all the wrong reason. Yes, eventual prices fall back !

31. thomaswong.1986 Follow Befriend 15 threads 2,845 comments

    92   11:28pm Thu 9 Aug 2012   Share   Quote   Permalink   Like   Dislike   iwog says In two months, this chart will show a new post-crash, post 2009 high. Sobriety is painful for some!

32. E-man Follow Befriend (31) 34 threads 2,549 comments San Jose, CA Premium

    93   11:39pm Thu 9 Aug 2012   Share   Quote   Permalink   Like   Dislike   Protected   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?

33. thomaswong.1986 Follow Befriend 15 threads 2,845 comments

    94   11:42pm Thu 9 Aug 2012   Share   Quote   Permalink   Like   Dislike   E-man says The key question is, how long would we have to wait? are we still alive by then to see those prices? the more govt intervention, the further out the correction.

34. dunnross Follow Befriend 28 threads 1,489 comments San Jose, CA Premium

    95   12:18am Fri 10 Aug 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   thomaswong.1986 says $300K.. in CA it sure can happen! and plenty of sunshine without the high markup! Also, keep in mind that a $300K median house in the Bay Area/LA is equivalent to a $100K house, everywhere else, in terms of house quality and land sq footage. So, even at $300K, you are still overpaying for what you actually get.

35. Randy H Follow Befriend (5) 44 threads 4,602 comments Los Altos, CA Premium

    96   5:26am Fri 10 Aug 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   dunnross says Also, keep in mind that a $300K median house in the Bay Area/LA is equivalent to a $100K house, everywhere else, in terms of house quality and land sq footage. So, even at $300K, you are still overpaying for what you actually get. That statement makes no sense. It strikes me that you're discounting the first three most relevant variables driving the market price for real estate. And it doesn't matter what you think. Market prices depend upon what everyone else thinks. Seems a lot of people have problem with that very basic concept.

36. dunnross Follow Befriend 28 threads 1,489 comments San Jose, CA Premium

    97   7:55am Fri 10 Aug 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   Randy H says It strikes me that you're discounting the first three most relevant variables driving the market price for real estate. Yes, I am discounting the 3 most relevant variables - "location, location, location", because these variables determining value today, will no longer be there tomorrow. Detroit was a desirable location 40 years ago, but look at it, now.

37. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

    98   8:37am Fri 10 Aug 2012   Share   Quote   Permalink   Like   Dislike   dunnross says Detroit was a desirable location 40 years ago, but look at it, now. But,but that can never happen to SF,correct?

38. lostand confused Follow Befriend (9) 165 threads 1,548 comments Premium

    99   8:38am Fri 10 Aug 2012   Share   Quote   Permalink   Like   Dislike   Protected   300k+ for most of the bay area is just right for this economy. Interest rates may be low, 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. Now if there is a new dotcom that cannot be offshored and done anywhere else, then fine-but not for this economy.

39. rufita11 Follow Befriend (3) 10 threads 166 comments San Ramon, CA

    100   6:21pm Fri 10 Aug 2012   Share   Quote   Permalink   Like   Dislike   Call it Crazy says rootvg says I have a friend in Ohio who was raised old school Italian and he still looks at women as future wives and mothers. He evaluates potential girlfriends with that same set of criteria. I thought the criteria was when you get a new girlfriend, you look at her mother, and expect your girlfriend will look like her mother in 30 years.... That's such bull. I look like my dad who looks like his mother, so I'm going to look like my grandmother--already saving for the plastic surgery she got when she was 70 :)

40. rootvg Follow Befriend (8) 1 threads 792 comments Danville, CA Premium

    101   6:25pm Fri 10 Aug 2012   Share   Quote   Permalink   Like   Dislike   Protected   rufita11 says Call it Crazy says rootvg says I have a friend in Ohio who was raised old school Italian and he still looks at women as future wives and mothers. He evaluates potential girlfriends with that same set of criteria. I thought the criteria was when you get a new girlfriend, you look at her mother, and expect your girlfriend will look like her mother in 30 years.... That's such bull. I look like my dad who looks like his mother, so I'm going to look like my grandmother--already saving for the plastic surgery she got when she was 70 :) There's an acquaintance of ours who looks very much like we think an old flame of mine will look when she turns sixty, the bags under the eyes and spreading out in the back, etc. Whenever we see her I look at my wife and say, hey...I wonder if is here... VERY funny stuff, but I guess you have to be there.

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