patrick.net

I see you guys are all lying! The Spring Bounce is definitely here! Houses continue selling like hot cakes -- all you'll have to do is to put up a sign, and the bidding war will start in 30 seconds (or less!)

Interest rate will go higher, but who cares? It's common knowledge that everyone's making at least $200K a year in the Bay Area. A 20% appreciate in property value, and a near-zero inventory are to be expected by the end of June.

Spring Bounce fever: I happened to work late last night, and talked to the janitor. Turned out he was about to buy his first home. His goal was to buy a place in Condotino (so that he kids will have better education, and will not become a janitor like him). His main concern was typical. He was only making $80K a year, which was a shock to me, because as far as I'd heard, everyone in the Bay Area was making at least $100K. I suggested him to ask for a raise, or go clean toilets for another company that wasn't this cheap.

I myself got only 20% raise this year, which was kind of disappointing because I've been told a 30% raise in the Bay Area is not atypical. My income is still 10% short from being able to afford a house in Fair Oaks Ave., Sunnyvale. I guess the Option ARM comes in handy after all. I'd better get in the peak before another 20% appreciation of Bay Area properties. Everyone wants to live here, and work here, right, because this is the best place in the world. Where else would you find a company so nice to project World Cup games live (from ESPN, not that Spanish-speaking channel) in the cafeteria in the middle of the workday? That alone is worth the Bay Area premium.

Thanks brightc,

I needed a laugh too! According to today's buffet of articles patrick tells us through Craigslist that there are 475 price reductions listed for the BA. But that certainly doesn't have to spell the end for bidding wars. With rates rising (in the short term) wouldn't it make sense to "lock in" the home of your dreams today on a 40 year loan (long term)? Why take the chance? Leslie Appleton-Young is struggling for a new "moniker". What will your's be? If we don't move and quick during this brief buyer's market how will we finance our dreams when the treas. dept. tells fannie where to stick it?

tannenbaum,

Let's not forget the Help You Sell, For Sale By Owner, Sell 4 Less, By Owner Direct, By Owner Connect listings sprouting up like mushrooms!

Will any (or all) of the followings happen in the next three months:

* Rate will go up another 0.25%
* Inflation keeps rising. Oil and gas prices continue climbing up
* Stock market stagnates. Bay Area residents can't cash in their options (including me...)
* Bay Area housing inventory keeps piling up

If there is no crash, there's at least a 20% correction in the Bay Area housing market. Is that wishful thinking, or it's entirely a plausible scenario?

The other search was a ‘Wishlist’, in which I put in a lowball range with fairly outrageous (at the time) requirements for lot size, sq.ft., bedrooms, etc. Back then, this wishlist had 0 results. Last night, there were 14.

There is so much inventory out there it is getting difficult. And this is just the beginning.

Perhaps we should keep adding requirements just so that we are not tempted to buy? ;)

The following numbers are for Santa Clara County (source: mlslistings.com - I've been tracking this since last year, SFH/Condos combined):

4/15/2006 3879
5/15/2006 4475
6/15/2006 5104

*6/15/2005 3653

There is definitely a Spring Boom. A boom in inventory.

http://bubbletracking.blogspot.com/2006/06/tracking-san-josesanta-clara-county.html

6/15/2006 5104

*6/15/2005 3653

Come on Lunarpark, that is not even a 40% increase year/year. ;) Look at Sacramento:

6/05: 6,241
6/06: 15,744

http://bubbletracking.blogspot.com/2006/06/tracking-sacramento-metro.html

tannenbaum Says:

Antioch now has 900 (yes, nine HUNDRED) active lsitings. Need I say more?

Yes, Antioch is one of those fringe BA towns that will fall hard.

newsfreak Says:

I am watching the hurricanes. That could effect the price of oil and other things. Alberto was small, but early, so people may get jumpy if another comes thru.

Natural gas futures took a big jump after Alberto.

Therefore, do not buy until the stars and planets agree with you.

Consult the stars (or I Ching) before buying.

* Not esoteric advice.

On a local level, we were driving around Stevens Creek Blvd in Crapertino last weekend running errands. The number of open house signs at all the major intersections was impressive. I think 5-6 alone at DeAnza Blvd alone. Also, we went to a couple of OH's in the neighborhood we're eventually planning to buy in, Portola Valley. Lot's of OH signs there, and at the 2 places we checked out - there was only 1 other family total, with 2 very bored realtors sitting on their butts. I hear the high end market, despite the mythical "Google Effect" is deathly slow, and our observations were definitely in agreement with this.

The full faith and credit of the U.S. government lie behind these home loans. If the homeowners go broke in an economic crash, they default.

No, debt holders will be just paid back in devalued dollars. Isn't the printing press great?

Peter P Says:

No, debt holders will be just paid back in devalued dollars. Isn’t the printing press great?

So you're blaming Gutenberg for inflation?

20488 STEVENS CREEK BL, Condotino - I wonder how many units in this condo building are flipper owned. There are a bunch of them on the mlslistings.com right now.

"Come on Lunarpark, that is not even a 40% increase year/year."

We will get there! Patience.

What I'm seeing is much of the same since February. The same exact houses are still for sale, and from what I can tell, there's quite a few neighbors that are making mad dashes to repair their homes for what I assume will be more homes added to the stagnant inventory.
I feel pretty confident is believing that the crash is set up now and now things will really start to happen. Alameda is one of the safest areas in the bay. If nothing is selling here, then I can only assume things will be worse elsewhere.

20488 STEVENS CREEK BL, Condotino - I wonder how many units in this condo building are flipper owned. There are a bunch of them on the mlslistings.com right now.

You mean Verona Apartments?

http://www.apartmentratings.com/rate/CA-Cupertino-Verona-Apartments-Pricing.html

If it gets such low ratings as an apartment complex... what is it after the conversion?

BTW, the complex does not have much light at 9pm. Odd.

"If it gets such low ratings as an apartment complex… what is it after the conversion?"

Why do they have rental rates listed for 2006? Are some of these units still apartments?

Oh I hear you! Every Wed. our little paper comes out w/RE section and we see our dollar going further all the time. So we’ve now passed on listings that “were ideal” just 6 months ago!

Yes, last year we would be thinking: perhaps a condo in a so-so neighborhood is not that bad.

This year: this newer SFH looks fine, but the feng shui is not good, see ya.

Nevermind, total blonde moment.

CB Says:

The inventory is actually decreasing because the 550 Moreland project in Santa Clara by the Prometheus company has been canceled, instantly removing 461 units of “luxury condominum” off the market.

I wouldn't say inventory is decreasing based on this. First, units from a yet-to-begin project doesn't count in current inventory. Second, it's not clear at all if the "loss" of 461 units will be offset at all by an equal or greater number of other units coming on just from the usual sources of various people and developers putting stuff on the market.

On a related note, though, did anyone see the article in the Chronic-le about the Rincon Hill condos? $500K-$2M units to live at the on ramp to the Bay Bridge. I wonder what fools plan to live there.

Why do they have rental rates listed for 2006? Are some of these units still apartments?

Don't know. I guess residents can still stay through the leases.

Peter P,

You got a "problem" with using a thread graphic, or what?

- doesn't
+ don't

The inventory is actually decreasing because the 550 Moreland project in Santa Clara by the Prometheus company has been canceled, instantly removing 461 units of “luxury condominum” off the market.

Inventory that never was.

They called it luxury condo. I asked them whether there will be turndown service. They did not know what I was talking about.

You got a “problem” with using a thread graphic, or what?

I am just lazy. :)

WW2,

Man, something about your outlook has changed over the last couple of days. Good for you! You're seeing the blood, I mean 'light' at the end of the tunnel! Isn't it great? I can't speak to the BA directly but if you are showing growth in inventory that is fantastic.

Peter P,

You know it is just that damn simple! Last year my wife and I would pour over listings and try to figure out how to 'shoe horn' our lives into them and now if it doesn't fit like a glove, turn the page. Next!

The other irony about the Prometheus development being cancelled - who the heck decided to call that company Prometheus? ie, the sleaziest of them all in Greek mythology???

You know it is just that damn simple! Last year my wife and I would pour over listings and try to figure out how to ’shoe horn’ our lives into them and now if it doesn’t fit like a glove, turn the page. Next!

Very true indeed.

Dinor,
I have to be realistic. I don't think me and my wife who make 85k combined will ever be able to afford any kind of home that would be close to what we would consider to our standards here, but I do firmly believe that the BA is now on the tipping point for severe reductions. I am glad I will be around to witness it.

Will there be demand for "luxury" apartments outside Google's orb of influence?

I remember 550 Moreland has rather spacious floorplans.

They claimed they will keep the property value up by managing this mixed unit in a A-1 level whatever that means.

Free steak sauce?

WW2,

Judge Schmells: "You know I'm no slouch myself"

Ty Webb: "Don't sell yourself short Judge, you're a tremendous slouch"

*From the movie "Caddyshack"

O.K then, would you admit that things are about to get as juicy as they are going to get in a long, long time?

Dinor,
I was never a fan of soap operas, but what we're about to see will be highly entertaining.

You got a “problem” with using a thread graphic, or what?

I am just lazy.

Mr. P,

Since you are admittedly "motivation-challenged" on the thread graphic subject (kudos for your honesty, btw), I have taken the liberty of procuring a topic-appropriate image on your behalf:

i.e., "Spring bounce" = "dead cat bounce"
Please post this at your leisure, sir. :-)

WW2,

Soap Opera? HD and LOW are already feeling the pinch. The only time I hear housing related stocks mentioned any more is for "candidates to short" lists!

"As the ARM Resets"

"The Young and the FB's"

"One Payment to Live"

"General Hysteria"

"Santa Barbara"

HARM, can you help me resample it to a smaller size. Thanks! :)

Peter P,

Click the "Edit" link (only visible to you) under the thread text on the main page.

Insert this line above your body text: