patrick.net

I don’t have the numbers in front of me but on average over the past 50 years homes in CA have gone up in value a little faster than inflation.

Nationwide, housing prices post WWII have appreciated at inflation + log(population growth) + 1%. If you factor in from the 1800s you lose the "+ 1%" part.

CA has enjoyed about an extra "premium" mostly due to faster population growth as compared to the whole.

And there's another model that claims the population growth is not so important as population demographics (the curve shape of ages). I linked that article last thread or two. This model says that what is gained due to population growth will be shed later unless populations can grow at exponential rates, because eventually the population becomes "elder heavy". Sound familiar?

Look on the bright side: that means it may be bad in CA but it will be worse in FL.

skibum,

Oh yeah! That's right, what'd I say "Total Zero"? No, actually Less Than Zero would be more accurate.

You're right, this is the wind down phase for the builders and as I mentioned a thread or so back, 2007 is the year where realtors will find themselves in "Julian's position"!

Well, in fairness, when I read the CNN article about that, it noted that the savings rate does not count retirement accounts (e.g., 401k’s) as savings.

Person,

How many Americans have underfunded or not funded their 401Ks? I recall the typical retirement plan savings to be anemic. I doubt that helps very much.

(look at the national savings rate - hint, it’s the same as the title to a bad 1980’s movie starring Robert Downey Jr.).

But the book was great! :)

hmmmm maybe the McDebtors will earn income like Mr. Downey did?

Thanks, Mr. X. I definitely am switching to Vonage and am interested in any referral deals. Will email you.

I have some real doubts about Vonage as an ongoing concerns.

My favorite was right before they IPOed, someone (Om?) bashed Vonage. A Vonage-fan posted a comment that basically said this: "Their stock is going to rock. Vonage is a great company - their customers love them. They lower their prices ALL the time to beat their competitors."

Sounds like a great business model to me.

http://finance.yahoo.com/q/ks?s=VG
Profitability
Profit Margin (ttm): -56.58%
Operating Margin (ttm): -56.10%

Management Effectiveness
Return on Assets (ttm): -32.55%
Return on Equity (ttm): -152.43%

OMG.

lunarpark,

I'll bet you like Ellis' latest novel even better! ;)

Btw, 5% investment return (after tax) sounds rather conservative.

Ever since the tech bubble I've become very risk averse. A huge chunk of my money is a 5% interest savings account (taxable).

I'm not sure where to invest my money these days. I keep thinking about putting more money into some index funds, but I keep hearing that the market's about tank any day now.

Ahahaha, actually I didn't care for it as much as his other work. But I just couldn't see myself posting as Patrick Bateman :)

"I keep thinking about putting more money into some index funds, but I keep hearing that the market’s about tank any day now."

Me too. I even went through the trouble of choosing some Vanguard funds, but I haven't pulled the trigger.

But I just couldn’t see myself posting as Patrick Bateman

You could have posted as "American Psycho."

Come to think about it, maybe I'll use that username sometime :)

Claire,

We're not sure whether we want to put down roots here or move back east to be closer to family. The plan is to wait and see what happens after the wife is w/ her graduate school in a couple of years.

If we do decide to buy here, I'd love to get a reasonably priced house enclosed by Shoreline, the train tracks, and Calderon. Unfortunately, we can only afford the worst house in town if it's down by ~40%.

eburbed and lunapark :

Why don't you look at an automatic investment plan ? A fixed amount - I think Vangaurd allows it to be as low as $50 - per month taken from you checking account. Forget about timing, average it out for next 5+ years.

If you had started that just before the 2000 crash, you would have been in healthy black before 2006 started ! I doubt we are going to see a stock market crash of that magnitude. Personally, I am mildly bullish on stock market for this year - my prediction is a very choppy year, so a AIP is a great way to handle it.

* I AM NOT AN EXPERT

Randy H Says:

> We’re planning to start trying again in February.
> *But* we’re skeptical enough so as to hold onto
> our rights to keep renting here for another year.
> A lot of stuff here in South Marin (in our price
> range at least) seems to have been pulled for
> the winter.

Does anyone know what happened to our friend Marinite from:
http://marinrealestatebubble.blogspot.com/ ?

He has not updated the BLOG in over a month since he posted a South Marin beauty that Randy might able to buy from the bank later this year…

Why don’t you look at an automatic investment plan ? A fixed amount - I think Vangaurd allows it to be as low as $50 - per month taken from you checking account. Forget about timing, average it out for next 5+ years.

Into which of Vanguard's funds might you recommend (NOT INVESTMENT ADVICE)?

I was toying around with buying a few shares of BRK.B - but if Warren dies that'd be really bad :(

after the wife is *done* w/ her graduate school....

MtViewRenter -

We are in similar dilemma, stay here or move to East Coast or move back home to be closer to family.

I do hear the East Coast has better schools - may not be an issue for you, but is for us.

FAB,

LOL! I drive past that POS every day. It has been on the market ever since I moved to Mill Valley. In fairness, it's a mixed-use building, with commercial space on one side (but no parking).

That picture makes it look like a palace compared to the real view. Normally there is a pile of trash, old mattresses, and broken down beach-bum trucks choking that whole area.

No one is going to buy it, even here in Tam Valley. There's a nice little duplex around the corner for sale for the same price, and it has parking...and no one has bought that in over 6 months either.

eburbed :

If you believe in index funds Vangaurd has probably the best offering. Apart from standard SP500, Midcap, Russel2000, International Developed Market etc index, they also offer variety of mixed offerings - look at their lifestyle funds or target retirement funds. These are just combinations of index funds. So you do one step asset allocation as well. (Make sure the allocation is what you want considering you OTHER investments.)

There is an additional benefit. The pure index funds charge a fee of $10 for balances less than $10K (ouch) but these combo funds (a basket of index funds) don't ! (nice)

Claire,

Our first and only kid is only 4 months old. So no, it's not a big issue, yet. We do miss the fact that family can help us take care of the baby, give us a break, etc. He's quite a handful already. Slightly off topic. How did you guys w/ multiple kids resist the urge to strangle them?

I'm not sure you can make the generalization that east coast schools are better overall. I thought it largely depended on which town you're in since the schools there get their funds mostly from the townships. Can't imagine there's that big of a difference between Mountain View High & Palo Alto High. Of course, you probably wouldn't want to send your kid to school in Oakland or Richmond w/o a police escort.

I went to public high school in Boston in the early 90s. It's a good thing it was an exam school where most of the kids actually want to learn. The regular high school next door had metal detectors and fully armed Boston police at all entrances. We didn't have any security personnel. Guess it was still pretty safe since if anything actually happened, one quick call and 20 cops from next door will come right over.

We are in similar dilemma, stay here or move to East Coast or move back home to be closer to family.

I do hear the East Coast has better schools - may not be an issue for you, but is for us.

The East Coast has dramatically better schools. In Long Island, NY - Jericho has one of the best public schools in the nation. Your children won't have to attend a talk by the local PD on the difference between Nortenos and Surrenos (which gangs use which colors) like they do in Mountain View.

Here's a housing comparison:

Cheapest house in Mountain View right now is $689k - 5br/1ba in 800 sqft. (They use the 5th dimension apparently).

http://tinyurl.com/yggsj4

Or, you could a 3br/2ba for $679k on a 7575 sqft lot.

http://tinyurl.com/yf68tp

Now granted there are some draw backs of moving to Jericho, LI
1) They don't have a street that's entirely Thai restaurants.
2) Mexican food there is not very good.
3) I'm ok with winters there, but summers are awful.
4) No tech jobs

Can’t imagine there’s that big of a difference between Mountain View High & Palo Alto High.

Sure there is - I don't think anyone's been stabbed at Palo Alto High.

There's actually a big difference even within Palo Alto ones. There was some controversy earlier about how Palo Alto High and how Gunn High had some ridiculous funding inequity.

Basically Gunn High had a mandatory voluntary (intentional) $2000 cash donation from parents.

Completely not related, Gunn appears dramatically higher in those silly school rankings than Palo Alto High. Or Mountain View. But Jericho (mentioned above) beats them all.

Here's a house from the school district that figure skater Sarah Hughes is from:

http://www.mlsli.com/uniDetails.CFM?MLNum=1811141&typeprop=1&start=1&rpp=20

4br/2ba on a 7695sqft lot. $659,000.

Cheaper than a 800 sqft house in Mountain View. And the schools there were feature in the NY Times for excellence.

@eburbed,

Sure, Vonage is losing money on every transaction, but they'll make up for it in volume. ;-)

Here are the rankings I was referring to:

http://www.msnbc.msn.com/id/7723397/site/newsweek/

Everyone says they don't matter, but everyone looks at them.

The first Bay Area one is Monte Vista at 57.
Sarah Hughes went to Great Neck North at 43.
Jericho (listed above) is at 14.
Gunn is at 70.
Mountain View high is at 291.

Sure there is - I don’t think anyone’s been stabbed at Palo Alto High.

Hmm, maybe there's a conspiracy to hide stabbing at PA High so there wouldn't be wide-spread panic? (j/k)

Is there really a lot of difference in the level of education offered, which I guess is actually kind of hard to measure quantitatively, or just the levels of test scores & where the students go to college?

I must confess that I don't really have much clue on the topic of local schools except for general impressions. Hell, until eburbed mentioned it, I didn't even know there's a Gunn or Jericho High.

The first Bay Area one is Monte Vista at 57.
Sarah Hughes went to Great Neck North at 43.
Jericho (listed above) is at 14.
Gunn is at 70.
Mountain View high is at 291.

Hey, that's not fair. Jericho isn't even in this area.

You should read “The Price of Admission”. You’ll discover that your kids will have a better chance of getting into Ivy League if they attend a crap school. Unless they are legacies. Then they have a 50/50 shot no matter what…

Just to be clear, a crap school in a "crap" state. Students from North Dakota are generally considered to be "affirmative action" despite their race.

palo alto renter:

Guess my kid is a shoo-in, if he decides to go that route.

Then again, private colleges are so expensive. It's not even that important for most professions since they need to go to grad school anyway. Think I'll just push him toward a decent public college instead.

Plus, schools like the ones in Palo Alto, Cupertino, Saratoga, etc. have IMO an unhealthy sense of academic competitiveness among students and parents. Many parents are raising their kids to be academic automatons, and it personally gives me pause about sending my daughter into such an environment.

Slightly off topic. How did you guys w/ multiple kids resist the urge to strangle them?

4 months old, you say? Just when you start getting exhausted, frustrated and angry, they start smiling, interacting and being generally cute. It's like an "intelligent design" to keep parents from killing their newborns.

Plus, schools like the ones in Palo Alto, Cupertino, Saratoga, etc. have IMO an unhealthy sense of academic competitiveness among students and parents. Many parents are raising their kids to be academic automatons, and it personally gives me pause about sending my daughter into such an environment.

http://wsjclassroom.com/teen/teencenter/05nov_whiteflight.htm

Gunn is much better than Mtn View High, there's just no comparison between the two, much higher income and education level among Gunn parents. Gunn used to be the most competitive high school in the entire Bay Area (except Lowell in SF, which is a whole different game), until Saratoga High and Monta Vista came along about 15 years ago.

Gunn is always known for its ultra-competitive atmosphere, it's been the defacto prep school to Stanford for years. My wife, who went to Los Altos High, said that it was easy to spot those super-driven, super-hardworking Gunn kids from a distance.

Also, if you're looking for a job in tech in Silicon Valley - Stanford really is the way to go. I think you automatically get accepted into Google.

Plus, schools like the ones in Palo Alto, Cupertino, Saratoga, etc. have IMO an unhealthy sense of academic competitiveness among students and parents. Many parents are raising their kids to be academic automatons, and it personally gives me pause about sending my daughter into such an environment.

Both my wife and me went to public high schools that weren't on the top 1000 list. They were probably never on those lists and never will be. Guess we were considered big fish in small ponds. It was good in some respects. We got more respect from the teachers & students, but it didn't help much preparing for the ultra-competitive environment at college.

We haven't decided how we will approach this yet. But I'm sure the solution will depend on the temperament of the child.

eburbed,

Thanks for the WSJ "classroom" link. Interesting stuff, and spot-on.

BTW, re: the great LI NY schools, does everyone there have that LI accent? That would be a downside to sending your kids to school there.

Today, Saratoga High, Monta Vista and Gunn are all sort of the same, feeder school into Stanford and UCB, very competitive academically.

Harker is a good alternative for those who don't live in a good school district. Chambers sends his kid to Harker as well.

What is interesting to me is that competitive students and parents seem to think going to a competitive HS like Monte Vista, Gunn, etc. is a ticket to getting into a top college. I would second Mt. View Renter's point - how many of the "middling" students at, say, Monte Vista get lost in the crowd of overachievers and hence don't get into a top school? If that same kid had gone to a less competitive school, maybe that kid would have been valedictorian.

Moreover, there's the utility of HS as a stepping stone to an Ivy-equivalent, but then there's the utility of actually getting an education. I doubt these top HS's do so much of a better job than the rest. AND, let's not forget actually doing things other than studying, like playing sports, learning about the world and yourself, etc. (other than for the purpose of padding your college application).

I find the competitive HS mindset sad and depressing. What kind of childhood is that?

BTW, re: the great LI NY schools, does everyone there have that LI accent? That would be a downside to sending your kids to school there.

I was going to make a joke about that. Something about "But your daughter may sound like Fran Drescher or Sarah Silverman"

But it really depends on your parents. I certainly don't sound like Tony Soprano or Woody Allen.

Today, Saratoga High, Monta Vista and Gunn are all sort of the same, feeder school into Stanford and UCB, very competitive academically.

That's one of the things that really bugs me about the West Coast - the lack of good colleges. It's always Stanford this, Cal that, UCLA the other thing.

Back in the east there was more diversity: Tufts, UPenn, MIT, Columbia, NYU, Cornell, Johns Hopkins, Georgetown, Duke, BU - maybe even (gasp) Penn State.