patrick.net

Randy H.

Thanks for the spreadsheet link, but I'm too stupid to figure a couple things out. Is there a instruction link or forum? I didn't want to hijack this thread with questions.

Austingal said: "We are going to buy a mobile home in the good school district on a pier and beam foundation (unable to be financed) for cash."

You are spending $143k on a MH that doesn't qualify for financing in a crummy school district?!?

What's going to happen when you try and resale? Am I missing something?

SFWoman, SFBubbleBuyer,

Thanks for the advice. We are big walkers too. My wife would want to walk to work (in the financial district) and I would probably ride my bike if I can get an engineering job in the city proper. A lot of SF seems imposing in scale compared to Boston, and we prefer a neighborhood that is homey (for the same reason Manhattan is not as appealing). We're willing to give up some space and give up parking in order to find this.

This site suggest that the average 2-bedroom apt rents for $2616 in North Beach and $3505 in Nob Hill: http://www.rent-sf.com/avg_rent.php

Is that because the quality in Nob Hill is much higher, or just that the location is more desirable?

Astrid,

I'm not trolling. :) And if I were single, I wouldn't be looking for a house at all. My wife, however, believes things happen this way : Get Married, move to SF where her family lives, Buy House, Have Kids.

We're both early thirties. We both want kids starting in about two years. The wife wants a house before we start trying. I am arguing to wait for awhile on the house purchase. If I don't win the argument, I don't want to be stuck with a house we can't afford to sell and can't stand because of location/schools/etc.

And I was being sarcastic when I said "Why would anybody be bearish on this market?"

"FVacationHomeB" LOL!

Took me a minute, but definitely funny! Perhaps had it been prefaced by "Mr. Thinks he's Donald Freaking Trump" it would have stood out a little more? :)

The only way a vacation home makes sense (to me anyway) is if it's located where you would want to retire/live permanently. Outside of that it's really just vanity. "Oh, we were up at our FVacationHomeB (TM) over the weekend and Bruce and Demi....."

DinOR,

That high profile hotel dude divorce wouldn't be Mr. Shiloh Inn, would he?

Boston Transplant :

CalTrain will let you bring bikes on specific trains. http://www.caltrain.com/caltrain_bike_FAQs.html gives you the skinny. If you're flexible on your commute schedule, you should have no problem workign in the southbay and biking. CalTrain isn't exactly FAST, but it's a damn site better than sitting in traffic.

Nob Hill has high rents. I never saw the allure, but certain types of people are impressed if you're in 'Snob Hill'. The views are definately nice, however.

For a 'homey' feel, I recommend Noe Valley. It's not really 'walking' distance to the financial district, but it's definately walking distance to Bart which will dump you right there in a few stops. Rents in Noe Valley are hit and miss. You can get some good deals, but there are others that our sky high. I lived there for four years.

If you can find a month to month or even a six month lease, I would go with that and get a feel for the city.

If the bubble really does rupture catastrophically (so far it's just threatening... and promising at least a deflation) everybody sitting on cash reserves will probably be able to afford a house and a vacation home.

PAR,

Rich is.... he's brutal ain't he? Dead "kitten" bounce?

Doug H,

Yeah, watching that guy go into meltdown mode was not pretty! Mark was one of OR's home grown success stories and quite the darling with the finance crowd and then he went wiggy. I'd heard he started this crusade about frivolous lawsuits and just couldn't let it go!

Even conservative talk show hosts couldn't get him to talk about anything else. He just got obsessed with it and it really cost him. He's a big part of the reason my "bubble crusade" has been kept as quiet as possible and why I'm grateful to everyone here for putting up w/me. :)

"Not having an income to take deductions, Priceless"

O.K, that may be the best take off on that ad yet! :)

Even by ditch digger's standards this guy is..... is.... I dunno?

Boston Transplant,

I think that a lot of the Nob Hill rent being higher is because of some of the very luxurious high rise or older (Brocklebank type) doorman buildings. They are pricey, and there are a lot of them on Nob Hill. The North Beach area that is nice is the area at the foot of Russian Hill. You don't want to get close to the Chinatown area that borders North Beach or you start hitting nightclubs and strip joints.

Noe Valley is very convenient to the freeway, most of the people I know who live there work in Silicon Valley, and can hope right onto 280. When I first moved here (1993) Noe was very Birkenstock and hairy armpits and badly renovated (in the 1970s) working class Victorians. It gentrified during the dot com boom, and then even more so the past five years or so. It reminds me of a gentrified Dorchester. It and Potrero Hill and the Mission are the sunniest neighborhoods.

Ah, yes. Definitely rent for a year or so before buying if sun is important to you. Some of the neighborhoods are really socked in during the summer, and you don't want to accidentally buy in one if you don't want fog June-August.

ubermonkey,

The graph stops at 1998. The spread has gotten much greater.

newsfreak,

That's the least frightening part of his agenda, if you ask me.

SP,

There are lockers up at Squaw, there is a club with lockers next to the parking lot for the Squaw Kids facility. I've never looked into it, I only go up there 4 or 5 times a year max. I let my husband ski with the kids in Oregon or elsewhere the rest of the time. I like sun and heat in the winter!

SFWoman said:

> The idea of not having to schlep your equipment
> and clothes up every time you ski is appealing,

Then SP Says:

> There are some places in EU (Austria, for e.g.)
> that you can rent a railway station locker for a
> long time.

When I was skiing and snowboarding a lot more a few years back I had lockers at both Squaw and Heavenly…

Doug,

There's a forum on my blog dedicated to the spreadsheet and the alternate flavors contributed by others. Click my name, and then click "bubblizer thread" in the upper left of my blog.

--Randy

newsfreak Says:
Frank said Bush’s mantra–”Don’t believe your wallet, believe ME!”

That's the neocons propaganda machine in general: "Are you going to believe us, or your own lyin' eyes?"

The graph stops at 1998. The spread has gotten much greater.

So many graphs! Which one to look at?

Speaking of income inequality:

http://news.yahoo.com/s/nm/20070220/wl_nm/korea_suicide_dc_2

South Korea seeks to curb rising suicide rate
>One reason behind the increase in suicides may be a widening gap between the haves and the have-nots in South Korea, with poorer citizens more likely to kill themselves than the affluent, according to government data.

argh... another comment in moderation. Please unblock?

Something in today's paper:

Why renters fat and thin are singing

The beginning of wisdom is to realise that the rental market doesn't work the way landlords and real estate agents keep claiming it does. They try to tell us rents are set under a "cost-plus" model. So whenever the Reserve Bank raises interest rates or the government increases land tax, the higher cost to the landlord is "passed straight through" to renters.

That's the way landlords would like it to work and it's the way it does work if the landlords can get away with it. Oftentimes, however, they can't, so they have to shoulder any cost increases themselves rather than pass them on.

What stops them? Weak demand for rental accommodation relative to the supply of accommodation available. In other words, landlords are afraid to increase their rent for fear they'll lose their tenants to other, less rapacious landlords.

This is just what's been the case for the past six years or so, but is no longer so. Landlords now have the upper hand and are able to start whacking rents up.

During the housing boom that ended in late 2003, the supply of rental accommodation grew faster than demand as so many people sought to get rich quick by getting into negatively geared property investments. Smarties were buying as yet unbuilt apartments "off the plan", spurred on partly by the Howard Government's decision in 1999 to halve the tax on capital gains.

For the yield on rental property to have been maintained, rents would have had to rise in line with house prices. They rose by nothing like that because the supply of accommodation was growing so strongly relative to demand, leaving limited scope for rent rises.

At the time, in the heat of the boom, negative gearers weren't worried about the ever-lower running yields they were earning because they had their eyes set on unending capital gains.

Now, however, with the hope of capital gain evaporated, landlords' sights are set squarely on their low yields and the low rents that have caused them. And with demand running ahead of supply, they are well placed to put them up.

[etc]

I see you just had a little temblor down in Los Gatos. It popped up as a M3 on my earthquake alert.

Hey All,

Haven't posted in a while, but wanted to chime in on the Squaw condo thing. As others have pointed out, the second home market is usually more vulnerable during downturns, and it may be worse this time around than previous down cycles becuase all this funny money has left a lot of RE "investors" overexposed. And guess what they'll dump first - the primary residence or the Tahoe condo?

I LOVE skiing (hence the handle). In fact, that's a lot of what I've been doing instead of posting of late :) , and I would ideally have a second home in Tahoe too, but now just doesn't seem to be the right time. I've seen many POS's on the market in both the North and South shores, and prices do seem to be coming down for all but the mega-monster shorefront behemoths. As an aside, if you're looking for convenience and flexibility in Tahoe, I'd personally go for a place in Truckee rather than within Squaw. Traffic is easier in and out from the BA, and it's closer to other resorts (Northstar, SugarBowl, etc.).

Hey, maybe between all interested parties, we should have a patrick.net ski trip this season!

I agree 100%, a person with a good college education should be able to provide for a family of 3 or 4 in a middle class lifestyle.

That's pretty much impossible given the trend of globalization. Which, is a bad thing for us Americans, is a good thing from a humanity perspective.

It really depends on the definition of middle class. Could anyone nowadays live with one car, 1,200 sq ft house, and no name brand clothes? America has gone from a country founded by Puritans to a people who define their lives in very materialistic terms.

eburbed,

I don't think that's impossible. Just think of all the headhunters, lawyers, administrators, HR people, realtors, dot.commers trying to make a billion or two selling dogfood via the internet. Do they really make our lives any better? A lot of modern life just seems to be make work building on top of itself. Materially, I think Americans will do just fine if they cut their consumption of raw materials by half - they might even lose a couple pounds in the process - without involvement by big pharma.

Materially, I think Americans will do just fine if they cut their consumption of raw materials by half

Why do you have our Freedom(TM)?

skibum Says:

> Haven’t posted in a while, but wanted to chime in
> on the Squaw condo thing. As others have pointed
> out, the second home market is usually more
> vulnerable during downturns, and it may be worse
> this time around than previous down cycles because
> all this funny money has left a lot of RE “investors”
> overexposed. And guess what they’ll dump first –
> the primary residence or the Tahoe condo?

Back in 1996 I was at a party at a Realtors home in the Tahoe Keys and he mentioned that he had 180 active listings. I was talking with other Realtor friends at the party and every one of them had over 100 current listings (everything from south shore foruplexes for $100K and $50K 1 Br I Ba Cabins in the Meadow Area to $500K Lake View places). It seems like most Tahoe Area Real Estate has gone up more on average since 1996 than even San Francisco…

I’m planning to buy a cabin up there in the next downturn but I’m not sure where since there are pros and cons of every area:

Lahontan – Nice homes, gated Community, Central location – Expensive, Have to drive to Ski

Sugar Bowl – Close to Bay Area, If you have kids they can join the ski team and network with the children of the super connected Sugar Bowl shareholders – Not much nightlife, Long Drive to dinner.

Squaw Valley – Close to skiing, lost of bars and restaurants, - can get trapped in the valley, not as good in the summer.

West Shore – Great for boating in the summer, fun summer parties, long drive to skiing, farthest drive from SF…

GC Says:

> Do people really love SF?

Yes

> How are the bohemian parts of SF?
> The real ones, not the parts inhabited by
> imitation bohes and bohe-wannabes.

They are shrinking fast as SF becomes “yuppafied” by the increasing number of 20 something tech people that commute to the Peninsula. You can still find some real bohemians in West Marin and the Sonoma Coast…

> BTW, is metrosexual the new thing or the past?

Most “Metrosexuals” are gay guys that don’t have the guts to come out of the closet (aka are not ready to take the train from Straightsville to Homotown)…

I really look forward to the almost inevitable second home/vacation home crash. I don't care about owning primary residences but I'd like to have a nice little place up the Sonoma coast/Southern Oregon one day. It'd be a nice place for my parents when Shanghai is too hot or cold.

astrid,

Absolutely! It's not that I don't find the debate regarding critical metro markets/neighborhoods interesting. It's just that, I'll never buy there (SF or PDX) even if they were basically giving 'em away. At best I'd get a modest place, primarily for M-F convenience if anything.

I'd love to get some RE perma-bull come post here and tell us there won't be any downward price pressure in Bandon or Bend OR, Tahoe etc. Based on.... uh...?

astrid,

Southern Oregon, with perhaps some exceptions in Ashland, isn't 2nd homeville. Medford, Jacksonville, etc. are inhabited mostly by working class folks who became house rich in California and then moved up to Oregon with the proceeds from their house sales. Have you been to the Medford area (the town in southern Oregon)?

It consists of subdivision after subdivision, all houses with three SUVs and an RV parked in front of their four car garage, then strip malls all along I5. Restaurants include such divine places as Applebies and McDonalds.

Ashland is nice, though, and I've had good food at several restaurants there.

SFWoman,

I don't know much about inland Oregon (I drove past Medford once and didn't remember any thing about it), but the Lost Coast and the southern Oregon coastline is really gorgeous in a mist shrouded ethereal greenness that I really admire.

On the other hand, it's highly debatable whether my parents would ever live in a 5,000 redneck town 40 miles from the nearest other 5,000 redneck town. I could make it as long as there's high speed internet and UPS delivery, but no one else in my family would.

DinOR,

I would love to own in the BA if the price is right. As much as I mock the Bay Area intangibles, it really has a lot going for it weather/food/scenery-wise. I actually like what I've seen of Portland and Seattle.

However, I'm not going to mortgage my future merely for the privilege of owning. And no matter how low the monthly payments get, when a house gets to be 5-10X my gross annual income, there's a huge risk that I won't be able to sleep soundly at night. And sleeping is important for my complexion and mental wellbeing.

Don't despair, Astrid. It'll take some time, but your folks can game the system on the benevolence of the U.S. taxpayer to get onto social security. A lifelong resident of California, over the years I've known lotsa people who've depended on those elderly parents' social security checks to make the housing/property tax payments.

sybrib,

If you're mocking me, I fear you have the wrong target. My parents have been in this country for over 20 years. By the time they retire, they have earned their SSI/Medicare payouts as much as most Americans. We do know other people who bring their elderly parents to take advantage of Medicaid - though most who do so appear to be from Taiwan and not Mainland China.

I have no intention of living with my parents to make ends meet. I'd rather rent for the rest of my life. In a basement walk up. Next to a busy intersection. And I hate basement walk ups and noise.

Isn't Taiwan a province of China?

You conveniently left out the part that it will take some time. Some time to have a payroll job, for awhile. I've known lots of families, and I never said they were all immigrants, who need that extra SS income for buying/owning the house.

Of course there is too much school district hysteria involved.

It is a twisted and sick approach.

Remember, the newspaper headline cheating scandal a couple of years ago was in priviledged Saratoga, those poor little rich kids feeling so much pressure to have high grades. They got caught cheating, but they were just victims.

sybrib,

"Isn’t Taiwan a province of China?"

That's a comment that will hearten the Mainland Chinese government's propaganda department.