patrick.net

Japan down 2.4%. Other Pacific/Asian markets down as well.

That 1.65M thing in Saratoga is an Eichler?

I don't care if that's Saratoga...I won't pay $700/sqft for a slab floor.

I'd take a Glide House of some other modernist prefab over an Eichler--the build standards are far better (and I bet plumbing is easier to fix too). Of course, land costs are an issue in the SFBay, but outside CA it might be reasonable. Something tells me we've discussed this before...?

I was just referring to the openess of the design and the way they integrated the pool into the overall layout of the home. Actually I would say this is more like Michelle Kaufman's "Breeze House" which is really for people that feel couped up (like Oregonians) :(

MKD's breezehouse is a lot nicer than glidehouse. I did more research on the web, and came to a different conclusion than the one I arrived at earlier. The modern prefab homes should be better built than custom stick on site. The cost savings is not much, about 5-15%, but you have more QC along the way.

One of my neighbors has been building this really nice, steel frame custom home for about 3 years, he is eventually done with the shell and moving on to the interior now. You didn't read it wrong, yep, 3 years. I don't know why it took so long, but by the time it is done, it will be a stunning 6000 sft+ modern house. But there's one problem with it. Some of the sticks and wood panels have to weather months of rain while being built, which is very conducive to mold no matter how you treat it. If I build a home from scratch, I prefer to go with modular, or at least have most of the home built off site within a factory to be assembled on site.

I also looked at some newly built homes in BA, most, if not all, of them are of sub-optimal quality. One of the homes a few blocks down that was sold last year for $2.6M has this really elaborate mosaic marble pattern at the entry, but guess what, the border line is not even straight! The ornamental pillar is made of plaster, and the fireplace marble tiles don't match in color. These are the little stuff that my naked eyes can catch, I have no confidence in what my nakes eyes cannot catch.

Also, some of the remodeling experience my friends went through indicated that the building labor here simply don't care. In BA, what you get are $15/hour Mexican labor (mostly illegal immigrants) who don't give a shit about your home, and have little or no prior construction experience. They cut corners whenever they can, so that they can move on to the next job ASAP. Unless you spend lots of time becoming an expert in the construction process yourself and supervise on site 24 x 7, you have no idea what kind of stuff goes under the hood.

Therefore, I prefer to have a home manufactured by quality labor on a factory floor, while the factory itself has a reputation to defend.

@FatalException,

CHOLERA :lol: Nice job! Btw, Brazil was a movie waaay ahead of its time --still one of my all-time favorites.

bruceb,

I am fascinated by Google.

Some things don't make sense to me because they seem to defy sensible logic.

If I wait long enough, what I thought was "common sense" was right, and all the hip and cool spinmeister spin was lies.

Like, the overnight electricity shortage in California a few years ago, and the concomittant Google-like rise of Enron. (Yes, yes, probably supply is tight. But, we experienced an "overnight" shortage of massive proportions).

You see, I still have never, ever, heard one single person, of any age, of any degree of "internet savvy", say that they made a purchase from a website that Google helped them to find.

sybrib,

I just did, literally five minutes ago! I wanted to send my landscaping contractor a gift for really, really doing a great job (we are about 90% finished and he is an absolute perfectionist) and he likes exotic fruits so I googled 'Exotic fruit basket' and got a hit for Melissa's Deluxe Exotic Fruit Basket. I just ordered it.

SFW:

Thank you for sharing, now I've heard of one. I think like bruceb is mentioning, there will be a reckoning to see if there's enough people like you for that capitalization. Time will tell.

SF
I didn’t even bother to point out the obvious signs of softening. Why would I at this point? It would be like pointing out the flaws and contradictions in someone’s religion. I then realized that real estate had become a religion, something that people worshipped and had faith, even with evidence to the contrary, in. The ‘Manifestation’ stuff, and prosperity Christianity are just attempts to blend this new Prosperity/Real Estate religion into established belief systems.

SFWoman, you rock. That is an awesome analogy. It is totally like that. That was just like that idiot Reality. He didn't have a point to make, just wanted to condem us for our beliefs. When people used to tell me I was a fool for thinking the party could end, I would ask them why can't it stop? Their reply, the trend points upwards. It was pure faith, they just thought it would keep going up despite evidence of the fundamentals being totally disconnected.

SP -Although I was expecting it to happen, I was surprised by the speed and intensity with which subprime was hit. I am wondering if we should rethink our previous assumptions on how quickly this will roll once it actually starts.

This site is not a crystal ball. It is just a reminder of out of whack fundamentals. There is no timeline, just a predicted pattern of events, one logically leading to the other.

I DVRd CBS news today. It is awesome. I don't believe there is ANYONE now calling for a recovery in the middle of 2007 anymore. I haven't heard the term soft landing in quite a while. They predict 18 to 36 months. That is a far cry from, 'a slowdown in the rate of appreciation.'

PAR Says:

> I’ve been collecting some data on BA foreclosures.

Once the banks take back the homes and the they are sold by the REO the Realtors will be able to report “Bay Area Home Sales Increase”…

Malcolm,

There have been some fringe articles, penned by comp-e-tent but out-side-the-tent economists, that have suggested a very fast meltdown in liquidity.

I think there is precedent for it, the margin calls for the dotcommers in March 2000. Remember how quick the plunge? After the margin call plunge, a protracted, less steep but even more deep, drop in the prices.

But "it's different this time". What is different? Unlike the 50% margin of the dotcom stocks, the "housing stock" is completely leveraged. And it's people's homes, not their 401K's or their play money. It's their homes.

And those homes have property tax collections based upon the values of those homes. Property taxes to pay for things like schools and public safety.

Yeah, it is different this time.

At least, the elite neighborhoods in this area that are in demand by rich Asians who continue to pay in cash, will be cushioned. But that's only for a few immigrant enclaves.

sybrib Says:

> You see, I still have never, ever, heard one single
> person, of any age, of any degree of “internet savvy”,
> say that they made a purchase from a website that
> Google helped them to find.

I go to Google and click the “more” button to get to Froogle to buy stuff at least once a week:

http://froogle.google.com/

P.S. I still think that there are some real problems with copyright and click fraud…

Hi Sybrib, my hunch is that rapid declines are now inevitable. I've always been cautious about guessing precise dates, because I used to have an annoying engineer friend who kept saying 'so when is this crash going to happen' or here's Malcolm, Mr. doom and gloom. I used to lay out scenarios and was admittedly unsure about how severe. I used to say we could end up with another depression or blood could run in the streets, I was not quite sure. I did know that if defaults led to tightening of the money supply then we would have a rapid price decrease.
I maintain that the bubble popped late 2004 to mid 2005 (depending on definition), and 2006 was the beginning of deflation. Now the pin prick is a rupture.

bruceb,

I was going to take the cash for the fruit, break it up into billions of subatomic particles and send it over the cable lines to pay for the fruit, but it seemed like soooo much work so I just used the credit card.

Seriously, is there another way to pay for things online than with a credit card?

I also don't understand why Google was worth so much money. It's a really nice search engine, but 99.9% of the times I use the internet it isn't to purchase something, and usually when I do I just pop over to Amazon or Edmund Scientific (great for children's birthday gifts if you are ever stuck). I also don't see the barriers to entry in the search engine field as being all that high. The next young genius with a killer algorithm could steal away their business.

Dare I say, dare I say

BLOG PARTY!!!!!

SFWoman Says:

> I then realized that real estate had become a religion,
> something that people worshipped and had faith, even
> with evidence to the contrary

Throughout history people have had a need to believe in something. Here in the Bay Area there is a huge drop in people who believe in “traditional” religions and a huge increase in people who worship Real Estate and the Environment.

If I announced at a party in SF that I thought the Bible or Book of Mormon was a fairy tale most people would probably agree with me, but if I announced that Real Estate was overvalued and SUVs were not causing irreparable harm to the environment I would be in trouble…

P.S. Did anyone read about the execution style shooting at the Oakland Church this weekend?

Reading between the lines I think we had a “flipper in trouble” The first line of the article said: “A successful businesswoman shot to death outside an East Oakland church had offered her estranged husband three of their jointly-owned six homes to settle a bitter divorce, but he angrily refused and killed her, according to her family and police. “

She was so “successful” in real estate that she still worked as “an administrator for California State Automobile Association”

Sounds to me like we might have found the African American “Casey Serin” who tried to flip her way to riches while in a bad marriage to a conflicted killer who didn’t work much…

99.9% of Google Revenue is advertising.
Advertising dollar that would have gone to newpapers.
That is why newspapers are folding or being sold.

I worked at Yahoo for 18 months.. and hated it.

FYI when advertising dollar dives like it did in 2000
then expect Goog earnings to pop as did Yahoo.
Yahoo laid off 25% of its workforce that year.

Pray to St Jude, the patron saint of hopeless cases.

No panic, yet
March 13: Subprime concerns have investors backing off, but not panicking, Robert Heller, managing director of Chapdelaine Brokerage, tells CNBC's Erin Burnett.

ahahahahahah

I repeat ahahahahah

and no, that's not 2.4 million

ahahahahahahha

What does everyone think about the Alt-A's, will no doc loans be yanked?

Space Age,

I understand about the advertising. But I'm skeptical that the advertisers are getting a good value proposition. Marketing places especially in the bicoastal organizations seem to be dominated by the beautiful people from good universities, their limited perspective blinding them of the big picture.

That's probably why the rise of WalMart caught them off guard.

Sybrib-
Yes, it funny how one goes to Walmart in Mt View and see plenty of Benz and BMWs.

ALT A have been yanked. Its pretty much over.

ALT A have been yanked. Its pretty much over.

Alt-A is a loose definition. So not sure what do you mean when you say it's yanked. But I agree with your sentiment. If income documentation and down payments become mandatory, it is pretty much over.

Is it time to start petitions AGAINST a bailout?

Seriously.

Anybody who votes on the floor to give a thin dime to FBs will not get my vote come the next reelection.

Is it time to start petitions AGAINST a bailout?

LOL!!! :lol:

Like anyone cares.

I dunno... there are more NFBs than FBs around. Renters... 26 million who own their homes outright...

Isn't any Jumbo an "Alt-A"? I would be suprised to find that lenders are no longer giving out jumbo loans of any kind.

Jimbo,
That would CERTAINLY spell doom for the SFBayArea.

it's showtime:

Market hit by US home loan crisis

The US Mortgage Bankers Association reported the proportion of mortgages in the initial stages of foreclosure rose to the highest rate on record, while the chief executive of the largest US home lender said the subprime mortgage industry is now in a 'liquidity crisis.' The subprime sector caters to borrowers with weak credit.

An unexpected drop in retail sales for February added to concerns.

'Just when you thought it was safe to go back to the stock market, a new panic has taken hold. This time it was the report by the Mortgage Bankers Association,' said Phil Flynn, vice president and senior market analyst at Alaron Trading in Chicago.

Shares of financial services companies with exposure to the mortgage market were among the biggest decliners. Citigroup Inc. was the biggest drag on the S&P 500, followed by JPMorgan Chase & Co. and Bank of America Corp., while JPMorgan was the Dow's biggest decliner.

Investors worry that fallout from rising loan defaults in the subprime market could hurt consumer spending as lenders tighten credit amid the housing slowdown. The subprime mortgage market caters to borrowers with weak credit.

In an interview with CNBC television, Countrywide Financial Corp. Chief Executive Angelo Mozilo said the US mortgage sector is entering a "liquidity crisis," but that investors and speculators are overreacting by punishing healthier lenders as well as marginal ones.

"This is now becoming a liquidity crisis," and "it's going to get uglier," Mozilo said in an interview with CNBC television.

I need to be fully awake to make sure I describe it using only publicly available info.

ooh... do they have alien technology too?

I also don’t understand why Google was worth so much money. It’s a really nice search engine, but 99.9% of the times I use the internet it isn’t to purchase something, and usually when I do I just pop over to Amazon or Edmund Scientific

I think that might have been what caused the tech wreck... something about zero revenues, fast burn rates and 500:1 P/E ratios...

I also don’t see the barriers to entry in the search engine field as being all that high. The next young genius with a killer algorithm could steal away their business.

Maybe the next genius who can stop credit card fraud at small stores by using a universal intermediary service! I'm on it now...

CR has posted a chart of prime ARM foreclosures by region.

http://calculatedrisk.blogspot.com/index.html

Is it time to start petitions AGAINST a bailout?

Anybody who votes on the floor to give a thin dime to FBs will not get my vote come the next reelection.

You can start with these guys, they have been fighting government waste for years!

In fact, it looks like they are well aware of it.

SP,

Sometime I would love to have that explained to me! I have never understood it.

I mentioned the subprime meltdown to my husband last night and said I saw the Countrywide guy on TV. My husband said 'Angelo?' I said I thought so. My husband said that he sees him at meetings a couple of times a year, that he's polite and nice, a very straight talker, no b.s. from the guy. If he disagrees with someone he comes right out and says so and what you see is what you get with the guy.

Check this out, here is a real life example of lending standards getting tightened.

i did not know that mid-way through the process, the lender had the right to change what kind of financing they were going to offer!!!!!!!!

this throws a BIG monkey wrench into our ability to buy our house!!!!!!!!!!!

Seems they don't even understand why....typical FB! :lol:

SFWoman,

Oh, I wouldn't doubt your husband's assessment of Angelo. These "big picture" guys can afford to be gracious. They have plenty of little people sweating the small stuff AND a "hit the numbers" sales force that allow them to sell 140 mil. of their own stock. A lot of these guys are "real nice" (when you don't work for them!) :)

Malcom,

I agree, the bubble popped in late 2004 to mid 2005. Absotively... posolutely! True, depending on your definition (and locale) it may have worked out a little differently but outside of a few rare instances everything purchased after that is really on the fence.

So many people were so confident that everything would do well all they focused on was "locking in the BEST possible rate". (Yeah, the guy's a 100K underwater) but check out that great rate of his!