patrick.net

Marin still has the best natural environment though.

I am fine with jerks. I can behave like one if I have to.

"archaic and inefficient"

Incredible isn't it? It's 2007, we're in the technology center of the universe and we're still tolerating RE transactions to be conducted like a ladies bridge club.

No offense ladies. :)

Speaking of Marin (fresh post from Ben's blog):

The Marin Independent Journal: “A prominent real-estate economist predicts that troubles will persist in the California housing sector throughout the year, but she said Marin’s unique market is weathering the downturn better than other areas.”

“‘It’s God’s country, what can I say,’ (said) Leslie Appleton-Young, chief economist for the California Association of Realtors. ‘When is the 30 percent decline in Marin County’s market going to happen? Not in my lifetime.’”

“Marin’s foreclosure activity nearly doubled in the fourth quarter of last year. By comparison, notices of default were up 134 percent in the nine-county Bay Area over the same period, DataQuick reported.”

“Statewide, default notices increased 145 percent year-over-year. In Merced, Placer and Santa Barbara counties, the increase exceeded 250 percent.”

“Recent foreclosure activity has apparently been brisk in Marin. According to Yahoo, dozens of foreclosures have been listed in Marin in the past two weeks alone.”

The problem with Marin foreclosures is they exert very little downward pressure on prices. When something here forecloses it never even hits the ground before it's snapped up, usually by an investor who then turns around and sells it through an agent for the "market price". So unless there's a literal flood of foreclosures, their price is not a marginal price setter.

(I refer earlier to intense, boring, debates I had with others about why marginal pricing so often does *not* happen in real estate. Just because a comparable home sells for 30% below another in foreclosure does not mean the owner of the other house will sell for 30% cheaper, nor does it mean that buyers expect a 30% discount).

This is cool.

NYT has come out with their Buy vs Rent article, and it has an interactive tool to figure out using your numbers. Nowhere near as sophisticated as the Bubblizer. But it is far more simple to use and understand. They oversimplify a lot things, but make it accessible to the average Joe.

http://tinyurl.com/2ysc27

I entered some typical BA numbers. 1M for the house, 10% down payment, 6.5% mortgage rate, 5% annual appreciation, 2500 rent and 5% rent increase every year, 1.25% property taxes.

It says, buying is better than renting after 17 years.

Jon,

I agree. There is a world of difference between "unethical" (but legal) and unlawful activity. Right now Realtors and agents (just like mortgage lenders) are basically being asked to self-police, while most arguably unethical practices are not illegal. And the results speak for themselves.

We need a Sarbox for the banksters, mtg. brokers and Realtors (preferably something a lot better than the Frank-Bachus bill).

It says, buying is better than renting after 17 years.

Where is "theotherside" when we need her.

Please anyone reading take note, after a couple of us, myself included, finally [again] rebuffed her calculations she *poofed*.

By my account, she'll reappear in about 3-5 threads and post the same "it's always a good time to buy" calculations. Maybe then we can point her to the NYT.

inefficient, opaque ... market

Just to culture-jam the neoclassical economists, I don't know that any market can be 'efficient' really, only processes can be efficient, e.g. my engine is more energy-efficient that yours, my automated logistics system is more man-hour efficient than yours, etc. As for 'transparency', who requires that in business, except in the textbooks? Transparency is just a codeword meaning I don't want to get ripped off too much while I'm conducting business, if I order a widget at 3c I expect to get a widget at 3c. But do the captains of industry like having their salaries published all over the papers? Do they like having every practice exposed? e.g. when they buy blood diamonds from Sierra Leone at $1 each? From the realtors and MBs point of view, the RE market is very 'efficient' at putting money in their pockets, that's why they like it the way it is... I don't think markets are particularly virtuous, and the ascribed holy grails of efficiency and transparency in themselves are not particularly virtuous -- they're at best a means to an end...

Randy,

Yes, that pretty much coincides with my opinion of Marin, too, but I have never lived there, just visited. The natural beauty is outstanding, but other than that, I was not particularly impressed. There are of course, some nice people anywhere.

“and if you want to buy a house you actually want in a neighborhood you actually want, then you’ll never see it on MLS, that’s the way things work up here”.

I wonder if there is a sort of slyly unstated redlining going on here. You mentioned before that you were threated with being blackballed if you continued in your behavior, this is probably part of it, too.

isn’t this a free country, why can’t someone list or not list their home however the hell they want to. who are you to decide that it is “not nice” and “not according to the rules” to do what you can to sell a house?

I agree.

why is it unethical for the agent to want to “doubledip”? umm, don’t we all want to make more money? if a seller doesn’t like that, then why the hell do they sign with the agent under those rules?

Greed is amoral. However, it would be unethical if the agent breaks the contract.

I’m not an agent, nor do i particularly care for agents, but I do believe in the free market and personal liberties!!

Excellent!

@SoftestLanding

Rare that I am accused of not being capitalistic enough.

To your point. No. Being able to list their home however the hell they want to is anathema with the concept of a free market. Might I suggest a short study in "market asymmetries".

Free markets do not function to maximize efficiency and discover optimal pricing when asymmetries exist. The situation we are discussing is a classic information asymmetry. The situation gives some buyers and sellers preference over others -- preferences which are not determined by the free market but by personal incentives which may not be aligned with market optimization.

Think of what the stock market would be like if we applied your logic. We'd have nothing but insider trading, and no one would make any money except for those who were part of the in-club.

If we apply Objectivist principals, upon which modern capitalism is theoretically based (which thereby excludes market fundamentalist cranks) then a free market requires that there is no coercion. In the face of coercive pressures, markets to not function properly or for the benefit of the economy.

Pocket listings are a form of coercion because they function to exclude some would be buyer participants and to deceive both buyer and seller participants.

I refer you to DinOR for a lecture on the proper purpose and function of regulatory regimes which ensure fiduciary responsibility in financial transactions. And I remind you that without any regulatory regime you do not have a free market, you have an anarchy. Anarchies are not "naturally" tamed not by rational market functions, but by coercive forces such as cartels, syndicates, cleptocractic organizations and deceptions which simply fill the void.

*principles.

Pocket listings may not be in the sellers' best interest. They need to understand that and take steps to ensure full martket participation.

My favorite thing about that kind of system are the large murals of the leader everywhere !!

Like naming everything under the sun "Ronald Reagan"?

COMPLETELY off topic, but I just got the funniest unsolicited mortgage e-mail! Watch out for the Magic Mortgage Man!

Seriously, it's funny now that Mortgage brokers are starting to stab eachother in the back over bad lending practices. Before, they'd never mention it so nobody would stab them for THEIR lending practices.

Now that the pie is getting smaller by the day, they'll be gutting eachother like fish trying to keep their slice from disappearing.

Like naming everything under the sun “Ronald Reagan”?

I completely totally utterly fail to understand the objection. In India, every village/town/city/metro has a few things named after Mahatma Gandhi. I have enormous respect for him, but even I got tired of seeing his name everywhere.

So complaining about naming a few things Reagan, dude, you have NO idea how bad it can get.

What I did find surprising in US was that the Kennedy clan being treated as some sort of unofficial first family.

COMPLETELY off topic, but I just got the funniest unsolicited mortgage e-mail! Watch out for the Magic Mortgage Man!

O M F G ! !

Muggy may be on to something. It's looking more and more like I really have enough material for an entire series of novels. You just can't make this shit up.

All I can say is that the pic in that ad HAS to be a blog topic pic soon.

I'd say Marin County is perhaps the most reasonably priced compared to Santa Clara, which is not as bad as San Mateo.

I am not familiar with Marin, but I know Larkspur and Tiburon are prime Marin. Based on what I see from ziprealty, a house with a similar price in South Valley will more likely to be inferior to the one up in Marin because
1) the Marin home in $1.5M range is likely have stunning views (yep, literally million-dollar view). View is not guaranteed in this price range in Santa Clara.
2) the Marin home is more likely more unique in the architectural style. In South Valley, $1.5M means a better location with an extremely boring ranch style recently updated with the prototypical graniteel on a decent lot.

San Mateo is the worst. I have no idea what kind of idiot will pay $1.5M to buy a typical home up in San Mateo county. I think Marin is likely to hold its price better than SC and SM.

My theory is that you're going to see a lot of FSBO pop up in the Bay Area. I remember searching for "FSBO" on craigslist a few years ago and you could count on maybe two listings for some crappy Tahoe cabins. Now that people are upside down to the tune of a realtor's commission (at least), you're going to see some creative selling in place of all that creative financing...

When you're bored, go to craigslist and search for any of the following terms:

"FSBO"
"sale by owner"
"not on mls"
"principals only"
"no agents"

Or my favorites:
"short sale"
"bank owned"
"REO"

You get the point...

I like the view of this Milpitas home. Seriously.

http://tinyurl.com/2pnctp

I think Marin is likely to hold its price better than SC and SM.

I agree.

Of course, I love the view in Marin across the San Pablo Bay in the morning.

View is better than ANY school district. At least you get to look at it.

Peter P,

when spring is over, that house in Milpitas will be surrounded by dead brown grass. I am sorry, a million-dollar home in Milpitas is just an oxymoron, let alone a 2-million-dollar-home.

I am sorry, a million-dollar home in Milpitas is just an oxymoron, let alone a 2-million-dollar-home.

I like the Spring Valley area though. Just please do not let me see any "city lights" view.

I completely totally utterly fail to understand the objection. In India, every village/town/city/metro has a few things named after Mahatma Gandhi.

Yeah but that was after he died.

They started trying to name all sorts of stuff after Reagan while he was still (physically) alive. The worst is the airport - considering he fired all the air traffic controllers and banned them for life. Now we have a pending air traffic controller shortage crisis. :(

The Summitpointe area is also very nice.

I like Reagan. I like Thatcher too.

Yeah, what Randy said for me too ;-)

Why is it that RE perma-bulls like SoftestLanding always immediately lurch to the "market regulation = COMMUNISM!" argument the moment anyone hints that industry self-policing may not produce, uh, completely optimal results for consumers?

Is this the "Chewbacca defense" for realtwhores? Kind of reminds me of comparing any political leader to Hitler. Pretty much stops debate cold in its tracks.

Why do you hate our Freedom?
Have you stopped beating your wife?

Kind of reminds me of comparing any political leader to Hitler. Pretty much stops debate cold in its tracks.

That's known as Godwin's Law.

http://en.wikipedia.org/wiki/Godwin's_law

BTW, I own the usage of "Why do you have our Freedom(TM)?" on this site...

don’t be academic and rational in your arguments,

Awesome ! This is too good. You made my day.

SoftestLanding

If I sell you a nice pair of earrings for your wife/girlfriend, with beautiful sparkling blue sapphire stones, for $10,000 is that fair if I don't bother to tell you the stones are synthetic? What if I imply they are real, without ever really saying they're real? What if I put in fine print they're synthetic, but my sales person tells you, "these are real, no reason to worry"?

What are these earrings worth? In your vision of the "free market", anything goes. In your version of the free market, the earrings have no real market price. The price is whatever can be extorted out of buyers lacking information.

Of course you could say "caveat emptor", better know what you're buying. But do you really want to become a gemologist just so you can get some loving?

And of course that means you'll need to become a medical doctor, an auto mechanic, a stock broker, a pharmacist, a tax accountant, and so on.

No, we have rules so that we don't have to all be experts at everything, and we can rely upon a free market to make things fair.

The operative word is free.

isn’t this a free country, why can’t someone list or not list their home however the hell they want to.

Absolutely. I think sellers should be able to list their house for whatever they feel like. And they should be represented well by their RE agent, which means seeing ALL the bids on their house --not just the ones the agent "wants" them to see (because it means more commission for them).

who are you to decide that it is “not nice” and “not according to the rules” to do what you can to sell a house?

Oh, ok. So in SL's cowboy capitalist paradise, people can do whatever the f**k they want, ethics and laws be damned. So if I want a better price for my house, I should be able to kidnap Mr. Buyer's wife until I get my asking price, then? Sounds like a plan --sign me up.

It is a competitive marketplace isn’t it?

No "it" is not. "It" is an incredibly corrupt, archaic, inefficient and monopolisitic industry, where valuable information is deliberately withheld from both buyers and sellers, in order to benefit middlemen, who add little real value to the process.

why is it unethical for the agent to want to “doubledip”? umm, don’t we all want to make more money? if a seller doesn’t like that, then why the hell do they sign with the agent under those rules?

The seller is rarely --if ever-- aware that the agent is really doing this. If they were, the practice would become pretty rare.

is capitalism dead in this country? maybe all of you people should decide what is “slimy” and what is “nice”. then you should legislate it and force it down everyone’s throats!

So thievery, fraud & misrepresentation = Capitalism? Maybe this is true to some (DS), but I like to think we can do a little better than that.

OO Says:

> I’d say Marin County is perhaps the most reasonably
> priced compared to Santa Clara, which is not as bad
> as San Mateo.

Randy may want to ad more but I would say that Marin (that every time I looked over the past 20 years has had the highest per capita income in the US) has always had home prices much higher on average than Santa Clara County for some great deals take a look at the link below:
http://marinpos.blogspot.com/

> 1) the Marin home in $1.5M range is likely have stunning
> views (yep, literally million-dollar view). View is not
> guaranteed in this price range in Santa Clara.

You might find a level lot or a teardown in Marin with a nice view for $1.5mm, but not a nice home.

> 2) the Marin home is more likely more unique in the architectural
> style. In South Valley, $1.5M means a better location with an
> extremely boring ranch style recently updated with the prototypical
> graniteel on a decent lot.

Most people would rather a nice track home than a former “hippie cabin” that was built out of scrap wood by stoned carpenters when some moved out of their VW van in ’67.

> San Mateo is the worst. I have no idea what kind of idiot
> will pay $1.5M to buy a typical home up in San Mateo county.
> I think Marin is likely to hold its price better than SC and SM.

I can’t think of a better place to raise a family than San Mateo County. Some of the reasons include great weather (SC county is hot in the summer and parts of Marin like Tam/Tennessee Valley get an almost daily fog blast), easy drive to SF or SJ, and overall great demographic profile…

And of course that means you’ll need to become a medical doctor, an auto mechanic, a stock broker, a pharmacist, a tax accountant, and so on.

No, just make sure you don't ever need to see a doctor or a lawyer or a mechanic etc and you have nothing to worry.

Sorry for taking out the serious tone Randy, but why do you even bother arguing with SoftestLanding/TOS/ConfusedRenter etc. ? I admire your patience, but they don't deserve it.

Pocket listings-

In the past when looking at listings I notice that a new high rise building or condo conversion will have about 6 to 10 listings. Then when I inquire what units are avialable the sellers agent generally has many more than the 6 to 10 listed. Are the other 50 units available considered pocket listings?

I asked my buyers agent about this and she said that is how developers list. They put out a few at a time. I guess the implication is "don't scare the market with 200 new condos" or whatever.

eburbed,
Why single out Reagan? I personally admire him, but that's besides the point. What about Norm Mineta SJ airport? Norm's still alive and kicking, isn't he? Or Bush airport in Houston?

I think FANS will solve part of the problem.

http://en.wikipedia.org/wiki/Future_Air_Navigation_System

With telecommunication technologies, air traffic control can easily be moved offshore.

Johns says he was looking at houses when he came upon a New Tampa development called Covington Estates and mistakenly thought it said “King’s Covenant.”

Hmmm. Let me think. "Covington" has the "ing" sound of "King". It also begins with "Cov" like "Covenant". OK. I agree. There is indeed a lot of similarity. I don't blame him. Anyone would make the same mistake. We are all human.

Randy H Says:

> Of course you could say “caveat emptor”, better
> know what you’re buying. But do you really want to
> become a gemologist just so you can get some loving?

This reminds me of another good Buffett quote:

“If you don’t know jewelry, know your jeweler”

With that said I would never buy a piece of jewelry that I couldn’t return if a third party didn’t verify the value…