patrick.net

W2,

"frantic paint-slapping and flower planting" LOL!

While I'll grant you the BA has "intagibles" no place is bomb proof. Oh, slight correction though. The BA (like western Oregon) doesn't really have a winter. I refer to it as the "sit-com re-run season". Chicago has winters.

Dinor,
Are you saying that you've joined the " slight correction" boat? I can rattle off several homes I drove by that have been reduced for over 60k off the asking price. It doesn't sound like a lot given the price was 700k or more, but 60k is a sizeable chunk of change. It doesn't take many 60k cuts to start edgin back into reality.

WW2,

By no means am I in the "slight correction" camp! Traders live for the smell of blood in the water. It doesn't even need to be all that much either. Just a drop tells us there is something wounded in the water. Volatility = profitability. Nobody makes much money on small price swings (unless you have industrial strength volume) so we tend to gravitate towards volatility like moths to light. A slight correction? Don't waste my mutha f@cking time!*

*Al Pacino in the movie "Heat"

Dinor,
My only concern is that when the price drops start occuring at a regular pace, I'll bet that there will be those who think they're getting a bargain. Of course if you can afford, then by all means: snap it up. But in my opinion, people should hold off until prices start poking downwards to 2002-2003 prices.
While still expensive, this is the last time period that real wages could barely eek out the payments without "phunny muney" loans. I think that it has been said many times here before that the RE and financial institutions are trying a hand at damage control. Showing a severe downturn in prices and a slowing of sales would be red lights for would-be buyers, even those who see the reduced price signs. A rampant decline would be a signal for homebuyers to hold off until the action started to subside. Hence the careful, feeble, vauge language.
SFwoman, unfortunatly, I'm not as familiar with the law firm world. At the same time, I think that when the higher paid professionals start showing up on housing blogs, that's a sure-fire sign that the absolute max in affordability has already been breached and the sales have come to a screeching halt. If you think a person making 275k( perhaps add another 60-100k if their partner works) has problems affording something in SF, imagine the bulk of us making 50-85k combined? It ain't happening, and not until those prices are in the 300k range. Truthfully, a young couple making the median income should realistically only be buying something in the 175-200k range MAX. I don't see that happening here anytime soon,if ever. But it just comes to show that prices would need to come down a HUGE amount if the area were to have anything close to a balanced socioeconomic mix of citizens.

I keep hearing that inventory isn't climbing much in the Bay Area. I've been tracking Santa Clara County since last year. Last year at this time we were in 3200 inventory range with sfh/condos combined. Today we are close to an inventory of 5000. Inventory is obviously climbing, just not as FAST as some places. In fact, we have reached a new YOY inventory high EACH DAY since the beginning of May.

George,
As I've mentioned to the point of probably irratating the bloggers here, moving has been on my mind for some time. Moving to me is a given. My problem is more about a race against time. I cannot tell you how many of my friends have already left CA and NY. They're all the same age, income bracket, and marital status; newlywed.
The problem is that everyone else knows about these areas and the intrest is rapidly growing. As a result, the prices are slowly starting to edge up. My plan was/Is to save up enough for the whole house. The whole shebang, no payments, and even some left over for my own business.
I don't have a problem moving. I don't buy into the whole " everyone is better-smarter-more beautiful" in the BA crap. I've lived all over and know from experience. But what concerns me is when these areas start becoming the new hot places to live. I keep a very close eye on the numbers. If those property increases go up faster than I can save, I'm outta here because the whole reason I'm here would be pointless.
You better believe that within 10 years none of what happened here in the BA will be a concern to me. I would have hoped to just simply remember it as a bad dream.

George,
That's a kinda ugly house. Looks like a Prefab. But for 86K? Hell- I could buy that, have money left over for a new car, a little bit of retirement, and start a business. WHo cares if it's ugly? Paint it purple for that matter.
Actually, you think that's cheap? My brother bought his place, a smaller 3 bedroom deal with half an acre for 38k. 38k!

George,
NC seems to be the "Hot" name in places to move to around here. I have no idea why either. It seems kind of random. My guess is that there seems to be a few tech firms around here moving satelelite offices to Durahm.
The only problem with NC is that parts of it are looking more like DC than NC. Raleigh is UGLY! On the other hand, Asheville is really beautiful and quaint. That said, it would remind anyone old enough of 1960's Berkeley because that's the general atmosphere there: Hippies and crappy art work on the side of the road.
The other issue with NC is that it is a very mountainous state. Getting from one town to another can take all day. The roads in many places are very twisty. The towns are mostly blink N miss em'. If you're used to big cities, then NC would be a big change, and one that Californians would probably not like. If you fear christians, conservatives, and stuff like that, then you'll hate it. If you're open minded and like change, then you'll do fine. If you hate hippies and move to Asheville, you'll hate it also.

John,
Unfortunately, the days of orchards everywhere are long gone. My prediction is that yes, the BA is not quite as vulnerable to a HARD crash as other areas, but prices here will still fall along with the rest of the bubble-zones. There's no fundamental reason why this time around should be different than every other RE downturn in recent history. If anything, one could argue that the relative amount of funny money here makes the BA MORE vulnerable that other areas. That being said, I like Eichlers and wouldn't include it in the horse poop category. Just a personal preference.

George,
another reason that those houses are cheap is that there are far less construction requirements. No earthquake codes, and so forth. Half the cost of a new home in Cali is the foundation work. The other diffrence is that these states ENCOURAGE new building. To them, the more people, the better for business. So in many cases, construction companies get tax cuts and incentives to build.

George,
There's clearly been a turn in market psychology. It's amazing how quickly sentiment changed from bull to bear. Everyone's waiting for June 28-29 and the Fed. My wet dream is a 50bp hike at that meeting.

I keep hearing that inventory isn’t climbing much in the Bay Area. I’ve been tracking Santa Clara County since last year. Last year at this time we were in 3200 inventory range with sfh/condos combined. Today we are close to an inventory of 5000. Inventory is obviously climbing, just not as FAST as some places. In fact, we have reached a new YOY inventory high EACH DAY since the beginning of May.

Compared to Sacramento, inventory usn't climbing much. But we will see the days of 5-digit inventory.

Many sellers are waiting for their neighbors to close so that they can price theirs higher. If their neighbors do not sell, they will wait... for now. Until they panic and price theirs lower.

Everyone’s waiting for June 28-29 and the Fed. My wet dream is a 50bp hike at that meeting.

My wet dream would be that + Fed announcing that Mtg. brokers/originators can no longer bundle & re-sell the neg-am, IO crap they've been peddling to suckers as MBSs/CDOs. You loan it, you book it, asshole! And then Congress repealing the mtg. interest tax deduction for "vacation" homes. And then reinstating the "one-time only, over age 55" rule for RE capital gains exemption.

HARM,
You have much higher aspirations than me. Unfortunately, I think the Fed 50bp hike is the only one one your list that has any chance of actually happening, at least in the next 5-10 years. On the other hand, if the correction is severe enough, most of your wish list won't be necessary, as lenders will be gun shy and raise lending standards themselves after getting burned, the secondary market will be much less enticing, and "vacation", er, investment homes will be much less in demand.

On the other hand, I'm always amazed at the creative ways the sleazeball component of the RE/financial/government complex find to get ahead.

Face reality,
I would be paying very close attention to the local economies outside the BA. If other companies keep forming that can do the same thing as any here, then I wouldn't expect companies in the BA to remain competitive unless they start making cuts. As mentioned, there are plenty of award-winning design firms in places like Nashville now where there were none just a few years ago. This coincides with the fact that designers get paid a fraction of what they did just a few years ago: My wage is almost the same as it is in Nashville. That kind of change in the tech industry will have the same effect.

Waiting for a crash in this area has been a frustrating experience for many years now, and it will continue to be so, especially in the core areas. There are typically more fluctuations at the outskirts.

Well, one does not have to wait for the crash to buy. Buy one must not buy something just to get in.

If anything, one could argue that the relative amount of funny money here makes the BA MORE vulnerable that other areas.

I hate to say this but the BA market is less vulnerable than most other areas. BA homeownerships though... they may have to live in a sub-prime starter home for years, paying huge mortgage meanwhile.

In Santa Clara County it went up only 67% from $314K in 1997 to $525K in 2001.

It may simply be suggesting that more engineer-minion housing units have been built here while more upscale mansions have been built in San Diego.

MEDIAN ANYTHING is meaningless.

Eichlers. I like the layout, but the insulation stinks, you need to get the foam roof crap or its a hotbox, and the subfloor water heating stuff is a disaster. Floor plan nice, build quality is (everytime I see) horribly pathetic.

Eichlers? It is a Feng Shui nightmare.

Peter P,
You made a very obvious statement that I think most BA residents aren't aware of because they've been conditioned to think that living in a tiny house or loft paying 4 times the money is acceptable when in fact, the quality of life the avg citizen here is probably less than it is in many other cities across the country.

You made a very obvious statement that I think most BA residents aren’t aware of because they’ve been conditioned to think that living in a tiny house or loft paying 4 times the money is acceptable when in fact, the quality of life the avg citizen here is probably less than it is in many other cities across the country.

Very true. Most people confuses work with life. As a result, they cannot get out of the feedback loop.

On a side note, is it possible to have high inventory and low sales in a housing boom?

The answer is a categorical no.

So we need more illegal immigrants to continue the housing boom?

No amnesty!

You have two choices in what to believe,

You either believe you are the next Warren Buffet because you NAAVLPed your way into a 1.2million dollar shit box in crapatino. Come on now. Really. Crapatino? Isn't that San Hosebag South? You believe your financial prowess is well justified because your crapbox keeps going up and up and up, thus supplying you with a ready tap of cheap money. Hmmm, what happens when there are no more suckers to buy the 12.8mil stucco crapbox in crapatino? The average/median income of the bay area does not justify the housing costs. The logic is faulty. If you believe in this scenario you also believe in turning the BA into little havana/hanoi/whatever, as the only ones that will live there are well heeled BA types, which all data indicates at max what 10% (a truly generous number) of the BA is making enough money to afford the crapatino stucco crapbox? or you believe your servants/burrito folder/cop/fireman/teachers are willing to pay the amazing rent, as you also believe that there is an up tick in rents. You are high, are you a boomer? If not, you have no reason to be high during the day.

Or you believe that housing is a product of easy money and fraud. The easy money is getting turned off, next comes the finger pointing and perp walking.

Come on really, 1.44 mil for a stucco crapbox in crapatino? What were you thinking? How have you deluded yourself into thinking this is normal? How much TV do you watch? You might want to consider turning off the opiatebox and paying attention.

Face Realty back to Craigslist for you. I’ve read your posts over there and either someone is channeling you or it is you. Either way by by.

Fake P,
ARe you kidding? I hope you're being sarcastic and me being too hungry before lunch is playinf tricks on me. Has there been a lot of change in the last 6 months?
Well, going from some of the highest gains in housing history, with the highest sales numbers to one of the biggest slowdowns in over 10 years, with hardly a thing moving is what I would call a fairly dramatic shift. The only thing we're doing is seeing how long people will hold off lowering their prices, which they will because nobody is selling.
By the way- Zillow is a joke.According to Zillow, my parent's house in the middle of nowhere is worth 300k, right after the appraiser valued it at 185k.

HARM:
Hey, when have sales and inventory ever been used by bubbleheads as an important statistic for a housing crash?

Mr. Smarmy,

See "Lagging Vs. Leading Implosion Indicators" from mid-December, 2005. Where, I might add, YOU were the second poster. And this was NOT the first time falling sales/rising inventory were discussed as a leading indicator --just the first time it had its own dedicated thread.

Don’t we all say 40%/30%/20% reduction in median price over a period of time in our predictions? Are you trying to salvage what is left of your beliefs? :p

Some did, while others (including myself) were much more conservative in their guesses because we expect the crash to play out over many years, and we expect prices to be very sticky on the way down. Furthermore, I fully expect some of the real price correction will come in the form of inflation-erosion, just as it did last time. See our original "dead-pool" predictions at "FuckedCounty.com.

Note that even then, I predicted only mild YoY deflation in most B.A. counties. And, yes, as I said before, I now expect those predictions to be off on timing by at least 6 months. Nobody's perfect at precisely timing the future, now are they, Face? Not even your heroes, Gary "15% in the bag" Watts and David Liar-eah. At least the bears got the market's direction right.

On a side note, is it possible to have high inventory and low sales in a housing boom? Or is it possible to have low inventory and high sales in a housing crash? Personally I think that both scenarios are possible… Should I give you guys another 6 months and let reality speak the truth again? So far, I have given you guys 2 periods of 6 months, and things aren’t moving yet. Maybe it will take another housing boom before you guys give up…:p Or maybe you will ask for another 6 months, because median price is “a lagging indicator”? :p

Yes, time will tell, my arrogant friend.

SAN FRANCISCO (U R HERE)

BOS TON

PHO ENIX

DEN VER

TUC SON

LAS VEGAS

SAN DIEGO

FLO RIDA

Anybody remember cartoons when we were kids? The old gag where the soon to be victim is on the top rung of a ladder and the assailant below is using a saw to cut through each rung from the bottom up? Our victim (try as he might) can do the splits all he wants but in the end, one rung does not a ladder make. So we can choose to ignore what has/is/about to happen to other major metro areas but we do so at our own peril. It's good to be on top isn't it?

Uh, the gaps are supposed to be WIDER at the bottom. Can someone w/ art skills past the 4th grade "fix" that for me? Please?

Senor El HARM, I think you meant my arrogant fiend

@Surfer-X --yes!
Must have been a typo, my bad... :lol:

The current price of my house and the price of my co-worker’s house are not beliefs, they are facts.

Sure asshole, I'll bet you, put your house on the market and see what it brings. Facts? Seemingly you wouldn't know a fact if it reared up and bit your wife's fat ass. Go back to counting your paper gain and quit wasting people's time. I bet Face Realty and HaHa would like to cuddle with you, but franky your blather really just annoys me.

Crapatino, get a life homeboy. It's a shithole and you are a sucker.

In America, we have the freedom to do whatever we want with our lives, disagreement does not necessarily mean that either side has to be wrong…:p

Sorry FakeP, you are right. I am a little over annoyed at housing.

Crapatino, get a life homeboy. It’s a shithole and you are a sucker.

There are schools in Cupertino. Students can graduate from the top-notch high school directly to De Anza college, all without leaving town.

HARM,

What so many bulls fail to understand (and sometimes I think all they understand is "my property increased in value") is that SO much of what we stand for is at least putting forth our best efforts toward seeing a broken realtor model and defective tax system put to rights. If we do away with the "24 Month Club", open the MLS, make lenders eat their own cooking, get appraisers on the straight and narrow, stop giving away free money to anyone that can "fog a mirror" and housing prices STILL rise we have done our job! (Now I seriously doubt RE can withstand ONE of those blows let alone ALL of them) but we'll have done what's right for the future of the country and our children. But I guess when you got YOUR big fat stacks of cash, who cares!

Students can graduate from the top-notch high school directly to De Anza college

Last time I checked De Anza was a second rate Jr. College, AKA, High School v2.0

Last time I checked De Anza was a second rate Jr. College

Stanford is a Jr. University. :)

The thing that most of the SuperSavvy Buffet Jrs out there fail to realize is that there is a very large base of folks who refuse to participate in the "my house is worth _____" crap. Believe it or not, and I know it is asking something that the SuperSavvy Buffet Jrs simply cannot do, there are many many of us that do not view the house as an investment and simply want a nice place to live. A few very greedy stupid folks are really trying their damnest to make life sucky for those of us who do not want to move every 2 years to capture our investment cash.

Again, Crapatino? Come on now, seriously. I feel anyone who would pay over 350K for a house anywhere in crapatino should really get an MRI because a tumor most surely is in the ol noggin. Wow, I am still taken back with the enamour of Crapatino, why not just move the the Alamaden section of San Hosebag, or Willow Glen, so you can tell people "I live in Alamaden or Willow Glen" when really you just live in San jose. For the record, what is the difference between Crapatino and San Hosebag again? Los Altos maybe, SF maybe, Woodside sure, but Crapatino? Put the bong down my fiend, a boomer needs it.

Robert Cote'

You're excused. Good stuff Robert!

But I guess when you got YOUR big fat stacks of cash, who cares!

DinOR it is about time you woke up and smelled the bong water.