patrick.net

Bernanke bought a house in Washington DC at peak.
Now he is trying to print trillions of dollars to bring the house market up, so he can stay above water.

Scary stuff.

As per reality track, foreclosures are likely to rise 15% this year. In the month of January 2012, 1 in 278 houses in CA got a notice of foreclosure so expect houses to flood the market this year. Have patience.

B.A.C.A.H. says

bmwman91 says

BA is full of people that are really smart

I knew an engineer (PhD) in SV who knocked out a couple of front teeth when he started some work on his backyard fence. Held the nail in place with his left hand. With right hand, drew the hammer back for his first stroke onto that nail, but drew it too far back, too quickly. Drew it right back till the claw whacked his mouth and two front teeth.
Yeh. Smart folks.

smashing a hammer into your own mouth seems, ummmm, rather narrow when i look for smart

lets call the phd a kind of focused intelligence, not the kind of smarts thats good for all humans.

specialization is for insects to quote uncle Bobby H.

http://c2.com/cgi/wiki?SpecializationIsForInsects

if risk, reward and reality are completely decoupled in this bay area

if an applicant couldnt untie their own hands in a hostage situation and program their way in a combination of PHP, SQL, C++, java, perl and 8080 assembler i wouldnt think twice about ignoring that applicant's resume

when i hire, i dont look for specialists, i look for problem solvers, generalists

its always divide and conquer debugging, i dont care if its fuel versus spark for your
car to find why its running rough or if its asserts in your C code

self inflicted hammer to the mouth is a sad life experience, but suggests that the experience is too narrow to understand that debugging fence is the same as the sink drain trap dishwasher, is the same as debugging the rough Ducati idle and the same as the run time stack overflow.

bmwman91 says

lol f**k this place.

Cattle, racing each other to the slaughterhouse.

Man, that is profound! (serious) I love that expression, I'm gonna steal it. Is it common? "Cattle, racing each other to the slaughterhouse" Perfect!!!

Calvium Networks, FriendFinder, Pandora, and few others went IPO but no one mentions them. There are NO millionaires to speak from them. Many many more start up gets sold off because they were never ready for such a responsibility.

NorCalBear says

the article says
The winning bidder on the Palo Alto home was a Google (GOOG) employee

Seriously? $1.65M for a 3/2 ranch with original harvest gold non-functioning oven and vintage knotty pine paneling. A remodeled version of that would rent for what $5k-$6k a month?
I thought Google was supposed to hire smart people?

Yes, they are idiots... Providing you have a stable job and good salary, at least for a Million you can actually buy a $1M home.. in San Jose.. the extra can go to kids education or buy yourself a Corvette.

$1,020,000 5940 KILLARNEY Cir
San Jose, CA 95138
Beds: 4 Baths: 3.5 Sq. Ft.: 2,485

http://www.redfin.com/CA/San-Jose/1586-Silver-Ranch-Ln-95138/home/559221

Property History for 5940 KILLARNEY Cir
Date Event Price Appreciation Source
Mar 21, 2012 Listed (Active) $1,020,000 -- MLSListings #81210603
Dec 06, 2004 Sold (Public Records) $960,000 1.6%/yr Public Records
Aug 01, 2002 Sold (Public Records) $925,000 14.8%/yr Public Records
Aug 29, 1996 Sold (Public Records) $408,000 -- Public Records

This ones a gem... 3300 sq ft fairly modern home.

Sold on 03/16/2012 $940,000
1603 RANGEWOOD Pl
San Jose, CA 95138

http://www.redfin.com/CA/San-Jose/5940-Killarney-Cir-95138/home/1520866

Property History for 1603 RANGEWOOD Pl
Date Event Price Appreciation Source
Mar 16, 2012 Sold (MLS) (Sold) $940,000 -- MLSListings #81202082
Mar 14, 2012 Sold (Public Records) $940,000 -8.2%/yr Public Records
Mar 07, 2012 Pending Without Release -- -- MLSListings #81202082
Jan 30, 2012 Pending (Pending With Release) -- -- MLSListings #81202082
Jan 18, 2012 Listed (Active) ** -- MLSListings #81202082
Sep 20, 2011 Sold (Public Records). $846,000 -- Public Records
Apr 20, 2006 Sold (Public Records) $1,555,000 27.8%/yr Public Records
Sep 10, 2004 Sold (Public Records) $1,048,000 -- Public Records

B.A.C.A.H. says

I knew an engineer (PhD) in SV who knocked out a couple of front teeth when he started some work on his backyard fence. Held the nail in place with his left hand. With right hand, drew the hammer back for his first stroke onto that nail, but drew it too far back, too quickly. Drew it right back till the claw whacked his mouth and two front teeth.
Yeh. Smart folks.

Yes, I agree, and you been around too long to know. Its all the media that have created this crap.

http://www.youtube.com/embed/C5d151lqJsA

http://www.youtube.com/embed/CmYDgncMhXw

Its important to realize that once again, this conversation is about the very narrow confines of Silicon Valley. Elsewhere in the BA there is TONS of inventory.

I can honestly say that if I were a Facebook millionaire, I wouldn't buy any bay area property. I'd "throw" my money away and rent a really, really nice house somewhere until I built my dream home elsewhere.

Part of what makes rich people stay rich is investing wisely (or stealing, both tactics work in this day and age), and 50 year old fixer upper homes for 1.5 million bucks, just because you can, does not sound like a wise investment, at least to me.

generallyfd says

Part of what makes rich people stay rich is investing wisely

What part of handing 28-33 year olds $millions of dollars sounds like a recipe for wise investment? lol

a good analysis here : http://bayarearealestatetrends.com/2012/03/28/are-bay-area-home-prices-going-up-again-whats-going-on-here/

Would someone please find this house that sold in Palo Alto for 400K more than asking price with the 3 brown front poles, a tree by an awning, and the tan/brown color? I'm at work and can't do it. Or call the name/number in the article and ask that person. I believe sale records are public domain. Thank you.

permanent_marker says

a good analysis here : http://bayarearealestatetrends.com/2012/03/28/are-bay-area-home-prices-going-up-again-whats-going-on-here/

Good link, thanks!

David9 says

Funny, not one address to verify these claims

I think the claim is true. Movoto shows only 26 homes forsale today in Santa Clara.

However, I don't see that as positive. To me it shows that people are not happy with the price their home would get them. They are holding out for better. The question is if they are right to hold out or not. I personally, know a few people that own in Santa Clara and would sell in a heartbeat if prices where higher.

http://www.movoto.com/mapsearch.aspx#ButtonResult&Santa$032Clara$044$032ca&&MinPrice_0/MaxPrice_0/PropertyType_1/ListingType_0/SortBy_0/PriceReduced_0/HasPhotos_0/HasPool_0/NewListing_0/HasOpenDate_0/MetroArea_1/

There seems to be ample evidence that, right now, supply is highly restricted in the "desirable" areas and the areas adjacent to them. Constricted supply & undiminished (or larger) demand = higher commodity price. For how long will the supply be tightly constricted? Nobody knows. The shadow inventory out there is huge, but I am not 100% sure that we can ever count on it hitting the market & being available to normal people.

Why does it really matter if supply is limited in the "desirable" ( specific SV towns and parts of SF) areas anyway? The prices have been crazy high- as in higher than probably any of us can afford for years- both during and after the boom. Meanwhile, prices and supplies are lower and plentiful most anywhere else in the BA.

bmwman91 says

The shadow inventory out there is huge, but I am not 100% sure that we can ever count on it hitting the market & being available to normal people.

I too don't buy the shadow inventory in the bay area. Or if there is such an inventory the banks would greatly prefer to sell in bulk to investors as they have in the past. I have gone after a few foreclosures and have found the process to be much more confusing than a regular purchase.

Anyone who has tried to buy a house recently knows that the bidding wars in certain areas are back. I have watched the inventory decrease steadily in Santa Clara for the past few months. I think you combine that with a slight uptick in interest rates and you have the ingredients for a bidding war. Whether that subsides is just a guess for anyone. But if you believe that the economy is at least stable for the time being and you combine that with the fact that construction has been limited the past few years then things may stay heated for awhile.

2 cents says

I too don't buy the shadow inventory in the bay area. Or if there is such an inventory the banks would greatly prefer to sell in bulk to investors as they have in the past. I have gone after a few foreclosures and have found the process to be much more confusing than a regular purchase.

Anyone who has tried to buy a house recently knows that the bidding wars in certain areas are back

Yeah, well how does that explain that most of the houses around us in a nice part of the east bay sit on average for at least 6 months before selling, and then usually at less than asking? Again- we're talking about abnormal action happening in a very small slice of the overall Bay Area. Hardly an indication of anything other than what we already know: The rich areas are expensive. Big deal.

I called Pete from the number on the article. He was very nice, polite, and business like. He said the house with the 3 brown poles, tree by the awning, and tan/ brown color is on Churchhill Lane in Los Altos.

I still can't find the sale record.

edvard2 says

Yeah, well how does that explain that most of the houses around us in a nice part of the east bay sit on average for at least 6 months before selling, and then usually at less than asking? Again- we're talking about abnormal action happening in a very small slice of the overall Bay Area. Hardly an indication of anything other than what we already know: The rich areas are expensive. Big deal.

I would explain it by saying I guess not as many people want to live there... not sure I get your point.

I would hardly call Santa Clara a "rich area" in the bay area. It is convenient, but not what I would classify as the upper end market. Just thought I would confirm that what I consider a mid-market area is experiencing extremely low inventory.

edvard2 says

Why does it really matter if supply is limited in the "desirable" ( specific SV towns and parts of SF) areas anyway?

It matters to me based on where my job is, and where it will likely be. Losing 6-10 hours of free time each week to a commute is something that I, and a lot of others, would prefer to avoid. The obvious trade-off seems to be in house pricing. I don't care at all about the schools or shopping convenience, I care about not spending a ton of time pissed off & in traffic. I used to commute from central San Jose / Cambrian to Mountain View, which isn't even "bad" by many commute standards, but living 5 minutes (on a bike) from work now is worlds better.

As 2 cents above notes, Santa Clara is nothing remarkable, and for some reason it is experiencing supply shortages & high demand. I guess that since MV/PA/LA are all way beyond reason, the people that can't borrow their way into those places are moving on to Santa Clara. Locusts!

2 cents says

I too don't buy the shadow inventory in the bay area.

The real shadow inventory is all the people who borrowed and bought between 2004-2008 in the Bay Area who are now underwater by hundreds of thousands$$$.

Pick a block you are interested in living on and zillow all the last sale prices. There's your soon-to-be inventory.

How long those folks are going to hang on before short selling or foreclosing? How many of them will strategically default?

In San Francisco proper we are seeing capitulation in the further-flung neighborhoods (Bayview, Excelsior, Outer Mission), but it's starting to creep inward.

Pacific Heights will NEVER be cheap, so don't hold your breath for an affordable mansion with views of Alcatraz. Certain "hot" neighborhoods like the Inner Mission and Bernal Heights are insane, and may not come down that much further than they have. But there are still plenty of other regular nabes with middle income folks that will (hopefully) see another leg down.

Just my 2 cents, adjusted for inflation.

We have been actively looking in the city, but will realistically wait and rent another year or two if we don't find what we really want at a price we can afford.

1sfrenter says

We have been actively looking in the city, but will realistically wait and rent another year or two if we don't find what we really want at a price we can afford.

Same with my fiancee & I. We are hoping that 2012 is yet another year when people make poor decisions & end up driving the market lower once they are sufficiently underwater. The media seems to be pushing the "2012 year of recovery" angle, and a lot of people that want to believe that seem to be buying it. Hopefully by Q3 it will become obvious that it was a trap, and people will get desperate to unload once they see that there was no light shining at the end of that tunnel.

At the very least, we are waiting until after the election. The candidates know that all sorts of people are underwater, and they are going to promise free houses & money to all of them to buy votes. Once the dust settles & they stop pretending to give a shit about broke house debtors, things should resume their downward slide.

bmwman91 says

Why does it really matter if supply is limited in the "desirable" ( specific SV towns and parts of SF) areas anyway?

If those places are your home, where you work and where your kids go to school and where you have roots and community, then yes, it does matter. Just not to you...

If you are twenty-something and childless, maybe relocating is an option. But once you have kids and hit your forties and are established in your career....

bmwman91 says

The media seems to be pushing the "2012 year of recovery" angle, and a lot of people that want to believe that seem to be buying it.

They've been saying this for 5 years running.

1sfrenter says

bmwman91 says

The media seems to be pushing the "2012 year of recovery" angle, and a lot of people that want to believe that seem to be buying it.

They've been saying this for 5 years running.

For sure. This year seems to have extra fervor though, probably due to the elections coming up.

Yes I cant wait for Obama to brag about all the bailouts he has done (saving loanowners and thier loans!) and to promise even more bailouts for the banks (loanowners loans again disguised as housing).
Of course the R party is the same party (except for non financial doesnt matter cant enforce it anyway stupid social issues).

1sfrenter says

The real shadow inventory is all the people who borrowed and bought between 2004-2008 in the Bay Area who are now underwater by hundreds of thousands$$$.

While that may be true, time will take care of some, some will give up, and others will stick it out until their house is paid off. I would not deem it as bulk inventory screaming to come back on the market.

I don't know much about the city, only my little corner of the bay area. SF is another world to me, but here is to hoping your strategy pays off for you.

Here is something to consider:

here is a search for zipcode : 94043 (mountain view, not high end)
redfin : for sale : 12
realtytrac : regular sale (5) , foreclosure sale (7) [adds upto 12 reported by redfin],
but here is a kicker : in-foreclosure : 72 !

see the screen shots

2 cents says

I too don't buy the shadow inventory in the bay area.

image from realtytrac

Wow, a 90% Foreclosure Micro Market.

I suppose we should believe the article.

You should make the same comparison for Santa Clara, only since it was mentioned that the inventory is so low.

I made a thread last week about the this. Based on the numbers from foreclosureradar & hotpads, the shadow inventory of houses in foreclosure (but not listed) is many times the size of the market of regular listed sales.

The real question is whether or not those houses will become available to the public to purchase. My bets are on "no" since the RE game is a rigged one, and the only people that I think will get access to them are in large institutional investing firms.

bmwman91 says

and the only people that I think will get access to them are in large institutional investing firms.

Bingo

Santa Clara stats :
redfin : 86 for sale
realtytrac : in foreclosures 244

@patrick
the image scaling / resizing isn't working correctly.

75% Foreclosure Micro Market.

Let me get out my check book.

1sfrenter says

Pacific Heights will NEVER be cheap, so don't hold your breath for an affordable mansion with views of Alcatraz.

For many in decades past, Pacific Heights never mattered, so why should it matter today and decades into the future.

RentingForHalfTheCost says

I think the claim is true. Movoto shows only 26 homes forsale today in Santa Clara.

You have over 64 sold last month in SC City from +1200 total county.

http://dqnews.com/Articles/2012/News/California/Bay-Area/RRBay120315.aspx

http://dqnews.com/Charts/Monthly-Charts/SF-Chronicle-Charts/ZIPSFC.aspx