patrick.net

wthrfrk80 says

FunTime says

Or a woman. Or from Japan or Germany.

My whole family is of German ancestry. We had no problems. Even my Grandpa who came here in the 50's with a thick accent had no problems. Even though he fought for the Germans in WWII. He was the one who taught me how to properly fold and respect the American flag, by the way. Pretty amazing when I think of it, considering that same flag was on the planes bombing the shit out of his homeland.

Women were treated better then since they were seen as future wives and mothers; not just sex objects. The whole "sex is just recreation" concept had not yet gone mainstream. Cooking, cleaning, and taking care of a family at home had not yet been scorned by an angry bitter minority. As if sitting for 40+ hours a week in a cube farm is somehow more glamorous and fulfilling.

I have a friend in Ohio who was raised old school Italian and he still looks at women as future wives and mothers. He evaluates potential girlfriends with that same set of criteria.

wthrfrk80 says

rootvg says

Peter Schiff said the Chinese would flood in here to invest all those Dollars we've given them over the past twenty years. He was right.

They said the same thing about the Japs in 1989. Remember the final episode of "Newhart" where the whole town sells out to a Japanese RE tycoon and Joanna is wearing a kimono?

China in 2012 = Japan in 1989. Same kind of asset-bubble driven economy. China will have a "lost decade" just like Japan...except with potential civil unrest and violence.

I loved that episode, especially where Suzanne Pleshette shows up in the final scene.

FunTime says

My wife has made the same or more money than me for years. The only time I heard about it was during flight training. You burn some bucks doing that.

Call it Crazy says

rootvg says

I have a friend in Ohio who was raised old school Italian and he still looks at women as future wives and mothers. He evaluates potential girlfriends with that same set of criteria.

I thought the criteria was when you get a new girlfriend, you look at her mother, and expect your girlfriend will look like her mother in 30 years....

That's what my father told me. My mother-in-law smoked and took a lot of prescription drugs, none of which my wife does so would one think she'll fare much better. My mother-in-law is also in a nursing home in her seventies and I've had flight instructors who were almost that old.

The chart only goes to Q1 of 2011 - is there an updated version available?

BayArea007 says

Fed will keep rates low for a vey long time as they realize increasing rates will have a negative impact on housing. They will continue trying to re-inflate the housing market over the next decade. Unfortunately, I need a house, have a baby on the way, and have to face the fact that my wife wants a house.

I would rather rent, but renting a 4 bedroom house in nice area in the Bay, probably runs 4-5K per month. A 700K+ loan interest only 3% interest loan + taxes - minus the tax break make the decision to buy a relatively easy one.

I agree with many of your comments - job market sucks and the recovery is a myth. Every US President, whether Obama or Romney wants to govern in an interest low environment.

Why do you need/want 4 bedrooms - 2 1/2 or 3 should be plenty, no? You can get that for $2500 or less in decent SF residential neighborhoods.

Patrick,

Based on the graph you provided, do you seriously believe that home prices in SF & SJ will come down to the mid $300k in the future?

Prices will not come down to the mid $300Ks. In many areas that was the previous low following the Loma Prieta slump which didn't really start rebounding until 95-96.

Logarithms are your friend.

Randy H says

Prices will not come down to the mid $300Ks. In many areas that was the previous low following the Loma Prieta slump which didn't really start rebounding until 95-96.

The declines in the Bay Area had very little to do from Loma Prieta.. we had an earthquake.. not much of a big thing for many... Now talk about what happened to the tech industry during the same period ?

$300K.. in CA it sure can happen! and plenty of sunshine without the high markup!

Southland Home Sales Up From Year Ago; Median Price Climbs to $300K(DQNEWS)

http://www.dqnews.com/Articles/2012/News/California/Southern-CA/RRSCA120717.aspx

E-man says

Based on the graph you provided, do you seriously believe that home prices in SF & SJ will come down to the mid $300k in the future?

Why would it not ? All the reasons people cite for high Bay Area prices during the bubble were also true in expanding economy of 70s and 80s and yet it fell back to long term trends. Since 2000 our economy has contracted and the same time we saw prices skyrocketed for all the wrong reason.

Yes, eventual prices fall back !

thomaswong.1986 says

eventual prices fall back !

The key question is, how long would we have to wait? are we still alive by then to see those prices?

E-man says

The key question is, how long would we have to wait? are we still alive by then to see those prices?

the more govt intervention, the further out the correction.

thomaswong.1986 says

$300K.. in CA it sure can happen! and plenty of sunshine without the high markup!

Also, keep in mind that a $300K median house in the Bay Area/LA is equivalent to a $100K house, everywhere else, in terms of house quality and land sq footage. So, even at $300K, you are still overpaying for what you actually get.

dunnross says

Also, keep in mind that a $300K median house in the Bay Area/LA is equivalent to a $100K house, everywhere else, in terms of house quality and land sq footage. So, even at $300K, you are still overpaying for what you actually get.

That statement makes no sense. It strikes me that you're discounting the first three most relevant variables driving the market price for real estate.

And it doesn't matter what you think. Market prices depend upon what everyone else thinks. Seems a lot of people have problem with that very basic concept.

Randy H says

It strikes me that you're discounting the first three most relevant variables driving the market price for real estate.

Yes, I am discounting the 3 most relevant variables - "location, location, location", because these variables determining value today, will no longer be there tomorrow. Detroit was a desirable location 40 years ago, but look at it, now.

dunnross says

Detroit was a desirable location 40 years ago, but look at it, now.

But,but that can never happen to SF,correct?

300k+ for most of the bay area is just right for this economy. Interest rates may be low, but when you buy a home for 700-900k or even higher, you are stuck with high property taxes too. For this job market, mid 300s is right for most areas. Now if there is a new dotcom that cannot be offshored and done anywhere else, then fine-but not for this economy.

Call it Crazy says

rootvg says

I have a friend in Ohio who was raised old school Italian and he still looks at women as future wives and mothers. He evaluates potential girlfriends with that same set of criteria.

I thought the criteria was when you get a new girlfriend, you look at her mother, and expect your girlfriend will look like her mother in 30 years....

That's such bull. I look like my dad who looks like his mother, so I'm going to look like my grandmother--already saving for the plastic surgery she got when she was 70 :)

rufita11 says

Call it Crazy says

rootvg says

I have a friend in Ohio who was raised old school Italian and he still looks at women as future wives and mothers. He evaluates potential girlfriends with that same set of criteria.

I thought the criteria was when you get a new girlfriend, you look at her mother, and expect your girlfriend will look like her mother in 30 years....

That's such bull. I look like my dad who looks like his mother, so I'm going to look like my grandmother--already saving for the plastic surgery she got when she was 70 :)

There's an acquaintance of ours who looks very much like we think an old flame of mine will look when she turns sixty, the bags under the eyes and spreading out in the back, etc. Whenever we see her I look at my wife and say, hey...I wonder if is here...

VERY funny stuff, but I guess you have to be there.

Everybody that I know that knows the SF Bay area say housing will never correct like it has done for the Washington DC area, Florida, Nevada, Arizona, etc. because everybody wants to move to San Francisco. So they consider San Francisco the exception because of several factors such as being gay-friendly, having a great climate, and being a job engine for technology companies.

lostand confused says

but when you buy a home for 700-900k or even higher, you are stuck with high property taxes too. For this job market, mid 300s is right for most areas

Yep. In the tech department that I work in, most of those coworker engineers' property tax bills are higher than my family's entire housing cost.

E-man says

thomaswong.1986 says

eventual prices fall back !

The key question is, how long would we have to wait? are we still alive by then to see those prices?

Even worse, how much higher will the trendline be when they finally "revert to the mean"?

Imagine the 1994 buyer in San Jose who stumbled across that chart. He would see the trendline then at 200K, yet San Jose still at 250K and conclude "San Jose is gonna crash, I will wait it out".

Imagine too he stubbornly clung to his prediction that SJ would "revert to the mean" and refused to buy in 1995, 96, 97, followed by his horror as prices exploded upward 1998 and beyond, causing him to wait even further.

Finally, even if they did magically "revert to the mean" today, SJ would fall to 300K. Meaning at the end of the day, our poor guy would refuse to buy at 250K, rent for 18 years waiting for prices to fall, and then buy at 300K.

B.A.C.A.H. says

Yep. In the tech department that I work in, most of those coworker engineers' property tax bills are higher than my family's entire housing cost.

Which is f***ing crazy. How can those tech companies afford to do business in those areas? At what point does "nice weather" become "not worth it."?

Hawaii has nice weather.

CDon says

Finally, even if they did magically "revert to the mean" today, SJ would fall to 300K. Meaning at the end of the day, our poor guy would refuse to buy at 250K, rent for 18 years waiting for prices to fall, and then buy at 300K.

Yes, except the recession in the 90's was nothing at all, like what we are experiencing now. That was just a small bump in the Roaring Boom of the post WWW-II era. What we have now is a multi-generational depression, a complete paradigm shift.

adarmiento says

So they consider San Francisco the exception because of several factors such as being gay-friendly, having a great climate, and being a job engine for technology companies.

1. San Francisco is gay-friendly, but people-unfriendly.
2. City climate sucks. There is no summer in San Francisco. If you move away from the city, then it becomes not only people-unfriendly, but gay-unfriendly, as well.
3. Jobs here are too much skewed towards the high-tech, ie. non-diversified like the other places.
4. Most of the people I spoke to in cities like Chicago, think San Francisco is one of the worst cities for life, and have no intentions of moving here. Only people who live in San Francisco think it's something special.

freak,

I don't think its about the weather.

Lotsa people come here from all over the USA and all over the world. Some of them like rootvg, dunross, patrick, Randy H post here. They are all making some kind of trade off or sacrifice to pay for the expensive housing here.

Maybe we can read some remarks from them about why "The Bay Area Is So Special", since they are the ones who've voted with their feet.

What is the medium income in Bay Area? What can people afford at about 80K a year fixed rate? There are microclimates in the Bay Area. San Fran, Berkeley, and Palo Alto, for instance, are areas of wealth concentration. Plus there is very little home development. On the other hand, there area areas, like Richmond or Vallejo, that have very low prices but are not so desirable. I suspect that many people do not want to move to the far out areas because of commute time. One last note: I've seen whole empty neighborhoods with no "for sale" signs. It appears many homes are not being placed onto the market. At the end of day, what can people afford?

"1996..." Not a bad time to buy.

2012: Extremely poor time to buy in most bay area locations.

dunnross says

San Francisco is gay-friendly, but people-unfriendly.
2. City climate sucks. There is no summer in San Francisco. If you move away from the city, then it becomes not only people-unfriendly, but gay-unfriendly, as well.
3. Jobs here are too much skewed towards the high-tech, ie. non-diversified like the other places.
4. Most of the people I spoke to in cities like Chicago, think San Francisco is one of the worst cities for life, and have no intentions of moving here. Only people who live in San Francisco think it's something special.

After almost thirteen years of living in San Francisco, I disagree with three of your four points.

1. The friendliest people I've ever met, I've met in San Francisco.
2. If you love temperatures during June to August that require air conditioning, you will not love San Francisco temperatures during those months. If you love wearing jeans and a tshirt during the day and throwing on jacket in the later evening, you will love San Francisco weather during those months.
3. No data on which to base an opinion. I'd be interested to know what data resulted in your suggestion. I'm thinking surely you don't form opinions based purely on interviewing friends.
4. Since you provided no survey results and I'm thinking your point is based on acecdotes, I'll match every one of your anecdotes with stories of the envy expressed by people telling me San Francisco is their favorite city of all the cities they've visited on Earth.

I don't know what compels me to respond to posts like yours, but I just find San Francisco to be freaking amazing and different in most of the ways I'd want a city to be different.

Funny thing is that back in 1996, which was when I first moved to Silicon Valley, people were warning us that it was "a terrible time to buy". Luckily, back then I did the research and determined it was pretty clearly a rent-v-buy parity situation and looked [then] to be at the end of a 5-6 year slump.

When the dot-com bubble started heating up many of us knew it. It wasn't like it was any secret there was a bubble forming. The real estate prices were also going up, and I recall lots of people then thinking things would correct back to 89, 81, or even 72 prices. I remember surfing netcom and reading Usenet groups full of people who were "certain" that prices were headed back to 72 pricing, based on irrefutable fundamentals.

My only point is it's no comfort to be right if you have to wait half your life to get there. There have been at least 3 parity periods between 72 and now in Bay Area real estate, and if you bought during any of those you have done just fine. Of course, there will be some old coot who'll hold out renting until he's 77 years old who'll come out crowing about how "he knew all along" if the day comes that everything comes tumbling down.

Just beware that predicting the future is a very dicey business.

Randy H says

Of course, there will be some old coot who'll hold out renting until he's 77 years old who'll come out crowing about how "he knew all along" if the day comes that everything comes tumbling down.

...and will have been financially independent since age 50. In other words, will not have needed a job to pay bills.

96 was different. Now, technology allows the same job to be done in India, Costa Rica or the Phillipines. There is no growth industry -yet. The finances for many folks are in tatters and ruined. The future looks increasingly dismal and bleak.

Now something can come in and turn it upside down-but do the current prices justify that maybe?

Even the war mongers are acknowledging that you have to cut medicare to fund the war machine.

I know plenty of financially indpendent people in their 40s and 50s living in houses which they paid off in the 1990s-early 2000s. Waiting for doomsday is irrelevant when it comes to good financial planning.

Then why am I scrambling to re-shore every tech job in my division possible right now? India is not economically advantageous and China represents too much IP risk.

Fun,
sorry I am a lifelong Bay Arean, I gotta agree with dunross, BayAreans in general and 'Friscans in particular are rude. It's not an -in-your-face-rude, though. It's an aloofness rude.

B.A.C.A.H. says

Fun,
sorry I am a lifelong Bay Arean, I gotta agree with dunross, BayAreans in general and 'Friscans in particular are rude. It's not an -in-your-face-rude, though. It's an aloofness rude.

It might have to do with 1 in 10 Americans being so horribly depressed. At least 1 in 10 are taking anti-depressants.

Randy H says

know plenty of financially indpendent people in their 40s and 50s living in houses which they paid off in the 1990s-early 2000s. Waiting for doomsday is irrelevant when it comes to good financial planning.

I am one such financially independent asshole, and I still say you're playing down the bad moon that's a rising.

When people in New York say fuck you, what they really mean is have a nice day.

When people in the Bay Area say have a nice day, what they really mean is...

Youre A Liar says

A 20 year old paid off a house in 1991? Seriously? You're deluded.

Lots of late 20s/early 30s paid off their homes and/or bought them with all cash in the mid 90s. Perhaps you weren't around then...