patrick.net

"NYC -metro- is a lot more affordable than the Bay Area Metro."

Indeed, outside of Manhattan, CA prices actually buys a nice upper middle class home, not working class home stock that went for $50K thirty years ago. Plus, good New York suburbs have good public schools and parochial schools, so kids' education is a lot cheaper.

Manhattan is a whole other crazy world, but even there, the truly exorbitant prices seem to be concentrated in a few areas. And at least you don't have to figure car costs into living there.

Peter,

I don't know if it's true in Manhanttan. In the boros, partially true. Some buildings have just a shared laundry room in the basement. Same with old apartment/condo/co-op buildings in Seattle. I suspect it's also true in Manhattan.

If you are rich, you don't do laundry yourself. You have maids come in to pick up and drop off your dirty clothes. It's not that expensive.

So what is the verdict, are we in for a soft landing or not? The San Jose Mercury News was trying to make out there's not a problem today - at least that was the impression I got when I skimmed it today.

Regarding speeding limit.

I drove in Germany and Austria 4 yrs ago. It was my new BMW 3, euro delivery program. Told not to exceed 92 mph, as it was still in break-in period. So tried 90 mph on autobahn. Keine probleme. But every so often, a car would zoom me by. Must be driving at 110+ mph. I took a look. Very old beatup car from 70's or early 80's. A Ford. Another time, a Honda. One time, it was a fucking motocycle zooming by. Again, at least 100 mph.

No accidents. No near accidents. Germans drive very well. Very orderly but fast. I drove well, too. At least, on par.

My sis bought her house in Texas 15 yrs ago. Her prop taxes were $3500. She now pays $7800 per year in prop taxes. She tells me she regrets selling her home in Cali and moving to Texas 15 yrs ago.

Granted this is probably above today's inflation-adjusted value of $3500 in 1991 USD (btw, I would not trust any calculator that uses the grossly-understated CPI), but even so, $650/month plus a 1991 cost-basis FRM payment is not likely to break the bank for most people.

One of the things that has actually helped prevent a similar RE bubble from taking hold in Texas IS the free-floating tax basis, so no, I certainly do not "love" Prop. 13 and it's effects in this or any other market. I would trade the Texas model anyday for CA and its Prop. 13-enforced so-called "fairness".

No accidents. No near accidents. Germans drive very well. Very orderly but fast. I drove well, too. At least, on par.

But an otherwise survivable accident would be fatal at 100mph. A slight impact can cause the vehicle to lose control and flip multiple times. I want lower speed limit because I want more accidents to be survivable.

One of the things that has actually helped prevent a similar RE bubble from taking hold in Texas IS the free-floating tax basis, so no, I certainly do not “love” Prop. 13 and it’s effects in this or any other market. I would trade the Texas model anyday for CA and its Prop. 13-enforced so-called “fairness”.

Fairness cannot be enforced. Similarly, unicorns cannot be captured.

@Claire,
I think it's too early to tell out here. I know what my preference is, and I think we're behind Florida in terms of when the problems start showing up. I also think it's still the calm before the storm, and that the markets won't really notice the problem until autumn.

@Phil,
I should mention that Peter may be correct on speed, as removing limits tends to result in people paying more attention (sense of danger?) while not driving significantly faster. The increased lane discipline also means the people who do want to go fast don't end up weaving, which is an easy way to get into an accident. (A case of "sure, they may be unsafe, but they're less likely to take someone down with them")

Err.. I should revise that to "may be correct on speed itself being a problem", as the studies I mentioned earlier have more to do with the limits than the actual speeds travelled, and also show that average speeds didn't go through the roof.

Didn't mean to assert that Peter P had changed opinions on speed [limits].

heh heh, patrick.net's jumped the shark...

the vast majority of lawyers here only make $50-70K... if commercial lawyers leave Oz to work in UK or US, they never come back.....

An accident at 55 mph is or can be as deadly as one at 70 mph as human body is not meant to take any accident above 5-10mph.

70mph involves 60% more energy than 55mph. So it is at least 60% more deadly.

Have you imagined why rice mobiles have to weave in and out of lanes? cuz slow pokes like you stay on the speed lane at or below the speed limit.

Why do people have to facilitate crimes or infractions (speeding)?

Have you imagined why rice mobiles have to weave in and out of lanes?

it's cos they're little prats, they have fantasies of being race car drivers, they treat driving like it's a video game, and they're so unimportant to anyone that the 5 seconds they've shaved off at everyone else's expense causing near accidents and being rude little gits doesn't really mean anything in anyone's life...

it’s cos they’re little prats, they have fantasies of being race car drivers, they treat driving like it’s a video game, and they’re so unimportant to anyone that the 5 seconds they’ve shaved off at everyone else’s expense causing near accidents and being rude little gits doesn’t really mean anything in anyone’s life…

Something like that. :)

Ever pop the hood on one of those soo called rice mobiles...I am sure they can be made to run faster than German or american piece of shits if needed cuz they are much lighter..
No one is forcing you to drive faster or above the speed limits, some people choose it and i say let them.. you watch out for your own ass and move out of the way and that can be done by staying clear of the fast lane.. it is called a fast lane for a purpose.. does not matter whether it shaves of 5 seconds or 1 hour, its their choice.. an analogy for you - you didnt buy a house but you are renting cuz you wanted to save your ass financially while other people tried the fast lane.. so you got out of the way, just do the same on the road and no one gets hurt..

an analogy for you - you didnt buy a house but you are renting cuz you wanted to save your ass financially while other people tried the fast lane.. so you got out of the way, just do the same on the road and no one gets hurt..

Eh... I thought speeding is illegal. I would like to see an steep increase in speeding fine so that more officers can be hired to catch reckless drivers.

Ever pop the hood on one of those soo called rice mobiles…I am sure they can be made to run faster than German or american piece of shits if needed cuz they are much lighter..

No matter what car you drive the speed limit stays the same. What more speed? Get a Cessna. It can beat ANY car, speeding or not, from San Jose to Santa Barbara.

Yes speeding is illegal, but when you move out of the way, they will get caught faster, but the end result is you saved your ass as well as other people by moving out of the way. I would rather save my ass than trying to teach other people on the road a lesson on driving skills.

Yes speeding is illegal, but when you move out of the way, they will get caught faster, but the end result is you saved your ass as well as other people by moving out of the way. I would rather save my ass than trying to teach other people on the road a lesson on driving skills.

I always stay on the right side whenever possible. But speeding should not be considered acceptable.

Does anyone remember how much the car industry fought airbags, until it was a law? After that, every single car company was like "oh yeah, we pioneered these things, we were the first, oh we're so great, yadda yadda yadda".

On safety... what if we just passed a simple law that said that the bumper and frame of every passenger vehicle on the road had to be at the same height above the surface of the road?

Lots of folks are going to say wah wah wah we can't do that, for a thousand reasons, but you know what, necessity is the mother of invention. The playing field would be level and there would be no, well I bought a compact so i can crush a subcontact, but then i bought a midsize because i can crush a compact, but then i bought a full size because i can crush a midsize, but then i bought an suv because i can crush a full size, and see over it, but then i bought an suv because i can't see through the other suv's with my car, but then i bought a truck because i can crush the suv, but then i bought the hummer because, well, because, uh.... my penis is too small? i dunno.

But if everyone’s doing 75 in a 55, then the speed limits have been set according to politics instead of good engineering principles, and (it may just be me) that’s something I also consider unacceptable.

We need a way to penalize speeding even if everyone is doing it. The CHP will be overworked. This is way we need an electronic system.

Most people overestimate their abilities and so they drive too fast.

I am a big fan of minvans, but my wife refuses to drive one.

I have begged her to get a Honda Oddessy, or a Toyota Sienna, to no avail.

My Jeep is a great car. However, in terms of utility, it's no match for a minivan. Minivans are like twice as spacious. They are a million times easier to get into and out of, especially if you have infants or seniors. All minvans have third row seats, only some SUV's have them.

Minivans have all of the mass and safety benefits of an SUV, and the upright driving position. They're generally easier to drive, too, becaause all of the windows give you excellnet visibility.

Minivans get better fuel economy.

Minivans are superior to SUV's in pretty much every way. But people just won't buy them, they just aren't cool any more.

It's a tragedy.

Minivans are superior to SUV’s in pretty much every way. But people just won’t buy them, they just aren’t cool any more.

I think people cannot stand sliding doors. However, there are more car-like minivans now: Pacifica, R-class.

Saw this on Ben's blog.

http://tinyurl.com/mjtwv

This is what I want to see more and more. We on the blogs can say whatever we want, but the sheeple read/trust the MSM more than blogs. One more year and everyone and their 2 year old kid will get the idea that RE prices can .... oh my god ... DROP ! The REAL fun will start then.

Choice quotes
"The number of transactions continues to drop," said Christopher George, president of San Ramon-based mortgage company CMG Financial Services. "And now they are dropping at a pretty significant rate. There also could be a stopping, or even a reversal, of the cycle of appreciation of home prices."
...
"This could be a perfect storm," George said. "Interest rates are going up, payments are going up, more homes are on the market, and prices are flattening. With all of the homes that are on the market, those homes have to be sold at a cheaper price. That slows the price appreciation or even leads to lower prices."

Emphasis mine.

For those in or near Sacramento, get a sip of some nice and cool schadenfreude.

http://sacrealstats.blogspot.com/2006/07/flippers-in-trouble-gallery_20.html

Don’t move to a rental complex in Sunnyvale or Mountain View

I have lived in three different complexes in Sunnyvale and Mountain View. All have inside laundry. Try looking around, many of them actually have W/D in the unit.

Since we have 3 kids, the Volvo wagon works pretty well. We have the fold down rear seats as well.

I think Volvo should make a wagon/minivan hybrid to compete with Pacifica.

I am about 200 posts late but to state the obvious our countries economic system is called capitalism not laborism!

This country encourages investment and returns from capital and not those from labor and this is reflected in the tax code.

Paul Says:
I am about 200 posts late but to state the obvious our countries economic system is called capitalism not laborism!

This country encourages investment and returns from capital and not those from labor and this is reflected in the tax code.

that's a very naive and touching lay analysis of how things really work...

not to mention the illegality of driving like a pillock...

Please. Words of hatred are not very healthy. I think it better to take over their possessions when the time is ripe, provided of course that you will be able to. Possessions may or may not include their women. Of course if it were to me, the answer is no. Take your pickings when the time comes. But whatever you do, don't to be too harsh, for an anguished mind may flip and something nasty may follow.

an anguished mind may flip and something nasty may follow.

that's what we've been saying about flipping all along... except for the early bird flippers who got away with it...

The early bird flippers, they didn't follow anybody. I think they deserved their kills.

I am just wondering where they are going to move their money to next, so that I can partake in their next raid. May the force be with them.

That's it. I quit.

I guess housing does only go up in Cali.

Read it and weep:

Rents at San Jose-area apartment complexes rose more this spring than at any time since the peak of the tech boom.

Landlords no longer need to woo customers with a free month's rent or a DVD player. Rent for apartments in large complexes rose 9 percent compared with a year before, the biggest jump in any of 29 cities in California and elsewhere studied by RealFacts, a Novato company that does research for the apartment industry.

The average monthly rent in the area was $1,414. Palo Alto was the most expensive city at an average $1,929, and Campbell the least at an average $1,231.

A revitalized local job market and RISING HOME PRICES are two factors driving the rental market, said Caroline Latham, owner of RealFacts. With higher prices and mortgage rates making homes less affordable, there's increasing demand for rental housing.
_____

I give up. I'm throwing in the thrown in the towel. San Jose is over. It's the new Beverely Hills.

Anyone not pulling in big bucks probably should leave town.

I cannot live in denial anymore. Something aweful, something strange and fascinating, some fearful symmetry has gripped the throat of the Bay Area like a juggernaut.

God help us all!

skibum Says:

What crack are you smoking? San Jose the new Beverly Hills? Not that BH is all that, but San Josebag is hell - a sea of crappy homes in a soulless suburban/semi-urban wasteland.

_____

Oops. Yes, it does appear that I'm smoking crack.

I even said to myself, "Is this housing article for real, are housing prices really still going up in San Jo, or am I on Crack?"

Beverly Hills prices is what I mean.

You've got to be pulling in Beverly Hills bucks to live in San Jo now. You must pay top $$$ to be a San Jo, Ho.

Hey burbed, it's never too late to get in. I say since rents dropped 30% and are now "up" 9% (nevermind that all the flipper condos are reverting back to apts) it is clearly a "soft landing" and time for you to make the plunge. Otherwise you might be priced out forever. After all, it makes much more sense to pay 5-9K for a shit box that to rent for 1300.

Go for it! You can do this!

next time post the entire article, cherry picking a bunch of bullshit spewed by some fucking asshole affiliated with the realtwhores does little good. Hmmmm, the "average" mortgage payment was 3200. That's not the whole monthly nut.

The average mortgage payment Bay Area buyers committed to paying in June was $3,183, DataQuick said.

"The big question we started asking years ago was -- is this cycle ending with a crash or soft landing?" Karevoll said. "It's clear now we're in the middle of the soft landing. We had our frenzy and now the sales and appreciation rates are coming down. Now the question is will it go negative or will it approach zero and level off?"

Shit, i am totally wrong, the good folks at realtwhore inc. would never lie would they? Would they? Why would they possibly lie? They are just here to help us, why just last year they were helping us at Starbucks. They are merely continuing a tradition of service. I believe each and every story they tell. Really. The strong fundamentals of the bay area have been discussed ad infinitum, and no matter how you slice it the conclusion is constant, they aren't making anymore land, the average salary in the bay area is 250K, and it is such a perfect place to live of course it commands a premium. Shit they should bottle the air, now there's a money making idea.

Ok gotta go beat the shit out of a realtwhore. nighty night.

The Business Press: Are you really that bullish on the local housing market?

John Karevoll: Yes, I am. I'm not one who listens to all of the talk about a housing bubble. A bubble market has specific characteristics, like a lot of speculative buying. We have some of that [in the two-county region] but that's not what's driving the market. Most of the people who are buying houses out here are buying so they can put a roof over their heads. The market will settle down, but it's not going to pop.

He's a fucking genius, I say a MacArthur award for him.

I'm going to a "home buying seminar" in goleta next week. i can't fucking wait to hear their suggestions as to how my 91K pitance can buy a 800K shitbox.

Michael Holliday Says:
That’s it. I quit. I guess housing does only go up in Cali.

Rents at San Jose-area apartment complexes rose more this spring than at any time since the peak of the tech boom.

not really, this is just Phase II -- the rents go up because the landlords are hurting. if wages and salaries don't go up with it, interesting things will happen as people are forced to commit >> 30% of their net income to housing. hence the overall result will most likely be systemic inflation (Phase III), where wages struggle to keep up with cost of living.

alternatively, you've just created a new dual-class society of landlords and tenants, in virtually equal numbers, and it's been done by manipulating prices to deliberately exclude more and more people from purchasing. oh well. the next step will be evolving into Eloi and Morlocks, where the landlords become feeble and weak, and the Morlocks feast on them at night where possible...

burbed,

Ok, it's official --now I've seen everything. My favorite part:

ABOUT 24/7 NEG AM LOANS

WHY A NEG AM WEBSITE?
I started this website because I noticed that there is not that much information on the Internet concerning Negative Amortization Loans. Also the information I found on the Internet concerning this type of loan was usually on the negative side. Just because there is the word negative in its title does not mean that this type of loan is bad for borrowers. I realize, the Negative Amortization Loan is not for everyone but it is very beneficial and positive for many borrowers. It allows many investors to increase their real estate holdings and have positive cash flow from day one on investment properties. For many borrowers it gives them the opportunity to afford to buy a home or enables them to buy a bigger and better home. (See Benefits of the Negative Amortization Loan Page for more detailed information).

All this time I've been bashing NAAVLPs I never realized that these borrowers were all Zephyr-esque brilliant market-timing professional investors simply interested in optimizing their cash-flow. How wrong I've been! The people I've been disparaging as specuvestors are actually Cunning Hard-eyed Ultra-savvy Market ProfessionalS (CHUMPS). The 80% or so who took out option-ARMs in CA last year clearly are all "top drawer" geniuses who fully understand the downside risks and are financially prepared for them.

Thanks for setting me straight, Shawn!