patrick.net

Austinhousingbubble says

And, as you know, the asking price is never equal to the sum of its parts.

Nope not equal to sume of its parts... that is always negotiable!

thomas.wong1986 says

Getting out in the wild, i doubt they can appreciate it.. so why overpay for it. Indeed very puzzling. Thats another reason not to overpay, so you have funds to persue your other goals, like hobbies, activies and passions you enjoy. NOW WE ARE TALKING! And we certainly did all those things decades past.

We are still at ballistic price levels, but the prices continue to correct downwards. Give it a year, before you make your decision to leave.

This is partly why I like renting. It allows me to stay really close to work, and at least in the current system, save money. This gets me more time and more money to spend on things that I love, that can't be done at work. I happen to enjoy engineering, which is fortunate, but I also like lots of other stuff! My parents live in the Cambrian area, and my dad has a whole wood/machine shop in his garage, so I can still go there for car projects & woodworking from time to time.

I see a distinct shortage of hobbies among a lot of people these days. Perhaps it has always been that way. Still, as far as I can tell, hobbies keep you sane. Maybe that explains the insanity! What ever happened to doing something just for the sake of having FUN?! Being an adult is totally overrated in a number of ways, but mainly in the one where people think that "having fun" is for kids.

Austinhousingbubble says

And, as you know, the asking price is never equal to the sum of its parts.

Well, yes and no.

If it is just some older car that has been well maintained, or perhaps has a number of modifications to its suspension & engine (bolt-on's) then there's no way in hell that you are getting much more than the KBB/fair-market value for the car. If you take a car that is regarded as a "classic" and restore it to its original, stock glory, you may well be able to recover all of your expenses, and then some. That really requires a car that is considered classic and has some sort of historic value though.

There's no rational reason for RE prices to fluctuate wildly. Sure, if gold or oil is discovered under Your Town, things can go crazy. But otherwise, RE prices are a reflection of average salaries. People buy what they can afford.

wthrfrk80 says

There's no rational reason for RE prices to fluctuate wildly. Sure, if gold or oil is discovered under Your Town, things can go crazy. But otherwise, RE prices are a reflection of average salaries. People buy what they can afford.

I would correct your last sentence to read, "People buy the most expensive thing that they can finance." Not all people do, but there are probably more people here that are willing to do so than there is available inventory.

From what I can see in the Bay Area, there are two groups operating that keep prices where they are. The first is people with a lot of money, either from generous salaries & stock incentives ($300k+ household income), or from recent/upcoming IPOs. The second is people that are willing to borrow vast sums of money (and some of them may well come from the first group, and they DO have immense borrowing power). Given that a $200k gross household income puts you at the 88th percentile in the BA (94th nationally), and that inventories are really low, it should seem fairly obvious that there will be some steep competition for the inventory that is available. Add to that some number of wealthy Chinese folks that want to send their kids to schools here and stuff their money somewhere, and some of the renewed insanity we are observing makes sense.

As much as I want a nice house in a convenient location for under $500k, I am losing hope of that ever happening. There are way more people that make way more money than me, and give way less thought to the implications of having an expensive property in their name. To us they seem stupid for choosing to do that, and to them we seem stupid for running around crying about it instead of "working harder to make more money and buy what we want." There is some truth in both positions. More and more, I am feeling that the Bay Area is becoming, and will be, a place where the middle class, as we currently recognize it, ceases to exist. New York, and to an extent SF, have been middle-class-unfriendly for a long time. Maybe it is going to spread down here too.

The Bay Area seems to be a fortune-seeker's paradise. If you are born to wealthy parents or get lucky by getting into a pre-IPO powerhouse and busting your ass for years, you have it made here. If you want to enjoy a reasonable middle class income and just live & enjoy your life without spending 8+ hours commuting per week, the BA is becoming increasingly hostile.

bmwman91 says

I would correct your last sentence to read, "People buy the most expensive thing that they can finance."

Correction noted.

That implies an inverse relationship between mortgage interest rates and overall prices. With rates at historic lows, is this really the time to buy?

@bmwman91 - It sounds like you need to move. We almost did.

realitycheck says

I personally have several friends who have just started the process of short selling their homes so I know for sure home prices will be going down and not up.

To add to this, there seems to suddenly be a lot of short sales and foreclosures in our east bay neighborhood including 2 down the street from us. Surprising given that our area is generally fairly well-off and even though did experience some price reductions didn't really have many foreclosures or short sales. Almost seems like some sort of delayed reaction?

BMWman,
Totally feel where you're coming from. About 3 years ago I was laid -off and figured I'd make the plunge and get a job in Austin. Seemed like a sure thing since I am very seasoned and experienced. I wound up getting a job in the Bay Area instead. Anyway, long story short, if you're in the tech field there are VERY FEW cities that cater to people like us and while that isn't to say that places like Austin aren't nice and have a pronounced tech industry there ( SXSW is growing bigger and bigger every year and now has a large tech presence) its also true that unfortunately and perhaps fortunately the Bay Area seems to have fairly reliable, consistent work available. My experience with Austin was highly experienced people clambering for crappy part time entry level tech jobs. It was a big disappointment because you can seriously buy a pretty nice house in Austin for 200k or less.

In the meantime I think I've gotten a more zen attitude about it. My way of thinking for now is to keep renting cheap, save cash, keep working, and at some time we'll have enough saved to have more options- whether its to relocate and not be dependent on a highly paying job situation, or work here until we retire and then buy a house in retirement, or maybe even buy a house outright in the East Bay because at this point there are houses well below the 450k mark at this point, which is doable.

But anyhow, we've discussed this before, but is living close to work so important to you that you would rather relocate out of the Bay Area versus buying a house in somewhere cheaper like the East Bay or so on? I guess what I'm saying is that yeah- the Peninsula and the City are really expensive. But they've always been and always will be. You do have options. Its just making a decision on whether those options are worth it to you.

Note to self: be glad you didn't go into high-tech industry.

wthrfrk80 says

Note to self: be glad you didn't go into high-tech industry.

I could have gone to law school. I'm glad I didn't do that, either.

Inventory is just plain low to non-existent.

http://www.deptofnumbers.com/asking-prices/california/san-francisco/

Open houses for anything under 600K are packed with people. Decent places are pending within 2 weeks, over asking price.

Crappy places priced similarly stay on the market and with 100K price reductions are still selling after about 60-90 days.

Everything is still overpriced here in SF. There are foreclosures out there that the banks are sitting on. More and more short sales.

bmwman91 says

That really requires a car that is considered classic and has some sort of historic value though.

Perhaps; but t I think along with the housing bubble/credit collapse of 2008, the classic car market took a big dump, too. No more HELOC sugar for baby boomers to tap into for reliving their glory days. Just as an example, I passed on an opportunity last spring to pick up a '55 Nomad in mostly solid driver condition for 12K. Prices like that were *unheard of* in Hemming's even as far back as the mid nineties.

thomas.wong1986 says

MCMSinger says

LASVEGASWINNER says

LAS VEGAS PRICE CHART ISSUES "STRONG BUY" SIGNAL

PROFEESIONAL BUYERS AGENT - INVESTOR - SALES ASSOCIATE - PROPERTY MANAGER 35 years experience

LASVEGASWINNER is a shill & a troll realtard. You have been warned!

Check out his trulia profile http://trulia.com/profile/lasvegaswinner

Sure is a nice chart, but DQnews.com shows 8-15% price declines.

http://dqnews.com/Articles/2012/News/Las-Vegas/RRCLNV120228.aspx

Not only is this data incorrect. Look how they play with the price ranges on the side to make the chart look like it is a rocket taking off. I see this biased chart technique done so many times at work. Everyone should always look hard at the ranges people use for the charts. I am so used to it, before I even consider the value in the actual chart direction I inspect the X and Y axis ranges. This chart is a perfect example of someone trying to bias the data. If you put this same data in a table it would not have nearly the same effect. Or if you doubled the price range (X-axis) it would also change the effect.

bmwman91 says

Yeah, I am seeing some odd stuff going on in the BA. A few friends & coworkers have been feeling out the market, and a most of them have said that they have been outbid on houses when they offer the asking price or a little more. It is anecdotal, sure, but I am now hearing the from more & more first-timers that are feeling the market out right now. All I can do is shrug. The most recent case was this afternoon and involved a house in Fremont. She said that the house went for $100k over asking a couple of weeks after they offered the asking price. Fremont, REALLY?

What is going on? Is this some seasonal thing where a lot of the pent-up demand is oozing out, or is the Bay Area just fucked beyond reason & prices here will always demand that buyers either be rich, or live in near-insolvency to have a house? This place blows my mind sometimes, and all I can do is shake my head at it.

We knew all of this before moving here. It's the same way in DC.

ThreeBays says

Just to add one more anecdote, our friends who are moving out of the area put their home in RS up for sale just inder 1M and in less than 1 week they had an offer slightly over asking, from an all cash Chinese buyer.

What is going on? Why don't people flush with money buy nicer homes in Atherton instead of middle class homes in RS?

I got the impression that people in our new neighborhood were very glad we weren't one of those Chinese cash buyers there seem to be so many of.

bgamall4 says

RentingForHalfTheCost says

Not only is this data incorrect. Look how they play with the price ranges on the side to make the chart look like it is a rocket taking off.

I was in Las Vegas. Bank owned RE fell from 18000 units to 1600 units and prices have crept up in the area where most want to live, west of I95 up on the hill, circa Summerlin.

Gary Anderson strategicdefaultbooks.com

Just the gap between the waves, and the next one is doozie.

My comment was more to do with how they are displaying the data on the chart. They select the price range (x-axis) for maximum effect. Then they cut off the whole 0-125K part out of the graph. If someone did this at my work to me, I would walk out of the meeting. It is manipulation of the data in the worse sense. It shows a biased view and its only intention is to inject fear.

RentingForHalfTheCost says

LAS VEGAS PRICE CHART ISSUES "STRONG BUY" SIGNAL

Sheesh. Is this how we buy and sell houses these days? Like stocks and other tradable paper? By looking at charts with a scale of months rather than years or decades?

God Bless America. The land of speculation. Want real productive activity? Go to China.