patrick.net

Here are my assumptions for the above numbers.

Now if you actually buy that place for 700K and sell in 7 years then you are behind the renter by a cool 325K!!! Ouch. I don't care if you are rich, Asian, got kids that need that great school, want to walk to work, or even like the smell of a dump on warm days, that is some hard cold cash. Yikes.

crazydesi says

>>I also have strong reasons for staying & putting up with the insanity!

Same thing with me too, I want to leave BA too, but where should I go .... all the Semiconductor companies are here (and it is easy to switch jobs)

I do not want to justify the price, smell etc ... its only my frustration after waiting so long and looking to buy ....

Count yourself lucky you are waiting. I got a bunch of friends that bought over the last 10 years and are trapped. They would love to be in your shoes right now. When I am around them I am not allowed to talk about the housing market. Nothing, or they get really defensive as one can understand. They are working for the banks now.

wthrfrk80 says

bmwman91 says

The BA is on crazy pills. This place may well never make sense. Apparently fortune seeking douchebags will continue to flock here for "the weather" so that they aren't uncomfortable while outside (which consists of walking between their house & car, and their car & office).

$750k for a largely unremarkable house in Milpitas. LOL

And a windowless cubicle feels the same in Paterson, NJ as it does in San Jose.

Right, except that our jobs aren't in Paterson, NJ.

They're HERE...and they're gonna stay here.

thomas.wong1986 says

Fourth, after 2000 we have imported alot of ME TOO crowd from the East Coast with their IVY leage degrees who demand (ugh!) mega million salaries...

That's me you insensitive clod! ;)

So yes, we have higher AVERAGE salaries today, since you cut out so many people out since 1980

The data point I found was that in SF in1979 median household income was 15,866. So at $70k today that would be a 4.4x increase - so I think a local salary line going up to 440 may be more relevant reference than a national price inflation line to 300.

Wow, this is a first, 'Patrick' says I can buy it:

http://www.redfin.com/CA/Sherman-Oaks/4705-Kester-Ave-91403/unit-301/home/4821399 (Image below, compressed)

Image

Milpitas? Seriously, what a disgusting smelly place to live! P-U! Nothing like the smell of garbage in the summer when the wind blows the aroma of the dump through town.

bmwman91 says

"The trash dump smell probably won't be too bad, as long as the wind blows the way I think it does. Besides, I might be able to talk the sellers down to $700k! For that kind of money, I really can't expect my neighborhood to not smell like a trash dump."

I'd rather live in bumble-f*ck North Dakota in a $100K house, where I can drink the water and enjoy the smell of fresh air and green pastures, instead of buying this house for $700K sitting on top of a garbage in Milpitas.

It's not the landfills that smell, it's the sewage treatment plant.

I don't live there, but my job is downstream of that plant.

You get used to the smell.

drtor says

The data point I found was that in SF in1979 median household income was 15,866. So at $70k today that would be a 4.4x increase - so I think a local salary line going up to 440 may be more relevant reference than a national price inflation line to 300.

SF is vastly different than the South Bay... two different worlds..people and economy.

The Boom in the south bay since say 1975 to 2000 was due to the tech industries(semi, storage, software, etc) growth. Yes, we had a boom where we went from a few companies to vast numbers of many companies and large number of employees and plenty of growing income. This is very much like what you hear is going on in China today. Very very similar.

Yet you dont see a huge spike in RE prices from 1975 to 1997 like we have seen from 1998 to 2008.

Anyway much of our tech growth peaked in 2000, as part the industry maturity. So the prior decades are no idicaton that we will repeat the same furious growth. Therefore its going to be much more flat, at best, for years to come with continued pricing and cost pressures.

Overall salaries by SV Tech companies are not some arbitrary number created by employees wish list, its budgeted number heavily researched within industry guidelines. Check your HR people on their guidelines. Most use Bradford Salary Guide. As such these guides mainly use base years, inflation, and the current economic climate for new hire and annual increases in salary. go talk to your company HR and Financial Planning and Analysis group for details.

B.A.C.A.H. says

It's not the landfills that smell, it's the sewage treatment plant.
I don't live there, but my job is downstream of that plant.
You get used to the smell.

There was a meat processing plant on Trimble ave, a few blocks down from Cadence Design around the late 80s..
man! during the hot summers did it smell...

Frankly any part near the baylands will get you sick..and many work near there 8+hours a day.

Three things you should consider before buying in milpitas

1. Smell
2. Bad schools means bad house value retention
3. Right or wrong, the first word I have heard come out of people's mouth on hearing the word Milpitas/Great mall is ghetto. Perception is reality and shapes what people think about who their kids are going to be hanging out with in the neighborhood.

All those milpitas homes are new and shiny though..

rootvg says

Right, except that our jobs aren't in Paterson, NJ.
They're HERE...and they're gonna stay here.

Rootvg,

None of my comments are directed at people like you who are "stuck" in the Bay Area for whatever reason. I get that your situation is unique.

Well, looks like I am falling-back to waiting for salvation...in the form of a 8.0+ earthquake on the San Andreas fault line! If I am REALLY lucky, it will happen on April 4, which will freak out a certain group even more, and that also happens to have a lot of peninsula RE. The more people the next rumbler can shake-out, the better!

thomas.wong1986 says

Anyway much of our tech growth peaked in 2000, as part the industry maturity. So the prior decades are no idicaton that we will repeat the same furious growth. Therefore its going to be much more flat, at best, for years to come with continued pricing and cost pressures.

I completely agree with this. Flat or slightly declining prices is what I see as most likely as well.

What I had an issue with was the forecasts of the $750k house going down to $400-$500k, or that we should expect in your chart that SF and San Jose falling all the way back to the green national inflation line (another 50% drop). Which in fairness you didn't actually write but the chart may seem to suggest.

drtor says

thomas.wong1986 says

Anyway much of our tech growth peaked in 2000, as part the industry maturity. So the prior decades are no idicaton that we will repeat the same furious growth. Therefore its going to be much more flat, at best, for years to come with continued pricing and cost pressures.

I completely agree with this. Flat or slightly declining prices is what I see as most likely as well.

What I had an issue with was the forecasts of the $750k house going down to $400-$500k, or that we should expect in your chart that SF and San Jose falling all the way back to the green national inflation line (another 50% drop). Which in fairness you didn't actually write but the chart may seem to suggest.

400-500K is still too high. After the earthquake it'll be in the 200-300K range IMHO. Cash will be king. ;)

drtor says

I completely agree with this. Flat or slightly declining prices is what I see as most likely as well.
What I had an issue with was the forecasts of the $750k house going down to $400-$500k, or that we should expect in your chart that SF and San Jose falling all the way back to the green national inflation line (another 50% drop). Which in fairness you didn't actually write but the chart may seem to suggest.

Yes that sounds reasonable, considering pre bubble homes between 150-250K... Yes! and than doubled by year 2000..

In some cases we saw 400% increases by peak years..

Yet at best we saw inflation and income chalk up 30-35% ...
it was said time and time again, prices being diconnected from both.

So yes... we would/will see further cuts.. and 50% for some is not of the realm of posibities.

SJ says

Milpitas? Seriously, what a disgusting smelly place to live! P-U! Nothing like the smell of garbage in the summer when the wind blows the aroma of the dump through town.

Didnt they know what they were buying ???

Fremont dump... NYC Hudson River sewage..
what the difference ???

California. Where you pay 3/4 of a million bucks to live by a garbage dump.

Eman,

I looked at these homes also
562 Shelley Ct., and
540 Glasglow Ct.

I was hesitant to put offer as they are crossed 900k and the listing agents told me they have multiple offers and might not even consider my offer (which i was think to put around 850k or so).

If you submit an offer, how would you know that your offer will be accepted regardless of what price you're submitted?
Not sure, I do not trust RE agents

How would you know if the current homeowner does not have a relative buying it back for them, and essentially wiping out the difference in mortgage debt. Also, there is no tax consequences on this transaction. Nice isn't it? :)
I highly expect this is happening in Milpitas area, as lot of agents do not return my phone call to show me the property.

Eman,

I looked at these homes also
562 Shelley Ct., and
540 Glasglow Ct.

I was hesitant to put offer as they are crossed 900k and the listing agents told me they have multiple offers and might not even consider my offer (which i was think to put around 850k or so).

Q1.
Ans.Not sure, I do not trust RE agents

Q2.
Ans. highly expect this is happening in Milpitas area, as lot of agents do not return my phone call to show me the property.