patrick.net

The Bay Area is SPECIAL!

You have to be SPECIAL to afford housing here. Despite so many people here (myself included) hoping for the cost of living to go down to something more reasonable, it really does look like it will in fact do the opposite. Now, anyone that sees this, panics & decides that they MUST get into a house is part of the "specialness". All it makes me do is plan on leaving the area.

If I had that kind of cash laying around, I would certainly NOT be sinking it into a house. And if I were to sink it into a house, I would at least a) put it into a multi-plex to rent out and generate income and/or b) buy somewhere other than CA. But hey, different strokes for different folks.

Over 50 offers! Easily soaked up any shadow inventory.

Only super rich lives in BA. Get the hell outa there.

bubblesitter says

Only super rich lives in BA. Get the hell outa there.

That's the most ridiculous thing I've ever heard and I am assuming you don't live here and have spent very little time here.

There are plenty, I mean millions, of regular 99% type of people living here. They're not all going to leave.

supersunken says

The all cash offers are ridiculous. Where do people even come up with the money?

We've been looking for 4 months and outbid by all cash offers 3X already. It appears that the money is coming from China.

We're going to sit this out for at least a few months. The market turned on a dime, and houses here are selling for 75-100K more than they were 6 months ago.

WTF. Waited 11 years for the bubble to pop only to miss the bottom by 6 months?

We'll see how things are by the end of the summer. It's crazy out there right now.

bmwman91 says

The Bay Area is SPECIAL!

You have to be SPECIAL to afford housing here. Despite so many people here (myself included) hoping for the cost of living to go down to something more reasonable, it really does look like it will in fact do the opposite. Now, anyone that sees this, panics & decides that they MUST get into a house is part of the "specialness". All it makes me do is plan on leaving the area.

We didn't panic. Our deal was the right house at the right time in the right neighborhood and was the same monthly cost as rent. Renting, the tax man nailed us every year because of our incomes and not having children. Owning, we're gonna nail HIM.

If you're talking affordability in Mountain View or Milpitas, yeah...that's nasty. If you're talking Palo Alto or Menlo Park, forget it. You're gonna rent or you're gonna move. That's why I've never wanted to live over there. Panic in the residential RE market can end up costing you a lot of money. Panic in the car can cost you a lot of money. Panic behind the yoke can get you and whoever is with you killed. Here endeth the lesson.

1sfrenter says

The market turned on a dime, and houses here are selling for 75-100K more than they were 6 months ago.

WTF. Waited 11 years for the bubble to pop only to miss the bottom by 6 months?

I would buy it if you're referring to $1 million house rather than wait for another 11 years.

hanera says

Over 50 offers! Easily soaked up any shadow inventory.

I put in 3 of the offers.

$150 and they pay my closing costs
$16 and they need to take me out to dinner
$1 with no contingents (all cash!)

hanera says

1sfrenter says

The market turned on a dime, and houses here are selling for 75-100K more than they were 6 months ago.

WTF. Waited 11 years for the bubble to pop only to miss the bottom by 6 months?

I would buy it if you're referring to $1 million house rather than wait for another 11 years.

I wouldn't have my dog live in some of the $1 million houses in the BA. I view the owners as the ones that are waiting not the renters. The owners in the BA are waiting to actually have equity and that will be a long wait. I'll stay a renter forever and retire rich and never ever feel like I waited. The owners can wait on me in their retirement years when I eat at PF Changs. They will need the tips. ;)

P F Changs? Living large.

RentingForHalfTheCost says

The owners in the BA are waiting to actually have equity

Not all homeowners bought during 2006-2007. Those who had bought their houses earlier than 2006 or after 2007 have equity. Current house prices are at 2006 level.

hanera says

RentingForHalfTheCost says

The owners in the BA are waiting to actually have equity

Not all homeowners bought during 2006-2007. Those who had bought their houses earlier than 2006 or after 2007 have equity. Current house prices are at 2006 level.

Last stat I read has over 25% of people with mortgage underwater. It doesn't matter if they bought in 2006-2007, many people drank the kool-aid that was free and took equity out of their homes during the bonanza times. Look around at the people who have 50-60k jobs and have a brand new SUV, new boat, house remodel, 100k in landscaping, etc. That all came from the salary? I think not. They are now toy rich but house poor. Welcome to the BA special people.

RentingForHalfTheCost says

Last stat I read has over 25% of people with mortgage underwater.

We don't know how many are with mortgage. % can be misleading.

RentingForHalfTheCost says

Last stat I read has over 25% of people with mortgage underwater.

This is true but the numbers vary by county. In your neck of the woods - more affluent areas - I've heard the number is much lower. Also, in the affluent areas, there are people technically "underwater" but their incomes are high enough to wait it out for 5 or 10 years.

We have friends who have a combined income in the mid-six figures and are underwater about 200k on there home. It sucks but they will be able to deal with it.

hanera says

Those who had bought their houses earlier than 2006 or after 2007 have equity.

2006-2007 above should be changed to 2002-2003

Folks should try to get out of the Bay Area. It really isn't All That. It is a nice place to visit. Nice scenery in general. OK weather depending on where you live. But like everywhere else, there are also crappy areas.

I lived in SF for several years. Liked being able to walk to dining and bars. Hated the traffic and pollution and home prices. Lived in El Cerrito for a few years. What a crap hole. Folks were talking about how nice Emeryville is on this blog. What a crap hole. Which is my point - living there for too long desenstitizes you to the low points of the Bay Area. There are much nicer places to live, that are more affordable and that have even more natural beauty.

I also lived in San Diego. Came for the weather and beaches, and stayed for several years. But it is better experienced as a tourist, and now is bascially South L.A.

LOL

C'mon Blurtman. San Diego is basically South LA? That's a wee bit inaccurate don't you think?

I don't think anyone is going to mistake North San Diego for Compton, or Inglewood.

Blurtman says

There are much nicer places to live, that are more affordable and that have even more natural beauty.

Where do you live. Egypt, near the Nile?

Goran_K
I do not mean to say that San Diego is like South LA, but that except for the intervening Camp Pendleton, it would be LA, but the southern end of it.

And as a former Encinitas resident (right off Moonlight Beach), yes, the North County is likely the only sane place to live in San Diego. But even moreso, there is no deisrable life east of 5, just a never ending shit hole of instant, souless communities, endless traffic, and pollution.

Believe it or not, there was a time when there wasn't much east of 5, but that all began to change drammatically in the '80's. So, yes, there are decent coastal community pockets that ironically cannot be built up much more, just torn down, and replaced with newer abodes, but you are still trapped in high density sprawl. Plus, live there long enough and you will have leather skin, and hopefully not anything worse.

The climate is undeniably the best in the USA. But San Diego has been played out for quite a while. Get out of the area and explore. There are saner places to be.

rowemoore,
If you do find a nice place to live, do not tell anyone, else it may become Californicated.

Blurtman says

Folks should try to get out of the Bay Area. It really isn't All That. It is a nice place to visit. Nice scenery in general. OK weather depending on where you live. But like everywhere else, there are also crappy areas.

I lived in SF for several years. Liked being able to walk to dining and bars. Hated the traffic and pollution and home prices. Lived in El Cerrito for a few years. What a crap hole. Folks were talking about how nice Emeryville is on this blog. What a crap hole. Which is my point - living there for too long desenstitizes you to the low points of the Bay Area. There are much nicer places to live, that are more affordable and that have even more natural beauty.

I also lived in San Diego. Came for the weather and beaches, and stayed for several years. But it is better experienced as a tourist, and now is bascially South L.A.

I can't comment on the LA-SD part, but I generally agree with you about the Bay Area. I grew up here & still live here. There are a lot of nice things about the area in terms of natural beauty. LIVING here though, is sort of overrated based on the cost of living and traffic. I have spent plenty of summers & winters in the northeast, northwest, southeast Asia and mid-west. Honestly, it just isn't as TERRIBLE as the Bay Area ninnies make it out to be. In fact, I would say that the spring & fall in a lot of those places is nicer & more beautiful than it is here. People here are spoiled as fuck sometimes. I actually hear people COMPLAIN about the weather here sometimes...WTF, have you ever been ANYWHERE else? If I didn't have 80% of my family here, I'd be leaving now.

Blurtman says

rowemoore,

If you do find a nice place to live, do not tell anyone, else it may become Californicated.

In other words, you don't want to admit what god forsaken place you can afford.

rowemoore says

LIVING here though, is sort of overrated based on the cost of living and traffic.

Cost of living is a big factor -- agreed. But if you can afford it, I can think of only a few other places in the US that are comparable.

The nice thing for BA homeowners that bought years ago is that selling now is providing for a nice retirement.

hanera says

RentingForHalfTheCost says

Last stat I read has over 25% of people with mortgage underwater.

We don't know how many are with mortgage. % can be misleading.

Could go either way then. Higher or lower. My guess is higher from the people I know. Everyone lived life to the fullest and refinanced while extracting money. In my area I wouldn't be surprised if the number was higher than 25%.

"In other words, you don't want to admit what god forsaken place you can afford."

You have found me out. I live in a shack next to the tracks in Lodi. Oh, the humiliation. But, OTOH, it's easy to hop a train to anywhere.

Blurtman says

The climate is undeniably the best in the USA. But San Diego has been played out for quite a while. Get out of the area and explore. There are saner places to be.

I'm not looking in San Diego, but I agree about SoCal and NorCal being sort of overrated. People move here with really drastic expectations (most of the time without the income to back it up), and then become disappointed.

Let's face it, housing is too expensive, traffic sucks, people are way too materialistic and shallow. But, I honestly can't see myself leaving California. I think I've fallen under the California spell too strongly.

Blurtman says

"In other words, you don't want to admit what god forsaken place you can afford."

You have found me out. I live in a shack next to the tracks in Lodi. Oh, the humiliation. But, OTOH, it's easy to hop a train to anywhere.

There is a little link "quote" you can use.

Lodi, huh? Could be worse.

1sfrenter says

That's the most ridiculous thing I've ever heard and I am assuming you don't live here and have spent very little time here.

Well, hearing about these million $ shacks in BA is just that ridiculous. :)

rootvg says

We didn't panic. Our deal was the right house at the right time in the right neighborhood and was the same monthly cost as rent. Renting, the tax man nailed us every year because of our incomes and not having children. Owning, we're gonna nail HIM.

If you're talking affordability in Mountain View or Milpitas, yeah...that's nasty.

You bought like a year ago, right? I am referring more to people watching the market now and thinking, "oh shit there is so little available and it goes fast....we need to BUY NOW before there are no houses left, EVER!!!!!" Transient market behavior folks, can't you see?

As for nailing the IRS...good luck. It is easier said than done. If your mortgage & expenses are close to your previous rent, the tax deduction will put you ahead. Sounds like you got a really good deal.

Mountain View...forget that. I love living here ONLY because it is a 15 minute walk to work. That extra 6-10 hours a week of free time from not commuting is almost impossible to assign a dollar value to. Rent is maybe $300 more than I would spend if I had to drive 1 hour each way. Buying however, is stupid expensive around MV that I would have no money left to use on my hobbies with all of my free time from not commuting. I am looking mostly around my parents' neighborhood in San Jose / Cambrian. Sadly, even that area is beyond what I am comfortable spending to get a house that doesn't need to be scraped. The fact is that most people in their late 20's & early 30's can't afford the same house that their parents bought in the area 30 years ago. It's fine though, renting really doesn't bug me since it is still so much cheaper than buying in most parts of the south bay.

:-) There was a similiar article a couple of months back in the Contra Costa times (spelling?) I thought it was ridiculus so tried to find the home listing online by price, couldn't find it. Then I actually called the reporter who didn't quite admit of any misrepresentation but said 'oh, that house is in Mountain View on Church Lane' and 'We are just trying to make a point'. As you can guess, I never found the house listing or sale record in Mountain View either.

Maybe you will have better luck should you try to find these homes in the article..

Consider the Bay Area to be the Best Buy of RE. See what you like, and don't like, and buy more for less elsewhere.

Curious to know why people think renting right now is the right way to go when the rental market is on the rise and rent for a 1 bedroom in some places is more than mortgage on a 2/2 condo in the same locations?

I see the logic that you're not tied in for 30 years but if you plan to stay around in the area, your rent will fluctuate only a couple hundred bucks and there is no tax write off. The only real advantage to renting is you're not really chained down and can move easier if needed.

The only renting I see that's still affordable is if you're renting a room. What am I missing here?

Rents are not on the rise for me. Houses are falling believe it or not. That makes it easy for me to keep renting. You asked.

Blurtman says

Folks should try to get out of the Bay Area.

Wish I could get out of here. But where to go?

I was seriously considering Portland for a couple years. But after many, many people told me about the chilly, wet weather (I always visited in summer) I realize I could not survive there - my mood can be quite dependent on the weather.

Spent two years in Austin. Got really boring. Not a very big place when you live there. Great outdoors scene but itsy bitsy old town surrounded by boring suburbs. And Texas is just, well, Texas.

Malkovich says

Blurtman says

Folks should try to get out of the Bay Area.

Wish I could get out of here. But where to go?

If you are ever up in Seattle, and turn on the telly, you might see that just about every other ad is for a CRO recruiting patients for anti-depressant medication studies. But as they say, the two worst things in life are not getting what you really, really want, and getting what you really, really want. Clearly you need to keep your place in SF, and get another place in Hawaii, the Northwest (summertime only), Boston (ditto), NYC (ditto), or other large, vibrant big city, if you need the culture.

Blurtman says

Clearly you need to keep your place in SF, and get another place in Hawaii, the Northwest (summertime only), Boston (ditto), NYC (ditto), or other large, vibrant big city, if you need the culture.

Haha.. wish I could.

Actually my GF's family is in Honolulu. I have proposed numerous times that I keep my rent-controlled apartment and profitable business going here, start another business with her bro in HNL, and live half the year in each locale.

Seeing as I won't be buying an overpriced, 100yo, falling-apart duplex or triplex here in the Bay Area anytime soon, this plan may be a good option.

In all seriousness though, I have thought long and hard about moving other places and, well, despite all of its flaws, I love San Francisco/Oakland (I couldn't care less about anything south of SF or east of Oakland).

1sfrenter says

It appears that the money is coming from China.

Could very well be. I looked at this http://www.redfin.com/CA/Oakland/3514-Randolph-Ave-94602/home/1808876 last week - technically in a good area but it was a few houses from a crappy area of MacArthur (homies milling around) and it needed a ton of work.

I had a quick look at the house and left. As I walked back to my motorcycle this 7-series BMW aggressively raced up and parked in front of the house. These two 20-something Asian dudes literally bounded out of the car with a clipboard or something. In their dress shirts and pants (must have left the jackets in the car) they started jumping around the house like excited grasshoppers. Helmet in hand, I stood there dumbfounded.

Money from China indeed.

My friend in S.I. (NYC) just sold his very old house to Chinese. House was worthless but sits on nice small uphill lot overlooking Manhattan skyline. He was dreaming on the best possible bid of $550K. He got cool $600K all cash, no questions ask.
We and Europe made some Chinese very reach and now money are coming back to us.

supersunken says

Curious to know why people think renting right now is the right way to go when the rental market is on the rise and rent for a 1 bedroom in some places is more than mortgage on a 2/2 condo in the same locations?

My rent is less than a comparable condo. AND I am not buying a depreciating asset. So, I rent.