patrick.net

Philistine says

are actually putting 20% down on $700k starter homes

they are putting down everything they have saved as down payment !
and rolling the dice... Fools! they will lose their shirt !

edvard2 says

From the way I hear people talk about houses here you'd think the recession never-ever happened

Like its been said decades ago.. when the economy is down (sneeze), capital spending takes a major downturn (turns to a flu) for equipment/software makers as orders are canceled and shipments go off a cliff.. as such we have deep restructuring, consolidations and layoffs. people often think tech is immune .. but thats not the case... its often magnified in the SFBA.

epitaph says

A young professional is able to save 100K in a year? that would require at least a 230K salary, which is reserved for directors at most companies around here, and those jobs aren't filled by young people.

that is why afford-ability is down to 20-25% of current owners able to buy their own
home at current market prices and median incomes.. compared to 70-75% in mid 90s.

clearly we havent corrected enough even based on past historical norm...1980-90s

http://www.census.gov/hhes/www/housing/census/historic/values.html

I can't compete with all-cash, so I'm waiting for that bubble to dry up. Since you can't sell a home with a button click like you can stocks, I can somewhat sense investors undercutting their home prices for quicker sales, leading to a quick but sharp dip down.

I saw that 60 Minutes piece of China. If that's where the all-cash money is coming from, it's only a matter of time before that comes falling down to Earth.

Lots of people in here said it was foolish to buy 1 year ago. They said prices were going to drop 50+%. I saw conments talking about 1970 levels. Now were hearing words like bubble. I wonder if these people will ever be homeowners. Maybe these are the non working jealous liberals sitting on their asses waiting for the Dems to give them another handout. They already got everything else, food stamps etc.... Why not give em a house? Why should we even work anymore? Maybe I'm just being racist.

postbubblesucess says

Maybe these are the non working jealous liberals sitting on their asses waiting for the Dems to give them another handout. They already got everything else, food stamps etc.... Why not give em a house? Why should we even work anymore?

Wrong. I'm a working liberal who saved up a ton of cash and bought last year. WTF does liberal or conservative have to do with housing?

exfatguy says

so I'm waiting for that bubble to dry up.

Good luck with that plan. I am an all cash buyer and haven't been able to get anything in 6 months because all these idiots grossly overbidding on anything remotely interesting. I don't see how it's going to stop until inventory opens up dramatically, or we start hitting numbers where speculative investors are having flashbacks of the last crash.

Anyone who bases their offers on sound math is having a really tough go of it and it's only getting worse.

I've already started moving my cash into other investments (I'm starting to give up) because I can't bring myself to play the speculation game.

This is going to be massively entertaining. The fervor is rapidly approaching 2006 levels, and we are only 1 year in. As I have said before, this next bubble is going to be the "real" one and make the last one look like a practice run. The last one was fueled by ignorance and greed with the government being largely unaware of (or just not caring) what was going on. This time, it is fueled by the same ignorance and greed, except that the government is backing it as hard as it possibly can.

While as a prospective house buyer this irritates me greatly, it is at least interesting to watch some people that I thought of as rational, intelligent folks go willy-nilly and do silly things to get into houses. Gotta love those FHA loans! Some friends can afford it fine, but I have a few that I really wonder about. The one upside, although small, is that rents in my area are continuing to soften a little. With "Rental Investnent" being the hot game of the day, rental inventory is starting to increase , especially with all of the very large new apartment complexes that are being built and aimed for completion this summer. Rents went nuts last year, with a 40% spike at one point in Mountain View (and then a 10% drop about 6 months later), so at least I am not going to have to deal with moving because my landlord wants to jack rent up $260.

I am not sure what will initiate the next crash. Wall Street is doing the exact same BS as it did last time, so there is always that time bomb. For the SV more specifically, there is the whole "pile of start-ups with unproven business models" thing, and it probably only takes one blow-up to scare VCs off of the web-media bandwagon. Who knows though. The fact that Zynga is still in business at all tells me that the whole environment is far more irrational than I realize.

The only real solution I see is leaving. I could stay and deal with the workaholic self-important masses of the SV and be a slave to my house, but get nice weather. Or, I could move elsewhere where, generally speaking, the only downside would be the weather and the people inhabiting the area aren't the equivalent of a locust plague in the fields of my happiness and peace of mind. I am stationed in Seattle for the whole month of march and my wife is coming up this weekend to hang out. We have been considering moving here for a couple of years, and I think that we'll decide once and for all this month.

OK heres a tip which I have yet to try (when i do I will let you guys know if it works)

1. approach new listing that is priced 100k under market on purpose to allow listing agent maximum buyer pool.
2. Use listing agent to try and make offer -all cash and verbally say 'hey if you get me this house, i will do a fix n flip and you can list it for me'.
3. CHA- CHING

im pretty sure this is fairly common in high priced low inventory markets.

bmwman91 says

While as a prospective house buyer this irritates me greatly, it is at least interesting to watch people that I thought of as rational, intelligent folks go willy-nilly and do silly things to get into houses.

It is indeed ridiculous. We bought last year but I'm pretty sure now we wouldn't be able to. It really did change that fast and for no good reason. To me this massive spike and creation of yet another bubble is a threat to the economy. It doesn't matter whether you own or rent. This is bad for everybody. All bubbles end badly. That this one seems to already be out of control is fairly serious.

edvard2 says

It is indeed ridiculous. We bought last year but I'm pretty sure now we wouldn't be able to. It really did change that fast and for no good reason. To me this massive spike and creation of yet another bubble is a threat to the economy. It doesn't matter whether you own or rent. This is bad for everybody. All bubbles end badly. That this one seems to already be out of control is fairly serious.

Yup. At the end, the only winners are the 0.1% that are driving all of this through our bought congress and Federal Reserve. This is yet another shake-down of the productive classes, and likely the biggest one yet for Americans. The oligarchy is going to push us straight back into Feudalism if nothing gets done about it.

bmwman91 says

Yup. At the end, the only winners are the 0.1% that are driving all of this
through our bought congress and Federal Reserve.

Right on ! I wanted to quote this statement of fact because I believe it is not 'Dr. Obvious' to everyone.

For me, it hit home that there is "officially" a bubble during a cab ride to the San Jose airport last month. The driver started talking to me about RE investment and how it was so easy to make money. All you had to do was get approved for the biggest loan you possibly can and then sell in a year or two to capture the profits. The key is to buy the priciest house that you can since percentage increases on an expensive value mean more money for me, he explained. All of his family members were doing it, or working on doing it, he explained.

So, when cabbies start talking to me about how easy it is to speculate on $700k+ houses in the cities of Santa Clara and Sunnyvale, I know that it is in full swing. I have overheard similar conversations in airport lounges and on airplanes between SJC and Sea-Tac. This is reminiscent of the Joe Kennedy anecdote about how he knew to sell in 1929 because his shoe shine boy started giving him "hot stock tips." The shoe shine boy probably got his own hot tips from Joe, what with him being Catholic and all.....da-dun-CHING! Thank you, thank you, I'll be here all day!

bmwman91 says

The oligarchy is going to push us straight back into Feudalism if nothing gets
done about it.

Which might not be a bad thing-feudalistic socieities were not very kind to the ogliarchs, when they overstayed their welcomes. AF's cannibal anarchy will be real!

lostand confused says

You can still get a home in Phoenix for 160k. Good luck in CA-unless you want to move next door to the crips or the latest greatest gangsta paradise.

Don't be silly. You just need wealthy parents, or to marry someone with wealthy parents, or start a company that sells ad space on web pages.

The bubble became clear to me only a few months after we bought. When we were looking there had been a large number of obviously undesirable homes that just simply stayed on the lists. We looked at a few and simply walked out. I mean- these were houses that I would no way in hell even consider. There was usually something fairly seriously wrong with them, like major foundation problems, permit issues, rot issues, weird layouts, or bad locations, like one we saw that was in the middle of a major intersection where 2 roads criss-crossed right in front of the house and there was a road behind it. Within a few months, these houses began to sell.

A house recently came up for sale 6 blocks from us. It was in fairly bad condition. It sold in 3 days. The situation sucks now. After having gone through that situation for years I still find it extremely irritating.

Bubbles been around forever. Jesus was born in a barn because of housing bubble.

PockyClipsNow says

Bubbles been around forever. Jesus was born in a barn because of housing bubble.

Quote of the day!

PockyClipsNow says

Bubbles been around forever. Jesus was born in a barn because of housing bubble.

I thought the whole Jesus thing was a massive money making bubble scheme that never popped?

It's a great time for Bernake to raise interest rates.

lostand confused says

PockyClipsNow says

Bubbles been around forever. Jesus was born in a barn because of housing bubble.

I thought the whole Jesus thing was a massive money making bubble scheme that never popped?

Of course. Who gets laid more: an unemployed carpenter or the son of god? Religion is really that simple.