patrick.net

Facebooksux says

Find a place in Manhattan that is easily defensible from cannibal anarchists.

how about Alcatraz Island ?

Lets add some time line over prices in paris....

Paris, Fr like London, UK also saw a dot.com tech stock bubble .. so their stock bubbles from late 90s also influenced RE prices. Their dot.com bubble ended like ours. But RE continued to inflated like a M***F****.. see chart below. Seems otherwise in prior years.. prices were unchanged for decades.. just like the US.

http://www.thebubblebubble.com/france-housing-bubble/

I think you need to check your London price once again.

Bigsby says

Do you know what the square foot price is in Tokyo?

where is Japan and German.. why didnt prices skyrocket since early 90s..

I am asking why did prices DIE in Japan and German and NEVER went back up..

Maybe you have an answer ?

thomaswong.1986 says

Bigsby says

Do you know what the square foot price is in Tokyo?

where is Japan and German.. why didnt prices skyrocket since early 90s..

I am asking why did prices DIE in Japan and German and NEVER went back up..

Maybe you have an answer ?

You didn't answer my question. And what do you mean 'die'? They went up to a ridiculous level during their bubble, and they have 'died' to a level that makes your bay area prices look extremely cheap. Does that help your argument? I suspect not.

Interest rates are going up stock market is at its all time peak. The smart money is selling anything that they can. This tells me that we are near or at the peak.

http://blogs.wsj.com/moneybeat/2013/07/18/blackstone-preparing-to-unleash-a-flood-of-real-estate-selling/

APOCALYPSEFUCK is Shostakovich says

go buy Cleveland with everyone in it

Well Shostakovich.. might better buy were other californian moved to...

Think up north... way way up north not to mention Utah and Nevada.

APOCALYPSEFUCK is Shostakovich says

If you wait two more years, you can sell and then go buy Cleveland with everyone in it.

Ugh, Cleveland? Really?

Might as well do Detroit and Gary ID in a two for one. You might even be able to wrangle Akron in the deal.

I don't know the SFBA market at all, really, but PA seems as safe a place as any. The questions I would be asking myself if I were in your shoes:

1. How much pain is involved in moving twice in less than 2 years, and what is that worth to me. Am I looking to move to a different place in the BA anyway, or am I totally happy staying put?

2. What do I think would happen to the prices in PA if interest rates rise by 1%? 2%? How likely does that kind of rate increase seem?

3. What would I do with the money if I were to sell now? What if I sell later?

4. What does the financial picture look like selling now vs selling later? Would the rent you would pay be higher? lower? the same as your current mortgage? What are the tax implications of owning vs renting in your situation?

5. Do you plan to buy or rent in Manhattan? How is Manhattan real estate doing compared with PA real estate? How do you think the picture will look in 2 years?

6. If you were to sell now, would/could you use the proceeds to buy in Manhattan, renting it out until you needed it?

I like having time on my side for both parts of the transaction (sell and buy, assuming you will buy in Manhattan), so I'd likely be looking to sell before your plan to move -- of course you may have flexibility on when you actually move, so you may be able to play the whole thing by ear. I'm also a bit risk averse and probably likely to sell too early in a bull market, especially as prices rocket past what I find reasonable or justifiable. Locking in the gains is pretty tempting, and I am afraid that rates will go up over the next few years (I don't know what that means to PA prices....)

I understand that it is a difficult decision, but what strikes me about it is how pleasant your "problem" is. Transitioning between two first class cities and deciding between locking in 50% gains now or rolling the dice and hoping for more.

cheapbastard says

Interest rates are going up stock market is at its all time peak. The smart money is selling anything that they can. This tells me that we are near or at the peak.

http://blogs.wsj.com/moneybeat/2013/07/18/blackstone-preparing-to-unleash-a-flood-of-real-estate-selling/

Don’t expect that Blackstone will sell property on open market.
Most likely all be acquired by another profit hungry investment company.

I think you are safe to see gains for another few years ... provided no doomsday catastrophic event (demand high, inventory low, tech highering like they are taking over the world)

If you want to play it really safe, sell before or 1 year into the next Presidential administration. There are two things the next pres is unlikely to touch: national defense and messing with the housing recovery. We have had some outright loons at the helm before though ... so nothing is impossible ... just darn unlikely.

If it is me, though I would start to salivate, it's a bit too early. (plus moving is such a PITA!)

Zuckerberg!

Well, nothing happened :-)

Serious ? Your going to compare Tokyo to SF ? SF isnt a center of anything today.

SF is cheaper because there is nothing there today, we dont have any justification for higher prices...

what are you going to say.. Nice weather... close to Silicon valley.. better Sourdough bread ?

We had all these thing for decades.. and why didnt we see price inflation in decades before...

The masses left big cities like SF decades ago.. no one has interest in big cities or living there with the smell of urine...

Aug. 21, 2012, 1:02 p.m. EDT
No bubble trouble for German property

There is an element of catch-up. German house prices fell by 23% in real terms between 1995 and 2009 and failed to keep up with what little nominal income growth there was.

http://www.marketwatch.com/story/no-bubble-trouble-for-german-property-2012-08-21

I won't sell because current house is a hedge against the future house in Manhattan.

Bigsby says

SF is rather close to something quite important in the shape of the internet and computer companies,

seriously... so why didnt SF price sky rocket in the past decades.. the whole Computer, Semi Storage etc etc took off decades ago.. why now ?

was it because of the 1999 tech stock bubble.. OH YEA !!! all that free money.

thomaswong.1986 says

Bigsby says

SF is rather close to something quite important in the shape of the internet and computer companies,

seriously... so why didnt SF price sky rocket in the past decades.. the whole Computer, Semi Storage etc etc took off decades ago.. why now ?

was it because of the 1999 tech stock bubble.. OH YEA !!! all that free money.

Prices around the world in most major metropolitan areas have become a lot more expensive in the last 15 years. You may as well ask the same question about most of the cities on the image.

Bigsby says

Prices around the world in most major metropolitan areas have become a lot more expensive in the last 15 years. You may as well ask the same question about most of the cities on the image.

They too are in a bubble. Just like the US.. home prices sky rocketed ONLY in recent years. Prior to that they were flat for decades..

Median price to purchase an apartment/sqft in:

Warsaw: $304
San Francisco: $600
Helsinki: $691

And cost to purchase an apartment in the city center of Stockton CA?

Priceless!

http://www.numbeo.com/cost-of-living/city_result.jsp?country=United+States&city=Stockton%2C+CA

thomaswong.1986 says

Bigsby says

Prices around the world in most major metropolitan areas have become a lot more expensive in the last 15 years. You may as well ask the same question about most of the cities on the image.

They too are in a bubble. Just like the US.. home prices sky rocketed ONLY in recent years. Prior to that they were flat for decades..

The world isn't the same place it was a few decades ago for all sorts of very obvious reasons, so you can't just say this was what it was like before therefore it should be the same now. It doesn't automatically follow. And we aren't talking about US prices as a whole, most of which are extremely reasonable, we are talking about very specific areas.

swebb says

understand that it is a difficult decision, but what strikes me about it is how pleasant your "problem" is. Transitioning between two first class cities and deciding between locking in 50% gains now or rolling the dice and hoping for more.

Thanks. That's helpful. I'm definitely renting in Manhattan. And, yes, these are good problems to have.

John Bailo says

JFP says

That would be a 50% gain for me in 5 years.

Sounds like a lot of work and risk and time.

I bought GroupOn at $4 and it went up to $8.

Took me 4 months to do what you are taking 5 years to do.

Yeh, but I made it with 80% of my investment not my money. To do the same in stocks is a lot riskier.

SFace says

Did you make 600k in grpn net of tax?

Don't forget that most of it is tax free, also. I've done well in stocks the last few years, but right now the house is looking a lot better as an investment.

JFP says

John Bailo says

JFP says

That would be a 50% gain for me in 5 years.

Sounds like a lot of work and risk and time.

I bought GroupOn at $4 and it went up to $8.

Took me 4 months to do what you are taking 5 years to do.

Yeh, but I made it with 80% of my investment not my money. To do the same in stocks is a lot riskier.

That is somewhat true (though the brokerage would never let you leverage like that anymore and therefore limit your risk as well) and good for you and the realtors but a problem for the the taxpayers on the hook to bail out house-owners and big banks - but this time is different ;)

I'm not going to say sell or keep. But to me the choice isn't as easy seeing as you're talking about moving to an equally if maybe even more expensive location. If you were like: " I'm going to move to North Carolina", well hell, if you made a million dollars on a house, you could basically retire in North Carolina. But Manhattan? Isn't a small loft of an apartment like a million bucks or something crazy like that?

Seems like a pretty good time to sell.

- Inventory has bottomed.

- Rates have jumped 20% since the beginning of the year.

- Investors have nearly disappeared from the market.

Plus you said you were planning to move anyway? This seems like a no brainer for me if you can get 50% on your investment right now.

I know in my local market (OC), some brokers I know have said the frenzy ended back in June. No more multiple offers, no more crazy over bidding by cash flush buyers. It's become very "normal" now.

Goran_K says

Inventory has bottomed.

Inventory is seasonal and it would be very unusual for it to bottom in the middle of summer. More likely it exhibited the usual increase in the summer and will drop again in fall and winter.

And he ignores that inventory is always seasonal.

treatmentreport says

You are full of it. I have a family friend that bought a house about sixty miles away from London - 1200 sqft for 180000 pounds. That's $225 per sqft.

Oh snap.

Yeah, throw in Richmond. It has a huge refinery and lucrative drug trade.

treatmentreport says

You are full of it. I have a family friend that bought a house about sixty miles away from London - 1200 sqft for 180000 pounds. That's $225 per sqft.

60 miles is a long way.

You can buy many homes 60 miles from NYC (Newburgh, NY for example) for $100/sq foot .5 acre of land too.

Stockton is about 60 miles from SF, and you can probably get something for $50 - $75 / sq ft

zesta says

Stockton is about 60 miles from SF, and you can probably get something for $50 - $75 / sq ft

Really? Maybe 3 years ago for something that was falling apart.

treatmentreport says

Again, not true. There are plenty of states where prices in the state capitol are a lot higher per sqft.

Plenty? I can think of Honolulu, Denver, and Annapolis. Are there others that I'm forgetting?

tatupu70 says

Plenty? I can think of Honolulu, Denver, and Annapolis. Are there others that I'm forgetting?

Almost all of east coast.

zesta says

Stockton is about 60 miles from SF, and you can probably get something for $50 - $75 / sq ft

Looks too cheap. Did you factor in the cost of ammunition? Gatlings are notorious ammo hogs.

thomaswong.1986 says

JFP says

Eichler round the corner from me sold for $1.8 Million. I've talked to a realtor, and they say (under current conditions), I would get closer to $2 million for my house. That would be a 50% gain for me in 5 years.

Yes, Its a fools game. No one I know as I grew up in SFBA would consider this normal.

Yes.. its a bubble... tragic!

So there will be a house for sale in Los Gatos soon?

treatmentreport says

Almost all of east coast.

Augusta, ME? no
Hartford, CT? no
Dover, DE? no
Atlanta, GA? about the same
Boston, MA? I did forget about Boston.
Concord, NH? no
Trenton, NJ? no ($33/ sq. ft.)
Albany, NY? no
Raleigh, NC? no
Columbia, SC? no
Providence, RI? no

I still don't see plenty. I see a handful at best. Out of 50.

treatmentreport says

Houses are generally bigger in US than elsewhere, so comparing suburbs on per sqft basis has to take that into account. If you look at the average house size, I bet prices are a lot more comparable.

Isn't that the point though? Right now you'll get more bang for your buck in the US. With US residences, you'll get an actual kitchen, full-size fridge, laundry room, den you'll and a backyard all within commuting distance to the city-center.

People wonder how the price of homes can keep rising if incomes don't rise along with it? The price of land might keep rising, but the size of the home won't stay the same. They'll start splitting the lots and you'll have more condos, townhomes, micro-homes. Metropolitan cities in the US still have a long way to go before they become as expensive as other international cities.

treatmentreport says

Google "us population growth rate". 0.7%.

0.7% of 300 millions is still +2.1million added every year, or 10 millions since 2008.

Granted less people are employed now than in 2008 and more of those who are are flipping burgers.

Everyone,

Thanks for the input. Bottom line is that I've decided to wait until Spring to sell. We'll see if that's the right decision or not.