patrick.net

I drove thru a high end neighborhood in the Aptos Hills and was astounded by how many for sale signs everywhere you can see. This same kind of thing happened a couple of years ago in the suburbs so it may the beginning of more crashing at the high end. As far as the low end, it is being manipulated by banks , realtors, and investors. I just read an article in the local paper from a realtor talking about how even at the low end, first time buyers are few. So I dont think the low-end has much hope. In any decent economy, you have to have entry level jobs that can afford entry level housing. Neither one of those is happening right now.

Let me simplify my question. If higher priced homes aren't selling as quickly as lower priced homes, will this drag on house prices? Or will the fact that lower priced homes are selling negate this? Forget all the details about where or how long or when you were born in the Bay Area. I've lived here my whole life too. I am in finance I do forecasts for a living. I just simply want to know someone's educated input on how the housing market will react to lower priced home sales going up while the higher priced homes have been languishing on the market.

I agree with those that feel the coming crash of the mid-high end will push the low end down even farther.

Re: "If higher priced homes aren’t selling as quickly as lower priced homes, will this drag on house prices?"
What about market segmentation? Do you really think that the same people could be interested in, for example, Concord and Orinda (or, say, San Jose and Los Altos)? From what I see location is the name of the game and prices seem to be more or less homogeneous within a zip code. Most houses tend to be old cardboard barns in the SFBA so what you actually buy is good schools, decent demographics and proximity to work.

Has anyone else seen the $900,000 short seller in Los Altos Hills? That should adjust the comps a bit. I expect it's to generate a lot of interest and then hopefully a higher sale price - but it was sold for over $2 million a couple of years ago - that's a huge haircut there, but unfortunately still not in my price range.

If this does lead to a sale then perhaps we will see a new trend of high end lowering prices significantly to generate more interest - the question will be whether they really accept the "low" offer or whether they will try to bid the prices up closer to what they really want for the houses?

Claire, looked it up, it is right by I-280 and probably noisy as hell.

I guess the main question is "how short" is the sale at 900k. Seems much too good to be true or feasible, although I would much welcome the new comp.

That short sale in LAH will definitely sell far more than $900K. All the comps are pointing that way, if it does sell for $900K, that will be completely disastrous for LA, CU, LG, SA, PA area.

Nick, people buy with a target budget, and try to buy as much house (in terms of location) as possible with that target budget.

Let's say I plan to buy $1M house in San Jose, but if that $1M can buy me a mansion in LAH, I will definitely hop over to LAH. Location does matter a lot, it is NOT just about schools.

I'm going to guess that the Los Altos Hills place everyone is referring to is 13151 Estralita Pl. I think they are hoping for buyers to engage in a bidding war. The owner bought for $2,167,500 in 2005 with a $1.5 million loan. In a brilliant tactical move they refinanced twice and got out their downpayment (current loan $1,912,500 variable first and $255,000 variable second). So it looks like they "rented" the place for four years with interest payments. No worries as the lenders (SMBC Mortgage and Cal State 9 Credit Union) have (no surprise) already folded. We're all prime now...