patrick.net

I FIRMLY agree with seatlledude … there is NO HOPE to compete with CHINESE and INDIAN famlies (to own a home in Bay Area).

Just buy whatever they will not buy. How about a luxury 2/2 condo with asymmetrically sized bedrooms? In ten years, boomers will be downsizing to these condos. Who cares about school districts?

I’m in menlo park and I hear airplanes all the time. It depends on their traffic and their holding patterns.

I live in San Jose downtown and I cannot even open my windows at night.

I have always landed coming up the coast from the south, but I think we fly toward the South San Francisco Industrial City or whatever it is sign when we take off.

Yes, I think 28R/L are the primary landing runways. Do you usually take off in a 747? I think smaller planes usually take off using 1R/L towards the bay.

China and India are something like 2/5ths of the world population. Even though they are poor countries, the small percentage that comprise their wealthy is a huge population of elites (and let's not forget all the Chinese in places like Singapore, Taiwan, etc.).

Of course who can blame them? "Tech" has built Bangalore and Hsinchu science park, etc., they've seen it with their own eyes. They smell, or at least think they smell, opportunity in Silicon Valley. Ours will be a desirable location for them to crowd into as long as there's a perception that we have a better quality of life than crowded cities like Shanghai and Bombay and as long as there's a perception among them that "Silicon Valley" means opportunity. High cost of living? We're talking about the "elites" in those countries of two billion. NOT the huddled masses. Sorry, elites are well capitalized compared to humble locals who grew up in "Valley of the Heart's Delight". When the common perception among these elites is that there's no opportunity to "get ahead here" AND our quality of life is worse than smoggy polluted crowded places like Bombay, THEN the young elites will stop coming here, stop crowding out and pricing out the locals.

Think it'll happen soon? Have you been to those crowded cities in Asia? Don't hold your breath. We're still far from being that crowded and polluted.

"People buy these houses for 30+ years. It is pretty rare to see turnover. A lot of the people are the old silicon valley money before the dot-commies ruined the place."

But if you drive off of HWY 9 in Monte Sereno, you will see quite a few for sale signs (some pending). I just did this last weekend.
Oh, and there was snow at Saratoga Gap (probably more this weekend).

Sunnyvale_Renter,

wishing for the realty market to tank so that foolish investors/speculators and irresponsible borrowers will pay for what they deserve is one thing, wishing for a maladie to fall upon a whole region taking innocent people's lives is another. I don't necessarily sympathesize these people enough to do volunteer work myself, but I find it disgusting that someone in a much better situation by the luck of birth wishing much more unfortunate people in the other parts of the world death and illness. They didn't do anything to cause your pain, why should you be so mean to these people who were born to an unfortunate place to begin with?

"And Cupertino is not what Cupertino used to be."

I know what you mean. In my teenage years I used to hang out at Vallco and flirt with the drummer from Half Church who worked at Rainbow Records. Good times.

Honestly I would love to leave the Bay Area in about two years but I don't know WHERE TO GO. So I stay, for now...

I’m thin, but have really long legs so I am squashed! I wish I took off in 747s! I think they are 767s?

I like 767s. Have you tried British Airways' Economy Plus? My friend said that it is pretty good. It is priced between economy and business.

Economy class is becoming inhumane.

Funny how a discussion on “Yield Curve” qickly morphs into “Class Struggle”. In Bay Area “class struggle” is so apparent even with SO CALLED HIGH SALARIES (I earn 160K per year).

Ha ha, 160K is nothing. If you cannot make at least 1M a year doing absolutely nothing (other than perhaps playing golf and going fishing if you feel like) you belong to the WRONG class.

There is no such thing as high salary. The fact that you are SALARIED means that you will go absolutely no where.

Holidays - a legal requirement anyway

Opportunity for Professional Growth - more room to be given more responsibilities with the same pay

Challenging and Rewarding Work Environment - work until you go crazy, thinking that work is good, debt is wealth.

Fun Atmosphere - beef chow fun anyone?

Be it 25K, 50K, 100K, 200K a year, it is still a fucking rat race!

Stocks Tumble, Bond Yields Climb As Interest Rate Worries Linger
http://biz.yahoo.com/ap/060308/wall_street.html?.v=13

This news makes me happy ….

This is just the beginning.

Look, if we do not profit from the fall we will go down with the rest.

"I hate to repeat:

I earn 160K in Bay Area and have NO HOPE of owning a home …. "

Perhaps not in Hillsborough or Los Altos Hills. But "no hope"? Hardly - you have to admit that is somewhat of a hyperbole. You most certainly can afford A home, perhaps not a GREAT home or even a single family home, even at these insane prices. I know people who have bought in the last year who make considerably less than you.

I know people who have bought in the last year who make considerably less than you.

Scary, isn't it? The "28% - 33% gross" guideline was established with a reason.

At 33% of gross income, "ha ha" can afford a $4400 mortgage payment. There are PLENTY of places he could qualify for. Didn't he also say he has something like $150K in cash? If he is single with no dependents, he should have a hell of a lot more saved than that at that level of a salary. I only make $63K/year and have $120K in the bank.

I just wanted to thank everyone for their support. Today I have been clean and sober for 2 years! That's right, it's been 2years since I've set foot in a Home Depot! I haven't so much as touched a rubber pond liner or decorative pre-cast concrete block let alone the harder stuff like newel posts and pergraniteel! For me, it all started innocently enough w/re-runs of This Old House but that led to Hometime and by the time I found myself watching Flip this House, I knew I'd hit rock bottom. That's why I always carry this galvanized 10 penny nail with me. To remind me of just how low I'd sunk, and how far I've come. Thanks everyone.

At 33% of gross income, “ha ha” can afford a $4400 mortgage payment. There are PLENTY of places he could qualify for.

It is 4400 PITIH.

Assuming property tax at 7000/yr, HOA + Insurance at 5000/yr, 30yr FRM at 6.35%, 4400 will support a 550K mortgage. Even with 150K down, that is about 700K. Perhaps a condo or a small townhouse in an okay neighborhood?

To remind me of just how low I’d sunk, and how far I’ve come. Thanks everyone.

Give yourself some credit. ;)

"Assuming property tax at 7000/yr, HOA + Insurance at 5000/yr, 30yr FRM at 6.35%, 4400 will support a 550K mortgage. Even with 150K down, that is about 700K. Perhaps a condo or a small townhouse in an okay neighborhood?"

You guys need to get out more - Bay Area does not mean just Palo Alto, Mountain View, Cupertino. A $700K house, sans HOA, is possible and in a decent neighborhood in a lot of the East Bay. Sorry, I just have a problem with people trying to get sympathy where none is warranted - "ha ha" is most certainly doing better than most folks out there.

A $700K house, sans HOA, is possible and in a decent neighborhood in a lot of the East Bay.

Where? In Fremont, condos and townhouses are already in the high 600's.

It is not easy to find actual houses for 700K. Recently, many people spend more than half of their incomes on houses. It is unwise to fight with the kamizakes.

I only make $63K/year and have $120K in the bank.

Congrats. If you are able to live on less, you will be out of the rat race sooner. High salary is not necessarily a bless. Being salaried is the curse!

"Where? In Fremont, condos and townhouses are already in the high 600’s."

I just did an MLS (ebrdi.com) for Fremont. As of right now, ACTIVE listings:

5 under $300K (all 1 bedroom condos obviously)
65 $300K-$399K
45 $400K-$499K
54 $500K-$599K, 28 of which are detached
72 $600K-$699K, 59 of which are detached

Again, get out of Silicon Valley central and it IS a little bit better...

Funny, they do not turn up in my searches.

So there is not one property under $700K in Fremont when you search ? What do you use to search?

So there is not one property under $700K in Fremont when you search ? What do you use to search?

ZipRealty. Perhaps I should adjust some parameters.

Search at realtor.com - they're there.

Fremont? Oh my. I think I would rather move to the Midwest.

As a fan of modern and contempory architecture, I was pleased with what I saw.

I love pre-fab. I have to repeat, it is not a mobile home.

I am a big, big fan of high density, wisely and beautifully designed urban infill. Bring it on!

Same here. But I am also a fan or rural, self-sufficient houses.

I've got an Idea...

1500 sq. ft house on 5000 square ft. of land = $1,000,000 in Bay Area.

Cool.

But let's try some new world math:

Let's divide that by ten and see what we can cook up for affordability:

1500/10 house = 150 sq. ft. dog house
5000/10 land = 500 sq. ft plot
1,000,000/10 price tag = $100,000 affordable price

Sweet!

What I'm going to do is start selling 150 sq ft. dog houses on 500 sq. ft of land for $100,000 in the Bay Area.

Trust me, it'll be worth it to live like a dog because:

1. It's the Bay Area and the best weather, restaurants, schools in the
world.

2. Real estate ALWAYS goes up. So in a few years you could actually
sell the dog house and move to Austin Texas and buy a mansion.

This metro-puppy lifestyle sounds like a viable option. I think I'll sell the rights to "Dog House Flipper" the TV show, on how I got rich flippin' burgers by day and flippin' dog houses by night.

I thank the Baby Boomers for creating the economic conditions that lead to my success.

Like the old Chinese proverb says: "Wei Chi." Where there is danger, there is also opportunity...

Ha, ha! I'm gonna be rich!

Soon I'll be pimin' it!

Wah Wah said:
"I hate to repeat:

I earn 160K in Bay Area and have NO HOPE of owning a home …. "

The ellipsis suggests that you want us to complete the sentence so here goes:

"... that is worthy of someone of my status and allows me to look down upon the minions of the land."

Just spoke w/ a friend (mort. bkr.) and by his estimates 50-60% of all homes in the U.S have zero equity. At this point it doesn't much matter if that was the result of "Zero Down", 125% financing, bought at the market peak or whatever. There is NO ROOM for a realt-whore in this picture! His sentiment was that over half of the home debtors are extremely vulnerable as the yield curve works itself out. Not cool.

John F,

"that is worthy of someone of my status"

Why did it take so long for someone to say that?

Thank you, although I’m starting to wonder why this bird flu seems to be evolving to a mammal transmisible virus at this point…

Shit happens.

Which is why we infectious disease types ALWAYS wash our hands.

I know.

Half the things you’ll catch out there are fecal-oral.

I used to be very careful. But then germs are everywhere anyway. I do not care as much anymore. The single most important factor in life is fate anyway.

SF Dean,

"overall economy tanking as a result?"

Will there be pain? Sure, but I tend to take the view that it will most directly impact those that are reliant on RE for their livlihood. Mort. brkrs. are already feeling the pain. The "re-fi" craze evaporated last Labor Day and with the on going fight to open up the MLS (banzai) there is bound to be pressure on realtors comp. as well. A true abberation was our own Monaco Coach right here in Coburg, OR. After 9/11 people thought twice about flying and "high end" RV's sold well. Their best years ever! That's going to dry up also. Most of the down payments were done w/ cash out re-fi's.

You can live in your vehicle but you cannot drive your house!

http://www.autoblog.com/2006/01/05/gmc-pad-wins-california-design-challenge/

All prices have to do is level off for things to get REALLY ugly.

Exactly. Also, once the expectation changes, high price-rent ratio can no longer be justified.

DinoOR (and others),

A newbie question. What is the real problem of having zero equity in one's home IF (a big IF) the home owner is not forced to sell or refinance ? Actually, the questions I have is - If I buy a house of 1M with 200K down, and the value drops to 700K in 2 years, the loan amount of 800K exceeds the value of the house. Can the bank demand more equity to be given to them in such a scenario ?

My particular example may be wrong. But I am trying to understand the "equity cushion" term. Is it only a risk that becomes real when I am forced to sell, or is it a risk because the loan is "callable" by bank ?