patrick.net

No haiku. Just a realtor's e-mail. Isn't he honest?

"Spring is here and we are already in day-light saving hours, but the weather is unusually wet and we are breaking records with consectutive days of rain. What this weather does to the market is forcing some sellers to delay putting their homes on the market, perhaps due to unfinished work and try to maximize the weekend open houses in better weather. Home inventory in most areas are higher than what it was last year and expected to increase in the next 2 months. Despite the wet weather, more buyers are getting into the market but on the average. The average DOM (Day on Market) has increased compared to last year. The average percentage-over-asking-price statistic is still over 100% (buyers paying over asking price) for cities such as Sunnyvale, Mountain View and Santa Clara; but in Cupertino, the average was under 100% in both January and February. The interest rate has gone up and will reduce the buying power for some buyers. Coupled with the cool-off period and price adjustments, we are in a neutral seller/buyer market. If you have not come across the 'perfect' home or are still waiting on the side-line, pay attention to homes that have just reduced price or have been on the market for over 2 weeks, chances are the sellers are more motivated and willing to negotiate."

I'm surprised to see this:

"but in Cupertino, the average was under 100% in both January and February"

I thought everyone wanted to live in Cupertino, no? Condos in Cupertino should've appreciated another 50% by now.

http://tinyurl.com/o2h2v

Insurance group: Area home prices could slump within two years
GREATER CHANCE OF DECLINES IN EAST BAY, S.F. AREA

I believe that OLDER neighborhoods, not necessarily richer, will have a softer landing.

It is a myth that Los Altos doesn't crash, down here in South Bay, Los Altos and Los Altos Hills crashed the hardest in the last round, down more than 25%. These neighborhoods are already looking at a much thinner support group.

I quoted a few months back the historical data of median price in different neighborhoods, Los Altos Hills and Atherton both crashed in 2001, coming down in price as much as 33% in 2 years! Then they got saved by the credit bubble.

Older, solid middle class neighborhoods with a high percentage of PAID OFF homes will have a soft landing. Exclusive neighborhoods may not fetch better, because people move there for prestige, and as I found out on foreclosure.com, you'd be surprised to see how many of these "owners" in Atherton or Los Altos Hills are living on the edge to put up the facade.

I don't know the data from the top of my head, but I would expect any OLD, traditionally middle-class neighborhoods with a higher percentage of families near "poverty line" to do better. Why so? Because the households that can afford to live in such neighborhoods with a "near poverty line" income are usually retirees, with an entirely paid off home. I have a neighbor like that, they own the place free and clear, have an old Mercedez Diesel that still runs, and lives on pension plus SS income. They have a small household expense, and can defer their property tax till they die, what else can knock them out of their homes? The retirees are the true cushion of a neighborhood, they have no reason to go anywhere, and they can afford to stay as long as possible.

The types of listings that I believe I was referring to belonged to “Rip Van Flipper”

Yeah, why shouldn't the guy who bought a place for $50K 20-30 years ago cash in? They didn't invent the boom. As long as they're planning to retire somewhere far, far away where housing is still affordable...

I sent this one to my "futureme", 3 years from now:

Blood is in the streets
Don't be afraid to buy now
Be glad that you sold

Los Gatos and Cupertino did very well in the last 89 crash, because both were sort of undiscovered from price point of view. I am afraid this is not going to be the case this time, because the mix of residents have changed.

Since I did househunting in the heat of last RE bust, so I will just talk about anecdoto stuff I encountered.

Los Gatos and Cupertino were sleepy retiree towns last time, the houses were generally small (

Oops got cut off, gotta start again.

Los Gatos and Cupertino were sleepy retiree towns last time, the houses were generally small (

what is the problem here? How come my message got cut off?

Try again to see if it works this time.

Los Gatos and Cupertino were sleepy retiree towns last time, the houses were generally small. When I was househunting, the sellers were typically long-time occupants, the home was paid off, and acquired for $20K or so. An average home that you see on the market in these neighborhoods for 1.2-1.3M today was selling at ~400K. Back then, a typical ~200-220K household of today was making around ~140K for the comparable jobs. So you see, the ~400K home was not unaffordable at all.

Saratoga was decisively more expensive, and outta my budget. But if I applied today's financial sense (or the lack thereof), I could still stretch it. A 2000sf home with 15K lot was selling for ~550K, newer ones for ~600K.

Los Altos actually crashed pretty hard, so a home of 2000sf on a 14K lot was only going for 480K or so, the comparables that I was looking at had a 20K premium over Cupertino (foothill) or Los Gatos equivalents.

ps,

the question depends on the following things.

1) How many new buyers have moved in Saratoga in the last few years. From my househunting experience in the last bust, the new occupants who got in at the top were the ones dropping price like nuts. The old occupants just held on.

2) How much greenbacks the Fed starts to crank out. Well, as you know, 1M today is not the same as 1M tomorrow, adjusted for money supply.

3) How many buyers like yourself are eyeing that piece of Saratoga property

I frankly don't know the answer (duh!), and I am not eyeing any neighborhoods that everybody is eyeing on, so I am certainly hoping for far less competition when the time is right.

Call now and let me show you how I’m more than just a loan officer — I’m a personal Home Mortgage Consultant!

I am more than a code monkey -- I am a computer software professional! Engineers get less respect than an illegal alien nowadays. Oh well, free market.

Scott,

yup, that was it, I took it off my last message. Thanks.

The question is. Are housing prices really coming down? Or is the media and internet really hyping a crash up?

It seems that apartment inventory is shrinking but condo inventory is growing. If this is sustained, the crash may be cushioned for certain property types in certain areas.

Check out this place I was bidding on. It is in ‘The Gold Box’, but on a very busy street. I offerred asking price, and got rejected! It’s only about 1,150 sqft. Went for $1.14 mil!

It is a shame that it does not even reach $1000/sf, isn't it?

Speaking of condo vs. SFH, I have to say most of the SFHs built after 2000 are just condos in disguise, no difference whatsoever.

When you look at a place like the trailer park development called Creekside Village in Los Gatos, you and your neighbor can have a pretty good exchange of conversation just sitting at your respective living rooms. And if you care to the second floor, you can kiss your neighbor from your respective bedrooms. There is of course no yard, no parking space in front so your friends cannot visit, no view, what else am I missing?

I would rather live in a condo than a SFH like that. Speaking of SFHs, shouldn't there be a minimum ratio of buildable space to land to qualify? I don't consider SFHs 3 inches away from thy neighbors SFH.

I went to a Toll Brothers sales office last weekend and the saleswoman said that housing never goes down in California. When we gave examples in the 1990's she said that housing does not go down over longer timeframes.

I think they are inviting lawsuits.

I would rather live in a condo than a SFH like that. Speaking of SFHs, shouldn’t there be a minimum ratio of buildable space to land to qualify? I don’t consider SFHs 3 inches away from thy neighbors SFH.

I think they only need to be detached. Well, at the quantum level everything is detached but entabgled, hmm... :)

The Marina apartment being across the street from a lawn area that actually had so much liquifaction that little mud volcanoes formed on it in the Loma Prieta quake may have something to do with the condo have sold so far under the average (December’s average anyway) square foot cost.

Thanks, now I feel like a volcano cake (chocolate souffle cake).

George,

ehh, the problem is, a lot of folks on this site are not looking at the fringe neighborhoods that will drop like a rock, there will be plenty of those in the Bay Area. Quite a number of them are like ps, looking at premium neighborhoods like Saratoga where the notion of "they are not making more land" is sort of valid. Hence comes the question soft or hard landing.

We all know that the US is heading for a general RE bust, most likely the biggest one in history. We are just not sure for our target neighborhoods, how big the bust will be.

Not a haiku, but a Ragtime show tune:

The minute you closed my loan
I could see you had no lending standards
A real risk taker
Well capitalized, so carefree
Say, wouldn't you like to know
What's underneath my balance sheet
So, let me get right to the point,
I don't sign my name to ev'ry promissory note I see..

Hey, big lender!
Wouldn't cha like to lend-a
a little money to me...me...me!

Now three years later I'm in foreclosure
Don't you wish you had required a down payment
A real big risk taken
Undercapitalized, security free
And now you know
What's underneath my balance sheet
So, let me get right to the point,
Every creditor in town has a lein on me...

Hey, big lender!
Wouldn't cha like to lend-a
a little money to me...me...me!

I am not at all surprised that average selling price is less than 100% asking price in Cupertino. I have seen empty open houses, with bored RE agents. The reason, is the asking price is WAY too much. Don't know how to exactly write this. Let me try ... IT IS WAY OVERPRICED. They have been priced with the assumption that RE market is what it was last year.

The sellers who get it quick, make a deal. 2 houses (actually a townhome, and a condo) had an asking price in the range of $400/sqft. They went in a couple of days - I did not even get the chance to go for open house as the house got sold before the weekend. I gather there were multiple offers and went over asking.

The ones that have asking price around $550/sqft and above, get almost no visitors. So the truth is somewhere in between.

At this rate Cupertino may be one of the early parts of BA to see a decline in YOY per sqft value.

Actually I have an idea of estimating the degree of bust.

We have access to public transaction records in each neighborhood right? We also know the total number of SFHs or condos in each neighborhood. 2003 seems to be the year that RE started to take off like mad. So we can tally the number of SFHs and condos transacted from 2003-2006, and compute the % of these transacted units in the entire pool, the higher the %, the higher the likelihood of a hard landing. I don't know if anyone knows how many houses in a neighborhood are entirely paid off, that will be one single most important indicator.

Then we can come up with some kind of peripheral risk profiling of neighborhoods. # of preforeclosures and tax liens in 2005 as a % of entire housing stock.

I think all these indicators can be rather reliant in predicting the magnitude of bust.

Owneroc,

The View From Sillicone Valley web site would give you the transaction information.

Yuck !

NOT Sillicone
= Silicon

>> I am more than a code monkey — I am a computer software professional! Engineers get less respect than an illegal alien nowadays.

I call myself “The Architect” — learnt after Matrix …..

Do you work for [the] Oracle? How are you going to deal with NEOs (negative equity owners)?

George,

I absolutely agree with you. Exclusive neighborhoods may not do better at all. If you log on to foreclosure.com, you will find plenty of pre-foreclosed homes (relative to the entire housing stock) and tax liens oweing 50,000+ in some "exclusive" neighborhoods. I even find people there I know who were known to be "doing well".

At this rate Cupertino may be one of the early parts of BA to see a decline in YOY per sqft value.

Per sqft value may be deceiving, as some have better amenities than others. We need to look at pergraniteel-adjusted prices.

At a quantum level, we don't know whether a house is undervalued or overvalued until it is observed. And, once observed, the price itself is affected by the observer. So, in effect, we are all affecting the prices simply by observing them. Worse, the notion of an objective state of price-ification is meaningless.

(Damn, it's so much easier to kill a cat.)

I don't know, realtors spin well in up and down markets.

SFWoman,

we would have LESS than a 50% chance of killing the Realtor?

We do have to compensate for the degree of quantum entanglement that Realtors(tm) already have with the Underworld.

I'd say that there is always a 100% chance that you end up getting a calendar with an oversized, airbrushed photo of the Realtor(tm) regardless of the state of the radioisotope.

Check this one out, the school closure is getting out of hand. There is a graph at the end of the article on kindergarten enrollment up till 2002. I believe the picture is going to look even worse if projected out to 2006.

http://www.demographers.com/SCHOOLCLOSURENEWSLETTER.pdf

Fucking Shitball Troll
Metaphysical maggot
Bed buddy of MP

Want proof maggot asshat trolls such as, metaphysical, are not only fucking annoying but stupid shit gobbling monkeys?

Take a look at the piece of shit "condo" it was so unfortuately outbid on. 1.1mil WITH NO FUCKING PARKING.

Where the fuck is it going to park its Hummer? In its wifes ass?

Trolls post online crap
Special Olympic gold medal
Both are retarded.

>I believe patric.net INVENTED the term CONDOTINO

I believe Peter P. invented the term.

@SFWoman, who knows, who cares? If you wish to be truly amused take a look at the blogs from a while back. The maggot MP was posting his flowing brown wave of crap from his work computer. The IP was traced back to Credit Suisse First Boston. The maggot then went to full cover its ass mode, it was quite amusing.

Haiku City USA:

Scary house price, make
me think twice. Hundred-thou job,
I live like a dog.

Damn, I AM a dog.
I grovel in dirt though I
make one hundred K.

Every day house price
goes up. I scream and I cry
and ask god why...me?

We are the children
Of the golden ghetto. We
Live like big piggies.

Next year I make more
Than two hundred-thou and still
Live like a damn cow.

Tax dollars wasted.
College degree worth less than
Sh-t. Me big groundhog.

Silicon Valley
Left me stranded, took away
My pride. I cry tears.

I am but a broke clock
That has stopped dead in its tracks.
No time relax.

Hell hath no fury
Like the market that will crash
Hard. Tsunami time.

I sip cheap wine to
Kill the pain and dream housing
Market falls in flame.

Put down the bong; Turn
Off the Led Zep; zip up your
Pants and go to work.

Pop!,

Uranium Participation Corporation [TSX:U] has a ETF for Uranium (I think). If you have ideas about creating a position based on Uranium please post it here.

ps,

it depends on which pocket of Saratoga you are targeting. If you are targeting the areas west of 85, the golden triangle area or the foothill south of 9, then I'd say don't expect bigger than average crash. If wife really wants it, and you can afford it, then be a good husband.

If you just care about the Saratoga address and don't mind living to the east of 85, then you have bigger bargaining chip. Saratoga is a good piece of real estate, I personally won't mind overpaying a bit for it.

I think anything in the *right* pocket of Saratoga with about 15K lot and 2400 sf home in a good condition, shouldn't crash below 1M. When it gets close to 1M, I believe there will be lots of pent-up demand in the surrounding suburbs wanting to trade up. I have a colleague who literally moved a couple of blocks over just to get the Saratoga address. That's my take on it.

Also, the part of Saratoga bordering Cupertino actually goes to Cupertino schools. The part east of 85 goes to San Jose, and the rest goes to Los Gatos-Saratoga school district.