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375 Hawthorne Avenue, Palo Alto CA 94301


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2006 Apr 30, 10:06am   30,058 views  272 comments

by Patrick   ➕follow (55)   💰tip   ignore  

tiny house

This tiny old box is for sale to any fool willing to throw away $1,595,000. While it is close to a nice park, what you will not learn from the sales material is that there is a half-way house for alcoholic vietnam vets nearby as well, nor that the street, which is quiet on Sundays, is a major thoroughfare during rush hours. In fact, the traffic situation is so bad that there was a city attempt to block much of the traffic through strategically placed barriers recently, but the outcry was so great that the barriers were removed, leaving only a simmering acrimony between neighbors for and those against the barriers.

There is no backyard at all, only a wooden deck. The house is overshadowed by the much larger house to the right. The steps are cracked brick, and the handrails are just painted pieces of pipe. There is peeling paint and perhaps some rot around the foundations.

The house has several cramped and unusal spaces which are called bedrooms for sales purposes. What used to be called the garage is a studio unit perhaps rentable to Stanford students, though that rent will make no significant difference to a mortgage this large.

#housing

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1   Michael Holliday   2006 Apr 30, 10:28am  

John Haverty, great series of Haikus.

I proffer you today's fruitful output in series:

$900K Nervous Breakdown:

God, I’m losing it.
I’m Broke. Ha, ha! You call that
Piece of shit a house?

$900K-Mortgage Trailer Trash:

One house, three kids, two
jobs, wife left, repo’d Hummer,
no equity…Shit!

The Devil is My Realtor:

Sold my soul; bought a
house. My plastic soul looks good
in a McMansion.

Sassy Realtor Lookin’ for a Mate:

Fat temptress; brass balls.
Tall. Looks great bra-less. Lost her
ass in real estate.

2   astrid   2006 Apr 30, 10:45am  

Hmmm, at least the "studio" is farther from the street.

3   newattorney   2006 Apr 30, 10:53am  

BenJ ammin Says:

April 30th, 2006 at 5:24 pm
Nice house. Expensive. But what’s the alternative if you have a family? Rent?

Look at this own site. 3bedroom rental prices are going ballistic. The economy is strong. Somehow, I believe this overpriced house will sell.

Ben Jammin

DO NOT FEED THE TROLL!

4   astrid   2006 Apr 30, 11:28am  

John Haverty,

"Nothing, in fact, them vomiting on the lawn could save me a bunch in fertilizer."

Only if your soil is extremely alkaline, otherwise the acidic stomach juice could kill your lawn.

5   Michael Holliday   2006 Apr 30, 11:56am  

Can someone please tell me how this friggen' insanity ends?

There is NO way salaries are going to increase to meet the high cost
of housing in the Bay Area. The trend is down with globalization, not up.

Is it all just going to implode over time, gaining momentum? I think
it just might.

THIS IS NOT AMERICA!

Let's see what happens to our streets tomorrow as the invading hordes
take to the streets waving Mexican flags and demanding more stuff.

Let's see:

$6.75 an hour pay + $25 an hour equivalent in free medical, dental, education, housing & food stamps at taxpayer's expense, and driving without having to pay for auto insurance = $31.75 an hour = >$66,000 per year!

Fricken Sweeeeet ass deal. And NO ALLEGIANCE TO AMERICA!

I'd be taking to the streets to keep this shit myself.

Let's see. 2001 the average starting salary for a Northern Arizona MBA grad was $57,500.

Five years later the average starting salary is $48,000.

WTF?

This is true.

Five years later and the average starting pay is $9,500 less. Add inflation and increase in housing etc. and you have cut the pay by at least one third in five years.

THIS MUST BE STAGFLATION. HOLY SHIT!

6   astrid   2006 Apr 30, 12:02pm  

Michael Holliday,

Any illegal immigrant/supporter of illegal immigrants dumb enough to skip work tomorrow is only hurting themselves and their law breaking bosses. Maybe they can even turn it into a weekly protest, just to even out the field for competing legal workers and law abiding employers.

7   Michael Holliday   2006 Apr 30, 12:22pm  

Good points Astrid.

8   Michael Holliday   2006 Apr 30, 1:17pm  

Ha Ha Says:

>> et’s see. 2001 the average starting salary for a Northern Arizona MBA grad was $57,500.

Advice:

Do not do MBA (unless from TOP 10) ……

________

Well, it's a little late for that.

Using that logic, should anyone get any degree other than a top 10?

My friend went to Colombia MBA program. One of his buddies took a year to get a job.

My friend is self-employed now.

After 5 years it pretty much doesn't matter where you got your MBA if it was AACSB accredited.

Etc.

9   Peter P   2006 Apr 30, 1:46pm  

2001 the average starting salary for a Northern Arizona MBA grad was $57,500.

They do not even worth 1 Ha?

10   OO   2006 Apr 30, 1:48pm  

Gold 656 and still on the rise.

Most gold bulls only set a target 600 by 2006 year end, now breaking 700 doesn't even seem bullish enough.

11   astrid   2006 Apr 30, 1:56pm  

Thinking about gold as the next irrational bubble...what sorts of signs should suggest a peak?

12   IUnknown   2006 Apr 30, 2:00pm  

My wife and I are full force focusing on leaving the Bay Area. What is the point of being here if you can't afford a basic life style. Why stay here without even a fleeting chance of buying a home. Why wait ten years for prices that may or may not fall.

We would both need a 40% to 50% raise just to begin getting in reach of a slum house. What is the point? Why work your ass off as a highly skilled tech worker when you barely make it check to check.

We're focusing all of our energy from this point forward on leaving. Good bye to this messed up place, we'll see you on vacation. As we leave, and many others so will the companies who can no longer find workers.

13   OO   2006 Apr 30, 2:02pm  

The peak should be:

1) Mid-night TV infomercial on "how to get richFAST investing in Gold"
2) More gold coin dealers than realtor offices
3) Gold Council spokesperson Ms. Pearville-Old starts talking about how gold will never ever go down...

14   astrid   2006 Apr 30, 2:13pm  

John Haverty,

A couple threads back, there was a discussion about the psychological value of gold v. real value of gold. I'm firmly in the camp that believes gold will soon be very valuable for psychological reasons (it's long association with value), so I can see a scenario of even $2000/oz gold. However, I think gold has very little real value, because it is way too scarce to replace fiat money and has very few practical industrial uses.

disclaimer: I'm broke, if you take my advice, you're taking advice from a broke person. Think about that! I'm litigation proof!

15   OO   2006 Apr 30, 2:14pm  

It is hard to pin a number to gold, but oil is still very much undervalued at this point.

Adjusted for CPI, the oil peak of the 80s should be around $100. However, here are some facts:

1) In 1980, India and China were not part of the oil game. Today, China is the SECOND largest automobile market with 2.5-3M *incremental* automobiles going on the road every year, go figure.

2) There was obviously more oil on earth in 1980 compared to 2006

3) US had a much smaller deficit in 1980 compared to 2006, therefore less urgent need to print money

So, oil above $100 is very doable. Whether it hits $200 or not I am not too optimisitic, but I am betting on it breaking $100. Given an average oil/gold ratio of 15-20, gold should be valued at around 1,500 to 2,000 once oil breaks $100.

16   OO   2006 Apr 30, 2:18pm  

China has very little gold, that is a big part of the gold bull story.

Up till the beginning of 2006, the % of gold in China's vast foreign reserve is only 0.6%!! China accounts for less than 10% of WW gold production. On a per capita level, Chinese have very very little gold.

For every percent of Chinese foreign reserve that needs to be converted into gold, it represents another 900-1000 tons of demand.

17   OO   2006 Apr 30, 2:21pm  

Now here is the question, you are talking about $90/bbl USD. The Canadians need to pay CAD to their workers for drilling.

Because of the complicated exchange rate issue as USD weakens, the more valid measure is *unit of energy required to extract energy equivalent to today's barrel of crude*.

18   astrid   2006 Apr 30, 2:24pm  

Owneroccupier,

Depending on the amount of RE implosion and other financial instability, I see a much faster run up on gold, almost completely driven by mass psychology.

19   FormerAptBroker   2006 Apr 30, 2:40pm  

Ha Ha Says:

> The country of immense credit and financial flexibility.
> For example, if you are holding 30year mortgage and
> get laid off — no problem refinance to 50year mortgage.
> So insanity will not end — you need to leave this country!

Let’s say the guy with $320K (2.1 Ha Has) in his checking account for the down payment buys the little Palo Alto “starter home” with a $1,280,000 loan (as stated above) the 30 yr P&I payment will be $8,090 a month.

If the guy that is laid off can find someone to refinance his 30 year loan with a 50 year loan (It will be tough to borrow over $1mm w/o a job) the payment will only drop about 10% to $7,216 (not exactly an easy payment without a job)…

20   Michael Holliday   2006 Apr 30, 2:45pm  

down.

Peter P Says:

2001 the average starting salary for a Northern Arizona MBA grad was $57,500.

They do not even worth 1 Ha?
_______

Answer: No! Not a total Ha-Ha value.

However, back then, a decent brick houses was only 1 Ha-Ha.
$57K was pimpola!

21   astrid   2006 Apr 30, 2:50pm  

Michael H and Peter P,

You've fallen for Ha Ha's incredibly devious scheme of talking about his income. Oh no!

Anyways, what do you guys think about the South African Rand. South Africa still produces most of the world's uranium, right?

22   FormerAptBroker   2006 Apr 30, 2:53pm  

astrid Says:
> disclaimer: I’m broke, if you take my advice, you’re taking
> advice from a broke person. Think about that! I’m litigation proof!
Astrid must have missed my post on insurance when I mentioned that attorneys are now getting judgments against “future” earnings when they sue broke people.

An attorney will have no problem getting a big judgment against Astrid since he is sure to get a jury to agree that she will eventually have earnings well above the average female when the jury finds out that on Sunday nights she discusses the inherent value of gold on line while most other females were watching Desperate Housewives…

23   OO   2006 Apr 30, 2:54pm  

South Africa is politically unstable, and the economy was really not quite balanced.

Australia will surpass South Africa in gold production by 2007 as the world's biggest gold mine, and has about 30% of the world's known reserve of uranium, compared to around 10% for South Africa. Kazahstan and Canada ranked 2nd and 3rd.

24   OO   2006 Apr 30, 2:56pm  

The uranium data is something I read a few years back, so new discovery could change the picture a little bit, although I doubt the ranking will change much.

25   FormerAptBroker   2006 Apr 30, 3:03pm  

Michael Holliday Says:

>>> The 2001 the average starting salary for a
>>> Northern Arizona MBA grad was $57,500.

Then Ha Ha wrote:

>> Do not do MBA (unless from TOP 10) ……

Then Michael wrote:

> Using that logic, should anyone get any degree
> other than a top 10?

I tend to agree with Ha Ha overall with a couple exceptions:

1. If you have a job that gives you time off and pays for the degree.

2. You have a job that will give you a guaranteed raise when you get the degree.

3. You work in the public sector and need a Masters to get a raise.

26   astrid   2006 Apr 30, 3:08pm  

Owneroccupier,

Thanks! And my info source is definitely older than yours. Vintage editions of National Geographics old(back when Zimbabawe was still Rhodesia).

FAB,

Thanks, I'll take that as a compliment. :P The funny thing is that my boyfriend does watch Desperate Housewives on Sundays. He's still a good money manager and much wealthier than me.

27   OO   2006 Apr 30, 3:11pm  

He must have been one of those hundreds of junior associates who got laid off by Wilson Sonsini in the dot bomb. Obviously a smart guy grabbing a lucrative opportunity as he sees it.

It is a shame that a law-school-trained professional needs to become a realtor, usually a positoin filled by bored housewives. There is nothing wrong with him doing it if he can earn big bucks, kudos to him. However, there is something very wrong with the society that wastes 3 years of law school training in a job that requires only a few months' study by a rather mediocre brain. It is a clear case of something very sick about this housing bubble.

28   Peter P   2006 Apr 30, 3:11pm  

Anyways, what do you guys think about the South African Rand. South Africa still produces most of the world’s uranium, right?

CAD! Tar sand!

29   OO   2006 Apr 30, 3:14pm  

gold just cracked 660. Man, I wonder when I wake up tomorrow, if it is going to break 700??

30   Peter P   2006 Apr 30, 3:37pm  

Near-term eCBOT mini-gold futures at 6635!

31   Peter P   2006 Apr 30, 3:39pm  

It is basically trending up since the opening of this trading session (4pm PDT)

32   Randy H   2006 Apr 30, 3:40pm  

Anyways, what do you guys think about the South African Rand. South Africa still produces most of the world’s uranium, right?

The downside to the Rand is that it gets punished as a carry trade currency for the USD.

33   astrid   2006 Apr 30, 6:25pm  

Randy,

That's really interesting! I hadn't thought of RSA as a carry trade economy, especially with the United States. I know (from my Economist reading days) that RSA faces a huge HIV problem and their post apartaid efforts have hobbled the economy, but I hadn't given serious thought to their trading status.

One more reason for amateurs like me to avoid the Rand.

34   HARM   2006 Apr 30, 6:40pm  

At 90/bbl, the Canadian Tar Sands (oil sands / bituminous sands) become very viable economically. Canada becomes the next Saudi Arabia. Between Venezuela and Canada, 66% of ALL THE OIL LEFT IN THE WORLD in those tar sands...

Australia will surpass South Africa in gold production by 2007 as the world’s biggest gold mine, and has about 30% of the world’s known reserve of uranium, compared to around 10% for South Africa. Kazahstan and Canada ranked 2nd and 3rd.

Hmmm... anyone know of any good currency funds for resource-rich former British colonies? Preferably one that doesn't require passing the Series 7 to be able to understand the risks/transactions involved.

35   HARM   2006 Apr 30, 7:11pm  

not so good now unless there’s another form of much cheaper energy (nuclear?) to use to extract the oil.

@ahj,

Yes, that's the part where Australia's "30% of the world’s known reserve of uranium" comes in :-). Who knows, Oz & Canada may become the 21st century's newest energy superpowers.

36   DinOR   2006 May 1, 12:37am  

RE listings like the one posted above work on my "last good nerve". I swear, it's the ones that are among the last to "cash out" that seem to be the most gutsy. From the looks of it I doubt this is over a 1,000 sq. ft. including the "studio". So that's what, roughly $1,595 per sq. ft? Then consider the 50 mph relentless traffic in your 30 mph zone. Who could possibly raise children here? Who would WANT to live here? This has "all YOU need to do is find another greater fool" written all over it. It has no value as a "home".

37   DinOR   2006 May 1, 1:05am  

Over the weekend my wife and I saw a print ad for DR Horton for a new subdivision they are working in Albany, OR (near Salem). The full page ad rather than tout all the usual pergraniteteel actually starts out by mentioning that they are "Energy Star" & "Earth Advantage" certified homes. They will be priced between 190K to the 260's and have floor plans from 1,372 to 2,732 sq. ft. Well, at those prices there are some floorplans that are under $100 per sq. ft! While not exactly picturesque Albany is a very nice town, with very nice people.

What is interesting to note is that this is cheap (real cheap) by even our standards. This I feel is proof that builders will continue to build no matter the consequences to "peak of market" buyers. These guys aren't going to simply stop and let the market or wages "catch up". They're going to do the only thing that builders know how to do. Namely, continue building. Would they prefer to be selling these floorplans from the 260's to the 360's? Well sure, what fool wouldn't? This also gives a glimpse that reveals their cost basis and yet allows them enough of a profit to keep the lights on. Not to beat it to death but we are seeing tons of homes come on the market that were bought just in 2004/5 and we have to wonder b/c many of these were custom or semi-custom homes! So it was build to suit but it no longer "suits" you a year later? I understand that peoples lives change but why so many and why so soon after a custom build?

38   DinOR   2006 May 1, 1:12am  

Just for a goof is there a way to track the percentage of homes (in certain markets) that were built/bought in the last say 24 months? I would be curious to see just how big that number really is. Sometime back I believe *athena* said perhaps it's time we called them what the really are. Pre-foreclosures b/c clearly these folks had bought on the expectation of ever higher returns and now their exotic loans coupled with flat to down markets mandate that they bail.

athena also said she didn't want to buy someone elses "maxed out credit cards" and I quite agree.

39   edvard   2006 May 1, 1:39am  

Smelly Red Thing,
Me and my wife are in the same boat. We're not from here, and have lived in many diffrent places over the years, most of them NOT on the coasts, which is about what 90% of the people who live in the BA are from.That said, many places across the country are just as interesting, in some cases more interesting thatn the BA. I'll agree to a certain extent that yes, the food is more diversified here.The weather is pretty nice. You can go off to the jazz festival of your choice on any given weekend. The job situation is pretty good. But as anyone here cannot deny, that comes at a severe price. It is at this delta that people make their choices. Do you live somewhere that has perhaps less ethnic foods, 4 seasons of weather-some of it unpleasant, but at the same time have your own place, decent public schools, a stabilized living situation since you are paying less, and living in an economic situation where the middle class still rules, with their fleets of Ford Tauruses, Toyota Camrys, and Chevy Malibus?-Or do you live somewhere that has great food, good weather, ethnic diversity, yet horibble traffic, pollution, bad public schools,uncomfortable socioeconomic disparity and unaffordable housing?
I've had to weigh these things over and over.If I moved somewhere else, would I be miserable? Would I have little choice in excercising my artistic expression and exploration? Would the food suck? Would the people be less open minded?
Then I listened to my parents- both of whom are school teachers, who've never been what you could call rich, that live in a rural part of Tennesee. They own their own 2 story home, with an apple orchard, with a swimming pool, 14 acres of land,and 2 decent cars. They just got back from a cruise to the mediteranian. They went to Italy the year before.
On any day of the week, they can watch a free 1 hour concert of americana, bluegrass, or alt country at the locally supported radio station downtown in a coffee cafe that serves free trade coffee and teas. They frequently take off to Asheville, NC, where they can sample origianal mountain cuisine, scenic beauty, or take part of a traditional chair caning class in one of the Appalachian arts and crafts centers. In Oct is the international storytelling festival in Jonesborough, TN. In Nov is the fall homecoming at the Museum of Applachia.I can rattle off a million other things they do on any given weekend. They don't live in the BA, but by what they do, you'd think they did- and they aren't rich either. My parents stay busy. More so than me and my wife, who work round the clock saving our pennies for the day that we can get out of here and buy our own place, which brings me to my next point.
Sure, moving can be a pain. You will have all kinds of worry and uncertainty. But uncertainty is what the BA is all about.Uncertainty of whether or not rent is going to skyrocket. Uncertainty of whether the job market could implode, just like it did in 2001. Uncertainty and the insult that home prices are assanine. So a move is really no diffrent. But you can make this uncertainty less severe simply by saving. That's what me and my wife have been doing for years. Take those BA wages and figure they'll go at least 50% further elsewhere and apply them towards the home you'll be able to buy outright somewhere else. The jobs, careers, and other stuff will come soon enough, but just think about the fact that yes- wherever you move will be diffrent than it is here. But don't make a point of trying to replace what you knew here with somewhere else. That is a big mistake. Start over and fall in love with a brand new place, with it's own quirks, people, food, music, and fun.
In the end, it all evens out eventually. Go with your gut feeling.

40   edvard   2006 May 1, 1:52am  

Benjamin,
Don't you think that it's rather interesting that wage increases , according to the report you posted above, grew, but mostly due to an increase in Medicare perscription payments? Why this should be counted as "income" is a mystery to me. And as far as the increase in construction, bring it on! More construction means lower prices and more inventory to add to the already record high level.

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