patrick.net

That was an informative post, thanks very much.

(13 :-)

Yes very informative, it basically debunks "fortress areas need to fall" that everyone talks about here. Many areas around here will never fall due to exactly what you stated. Places like palo alto, los gatos and others will remain high because they are very desirable.

You guys should research what happened to Tokyo and other "very desirable" areas of Japan....60-80% reductions in price....20+ years later...no bounce. And that is on an island with very limited space...

btw, no takers yet on the overpriced 233 Bay View POS....big surprise

someone will likely roll in and buy it with a tax-payer back mortgage, and they'll put a whopping 3% down...also given to them by the gov't and taxpayers

He points to specific reasons why a small area of the city can maintain such high property values, and you cite one of the worlds largest cities as a counter example.

The small area being described doesn't fall because it has a very small number of homes for sale per year. The people who live there have no interest in moving. The number for sale doesn't exceed the number of wealthy people coming into the city and/or building enough wealth to move into that area. Hence it's prices are supported by small customer base and smaller supply.

These are nothing alike. If you don't understand, re-read his statements, they are very clear.

Yes it's overpriced by about
$450,000 but it will sell for near asking, unfortunately. Only after interest rates start to rise will San Carlos property prices start softening.

Still no action on this house....tick, tick, tick

"New Aggressive Price"...lol

just want to to give some conclusions to these old topics. everyone was right that the property was gonna be low-balled. sold for 970K.

My relatives paid $565 / sq ft at the peak of the bubble a stones throw away from 233 Bayview, which just sold for $366 / sq ft. That's a strong down trend and an ugly situation. Lots of people in the same situation up there who either won't fess up to it or don't understand how bad their situation actually is (my relatives are the latter). My calculations suggest their home will likely continue to depreciate until it is worth 31-39% off the peak price.

Quant HF Mgr says

My relatives paid $565 / sq ft at the peak of the bubble a stones throw away from 233 Bayview, which just sold for $366 / sq ft. That’s a strong down trend and an ugly situation. Lots of people in the same situation up there who either won’t fess up to it or don’t understand how bad their situation actually is (my relatives are the latter). My calculations suggest their home will likely continue to depreciate until it is worth 31-39% off the peak price.

It's not ugly in my view at all, with regrets to your relatives. It's what needs to happen.

E-man says

I like pkowen’s perpective “It’s not ugly in my view at all, with regrets to your relatives. It’s what needs to happen.”

Agreed. I would add it was just plain stupidity and arrogance of buyers as prices skyrocketed to become cheerturds.

pkennedy says

Yes very informative, it basically debunks “fortress areas need to fall” that everyone talks about here. Many areas around here will never fall due to exactly what you stated. Places like palo alto, los gatos and others will remain high because they are very desirable.

http://www.paloaltoonline.com/news_features/real_estate/fall2000/2000_09_22.trends.php

"No one wants to recognize it, but between 1989 and 1992, prices dropped 30 to 40 percent. There's no question that could happen again. Everything has a cycle and real estate is no exception. It's foolish to think prices will go up forever. In the longer term they will, if you can weather the downturns in between. There's no way to know," Dancer said.

So what makes PA or LG imune to price declines? The majority of the price inflation comes form the free wheeling stock options of 1999. Take away IPOs and stock options what do you have left to support these prices. There is very little to support these prices. Desirabilty means very little.