patrick.net

The new mantra is “Sell now, before it gets unaffordable”.

More like "Sell now, before housing gets affordable".

Apart from these 2 counties everything in BA was down. Contra Costa down 10%, Alameda close to 3% decline etc. No reaction from anyone ?

StuckInBA,
You are looking at the homes sold numbers. Median Price is up in "Fortress Bay Area" counties -- SF, San Mateo, Marin, Santa Clara, and even Alameda.

BTW, looks like my local Specuvestor watchlist property now has a sale pending (Sept. 05 to Feb. 06 flip). Was hoping to see it go down in flames, but buyers are in the wings...

EBGuy
StuckInBA,
You are looking at the homes sold numbers. Median Price is up in “Fortress Bay Area” counties — SF, San Mateo, Marin, Santa Clara, and even Alameda.

Yuck. My bad.

Apart from these 2 counties everything in BA was down. Contra Costa down 10%, Alameda close to 3% decline etc. No reaction from anyone ?

Personally I don't consider anything but SF/San Mateo/Santa Clara to be in Silicon Valley.

But then again, I don't really consider Walnut Creek to be in the Bay Area, even though it is served by BART.

Maybe my definition is too strict.

Bruce Says:

> I do wonder if the rightful resentment of individuals –
> or whole regions of the country - who have had no
> part in the credit bubble will get a proper airing when
> bailouts are proposed.

The “real estate bubble” is not in every region of the country, but the “credit bubble” is. The single mom in Ohio making $6 an hour who bought the $120K house will have just as many problems as the single Cal grad I know that makes $100K a year and bought a $1.2mm condo…

P.S. I read something a while back that the number of college kids who graduate with over $10K in credit card debt is amazing…

Median Price is up in “Fortress Bay Area” counties — SF, San Mateo, Marin, Santa Clara, and even Alameda.

Fortress indeed. Just look at DQnews - median is still going up:

http://www.dqnews.com/ZIPSJMN.shtm

Now, people slam DQnews because their stats don't include the massive discounts/upgrades/etc that builders are offering on new homes - but there aren't that many of those here in the Fortress unlike... say... San Diego.

I read something a while back that the number of college kids who graduate with over $10K in credit card debt is amazing…

This is close:

http://www.bankrate.com/brm/news/cc/19980605.asp

The average undergraduate has $2,200 in credit card debt, according to Nellie Mae, the nation's largest maker of student loans. That figure jumps to $5,800 for graduate students.

I’d love to tap into zillow’s APIs and query everything that’s currently short.

Try

http://www.mls-2.com/staticpage.jsp?pageName=bargain_hunter.jsp

For example - Short Sales in San Jose:

http://www.mls-2.com/houseSearch.jsp?keyword=house+real+estate+mortgage+agent&city=San+Jose&state=CA&zip=&houseType=any&minPrice=-2&maxPrice=100000000&minBeds=-2&minBaths=-2&minSize=-2&pricedrop=-100&searchKeyword=short+sale&sortBy=4&SearchButton=Search

Argh... could someone unmoderate my comment?

This is kind of funny.

FAB and DinOR,

Honestly, echoing what SQT said a couple days ago about a certain peroxide blonde, I think attractive women, especially lower class born ones, drew a rather hard lot in life. A lot of them grow up with a lot of attention and gets spoilt by family/friends/significant others who lets them get away with bad behavior or ignorance.

Then they hit thirty and lose their looks, and poof, they got nothing going for them. Many of them are lazy, ignorant, unrealistic, and eventually bitter because people stop treating them nicely.

I read on financialsense.com that inflation is an oversized growth in the money supply. Maybe rising prices, maybe not. They said there is a liquidity trap, and/or asset bubbles going on.

They said that we are exporting our inflation, (excess money supply) to China, and, until recently, also to Japan. Like the behavior of the co-dependent to the drug addict, they facilitate our addiction by accepting our excess dollars.

Some of our "exported" inflation is coming back here in their most-favored assets, like real estate in the Bay Area. San Diego is "red-state" type place, better for the Asian property owner to stay away from there. San Joaquin Valley is, well, it's San Joaquin Valley. Bay Area, Vancouver BC, it's the places they want to be. Besides, Bay Area is closer to all the "prestige" that attracts those kinds of folks with that kind of capital. It is where our inflation, created all over the US, is getting re-imported into an asset bubble. Just read the "transactions" in Real Estate section in the Saturday SJ Merc. There's a reason why there's a proderance of Chinese and Indian names on the "buyer side", and a more diverse set of names on the "seller" side.

"CB" and "eburbed" are noticing the effect of this, why premier "Bay Area" counties' prices are holding up, but not San Joaquin Valley type counties.

It is an asset bubble.

Joe_renter,

What's up with that?

Go to the schools over in those places. Look at the faces of the students. THen read my post.

That's what's up with that.

This discussion on median in the "fortress" staying high is interesting. Come to think of it, why should we even expect it to be lower ? The median, as we all know, is what the median buyer SPENT on the house, and does not mean housing prices are going up or down.

The job situation is improved in last year in the BA, mortgage rates are almost unchanged in 12 months - oscillated in a narrow range. So the ability to SPEND has not deteriorated.

There is a little more inventory, and a bit less demand - hence very few bidding wars on very desirable homes.

Now the question is, is cost of similar houses going down ? Are buyers getting better houses in the same price ? I don't think median is reflecting all that's going on.

Now the question is, is cost of similar houses going down ? Are buyers getting better houses in the same price ? I don’t think median is reflecting all that’s going on.

Median prices are just for realtors to use for marketing, nothing more; the numbers have no significance when it comes to determining whether prices are rising or falling.

opps, for got to turn off italics :lol:

I do think that the median will soon fall off though, not just because house prices are falling but because easy money is disappearing and people aren't going to be able those uper-sized toxic loans anymore.

- those uper-sized
+ to get those super-sized

StuckinBA asked,

are buyers getting better houses in the same price?

Of course that is going on. I've been reading the SJ Merc. "transactions" listing for my zip code every Saturday for about 20 years. I have noticed it, more house for the money compared to 2006 and 2005. Living in the same zip code since the 1960's, it is easy for me to gauge the price trends on comparable houses.

That section of the newpaper is a tabloid-type insert in the Saturday SJ Merc., and most of the pages are with real estate advertising.

During the craziest time a couple of years ago, the SJ Merc added a feature. In addition to showing the names of the buyers and sellers, address and sq feet, they added something else: the year and price that the property had previously been sold. This way, you could see how much profit was made by the seller. It was an amazing fact to read and compare to the recent sale price.

Beginning a month or so ago, some of the transactions that were listed had the "previous sale" figures omitted. Most of the transactions still showed the "previous sale" info. with the year of the previous sale and the previous sale amount, showcasing the spectacular profits folks got on their little piece of Silicon Valley. But each Saturday, the fraction of transactions with the "previous sale" info. omitted gets a little larger. I guess, since the real estate industry pays for the advertising of that section of the newspaper, we can figure out the reason for the omissions.

http://finance.yahoo.com/loans/article/102417/Mortgage_Refinancing_Gets_Tougher

Meanwhile...Mortgage Refinancing Gets Tougher

Also, a word on Cupertino. My friend's house was on the market for months. She did receive several offers - all of them UNDER asking. She finally just sold it for asking price - closing date in March. Cupertino seems to be flat at best, not going up. I don't have a dog in the fight when it comes to Cupertino. I wouldn't buy there. I have no reason to care what Cupertino prices do.

The SC County median is up 1.5%, SF up is .7% - even LA is holding up better (6.1% YOY).

Also relevant, my friend who got her asking price sold for close to the same price that her neighbor sold for in 2005 - for the same size house, on the same size lot.

She's in a great school district. The only downside (I suppose) is that her house is a 2br. If you are buying for the school district you may desire a 3br.

Of course that is what I am saying. There are different dimensions to it.

One dimension is, our exported inflation coming back here, in the form of Asians' ability to pay for real estate. Of course they'd rather buy and live and work in Silicon Valley than San Joaquin Valley.

That is one dimension.

The other dimension, is the quality of life. Many of us here know that the value proposition ain't worth it.

It's not about being inferior to Asians or having kids that are inferior to the Asians, nor is it necessarily about being lazy. It's the value proposition of the quality of life.

It's become very crowded here, very competitive, very congested. The dominant culture has become too slavish to some kind of twisted model of Success, with designer SUVs, etc. Not exactly a high value proposition.

But compare to places like the canyons of Bombay, Hong Kong, Taipei... Cupertino and other desirable parts of the Bay Area are a clean, uncrowded, wide-open spaces kind of places. And for the ambitious well heeled Asian, at ground zero of Silicon Valley, also very near to two elite schools with many Nobel Laureates. Paradise.

On the other hand, long-time locals know better about the quality of life. It is a fair trade that's made: a local trades his itty bitty residence for a better quality of life somewhere else like in the Sierra foothills or southern Oregon, cashing out the local house at re-imported inflation-exported dollar asset-bubble prices, the immigrant trades his new wealth for his foothold in Silicon Valley.

It doesn't take long for both of these trends, locals cashing out and immigrants cashing in, to dramatically change the demographics.

So yes, they (Asians) are one of the factors propping up the prices here. Prices on comparables are slipping, yes. A trickle down effect as you move further out, till, you reach some kind of an area that's too far away, like San Joaquin, where prices fallin like a rock.

Imagine how much they'd be falling here at Bay Area ground zero if we didn't have all those repatriated dollars coming here.

It is not a problem.
It is what it is.
Locals here have had their quality of life crowded out since the first white settlers came, then the gold rush, and everything else. I came here
with my folks during one of those gold rushes of Cold War defense spending in the 1960's.
Asians are just the latest wave.

Not is it a complaint.
It is an observation.
I agree with your suggestion to "leave".
I have found that there are other ways "to leave" than leaving. It involves leaving the culture that in the past couple of decades has come to be the dominant one in "Silicon Valley" One can make choices like driving old cars, not trading up for new places, not pushing the kids to be hyper achievers, not "living large". (People who need those kinds of things for fulfillment probably have other issues). With these kinds of choices, a "local" like me can remain living here, at least for awhile, and so enjoy living not so far away from extended family and lifelong circle of like minded friends.

But I didn't say that I wasn't competitive. You said that, not me. The best kind of competition, though, is through teamwork. Some organizations around here still value it (at least for the time being).

CB

You used to live in Hong Kong, then Toronto, now you are..... here (!).

Bay Area is not as clean, and not as safe, but still, Silicon Valley / Bay Area is a magnet, and instead of being in Hong Kong or Toronto, you are attracted to being here.

I think you are making my point about accepting the trade off in order to be here, instead of those cleaner, safer, places.

GC,

Is it important to "being on top"?

I understand, we need to be "on top of our game", which probably means, no more repeats of Dec. 7th, and no more repeats of 9/11, and no more repeats of the Civil War, and no more repeats of the Great Depression, and also probably means civil rights for citizens. On top of our game.

But is it a worthwhile goal to be or remain on "top of the world"? Maybe our social security will be more secure in a world where we solve problems in teamwork with like minded democracies.

It would seem to me like part of that teamwork would be real partnership with our neighbors in Latin America. I mean our neighbors, the peons who live there, not the elites who govern them.

joe_renter,

The sellers don't set the prices for stuff. The buyers do. I enjoyed that photo and got a laugh out of it.

If it really sells for a million $, it won't be because of the local guy cashing out.
It will be the buyer willing to pay for it.

StuckInBA Says:

> The median, as we all know, is what the median
> buyer SPENT on the house, and does not mean
> housing prices are going up or down.
> Now the question is, is cost of similar houses going
> down ? Are buyers getting better houses in the
> same price ?

I was on the Peninsula this weekend and I was amazed at the number of big new homes that have replaced small modest homes in Burlingame. I wasn’t counting but on the drive from the Broadway exit off 101 to a friends house and the drive home via the Trousdale on ramp to 280 on the way home I bet I drove by 100 newer homes built after the older homes were torn down over the past couple years. On some blocks half or more of the homes were brand new huge homes that made the older tiny homes look strange. On some of the lots I remember a single home where there are now two brand new homes. As a kid riding my BMX bike around Burlingame, Hillsborough and San Mateo I can’t remember even a single home that was “torn down” to build and sell a new one. When developers are buying lots of tiny crappy homes in a city and building super nice big homes the rise in the “median price” does not mean that every home is going up in value…

That would depend on your definition of OK. Most BA families certainly gross less than a HaHa. I have friends in the BA who rent and make less than a HaHa together, they seem to do pretty well for themselves. However, they don't have kids and they haven't bought into the cult of luxury goods "must-haves."

I'm seeing homes hit the market in South Marin in the 1.4-1.5m range that would easily have been priced around 2.0-2.1m during the peak. That's the good news. The bad news is these puppies are selling fast, one I know of had 3 bids and most probably went over.

My problem is that even these prices are 30% too high, if you measure by any kind of sane return to the mean. You can actually see homes that sold for around $0.9m in 2002, more than doubled by 2005, and now are "bargains" at 1.5.

I believe the house on Orange has been for sale for over a year now. It's been relisted.

"With 1 HaHa, can a small family live an OK life renting in BA"

Yes, easily.

Because HaHa is special and deserves to own a big house on the hill.

Good wine.

CB:

I'm a local here and ever since college in the 1980's I had lowered my expectations in order to be able chose to live here and keep my sanity at the same time, well, the lady who became my wife knew what I was like.

Sometimes to get a rise out of her, I will accuse her of marrying me just so she could live in Silicon Valley.

Of course, she was a U.S. citizen, didn't need a green card or H1 or anything like that. She coulda moved here on her own.

Now, since you expressed an acknowledgement that there's a lot of tradeoffs to living here, I'm figuring that it is just a coincidence that you have traveled the well trodden road of Hong Kong to Canadian residency, marriage to U.S. green card, relocation to Silicon Valley. So, even if that's not you, certainly you see the irony in it.

Woot. Is this thread going to turn into another backlash against conspicuous consumerism? That's what got me onto this blog in the first place. What ever happened to bragging about your net worth, instead of your possessions? That concept was lost somewhere between generations.

My grandfathers were smart guys--they both enjoyed gardening. Of course, I kind of suck at gardening and other hobbies that require regular attention. Once I came close to killing the plastic plants in my office. Maybe I could have one of those Zen rock gardens where you rake around river stones into interesting patterns.

GC, I already like your taste in wine. That's about my monthly budget for vino rossi. I hope to one day have a wine cellar in which to relax, complete with custom tile, mosaics, stained glass and nice woodwork. Fortunately, I have relatives and friends with some of those skills. :)

Unless you both live less than 15 minutes from work and don't pay for parking, $200 for transportation is way too low, more like $200/person. If you have a white collar job (as opposed to an IT job) $200 for family cloth budget is quite low.

Unless a member of the family works in a certain ancient profession, $100/month for condoms warrants a "huh?"

Also - car payments, student loans, insurance, healthcare copays, any kind of entertainment, electricity for 2-3 could easily run north of $100 even in a small apartment.

The cost really jumps with kids, those ballet classes and cute jumpers cost a lot.

GC:

Do you have a daughter?

Hey, I think ballet is also a torment for most adults.

And don't think home maintenance, cooking, or knitting come cheap! Those enameled cast iron dutch ovens don't materialize by themselves. A decent hard wood spinning wheel will set you back about $1K. And then you need to get a flock of sheep and a farm...