patrick.net

"Cupertino has its own whole dynamic that probably has more to do with the rising elite class of people in Bangalore and Shanghai than what’s happening in the American economy."

I sure hate to see this elite class walk into my Los Gatos or Saratoga not to mention Woodside.

Randy H,

I can't even imagine how else you might be able to get hold of the property. Try to contact people who are already delinquent and offer to buy it from them? I guess there is already sort of cottage business in this kind of thing. Not my style, personally, though I can see how it might be lucrative.

What did you have in mind?

Is that with the taxes factored in?

Allah, I don't know why you even try. Our West Coast bubble is so much bigger than your East Coast bubble - ours is like the Goodyear Blimp, whereas yours is like a bubble gum sized one.

Have you ever seen any of the properties on Burbed.com?

Like the ugly $574k 3/2 that you cited on MLSLI... you know why at $549k gets you here?

It gets you this:

http://www.burbed.com/2007/03/07/650sqft-located-5-blocks-from-train-tracks/

Oh, and its in a place called Gilroy - it's like basically like Riverhead in terms of distance, and the fact that the main attraction is an Outlet mall.

Wesssst side!

Lots of space on Moffet field.. lots of new development SFH off 85 and central.

Ugh, Moffett field. That place is so polluted all your children will be born deformed. Like that brain cancer cluster near Whisman. Ugh.

I just would like a place that's West of El Camino.

Have people seen this $419k 991 sqfter in San Jose?

http://www.mlslistings.com/common/properties/photo_page.asp?mls_num=710942&Line1Address=1286+MICHIGAN+AV&Line2Address=San+Jose%26nbsp%3BCA%26nbsp%3B95002

I don't understand- did the Marine corp use this to train for fallujah??? How did this happen!

"so polluted all your children will be born deformed"

Actually anyplace in Sunnyvale will give you cancer. You see all the solvents used in Semiconducter production in the 1970s to 80s has containated the groundwater. Anyplace you go youwill find a health notice. Sunnyvale already has a rate of cancer.

You should see what FosterCity looked liked before its development.

I think what HelloKitty said is all legitimate in a normal market, be it up or down. However, the severely down market works entirely differently.

I didn't purchase my house with a buyer agent. We bought it directly from the listing agent and argued some price off while using a lawyer. I used a lawyer back then because
1) it is an existing house built in the 60s, lots of things could go wrong, and it was my first RE purchase in the US, so I wanted to cover my ass on all fronts
2) Lawyer fee was cheap (something like $9xx)

I would characterize the early 90s (the time of my purchase) in South Bay as a normal down market, there were not so many REOs. REOs mushroomed on East Bay, but this side of the bay was pretty calm, there was distress but no panic.

However, in a severaly distressed market, the best way is to negotiate directly with the bank, not the seller. There are several reasons:
1) Banks deal with a large listing agent who has to prove that he/she can unload fast. They fire agents every few months if inventory is not moving off the market fast. If speed is the major concern, playing trick to pocket the 6% is the last thing on the agent's mind.
2) Banks auction REOs off directly, even cutting out the agents.
3) Here is something that I saw in other severely distressed market not mentioned in the press. First of all, I think Hong Kong people in general are quite mild in demeanor and law-abiding. Not so when it comes to losing their lifetime savings. Lots of REO apartments in 2000 and 2001 that my friend, an expert RE vulture, saw, were just in terribly sabotaged stage, even if they were located in good areas. Before vacating their homes, they just trashed the place up, pouring concrete down the pipes, breaking up cabinets, etc. If you are taking it over directly from the sellers, you'd be in for a big surprise. The banks usually have NO time nor interest in fixing them up, so they just sell the sabotaged places as is. So the upside is, you get a sabotaged place for a really beaten-down price.

I'd say deal directly with the bank by 2010.

Of course there are a few stock option wealthy here and there, not enough to inflate the real estate, though.

I would think the first run-up in RE prices here (1998-2000) has something to do with stock options money. Someone I know real well struck IPO pay dirt and was trying to buy at the Avalon McMansion development in Fremont (lowest prices quickly went from like 800K to 1.2M), he lost out on the lottery so he didn't get the house. I left HP at 1993, every job I had after I met people parlay IPO or stock option money into houses.

Gray Davis had a record deficit because he kept the projection of capital gains and stock options which was something like 500% than normal, I would think someone would cash out and bought a few houses and thereby inflated prices.

Well, the second run-up in late 2003 probably has a lot less IPO money.

I would characterize the early 90s (the time of my purchase) in South Bay as a normal down market

Down market indeed, I bought my townhouse in 1991 for 225K, by December 1993, it was appraised as 175K, luckily I was not an FB, and my income grew a lot (%wise) during that time period.

As a normal homebuyer who is doesn't rely on RE investment for living, you cannot possibly compete with those experts who can get the first dip on the best deals. But, they are after the best deals (best price/function performance), not necessarily the best house. Because the best houses don't necessarily generate the best rental yield, which is very important for long-term RE investors who need that to carry the mortgage.

However, it is not that important that you capture the once-in-a-lifetime rock bottom price. If you hold off and buy in 5 years, you are already way ahead of those who bought since 2004. So in a big picture, +/-$10K to squeeze the last bit out the realtors is an after thought, if you can save $400K by postponing your purchase for a few years.

Agents can only play tricks if there are more buyers than sellers. When the number of buyers dwindle drastically, they will volunteer their commission to close the deal. When we bought our place, we wanted the seller to give some money towards the roof, which was approaching its lifetime. The seller refused, and the listing agent volunteered $2K out of her own commission to close the deal. It will happen again.

HelloKitty,

do you see any REO lots? I have never seen any REO lots. Do you know what kind of tricks listing agents usually play dealing with residential lots?

In the meantime, rents are GOING UP in the city, and I am facing a 25% increase myself.
Malcolm Says:
That is wild. I’ve never heard of an increase that steep in one go. Are they doing a renovation or is there just shortage of rental units?

Shortage of rental units, unmitigated greed, etc, etc. They are trying it on without a renovation. As I pointed out with the photos I submitted to the Tribunal. And they aren't even hurting, altho recent investment purchasers probably are.

But this phenomenon may transcend normal supply/demand considerations -- all these recent specuvestors can potentially control the price of housing and rents -- after all the RE agents scammed them into buying with a lousy ROI, now the RE agents can put the rents up to make the dream kum tru...

Hell why buy a home now? In a few months I will have a plethora of Mc Mansions to choose from which I will squat in. The banks will be too busy trying to sort this mess out that they probably won't notice!

Renting will be the new owning, squating will be the new renting and owning will be the new form of serfdom.

DesperateRenter Says:
I’ve been calling the bubble for 7 years now, and prices are still going up! 2007 has been white hot for homeowners

yeah, right. calling it for maybe 3 years, and 2007 has been very far from whitehot for loanowners, particularly with record rates of foreclosure and the folding of subprime lenders...

Malcolm:

I'm not sure how comparable Sarasota and the Bay Area are with respect to the conditions which drive down rental pricing, but the market here in SRQ shows some downward movement in rents.

The key here seems to be excess inventory in new construction and new condo conversions - places which were never sold. No one has been forced to vacate these developments and look for a rental, and there are many empty or nearly empty highrise, zero lot line SFHs, suburban condo complexes, and gated communities either recently completed or in the last stages of completion here. We have boom inventory in a bust climate.

This was true on a much smaller scale in the last downturn here. By 1990, it was easy to find rentals in Sarasota which were originally intended only for sale - a boon to renters like me who don't much care for terrible, stingy flats adjacent to and elegant 'clubhouse/fitness center/pool and spa'.

Over the boom decade, this city became so costly relative to (dull) nearby towns that most renters moved away to Bradenton or Venice and commuted to their work here. If this time is like 1990, many of them will lose those local jobs and go back to wherever. Much as I think of Bradenton as cheap, it's still pricey as compared to inland (similarly dull) towns like Lakeland or Ocala. People go to where they can manage.

If rents went down in SF in 1989, I expect they will again.

- and elegant
+ an elegant

*sigh*

Moron Lenders

Allah, I don’t know why you even try. Our West Coast bubble is so much bigger than your East Coast bubble - ours is like the Goodyear Blimp, whereas yours is like a bubble gum sized one.

I agree that prices are higher in some places on the west coast;salaries are also higher. I have had co-workers move to California (because anywhere is better than here) several years ago BB (before bubble) and get a 20% - 30% higher salary.

There are still some places in California where the cost of living is cheaper than Long Island.

That is why I say you can't compare the two. They are very large areas with varying prices and salaries. The prices over here would be much higher if people got paid more because it seems everyone wants to get the most they can at a how-much-a-month price.

http://www.mercurynews.com/business/ci_5512484

Ohio plans bailout. California to hold hearings on subprime.

HElp! I’ve been calling the bubble for 7 years now, and prices are still going up! 2007 has been white hot for homeowners, what am i going to do but get online and shout and complain!

Deperate Renter (ie Confused Renter/MP/FR):
Here's some "help" - go out and buy the biggest pipe you can at Home Depot and ram it up your a$$ you stupid troll.

lol...Ohio Housing Finance Agency will provide financing for about 1,000 loans with a fixed rate of about 6.75 percent,

LunarPark...
Bail out but no taxes... who will buy the bond? and only 1000 loans.
so what happens when comes to 10,000.

'HElp! I’ve been calling the bubble for 7 years now, and prices are still going up! 2007 '

Wallstreet Journal has had a discussion board since 2002. Chill and watch the meltdown.

High Salaries in Bay Area?

You got to be careful here, I have seen plenty of employers who paid high salaries like Netscape, tandem, amdahl, SGI and others... their problem was out of control spending. That is why they are no longer around.

The better run employers that survive the downturn are very conservativley run. They dont pay as much. Also depends on what your function is. Do you start a new engineer at 100K which is fairly close to a 10-15 year vet in the business. No off coarse not.

That's some real deflation. Some of those apartment owners are going to be hating life soon. I've wondered what the early 20 something crowd was doing for housing. Both renting and buying do seem really out of reach for those guys.

Though realistically, for an employee, what's the difference between working for a start-up and working for a "conservative"company. In both instances, you'll probably be in a different job in two years.

I don't work in IT at all but my dad does, and my sense is that everybody is enviously eyeing the IPO millionaires and biding their time in waiting for another job or anxiously waiting for the ax to fall on their current job.

Space Ace Says:
March 24th, 2007 at 9:12 am
lol…Ohio Housing Finance Agency will provide financing for about 1,000 loans with a fixed rate of about 6.75 percent,
LunarPark…
Bail out but no taxes… who will buy the bond? and only 1000 loans.
so what happens when comes to 10,000.

I don't like the idea of a government bailout but that almost seems workable. I do doubt that it will make a difference to the FBs. They couldn't qualify at that rate in the first place but it could save some of them. Most people could make a huge killing cherry picking the FBs who will survive and then lending them at an above market rate. This lottery of 1000 is just going to make matters worse.

The whole American economy and mentality has become incredibly unhealthy. Nowadays if someone is in the same job for 5 years and appear to be doing quite well, I'm actually thinking "what's wrong with you? don't you want to get ahead?" There's a whole lot of uncreative destruction going about.

Corporations have upsized, downsized, rightsized themselves into one heck of a conniption.

Luna
With the government's guarantee on the paper private banks will put up the money. I'd love to earn 6.75% on a safe investment. As they default though it will become a taxpayer bailout. Too bad it won't actually be a bailout, it will just be a waste because they are going to still default and the houses will still be sold at a loss.

astrid Says:
March 24th, 2007 at 10:11 am
The whole American economy and mentality has become incredibly unhealthy. Nowadays if someone is in the same job for 5 years and appear to be doing quite well, I’m actually thinking “what’s wrong with you? don’t you want to get ahead?” There’s a whole lot of uncreative destruction going about.
Corporations have upsized, downsized, rightsized themselves into one heck of a conniption.

I agree, I've held a few jobs for more than 3 years and I still get raked over the coals by some babyboomer who would be petrified by a job change. They treat it as an acheivment when in my opinion they have led a very boring career. On my last exit interview I actually wrote, I won't ever understand how someone can do the same work at the same place for 14 years. This sort of culture will lead to continued stiffling of new ideas and the company will slowly lose its competitive edge.

Malcolm,

I think we're actually on opposite sides of this debate. I don't think people should regularly change jobs if their current job is suitable (since job change is a high risk, high cost activity for everyone involved) but regular job changes is becoming the norm.

I do agree that most work places seem designed for counterproductiveness, where stupid people (by no means all of them babyboomers) stay forever and are constantly in the way of progress.

No, I think I agree with you. You even take my point that it is the frightened deadwood that lingers on. I've seen it everywhere I've worked that's been around for say 20 years, there are a bunch of older people who are literally human mindless robots.

I'm just a believer in moving on when you aren't happy at a job, and in my case, know when you've outgrown a job. I've left 3 perfect jobs that most people would have relished showing up for 15 years either because I moved, or I wanted to be in a different industry, and one case because I became disgusted with higher management schemes that involved lying to investors.

What's even funnier is that I usually always lasted longer than people starting at the same time, or before me. It is true, this small group of people literally entrench themselves in these companies, and after they turn 40 are only letgo during a retrenchment. Any other way and the company is afraid of a lawsuit.

It does seem to mainly be women who seem to have a phobia about a life change, but it seems to be male executive types who throw the age discrimination lawsuits around.

>You should see what FosterCity looked liked before its development.

Um, what did Foster City look like? I thought it simply didn't exist.

So where are the safe places to live? Other than.... Belmont I guess.

Malcolm,

Yeah, we're in agreement.

I think there are intelligent and able baby boomers out there, it's just that most of them are running their own businesses, doing consulting, (worst case scenario) working on their 6th frustrating dead end job in 10 years, or drop out of the workplace altogether.

Astraid

I did work for a well funded start up that was run very conservatively.
We did well 100% year over year growth. The youngest was 35 yo.
Lots of experience never hurts. When managment were to turn over every 3 years that would cause chaos an low morale.

eburbed-
You "guess" ? Dont you know?

Space Ace,

I agree that experience (as opposed to time punching) is critical for a company's wellbeing. I was just trying to say that staying in a well runned company for the long haul is so exceptional now, that people who do so almost appear as aberrants.

Women in managment suck. They are too political and totally clueless.
They way over complicate matters.

if their current job is suitable (since job change is a high risk, high cost activity for everyone involved) but regular job changes is becoming the norm.

One of my favorite bosses told me a smart employee is always passively looking at career options because it is an unpredictable world. Since I believe this to be true, for fun I'll challenge your point although I do recognize that is a very general unencompassing good rule of thumb. The reason I think at all levels job change is healthy for the individual and the general economy is that a great deal of knowledge transfers around. (I'm not referring to IP) I think when an individual changes a job it is a reality check on changing times, and often he/she will add skillsets to get a new job. It basically forces people to update instead of just sitting around hoping for a promotion with even less responsibility. The longer someone becomes idle in a job the more a change is detrimental and they can't control changes like disruptive technologies which can obsolete entire industries. Like I said on a prior thread, look at engineers, software engineers, realtors, lawyers, accountants, typesetters all of these were very good professions which are/have been severely impacted by economic and technological change. Blue collar guys are now making more than these white collar glamor type jobs because the market has correctly revalued their services mainly with the internet, and software innovations.

Space Ace,

I think that can be the case, but plenty of men in management are clueless, petty assholes. They just show their color more slowly. But good women bosses do exist, just like good women professors...they just tend to be rarer.