patrick.net

@Peter P,

The offset blockquotes (with sources cited) are real. The rest is geniune parody.

I see.

austingal,

Congrats! Hopefully, the market will "correct" while you're at home nesting, and by the time the little one is old enough to deal with a move, it'll be the right time to buy.

CB,

Is that what they mean when they say "So small you have to go outside to change your mind"? Chicago had a lot of "coach houses" that faced the alley left over from the horse and buggy days but this is ridiculous!

You never saw Realtors saying :

“Parisi said he believes ‘boom and bloom’ media coverage has hurt the market. ‘We’ve seen some very ridiculous asking prices,’ Parisi said. ‘People shouldn’t be desperate to buy a home… The problem is some sellers are out there just to take advantage of the marketplace.’”

Even more to the point than Mr. Parisi, Florida Realtorâ„¢ Becky Troutt gets right to the heart of the matter:

“I think some of the sellers are out for blood! …There is a difference from ‘making a buck’ and ‘trying to get something for nothing’! Just because the market is hot right now and homes take less than 3 months to flip…..doesn’t mean that buyers should have to give their financial futures away and it doesn’t give you the right to go for the jugular vein! How insulted would you be if you were that buyer and someone asked you to $90,000 over they had paid for a house 5 months ago? Do you think you would say…ok sure no problem. I’m not spinning my wheels in mud with an unrealistic seller who only wants to try and rip a buyer off!”

A note to home sellers: If you want to make $90,000 flipping a home……don’t look at homes that are $200,000 when you buy it and gouging idiots with too much access to credit hoping they will spend more than they want to spend or can afford just because it’s a hot market, and you think you can get a buyer up that much…..because….IT AIN’T GONNA HAPPEN!!!”

Never saw that, did you? Realtors' as a group (with individuals dissenting, I'm sure) wet their pants with glee as their commissions shot up. Never once did you hear them bitching about greedy sellers robbing the buyers. Now that their commission checks are coming down, nothing but bitching and moaning.

@SFBB,

Amen. You nailed it! The quotes so readily lent themselves to this they almost parody on their own don't they?

I think many readers here are missing the sarcasm here. Read the thread post more carefully!

Posted to her blog.

How long before it's deleted?

Too funny!

Another great example of creative writing! ...but you know they really feel like this.

@austingal Congratulations!

@Space Ace
You forgot the universe of options that opens up when taxpayers are soaked for bail out bucks to make the bond holders whole. This Reddit discussion thread on bail outs tells me Congress will enact such legislation in one form or another. The mainstream population simply does not grasp that turning to the government means giving more taxes.

@SFBubbleBuyer
What will be even more interesting to watch is the one-two punch the Realtor industry will be taking. The first punch is the commissions dropping as you mentioned. The second is the trend of information control is going against their favor. They are beginning to lose their control on pricing data, and will have to show business value elsewhere in the transaction.

Lets do the time warp dance...
http://www.dqnews.com/AA1996BAY12.shtm
Resale houses back in 1996

# Sold # Sold Pct. Med($K) Med($K) Pct.
Nov-95 Nov-96 Chng. Nov-95 Nov-96 Chng.

Alameda 807 863 6.9 $198 $207 4.5
Contra Costa 683 756 10.7 $190 $197 3.7
Marin 185 199 7.6 $337 $343 1.8
Napa 80 70 -12.5 $170 $175 2.9
San Francisco 260 283 8.8 $265 $269 1.5
San Mateo 456 528 15.8 $290 $284 -2.1
Santa Clara 1,108 1,031 -6.9 $257 $258 0.4
Solano 295 300 1.7 $147 $137 -6.8
Sonoma 383 395 3.1 $185 $185 0
Bay Area 4,257 4,425 3.9 $227 $229 0.9

Does anyone see prices around even 300K in Bay Area...
Any reason for the inflated prices... what changed??
(Maybe people got stupid)

Oh grasshoppers ... yea shall see...

Space Ace,

Nice find! That helps put things in perspective. Given that things really started to "ramp up" from there doesn't mean prices like that haven't existed for a "long, long time". Sellers like to gloss over that too.

Now those are median prices in Minnesota.

Posted my own 2 centavos on Becky Troutt's blog.

The sheer hypocrisy of that lady is astounding.

My wife always some real mice for our cats as toys. But that would be too cruel. And too messy.

As Georgie says "that's not food, if it were it would be in my bowl"

Georgie has no desire to catch mice, Georgie is a very lazy cat.

Brandon rulez!

SP,

I meant to imply that checks got smaller as well as less frequent in the "commission checks coming down" remarks. :)

If buyers sense that prices will start falling, they will wait for lower prices. Which means n_o_b_o_d_y g_e_t_s p_a_i_d. This is the real reason that realtwhores and everyone else who benefits from the transaction (at the buyers’ expense) will do ANYTHING to hide the fact that prices are going down.

This is the buyer-seller standoff problem that's been brought up before. At some point, if buyers do not capitulate, the Realtors (TM) will turn to the sellers and ask, nay, beg them to lower their prices in order to get a sale.

I don't think we're close to that point in the "prime" Bay Area yet.

Foreclosures in California up 800% y-o-y.

SpaceAce,
Thanks for the stats. Not to sound almost RE bullish, but one could argue prices in 1996 were below the historical trend for Bay Area housing prices, so the numbers are skewed low.

Either way, point well taken - there's potentially a lot of room for prices to fall. I still think the key is jobs/economy. Once the stupor from the Web 2.0 "the tech bubble is back" BS wears off, that will be the time point we're talking about. In turn, that relates to how much money continues to get pumped into the startups and larger public tech firms, which in turn depends on the overall economy. In that regard, the cracks are already starting to show...

HeadSet Says:

> Savers now get the chance to be evil.
> I’m going to lowball big time, and of course
> be turned down.
> Then when the house is still unsold months
> later, I will get a call seeing if I’m still interested.

You will get the call earlier if you give some friends the chance to be “evil” and offer even lower than your lowball offer (make sure they mention every bad thing about the house to sellers to plant the seed that they own a dump in a bad school district)…

"I still think the key is jobs/economy."

My point exactly, when did you ever see a BA economy that raised prices.
Not in my lifetime living in the BA. Detroit raised the price of Mustrang from 2500 first year to what today.. $20,000 or so. First PC was around $10,000 now down to $500 for laptop.

We dont have the pricing leverge to pay for employees high salaries and their bubbly homes. More recently, we had more acquisitions and mergers, employees loosing jobs than new start up going public (raising capital hiring new employees and expanding).

Thanks for the stats. Not to sound almost RE bullish, but one could argue prices in 1996 were below the historical trend for Bay Area housing prices, so the numbers are skewed low.

To make up for that, assuming 5% appreciation a year, $300k would be about $513k a year today.

DinOR Says "Now those are median prices in Minnesota."

Bear in Mind prices in New Jersey were the same as prices in SF South Bay. Yes they had snow in NJ while CA suffered a draught. That was back in 1976-79. Point being CA prices were no different than other parts of the nation. The stupid notion your paying for sunside was indeed stupid.

What FAB is referring to is framing. If you can get a collaborator to really do this it is *extremely* powerful int he seller's psyche. It turns them around from perceiving your $250K under asking offer as a quarter million dollar _loss_ to instead seeing your $50K over the last offer as a _gain_.

There are two problems:

1. Many sellers have a disgust barrier. Breaking their mental accounting through that barrier is the very definition of stickiness. It's hard to do. Many many sellers will say f-u to the first offer and just pull their listing if your second lowball comes in.

2. Getting a collaborator isn't easy. It's a *lot* of work for them. They have to be credible, which probably means they don't already have a house. They have to get pre-approved, make a earnest deposit, and make it look real. That always means there's a very small chance they end up with the house, also. (Of course then they could figure out somehow to let you take over the offer I suppose, but it would be messy).

What FAB is referring to is framing. If you can get a collaborator to really do this it is *extremely* powerful int he seller’s psyche.

Framing is a very interesting topic. Beyond Greed and Fear has some good discussion on it. Perception is everything.

An average 2000 sq ft TH I seen in 1997
was fetching for under $200K. Add 5%YoY
appreciation.
1997 200,000
1998 210,000
1999 220,500
2000 231,525
2001 243,101
2002 255,256
2003 268,019
2004 281,420
2005 295,491
2006 310,266
2007 325,779

That Same TH now is listed at $660K
Needless to say a 50% decline would
get you back to normal trend. You can
factor in Rent vs own and Income to price
you pretty much get back to LT averages.

2. Getting a collaborator isn’t easy. It’s a *lot* of work for them. They have to be credible, which probably means they don’t already have a house. They have to get pre-approved, make a earnest deposit, and make it look real. That always means there’s a very small chance they end up with the house, also. (Of course then they could figure out somehow to let you take over the offer I suppose, but it would be messy).

Oh... I don't know. I imagine you could find a *few* willing parties like that on this blog (_whistles innocently, rolls eyes skyward_).

"To make up for that, assuming 5% appreciation a year, $300k would be about $513k a year today."

That would be Marin County in 1997. The only place where med prices were $300K. And I agree for today $500K for Marin county sounds reasonable, along with LAH, Woodside, Saratoga, a few others.

surfer x,

if no-down is your requirement, then you'd better get your foot in before the door is slammed. The lending requirements are changing very rapidly up here in BA, I was told by a friend who is in the middle of refinancing that his lender told him that he couldn't qualify for the full-doc rate, while 3 months ago this was not a problem at all.

If you think that you can save up $60K in the next 3-5 years, then you probably should hold off. I don't know about Ventura, but this is just the beginning of the housing bust. It will go much deeper than people expect because when a bubble of this scale deflates, the market will tend to overreact the other way. It doesn't sound like you and Mrs. X are the quality-of-life buffs who demand a nice home so that she can do some interior deco.

However, the upside of getting in right now is, in the worst scenario, you put nothing down, and can always walk under anti-deficiency protection, while saving some tax in the mean time.

Surfer-x serves as an important data point for the housing bubble. One more potential buyer caved in. I think Randy is going to buy soon because of QOL considerations.

I will use FAB as a yardstick for buying. When he buys, then we have hit the bottom and I can follow suit :-)

Here's what 300k will get you these days.

It's a shame it has no picture.

Los Gatos Hills, in the middle of nowhere, a 680 sq ft 2/2 bungalow on 3100 sq ft of lot.

Awww, yah!

HARM,

In a heartbeat! Do people still get "pre-qualified" before putting in offers? I remember a time when realtwhores wanted to make sure you were pre-qual'd before they even drove you around! With as much as the deck has been stacked against the buyer the last decade I can't imagine any guilt over doing that!

SFBB,

that is not Los Gatos Hills, that is Los Gatos Mountains, very different concept. Los Gatos Hills refers to the Shannon road, Kennedy road area, or the Monte Sereno foothills with multi-million dollar mansions, the creme de la creme.

Los Gatos Mountains = Santa Cruz Mountains, most of which is sitting right on TOP of the major fault line. Many of those houses in the LG Mountains were built without proper codes. LG mountains is where the people in the valley used to have their vacation cabins.

I will use FAB as a yardstick for buying.

I am using my friend as a yardstick. She usually has good luck with big purchases. I need to borrow some luck from her. :)

My bad. I meant mountains. :D

Nothing like living on a fault line in a shack for 300k!

edog,

I'm no huge fan of Zillow either. It shows the home I sold in DEC 2003 currently valued at $899,990 (kidding). They're so grossly inaccurate I can't imagine anyone getting bent out of shape about it? Besides who are appraise-whores to bitch! Oh they were a bunch of altar boys during this whole thing.

Getting a collaborator isn't that difficult, have your parents do it. Sign an agreement beforehand so that there are no tax implications, and then have parents from the wife's side collaborate (if your wife has changed her last name, that is).

"LG mountains is where the people in the valley used to have their vacation cabins. "

"Nothing like living on a fault line in a shack for 300k!"

Yes... LG ...Santa Cruz Mts back in the day listed for around $125K or so. Do it yourself Septic tank and propane! Dont forget the forest fires! Did i mention propane tanks!

" I just take the 10 year graph off of Zillow and fit it with a line and thats what it “should” be now."

Did the same after the recession and plotted the S&P bottom I got into the market spot on, never had a single regret catching the bottom. This is a Peter Lynch theory at play. Im doing the same with home puchase.

Space Ace,

where do you target in BA since you've been here so long? Anywhere in the South Bay with a high intrinsic value?