patrick.net

Bay Area FB's may stay F'd...

"Fannie Mae and Freddie Mac pledged at least $20 billion to help homeowners caught in the subprime meltdown, but those in the Bay Area could be left out. ... The loan limit on government-sponsored enterprise loans for single-family homes in California is $417,000."
http://tinyurl.com/32dgqg

SP

BigBrother,

So... I take it you've got some investment properties that aren't selling then? That's ok. Wherever they're located I'm sure it's "special" and will weather the coming 5-year tidal wave of subprime & Alt-A ARM resets no problem.

Credit Suisse ARM Reset Chart (2007-2013)
(CLICK TO ENLARGE):

Funny how the housing market is tanking practically everywhere in the country, NODs and foreclosures are reaching peaks not seen since the last RE bust --and yet, as you say, unemployment remains stubbornly low. Plus, S&P just hit a new all-time high. Isn't the correct order supposed to be: recession & high unemployment first, followed by housing crash?

What gives, I wonder? It's almost like this time, it's the housing market crashing first, possibly to trigger a MEW shutoff recession later on. Or, perhaps there won't be a general recession at all, and the RE market will simply stagnate for several years or more. Meanwhile, incomes and rents catch up and inflation eats away at the real value of your depreciating assets.

Either way, buddy, looks like you're screwed while the rest of us earn double-digit returns on our stocks, ETFs & housing shorts. Sorry to disappoint you, but no Doom 'n Gloomers here, pal!

Sure must suck to be you, all overleveraged and caught with your pants down. Anyhoo, good luck to ya' --you'll need it! Oh, and say "hi" to the boyz at the NAR for us. :-)

Does Word 2007 do a better job of rendering to HTML? I’m having a nightmarish time trying to cut and paste Word docs into Wordpress.

The best way to produce HTML is to hand-code it. I do not trust any tool.

Word 2007 does have a blogging feature.

Big Brother
I know this will sound like heresy to many of the posters here, so I just want to preface what I am going to say by saying that the following is only one person's opinion (mine.)
I used to live in San Francisco and my daughter and a good friend of mine are currently living in San Francisco. The city had lots of appeal 20-30 years ago. I don't know if the City has changed or my perception has changed but it seems dirtier. Whacked out people used to be confined to the Haight but now they are everywhere. Even though real estate is expensive, many of the neighborhoods look poor and run down. The values ( not monetary) there have changed dramatically,also.
If you are young and single, it may hold a certain appeal but it seems as if many people move out past a certain point in their life. If you have super big bucks, you can insulate yourself somewhat.

I think this is the first time I heard Danville described as undesirable. I'll take Danville (esp. area of danville woman's former residence) over the vast majority of SF.

Peter P,

Ughhh, I guess I better pick up

I think this is the first time I heard Danville described as undesirable. I'll take Danville (esp. area of danville woman's former residence) over the vast majority of SF.

GC, I always prefer Microsoft products. The UIs are just so well-designed.

I used to think that. Some of the logic in their menus annoys me a little now though -- e.g. how Options are set up in Outlook (all over the place), Excel is a bit quirky, and the suite concept and convergence seemed to be something of an afterthought at times. But I don't like Adobe UIs much at all, having said that. What about the OpenOffice suite? Is it any more integrated?

I use OpenOffice at home. It's a little maddening, largely because I'm so used to the Word interface.

I have a twin sister who was born at the same time as I and has nothing in common with me. I blame gender, genetic variations and upbringing

That is a fraternal twin (being different gender)? Fraternal twins are no more similar than any 2 siblings, but helps prove the 80% genetic loading on phenotype... identical twins separated very early on show very similar temperaments when studied later, apart from the effects of disease or other environmental insult...

What happened to Lotus Notes and Domino servers? Their groupware was pretty good -- offered a lot more integration and promise than a bunch of disjointed MS server products...

BigBrother Says:

> This is a great thread, thnx everybody. I find that
> most people think they have secure jobs and increasing
> pay, yet for some reason the majority also feel that
> prices will drop b/c of a bad employment outlook.

The Bay Area is losing jobs every day to:

1. People in other countries that can work via e-mail
2. People who move from the Bay Area and continue to telecommute
3. Online shopping (retailing jobs are shrinking)
4. Companies moving because they can’t make a profit paying Bay Area rents and salaries
5. Companies closing because they can’t make a profit paying Bay Area rents and salaries

Many of the losses above are being offset by “Web 2.0” and other start ups, but we are heading in to a period of overall job loss in the Bay Area.

BigBrother Says:

> Do you live in San Francisco? Housing prices have
> creeped up under all this doom the media is portraying.

Can you give us the address of even single similar home or condo sale in 2006 and 2007 where the price is higher? The subprime melt down has slowed the sale of entry level homes and pushed up the median and average prices but every home selling in SF today would have sold for more last year (Things are even slowing on the high end, for example Kirk Hammett has not been able to sell his home in over a year and just lowered the price by $2mm)…

> I say give it another good 6 months to a year, and
> everybody will finally realize the media has hoodwinked
> potential buyers out of another year’s gain in SF
> real estate.

Give us the address of the investment homes in San Francisco that you just bought (since if you really believed SF homes were going up you would be an idiot not to buy at least a single investment home and get a huge leveraged return)…

Bap33 Says:

> “the doom the media is portraying” ……… doom?
> doom! Aint seen any doom yet. I guess Frisco has
> it’s own media ??

I just finished reading the WSJ this morning and picked up the (free) San Francisco Examiner that was also outside my front door.

The Examiner and WSJ both had big real estate sections (with lots of real estate ads). I didn’t read every word of both papers, but I didn’t see anything even close to “doom”…

P.S. When you say “Frisco” most people think of the horrible little town in CO on 70 just above Breckenridge (not the CA costal city just south of Marin)…

Look, rents up 12 percent in San Jose!

http://abclocal.go.com/kgo/story?section=local&id=5224785

I am sure I will get berated for not following the party line, but we should not ignore inconvenient facts.

The city had lots of appeal 20-30 years ago. I don’t know if the City has changed or my perception has changed but it seems dirtier.

The City is cleaner and safer than it was in the 70s and 80s. This is actually pretty easy to prove, at least the safer part. There are perhaps more mental patients walking the streets. This is because communities like Danville don't take care of their mentally ill and instead dump them on the streets of San Francisco. Talk to some homeless people: you find out that none of them are "from" San Francisco. Not really sure what can be done about that.

Jimbo,

From that article you cited:

According to Novato-based Real-Facts, which tracks apartment industry trends, this year's annual rent increases range from 2 percent in Sacramento to the spikes of 12 percent in San Jose and 7 percent in the Los Angeles region.

Ok, so basically rents are tracking (real) inflation at best in some areas (L.A.), below inflation in others (Sacramento), and higher around Googlaire country (San Jose). I could easily cherry-pick single data points and "prove" the opposite point.

Until the housing market settles more, it may continue to be a landlords' market.

In the Bay Area, San Jose is certainly not alone -- San Francisco, Marin and San Mateo counties also rank as some of the nation's least affordable areas for renters.

I don't know that you could call this a statewide "landlords' market" (sounds like typical media unsubstantiated "rah-rah" pro-REIC cheerleading to me), but I certainly agree that CA in general and the BA in particular are among the least affordable places in the country. Only thing is, this is even more true for home buyers than renters --something they conveniently failed to mention.

One thing danville woman, San Francisco is very much a city of neighborhoods. You can a very different idea of what The City is like depending on where you are spending your time. All big cities are like this, as far as I can tell.

But since you lived here in the past, I would assume you already know that.

OT, but an excellent in-depth critique of the 'offical' reported CPI figures here (aka "inflation ex-inflation"):
http://globaleconomicanalysis.blogspot.com/2007/04/cpi-three-card-monte.html

I can't imagine why anyone would take exception to calling "San Francisco" "Frisco"? I really can't.

Chuck Berry called SF 'Frisco' in (Sweet Little Sixteen) and without Chuck (like it or not) we'd be listening to some kind of techno-version of Lawrence Welk (or worse, Montovani!) If Chuck can say "Frisco" it's good enough for me. :)

I can only imagine what he would call Portland? :(

Jimbo

My daughter was doing a Psych Rotation at UCSF. One day she was interviewing a patient with homicidal tendencies. The next week she saw her on a San Francisco bus.
Nice.

And yes, I certainly DO feel "hoodwinked" by the gloom and doom media cheating me out of yet another year's gain.

Pffft.

HARM, DP

Thanks for those enlightening articles on MSN and NYT! All these years I had no idea that I was an "obsessional personality" and that my fear of being thoroughly corn-holed was holding me back. Well obviously "high" level functioning professionals take the plunge head first without so much as a moments reflection! Where do I sign?

(Please to note the NYT article is dated 31 July 2005) so it went to print on the very morning Robert Cote' called "the peak" while reading the paper and shuffling children off to school.

DinOR,

Frisco is too close to Fresno, and can YOU try to explain quality of life intangibles for Fresno? :)

See?

Hoodwinked I tell ya'.

@astrid,

Eeeew. I (quite by accident) drove thru Fresno last summer and it (along with the rest of the valley) was icky. That's where my wife invented the term "roof farms" as far as the eye can see. By Madera I couldn't keep my eyes open so we stopped at a hotel. Eeeew.

Honey, this IS the nicest place!

Also immortalized by Eric Clapton in "Low Down Dirty Frisco Blues" but I don't suppose that would cut any ice with you either.

Peter P,

Does Word 2007 has a table feature? Wordpress does have a table add on, but I'm not sure if that's worth getting. Our intranet is likely to migrate onto a Sharepoint 2007 platform, so I might as well familiarize myself with Microsoft products.

DinOR,

So that would be a "no," right?

astrid,

I can't explain the "intagibles" of life in StumpTown (Portland) either?

I was just born with the good fortune to be self-entertained. If you happened to be in the crowd when I was running the streets and bar hopping you would quickly deduce that nothing good can come of this. I invented the saying:

"Relax, the cops won't be here for another 10 minutes!"

Again I just don't get why anyone would take offense to that. If EC or Chuck thought enough of Portland to give it a hip and flattering name, hell I'd be only too proud to use it!

DinOR,

Not only can I not think of a flattering shortening for Portland, I think it needs to be stretched, so the other person won't ask "Portland, Oregon?"

PNW does have some drop dead gorgeous alpine meadows, coasts, etc.

the VAST MAJORITY of you are feeling good about your jobs, income, and future which contradicts the thesis that home prices are falling. Some highlight ARMs resetting, or the job losses. This is the ‘EVERYBODY ELSE BUT ME’ mentality, which is a fantastic social study.

BigBrother,

Again, what does one (jobs picture) necessarily have to do with the other (easy credit-spawned housing bubble)? House prices are hugely overvlaued by any historical metric you care to use (equivalent rents, HH incomes, "inflation", etc.). They will correct (revert to the mean) even if unemployment remains low and the rest of the economy remains robust --a best case scenario, btw.

The only difference a low unemployment/strong economy makes (assuming it continues to remain so) is that the correction is more likely to play out in the form of slow-drip real-price erosion. As in, nominal house prices stay fairly stagnant, or drop just a little, while the price of everything else (incl. wages) shoots up.

Either way, real house prices revert to the mean, and RE as an investment class remains a stinker at least for the next several years.

BigBrother Says:

> Hi FAB & HARM, I guess I must be living in a parallel
> universe b/c I don’t see much weakness at all in the city.

Have you looked? You didn’t tell us that address of the investment homes you have been buying. If you are not buying let us know why not.

> Here are two examples that were sent to me about homes
> hitting new highs in 2007. One went for 200K over asking
> to 3.7 million, which is a new record for the area.

3319-3321 Octavia is actually two legal units and sold for $1.7mm in late 2000 before a down to the studs rehab.

2752 Filbert is a home with a million dollar GG Bridge view and talking about home sales over $3mm is like talking about Chrysler sales over $250K. There are a small number of sales that are fun to talk about but just because some rich guy pays $1mm for a convertible with a Hemi or $3mm for a SF pied à terre in the city does not really change the market.

P.S. I was just flipping through a copy of Gantry Magazine from earlier this year (my Mom gives me the old issues) and there is a realtor ad that says the total sales in Atherton over the past 5 YEARS above $10mm was 25 and over the past 5 YEARS there were only 123 sales over $5mm

P.P.S. What Real Estate firm do you work for?

justchecking,

No, I have not conducted a large scale survey into this matter. Let me clarify, the vast majority of people I know, many of whom are very intelligent. I feel it myself, as I get older, it's harder to learn completely new information.

Meanwhile:

"It is known that there are an infinite number of worlds, simply because there is an infinite amount of space for them. However, not every one of them is inhabited. Therefore, there must be a finite number of inhabited worlds. Any finite number divided by infinity is as near to nothing as makes no odds, so the average population of all the planets in the Universe can be said to be zero. From this it follows that the population of the whole Universe is also zero, and that any people you may meet from time to time are merely the products of a deranged imagination."

@astrid

Funny! LOL!

I used to HATE that! You'd be cold callin' your monkey butt off and doing your little "pitch" and the prospect would say "Portland? Portland, Maine or Portland, Oregon?" (Laughs at own joke, hangs up). Arghh.

OR:

Portland, Oregon? I only do business with people from Portland, M_A_I_N_E! (Laughs at own joke, hangs up) Double Arghh!

My daughter was doing a Psych Rotation at UCSF. One day she was interviewing a patient with homicidal tendencies. The next week she saw her on a San Francisco bus.
Nice.

I am sure you have people like that in Danville, but there they are behind the wheel of a car instead of sitting next to you on the bus, which is arguably worse.

San Francisco schools are a very mixed bag. There some very good, even great schools here (Lowell HS comes to mind) and there are some real stinkers.

Our plan, which I have finally gotten my wife to buy off on, is to go through the whole school choice ranking and lottery and then see where our daughter ends up. If she gets into the good school near our house, great. If she gets into a good school across town, we will either rent or buy there and keep our current place. If she she gets into a bad school, then we will decide to either put her in private school or move to the suburbs.

Danville is a perfectly nice example of an Ameircan suburb, but I don't really see what sets it apart from all the other perfectly nice cookie-cutter suburbs all over the country. It is a bit pricier than average, but in line with the rest of the Bay Area. I guess the weather is pretty good.

Astrid, Justchecking

Re: Mental capacity/age

I have seen the same results graphically about mental aptitude and age. I think you are both right. The studies showed actually at 35 learning, and mental faculites start to go. On a chart it is actually pretty dramatic. The reasoning for this is what Justchecking was saying; less practice causes atrophy.

The conclusion was encouraging; teachers, and those sorts of professionals were affected to an almost insignificant degree in comparison to others. The theory is if you don't use it, you lose it and so they estimated that if more people did things like take classes, learn new things, and stay stimulated, their mental faculties wil be preserved into older age.

Frisco vs. San Francisco is more of a social class thing, I think. Herb Caen called it San Francisco or The City and said "never call it Frisco." The Hell's Angels have their Frisco Chapter.

My truck driving step-father calls it Frisco.

Who am I to correct him?

What about San Fran?

Or even SF as in "ess-eff"? I don't know where I picked up calling it that, maybe from all my years in "ell-ay"...

People here do that all the time. Pacific Beach PB, University Town Center UTC. San Diego has its own fun quirky sayings. Mostly in the older hippie parts, OB for Ocean Beach. Maybe it's left over from 60s lingo.