patrick.net

Wha'? 18 generations?

What's wrong with one guy whose own kids even hate him owning half the influential media of the US, UK and Oz in TV, radio and newspapers through a program of aggressive acquisition and tax avoidance anyhow?

I have a couple questions some people on the board may have answers to…sorry if it’s off topic, but the board seems a bit quiet.

1. I know Zillow has been much discussed and sometimes maligned on this board. I know its algorithm doesn’t take into account many subtleties. However, my question is whether you believe it for overall pricing trends over time for a given home (assuming there was not a major remodel or other changes). For example, this home in Cambridge, MA seems close to its 2003 price after peaking in 2005:

http://www.zillow.com/Charts.htm?chartDuration=10years&zpid=56441810

I ask because here in Boston, the town of Cambridge (and the Harvard area in particular) is considered “prime” and therefore subject to inevitable price rises. And judging from *median* prices one might believe this to be the case, though Zillow tells a different story. So my question really is, if Zillow shows every house in an area declining by 10% to 15%, do you believe it, even if median numbers imply no price decline?

2. Secondly, what do you think of the rent vs. buy on this Palo Alto home?
Zillow shows homes on the street in the $1M to $1.3M range. Rent is $3300/month per this listing…

http://s166.photobucket.com/albums/u96/puffinludwig656/

Mackay Drive, Palo Alto

Newly remodeled, furnished three bedrooms and two bathroom house Palo Alto House for Rent - $3,300 per month (one master bedroom and bathroom, 2 bedrooms will share a bathroom)

Move in September 1st. Just remodeled!

Deposit: one month rent. No pets ,12 months lease

Amenities : fully furnished, newly remodeled house, TV, DVD Player, High
speed internet, microwave, linen , kitchen flatware, new kitchen cabinets
with granite counter top, also new kitchen tile floor, new light fixtures
and garbage disposal , new marble fireplace, new hardwood floor, two new
bathrooms with granite counter top and new sinks, bath and toilets. There is a very large fenced (new) backyard with a lot of fruit trees. House is on a lot that is over 8000 square feet. All the windows in the house are new.
Washer and dryer, refrigerator , stove and also yard maintenance provided, two car garage

Nearby convenience: major shopping mall just 2 minutes away, train station and freeway 101 near by, but in a very quiet, treely neighbourhood.

(moderator: I broke my post into two, so you can delete the post waiting in moderation...thanks)

"puts the "bung" in bungalow"

Oh I hear ya'. We didn't even bother having a "house warming" party. (It felt more like a wake). What's odd was all of the "congrats" like we were a couple "not married in the eyes of The Lord" finally making it... "official"? Dude, I'm paying TWICE what it (had) cost me to rent the exact same place! Oh, not counting the add'l $150 in HOA's.

As Randy H will well attest, bubble-sitting isn't easy. Not by a long-shot. Fearful, trembling "landlords" Zillowing away in some twisted attempt to try and "time" the market. Gotta' love that.

While I'm complaining... it has been DREADFUL in OR! After our near permanent "wet spring" (where I finally 'got some sun' FOR the wedding AT the wedding) it has been the style of muggy mid-westerners move out here to get away from? We were at an outdoor party Saturday night and after we ate I felt (and I'm not kidding here) like passing out. I looked over and Mrs. DinOR didn't seem to be faring much better.

We've reached some sort of tipping point climate-wise in OR and it doesn't look good? In the 20 some odd years I've lived here it's NEVER been this humid, this late! Weird...

This one's for Sir Randall, Esq. Posted on Ben Jones's blog over the weekend:
(yes, it refers to FL, not NCal, but same principal holds true whereever there is overbuilding and rampant speculation on margin)

http://www.heraldtribune.com/article/20070715/REALESTATE/707150625

The homes that are on the market, or soon will be, represent a 4.7-year supply given the current pace of sales.

“In the meantime, he is trying to rent the houses to cover his expenses. But rents have also plunged. ‘I have one house on a deep water canal that I’m renting for $895, and I used to get $1,100. The others I used to rent for $1,000 and I’m now getting only $800."

Tiny violins, anyone?

What’s odd was all of the “congrats” like we were a couple “not married in the eyes of The Lord” finally making it… “official”?

LOL. I remember one of the regulars here (Muggy, Brand?) had posted his experience with moving into a McFlippertown development as a renter, then being greeted by the new neighbors. Once they found out he didn't "own" the place, an expression of horror washed over their faces and they practically tucked tail, turned and ran back home. As though renting was the Plague and they might 'catch' it.

Real estate has truly become a religion. It's part Cargoism, part Caste-system, with a generous dash of 'Prosperity Gospel' thrown in. Here's the general break-down:

Brahmins: Fed, Wall Street banksters, Lereah/Yun/LAY, Trump, Robert G. Allen, etc.
Kshatriya: Realtors(tm), rank'n'file NAR/MLS members, Congress, REIC lobbyists.
Vaisya: Garden-variety specuvestors, flippers, mortgage brokers, appraisers.
Sudra: The great mass of falling-knife catching, Kool-aid drinking, seminar-attending Sheeple.
Untouchables: Renters, savers and RE bears.

Speak of the devil, and he magically appears:

http://www.pennlive.com/business/patriotnews/index.ssf?/base/business/1184369127167280.xml&coll=1

In 2004, James Dailey and his wife were renting and not looking for a house to buy. At parties, he said, people would look at them "like we were weird."

"While I’m complaining… it has been DREADFUL in OR! "

This has been a rotten July in Idaho too. The entire upper Rockies has been in a terrible heat wave since late June - over 100 degrees every single day. This has broken records dating back to the 1930's. At least here the humidity stays in the 20-30% range.

DennisN,

After a few days in Vegas (near record breaking heat) it didn't seem all that bad? Very low humidity. On the drive back we had lunch in Hawthorne, NV (S.E of Reno) and it was still fine. By the time we got a room in Lakeview, OR although it was much cooler, the humidity must have been like 80+%! It'll take the fight right out of you.

@HARM,

Also notice there is almost zilch mobility between each caste. Although there may be several break-downs within each caste, those of the lower caste are required to always refer to members of a higher caste with deep respect even in private (lest the prosperity gods be listening).

HARM says: (yes, it refers to FL, not NCal, but same principal holds true whereever there is overbuilding and rampant speculation on margin)
Since you are from down south you may not know about the hot tub moratorium in Marin. Since it is very hard to get a hot tub permit, few homes are being built in the area. Rumor has it that the jacuzzi permitting process is controlled by a cabal of RE brokers who deal exclusively in pocket listings.

There is a good writeup on Socketsite in today's Chronicle. I know we covered this a while back, but this crash is really going to be some sort of tipping point for newspapers. They lose their last stream of advertising dollars from the REIC and at the same time peope realize their are more "credible" sources for RE news in the (moderated) blogosphere.
PS - I too am concerned about Surfer-Xs weight loss. As a homedebtor, it is clear to me that he can now no longer afford $27/lb cheese.

those of the lower caste are required to always refer to members of a higher caste with deep respect even in private (lest the prosperity gods be listening).

I'll have to remember that the next time I mention that bunghole Lereah ("Allah bless him and praised be his name"), or one of his new replacements.

OT, but there's a decent article in today's Chronicle about socketsite.com:

http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/07/16/MNG9TR15PF1.DTL

I particlarly like these bits:

One of his more shocking assertions is that the real inventory of homes on the market in San Francisco is far above what is listed on the traditional clearinghouse for that information, the Multiple Listing Service. In addition to the roughly 1,100 official listings, Koval insists that there are more than 4,000 additional finished units marketed through sales offices, being presold in midconstruction, and coming online by this time next year.

"The idea is to counter some of the industry rhetoric -- like, 'it's always a good time to buy,' 'the real estate market always goes up' and 'they're not making more land,' " said Koval, a renter.

Notice their back-handed little dig: "said Koval, a renter."

As in renter = no credibility.

As in renter = no credibility.

Like a "rent-tard"?

I had no idea socketsite had that volume of traffic. That's really incredible! 300k is basically every adult in the BA with access to a computer? I like the way Adam attempts to balance the "sell" and "buy" side.

If the realtor (TM) gal is sensitive about people openly discussing 6% commissions she's gonna' love this! According to CitiBank, Chas. Schwab will become the largest broker in the country (surpassing Merrill) within the next 3 years. Now... what does that tell you about how people feel about high fees!? Or does this also come under "never saw it coming"?

HARM,
Nice pickup. I also like this Realtor (TM) trying to lend credibility to her "profession":

Others take offense at what they see as unfair portrayals of the industry.

"Anytime we talk about (commission) prices, we get hammered," said Dona Crowder, the San Francisco director of the California Association of Realtors. "A lot of people don't understand what we do. ... Just like lawyers don't like shark jokes, real estate agents don't like jokes about us."

As if Realtors (TM) are even on the same page as lawyers! I would even put them below the level of the sleaziest ambulance chasing lawyer.

skibum,

Uh-huh. Calling this an "industry" must make 'parking garage flagger' a career? That'd be cool, send every realtor (TM) a set of lighted cone flashlights with a well wishing note for their new "career".

*Batteries not included

OT, but there’s a decent article in today’s Chronicle about socketsite.com

It also features Burbed - hits to my site were off the charts today as a result. :)

eburbed,
Congrats on the mention in the article! Do you think this means the thousands of web surfers are now privy to the Mountain View gangbanger tiff going on over there?

@eburbed,

YOU ARE THE WINNER! Sheesh.

What a loser. I got so tired of handing perfectly cared for clients off to "financial pedophiles" (mortgage brokers) I spent the $395, took 20 hours and got my OWN damn license! Took all of a week of "intensive training".

"Just like lawyers don’t like shark jokes, real estate agents don’t like jokes about us."

Oh please. I'm an attorney. We lawyers constantly tell each other lawyer jokes. We think they are hilarious.

Q. How many lawyers does it take to shingle a roof?

A. It depends upon how thinly you slice them.

In my case, to become a patent attorney I merely had to:

a) Get a BA in physics at UC
b) Get an MA in applied math at UC
c) Work as a EE for 17 years
d) Get my JD
e) Pass the 2 hardest bar exams: CA and Patent

Somehow that looks a lot more like a "real career" than some used home salesman.

That 6% stuff is crap. When I interviewed several Realtors last year to sell my SJ house, they all got down to 4.5% to 5% really quickly - and I only interviewed realtors who were themselves brokers.

Speaking of taking on the REIC, Carol LLyod's latest article tackles the FSBO issue. I noticed last week while looking at my neighbor's print addition of the SF Chronicle that her Surreal Estate column had been exiled from the Real Estate section to the Business Section. What kind of statement is that making?
Uh-oh, maybe this is why the REIC doesn't want her in that section...

According to Realtor.org (the trade association's Web site), "Homes sold with the help of a real estate professional in 2006 sold on average for 32 percent more" than those sold by owners.

One important distinction is that the Realtors' inclusion of private transactions between friends and family taints their conclusions considerably. With 40 percent of sales by owners involving someone they knew, that's a whole lot of discounts. This also suggests that nationally, owners doing their own selling do far better than the National Association of Realtors might like to admit.

Yahoo Finance Poll:

What will deliver the greatest returns in the next 12 months?

U.S. Stocks 31%
International Stocks 51%
Cash 8%
Bonds 6%
Real estate 7%

989 Votes to date

It is nothing personal, I wish him and all the other locals well who try to plant their own roots in their home state.

But it can also be a contrarian indicator, capitulation to the bubble that's been blown up mainly by non-Californians bringing their capital and gold rush mentality here from other places.

Been there myself when we also capitulated in the last bubble, had to grind our way through it one day at a time.

Congrats eburbed.

Boston Transplant.

I concur with you that zillow is quite accurate in reflecting the general pricing direction. when it comes down to individual property, it may be quite a bit off, but if you look at a few houses in the neighborhood, you can get a fairly updated picture (3 months lag) of what is happening in the market.

I went to a few open houses this past Sunday, in Saratoga and Monta Vista school district, and things still seemed to be sizzling. The open houses were quite packed at about 2-3pm in the afternoon, and some looked rather eager to make an offer. I don't know about Palo Alto, but I assume that the situation would be the same.

I've got a friend from Singapore coming in town this week to take a look of Palo Alto houses because he wants to send his kid to Gunn. His rationale of buying rather than renting is, paying rent is dumb (and of course 1.xmm is quite within his affordability). I sent him a bunch of materials from patrick.net hoping to dissuade him from joining the herd.

At least for now, anything below $1.5mm in the fortress (Gunn High, Monta Vista High and Saratoga High area) seems to be doing quite well. Stuff outside the fortress school districts seem to be faltering.

I don't know how long this will last, it's like watching the paint dry.

OO,

It sounds like your friend may have other reasons for buying (forex hedging, real diversification). It might even be a good play if he expects the USD to bounce back in the next few years.

Surfer-X,
As a fellow Santa Barbara housing watcher, I would love to get the full story on the why and how of this. Any chance of that?

Hey Surfer X -

congratulations, we all want to buy someday, I'm sure. As long as there are no other debts, and you didn't pay top dollar, that's fine. Money left for margaritas, mmm, that's gravy.

TO Lurker -

still here, busy at my website now and then, and on some courses, work life etc. My site is up there linked to my nickname - feel free to check it out. Anyway, I do know some people who bought recently in Vancouver - my sister paid over $500,000 for a 1 bedroom house in East Vancouver. Nice, but 1 bedroom!

And the madness apparently continues, because when she sold her townhouse, it went $60,000 over list.

Stop the madness in Western Canada.

Aside to Surfer X - I am actually waiting to buy myself - just want to see prices in Victoria reverse.

So every interest rate increase makes me a hopeful guy.

Peace.

If you ground them 30% from the 2005 price, all I can say is sweet!