patrick.net

One of the heads of Countrywide lives here part of the time. He's very nice. I wonder if that's him.

Speaking of CFC, over at CR there are rumors of impending massive layoffs at Countrwide, likely 6K-10K of their 60K workforce.

Skibum,

That would make sense, by what percentage have the number of mortgages given out declined? You wouldn't pay people just to process 'no way on earth' applications.

Randy H,

I took a gander at your thread and a couple others over on zillow. You're on a roll, man. Keep up the good work.

It's a bit funny seeing you debating a Realtor (Sandy) who writes as though she barely got her GED.

The periphery is definitely in trouble. It has also spread to the deeper reaches of East Bay.

In Palo Alto itself, I see an interesting dichotomy. Stuff is not moving above the $2 million range in the hills (the 1 acre+ lot houses). But the "middle-class" range of $1.2-1.5 million still is moving. The difference is stark enough that I have often wondered why someone would pay $1.2 million for an ugly house in a relatively tree-less seedy looking (for Palo Alto anyway) neighborhood, when the houses on the hills with nice views and big lots aren't moving.

A friend explained it as: there are still people who can put down $300-400K (usually from bubble gain on a previous home sale in San Jose etc). They may have family incomes of $200K, and borrow $700-800K. But they can't afford to go beyond the $1.2 million, so houses in the hills sit.

renter_paloalto,

Background: Most of these "middle-class" PA houses are in South PA. Most are either crappy ranch boxes or Eichlers.

You're friend's theory is probably one factor. Another major factor is that those wanting to buy into the low mil price range are reaching to get into a Palo Alto (TM) home, with the privelege of having their kids attend Gunn High School to compete with all the other kids Gunn-ing for a Harvard acceptance letter.

For the life of me I can't understand why else anyone would pay that money for South Palo Alto. It's generally ugly, treeless, and the house you buy could at any time all of a sudden be surrounded by newly built McMansion from all sides blocking any sunlight you had before.

All this so your kid can get an ulcer by age 20.

In Palo Alto itself, I see an interesting dichotomy.

There is another dichotomy in the entire Fortress but in another direction. A lot of houses are available for lot less but don't sell and the houses in Fortress are (or were) going over asking.

http://www.zillow.com/HomeDetails.htm?zprop=19619210

I remember visiting the open house for this one earlier in this Spring. The asking was 999888 or something like that. Say 1M.

This was sold for 1.2M, 200K over asking. And all this for a 1500sqft typical Cupertino sh1tbox.

You have to wonder how bad the school fetish must be. Even with some IPO money, why would you overbid 200K and pay a cool 1.2M for this shack ? Why this desperation to own in Cupertino ? Unless you have something like 10 kids, buying a much nicer home anywhere else and sending kids to a private school will be much cheaper. Even before the sh1t hit the fan in August, there were cheaper and better homes available in good areas of Sunnyvale.

If you are not from BA it's near impossible to understand this behavior. Not that people in BA actually understand it, but they are not shocked by this common pattern. This is Cupertino, they say. The Holy Land where The Never Ending Fountain of Equity Appreciation runs in the backyard of every home.

We will see.

I see other's obsession on their kids' education as my competitive advantage. More sushi for me. :)

I don't like sushi at all :(

Why?

My best friend doesn't like sushi. I got him to try it about three times saying "Maybe you just haven't had GOOD sushi", even though I knew he'd had good sushi each time. The man has defective genes, as far as I'm concerned. It's so sad.

Hmm... Toro... flavor bursting in my mouth... Yum...

Good sushi must be eaten with eyes closed.

I firmly believe that good food can bring world piece. Once those Iraqi insurgents just try a nice 9-course dinner, they will start to question what they have been fighting for.

Yum. Pork belly. Deep fried. Then stewed.

A very-good friend of ours finally abandoned vegetarianism. Rejoice!

peace...

Food IS erotic, isn't it? ;)

Depends on how... and on what... you serve it.

I'm betting that Peter eats a lot of donuts and bananas to go with that sexy sushi. ;)

RANDY, I never asked you before where you live in Marin? Have you ever been to Perrys at Francis Drake?

No, not yet. I've heard great things about the burgers, though. I don't make it out that far unless we're heading up to Lagunitas to hike with the little one, which is more often of late.

I'm in Mill Valley, Tam Valley, right in the McCrapsion Fog Belt. I really really really hate the tourist season climax with all the Stintson and Muir traffic.

A friend explained it as: there are still people who can put down $300-400K (usually from bubble gain on a previous home sale in San Jose etc). They may have family incomes of $200K, and borrow $700-800K. But they can’t afford to go beyond the $1.2 million, so houses in the hills sit.

This is *exactly* what is happening all over southern Marin. For a while the $2mm+ were still selling in dribbles. Now they're all sitting, or yanked. Only the $1.2's and below move. Magically, that's about just what a dual income family could afford with about $250K down.

Randy :

That Zillow post was outstanding.

Relying on two incomes to buy a house at the top of an economic cycle peak is questionable.

I gotta admit, I don't get the sushi obsession either. I spent 4 months in Japan eating more sushi than I ever wanted. I feel like I never need to eat another piece of sushi for the rest of my life.

stuckinBA

I don't think you really meant what you said about people from the BA understanding the school phenomenon. People who are actually FROM the BA don't understand it either. That's why, if you read the transactions in the Saturday Merc. News, the sellers in those neighborhoods tend to have names that reflect the overall demography of the USA, but the names of the buyers tend more to reflect places like Bombay and Shanghai.

It seems like there's a value system that one can "buy their way in" to their kids having a successful life.

And if that doesn't work, well, there are alternatives...

You can find the quote about the coveted Saratoga High School, " ..The perpetrators of the cheating scandals, the bomb threat and the death threat were all Asian American students, in a student body that today is split almost evenly between Asians and Caucasians...."

These things did not happen in East San Jose, where the Asian-American kids are more likely from Vietnamese or Filipino families.

THey happened at Saratoga H.S.

here is a link to the article:
http://www.metroactive.com/papers/metro/02.19.04/saratoga-0408.html

Why do realtards always compare the downpayment vs. the leveraged investment to determine return? Don't these clowns realize that you pay for the leverage with REAL money, too?!? You have to add in every single year of interest payments into the final amount.

The real equation for the return of a CD compared to real estate is:

D = downpayment
Y = length of loan in years
I = annual interest rate
M = monthly payment

D*(1+I)^Y + sum(12*M*(1+I)^(Y-n)) where n = 1 to Y-1

As a homeowner in South PA, I can tell you that you are all right - the shacks are selling for 1.2-1.5 million and this just gives you the right to send kids to the PA schools.

One big thing is the right to tear down your shack and build a mcmansion. For this reason, the houses that aren't in Eichler areas sell for more since you can't tear down an Eichler and build a 2 story house (your windows would look right into your Eichler neighbors). Also being outside the flood zone helps since you can build a basement and maximize the square footage you can build. Realtywhores also say that Gunn sells for a premium - I don't know why.

The most crazy example is a newly build mcmansion with a basement on South Court that went for $2.78 million. That money would buy a real house in Los Altos Hills.

Gunn sells for a premium - I don’t know why.

Me neither.

The world is ruled by dropouts.

Brand,

I hafta live somewhere. I hafta pay to live there. Even if the house is paidoff, capital is tied up.

So the yes, the interest payment "is" real money, in normal situation (not a housing bubble), it is real money that would otherwise be real money spent on rent.

So I think that in the approximation (but not the present distortion) the interest being paid is substitution for the rent being paid, rather than investment expense.

What do you think?

Million dollar 1600 sq ft Eichler in Cupertino as shown on CNBC during the peak of the bubble was barf city. It just shoeed how stupid are with money. And to think they were selling for under 200K in 1997. Holy smoke nearly 500 perc. increase.. im getting sick thinking about it...

I have not posted in almost a year because I had a dramatic career change and have had a steep learning curve. However, I have been lurking for the past several months, trying to catch back up. In the interest of keeping my posts short, I will break this up.
First, what brought me out:
1. While I can understand criticism of Mo Town, I have been working here for the last 6mos, (Under contracts with a certain Winery mentioned by SFWoman), and I can honestly state that Bakersfield makes Mo Town look good.
2. I was in the grocery store the other day and caught this snippet of a cell phone call: "No Mom, you don't understand! We have not been able to sell the house yet! The bank still has to approve it and we don't know whether they will or not! It is up to them to accept the offer and if they don't, I don't know what we are going to do!?" This was coming from a very well dressed and attractive 30 something female.
3. Regarding food and world peace: The last time I was staying in Marina del Rey, I went to an Iraqi/Iranian restaurant, (probably was just an Iranian restaurant 5 years ago). If I could only eat that for the rest of my life, I would consider blowing myself up too!
*Not Culinary Advice*

sybrib: HiThere is specifically talking about investment properties. He also stated that he's losing $100-200/month. If you wanted apples to apples, he would have to compare the downpayment + $200/month in safe investments.

Quick question to the regulars, can you please catch me up on the following?
1. Surfer X, (Baby and House?)
2. Robert Cote, (Not Rob Dawg, although both from Ventura?)
3. Linda?
4. Astrids Food Blog?

If I could only eat that for the rest of my life...

I don't know what is worse... having no food or having to eat bad food. :(

Isn't the whole idea of The British Empire built upon the basic human need to have exotic food?

If you look at British colonies that failed, Iraq is one of the glaring failures. Perhaps because they never introduced curry?

sybrib -- thanks for the great story about Saratoga. As a graduate of Sunnyvale High Im glad I had some great asian and chicano friends.
Needless to say we were all mellowed out passing the smokes and listening to some great tunes between classes. We all grew up since grammer school and had no divisions between us. Never had problems except for the transplants from other states. Great time and great laughs. These kids with their high pressure lives will never enjoy their
lives as they grow older. They are racist under the skin regardless of the diversity garbage they talk about.

What a bunch of nut jobs they created with their parents greed. LOL!

Sorry, I guess that Iraq was not a technical colony, but the English held a great deal of influence in that region in the early 20th century and had a clear responsibility to introduce good food!!

If you look at British colonies that failed, Iraq is one of the glaring failures. Perhaps because they never introduced curry?

Must have curry.

The potential of a nation is very much correlated to the complexity of its cuisine. This is why The British Empire fought for exotic spices. :)

California is prospering because it has its own fusion cuisine.

APEC update:

President Still Basically Eats Like Little Kid - Wonkette

altho it was some sort of BBQ...

I saw a study, several years ago, that had the marijuana trade from Humbolt County alone at about $100 million/year.

Shocking! thats freaking shocking... and to think High Times back in 70s mentioned this, but i never believed it... Gosh it must be finally true.

@ Peter P
Curry is what makes the world go round. Have you ever had Japanese Curry? My favorite is Hurry Curry, off Olympic West of the 405. Japanese comfort food!!

@ DS
When I spent time in AUS, you, (aussies), were always amazed at the American insistence on desert for every meal. (Come to think of it, so was I!). But Meat was very prevalent in the local fare. Perhaps that is because I was in Rockhampton?!
For the uninitiated: Rockhampton is the semi-rural Texas of Australia.

gavinln said
I have been watching the Stockton market very closely since earlier this year..

Have you checked out the John Laing Homes gated development off Eight Mile Road between Lower Sac and West Lane? I drove through it early in the summer when there were a few homes built as sample 3 & 4 bedroom floor plans, but not much else... acres and acres subdivided into lots with electrical in, but no foundations. I drove through last weekend. Not much has changed. Three months later there are hardly any homes built - maybe 6 or 7 for the summer. The half-built park looks abandoned. I wonder what will happen to these subdivisions that barely got started.

Back to the true purpose of this Blog, (although food and drink has always been a secret agenda), I see huge amounts of empty housing within the city limits of Modesto, yet there are large concentrations of brand new developments in the surrounding towns. Riverbank, Oakdale, Ceres and Turlock all have many new developer communities. I would suspect that this is the story for many CA cities, (created by specuvestors willing to hold houses vacant and drive families outward for the purpose of flipping). What is going to eventually happen? Will families stay in the outer communities, (creating urban blight)? Or will families eventually return for shorter commute times and create virtual ghost towns of McMansions? Has this been covered already? (I have been gone awhile..)