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3,068 square foot lot. No great loss. If you lived there, you could smell your neighbors cooking, and probably hear them cough. You'd definitely hear the Korean church choir on Sunday morning.
It seems like you fell in love with that property and one or two others like you were in the same boat. This is in no way an indication of the entire market condition.
I agree either people are really stupid or really rich (or both) in the bay area. People pay half a million for a 1950's tear down under high tension power line & next to a major road. Really people? The places still have the original 1950's appliances and roof. I just don't get it. A place that needs 100K of rehabilitation?!?
I'm determined to find a home, but looks like I'll be searching for a long time....
Unless you personally go to your county building and check the transfer tax, you don't really know what it sold for.
Worse -- even if they told you the truth in this case, Realtors are not motivated to tell you about the really cheap sales nearby.
Move!
It's called voting with your feet.
It's up to reasonable people to boycott and discourage economic suicide.
I don't think dual income families are stupid. They think they are rational because the environment (peers, relatives, etc) supports their rationality.
OP here...a couple facts I didn't previously state...
1) i wasn't interested in this particular house, i was using it as an example of what's been going on around the area i've been seriously looking for the last yr. This was just an example, not the most egregious, but the cleanest because of the sales from 2006 and 2008.
2) other examples i've seen, a 4/2, 1500 sqft home in alameda on a sub 3,500 lot sold for $649,000, a FSBO cookie cutter 3/2, approx 1700 sqft just went pending, asking was $749,000.
3) this house looks way better in pictures, is really close to that church and sits directly across a really broken down house with a metal chain linked fence surrounding the entire property.
To the poster, I am more than willing to pay $350 a sq foot if its not staring at a metal chain link fence, more power to the rich and stupid people who don't care and just want to buy.
All I am saying is that regardless of all the news and the facts, the reality is that if you want an okay house in an okay area, forget about the news. The reality is that there are way too many rich people who don't care about the facts. And to the poster that thinks that's "rational" nope, that's stupidity.
I rent a pretty nice place (nicer than 90% of the homes i've looked at) for about 60% of what a mortgage would be after 20% down. I will continue to rent, but I'm just over trying to hope that the market will ever be rational again.
It is a good thing you are in a decent rental ... too bad though that you are not allowed to enjoy the first class, unique, world coveted Mediterranean climate. That is only reserved for those who are mortgaged up to their eyeballs.
prices have been dropping for years. it's just a slow process.
in san jose, the asking price for the top 25th percentile has been dropping fairly consistently - about $50k/year since 2006.
this means every year you waited since 2006, you saved yourself roughly $50k/year. that - is a crazy amount.
the bad news (for us bears) is asking-prices don't seem to be dropping nearly as fast these days for the mid/low end.
the lesson though hasn't changed - waiting is very lucrative.
More than likely and illegal flip to begin with lender had to adjust REO to market price. Common stuff. Nothing new.
I just have to say to the OP, Amen, Amen. Even this site is chalk full of lemmings that thing a chicken shack on 100 square feet 20 miles from the nearest job opportunity is primo real estate should it be in the bay area.
It's the same story with rent, too many overpaid stupid people who can't save a dime due to shoveling it the landlord's pocket who in turn is circling the drain from massive debt.
Truly the land of self fulfilling prophecies.
Fyi geniuses, its never a good idea to take out a 30 YEAR LOAN, a lot can happen in 5 years, let alone 10 or 20. There is no rational that justifies the existence of that retardation besides the en mass stupidity that permeates America top to bottom.
I would think before branding someone as a "overpaid stupid" person - in my experience (and I am no spring chicken), most of the overpaid people I know get overpaid because they are far from stupid.
I am closely following the Cupertino and Saratoga market. I help my close friend househunt there in addition to my own research. My friend has placed offers on 8 houses in this area YTD. All of them had multiple offeres and he lost his bids. Finally, his offer got accepted for a house in the Cupertino school dist of Sunnyvale (multiple offers and counter offers and he had a personal interview with the homeowner and offered 15K above the asking price and got the house because the owners liked his family).
The reality is that salaries in the bay area are pretty good (for high tech jobs, though the number of jobs might not be that high). And most families have double income. And most people with double income families do not have the time to spend years looking. They even think of $100K more in house prices as reasonable - because amortized over 10 years it tends to look like $10K/year for a good neighborhood, schools, commute etc.
So, people waiting for a crash in South Bay prices have a long way to go.
PS: I am one of those patiently waiting for the South Bay prices to crash while living in my tacky, crappy tract home built in the 50s.
I think a person’s/household’s income must be considered to evaluate wrongness/rightness of a purchase. Based on that criteria, houses are generally not affordable in the Bay Area.
More buyers are moving here from the crowded canyons of places like Shanghai, Mumbai, Hong Kong. Their idea of housing cost is different than someone from somewhere else, say like the midwest of the USA. To them, these are Bargain Prices.
I think a person’s/household’s income must be considered to evaluate wrongness/rightness of a purchase. Based on that criteria, houses are generally not affordable in the Bay Area.
More buyers are moving here from the crowded canyons of places like Shanghai, Mumbai, Hong Kong. Their idea of housing cost is different than someone from somewhere else, say like the midwest of the USA. To them, these are Bargain Prices.
You keep saying this, but where's your proof? What percentage of BA buyers are coming from overseas? Where are you getting your numbers from? As far as I can see very very few people with that kind of money are moving to anywhere in the US. Almost everyone coming to the US are starting out and looking to move up, not people who are successful already. Or are executives/managers just putting in a couple of years in the states as part of the obligatory corporate ticket punching process then moving on.
Why would successful well off people give up income tax rates like HK (top rate 15%) or Mumbai (30% BUT you can deduct almost everything) or Shanghai (45% but well less than 30% after deductions) or Singapore (top rate 20%) to pay US taxes on their world wide income? They would be subject to 32% top federal rate PLUS up to 11% (Oregon) state income tax PLUS 7.5% or 15% fica contribution PLUS an who knows where it will end up estate tax on everything they own.
If successful people were going to expat, why choose the US at all? If you were a successful at manufacturing Vietnam is the place to be right now. Computer software or service industry, India is the ticket. Mineral extraction, go Oz, Chile, Africa. If they are just retiring why the BA? That doesn't make any sense all.
That doesn’t make any sense all.
Nope dont make any sense... and to top that, Charlie dont surf.
Could Outer Bay people be moving to the more desirable Inner Bay, providing some buoyancy to the market here?
If people think that Mediterranean climate is worth dealing with the eventual Big One, the wildfires, mudslides, and coal ash from China then I say good for them.
The drinking water situation ain't too sustainable either, but let's just ignore that because of the very infrequent frosts.
Regardless, if you want to buy a house in the Bay Area at this juncture you will have to overpay. If you are comfortable overpaying then that's your right. It's your money and your credit to do with as you please.
If successful people were going to expat, why choose the US at all? If you were a successful at manufacturing Vietnam is the place to be right now. Computer software or service industry, India is the ticket. Mineral extraction, go Oz, Chile, Africa. If they are just retiring why the BA? That doesn’t make any sense all.
No dude, that's not what I said.
That's what you said.
What I said was, compared to the housing prices where they came from, prices here are Bargain Prices, what you get (sq ft, Fortress, whatever) for what you pay (wages or wealth) or whatever. Compared to where they came from, housing cost is not so dear here as there; it is Bargain Prices. It is Bargain Prices whether they are Stanley Ho types or here on the foreign student - H1 - greencard route or stowaways on a freighter. So it is not stupid for them to spend their wealth or a higher portion of their wages on housing from the perspective they came from. But they did not come from a place like Indiannapolis or somewhere like that, which has a different perspective about it.
My point of the purchase wasn’t for the appreciation or equity build up. It’s so I can extract a cashflow when I near retirement.
This is like having a treasury bond losing its trading value if interest rates go up. But if you are holding it to maturity and you still get your interest payments then you haven't "lost" anything, except perhaps opportunity for different investments. Nothing wrong with that; it's what you signed up for when you made the purchase.
A lot the bashing here about "losing" equity on housing market trends sounds a lotta sour grapes to me, because people like you throw water on the schadenfreude.
The drinking water situation ain’t too sustainable either
Well yes and no. It is true that overall the Bay Area region depends upon Sierra snowmelt that is pumped up and over the "hills" (some people would call them "mountains") from the Central Valley. Not sustainable.
But is also true that San Francisco gets all of its Sierra snowmelt from a pipeline that is a 100% gravity operation from Hetch Hetchy all the way to Crystal Springs in the Peninsula, like a Roman aqueduct. At least this is, until the Cool and Hip Left Coast Liberal Eco Freaks in SF "shut it down" by tearing down the dam so as to "restore" the Hetch Hetchy Valley.
My point of the purchase wasn’t for the appreciation or equity build up. It’s so I can extract a cashflow when I near retirement.
This is like having a treasury bond losing its trading value if interest rates go up. But if you are holding it to maturity and you still get your interest payments then you haven’t “lost†anything, except perhaps opportunity for different investments. Nothing wrong with that; it’s what you signed up for when you made the purchase.
A lot the bashing here about “losing†equity on housing market trends sounds a lotta sour grapes to me, because people like you throw water on the schadenfreude.
While I'm not proud of my investment blunders, I'm willing to acknowledge them and say that I've learned from them. If that makes me an idiot so be it. Remember MCI, Lucent, Red hat? I lost 25k during the internet boom on those POS's and those were big hits when my nw was much smaller. I had invested in the DRIP iSTAR. A mezzanine debt REIT for 10 yeaers. I pumped 17k in that bad boy. It went from 50 dollars to 1 dollar. Those are examples of my worse investments. But I think my positives have more than made up for the blunders. Did I maximize my investment dollars. In hindsight, of course not. But if you had told me 10 years ago what my NW would be at the age of 40, I would have been pretty ecstatic.
No dude, that’s not what I said.
Actually the word you used was "BUYERS" so I assumed that was what you meant. Students living on someone's couch or programmers living 6 to a room on a H!B visa aren't buyers. What possible relevance does house prices have to someone on a student visa or H1B or a stowaway? Why in the world would they care if houses are cheaper in BA than HK? I don't know about you, but in college I didn't think about house prices once.
Well, I guess it's a pretty desirable area of alameda, though I still think the prices square foot there are outrageous. I've also heard that a lot of people buying there really cannot afford they prices they are paying. That part of Alameda is also the part that is not fill. You want to see ridiculous home prices, look at Bayport Alameda. It is on fill and the school is not highly rated. Alameda residents we talked to also felt passionately the West End was not very desirable. . Don't forget to check for permits if you are looking at Alameda. There is a lot of illegal work done and the city can fine you even if you bought the house that way!
Whether home prices are going up or down, not buying a house you really can't personally afford is still a good decision! Um, isn't that one reason people are getting foreclosed on???
We are thinking about forgetting Alameda altogether and looking at Walnut Creek. (One reason being their property taxes are insane) I'm just annoyed with flippers. I'd rather buy a fixer upper myself and pay a good value to fix it up properly. I really would prefer to pick my own countertops, etc. (And plus a flip always gives me a weird feeling that all the changes might just be cosmetic with cheap stuff that looks nice temporarily with big problems lurking underneath.
Well, I tried to be a dumb by offerring 3% over asking but still didn't get the home.
So it seems I have to become more dumber to get my offer on a house accepted.
So it seems I have to become more dumber to get my offer on a house accepted.
Nah, you just have to be more desperate to own than the next guy.
So it seems I have to become more dumber to get my offer on a house accepted.
Bid as high as you could. Go by your realtard's advice. If you don't buy now you will never be able to buy. Remember?
Redfin's housing price/sq. foot numbers (http://www.redfin.com/city/117/CA/Alameda) show down 11.9% from the prior year. I suggest these are the market elements you need to watch closely, as they suggest prices dropping hard and probably not good time to buy.
"Hullo, we are planning on buying a place with 3.5% down."
So your going to buy a house that you will be underwater on the second after you close? (It costs well over 3.5% to sell a house).
“Hullo, we are planning on buying a place with 3.5% down.â€
So your going to buy a house that you will be underwater on the second after you close? (It costs well over 3.5% to sell a house).
because with amend-extend-pretend bank policies, through squatting or strategic default you can actually get the down payment back by not paying mortgage (rent equivalent) for 1~2 years.
true, never thought of it that way. Just don't spend any money on maintenance and you can break even or maybe even profit if you live for free long enough.
us. And of course, we are approved for $600,000 (!!!???) but we are only spending $400,000. Financing is not an issue, it’s finding the right house. (There are only distressed properties coming on the market, so it has taken
I'm also gonna note that "maintenance costs" can be mitigated.
Its only recently that everyone just "HAD" to have all the most recent upgrades and so forth.
In the past, people bought a home, paid it off, and the home generally stayed in the same furnishings, decor, etc that it was when it was first moved into.
Maintenance was limited to painting every 10 years, roofs every 25-30 years, landscaping the place yourself, and flooring once every 10-25 years.
Here are a few more updates...
1) I just want to clarify that I can easily afford this house, I just think it's over-valued.
2) I only used this as an exampled, not because it was the most egregious (far from it) but because it was clean in the sense it had a sale price in 2006 and 2008.
3) I am just venting, and as others have put it, it's frustrating for those of us that are trying to make an economically prudent decision when we have to compete with those who are making completely emotional and financially irrational decisions. Just because you're rich and you can do it doesn't make it a good idea. I can burn all my savings to buy my ferrari 458, that doesn't mean it makes sense. I can afford a $6 raw egg, but that doesn't mean I should buy it when the supply/demand dictate that eggs should be a lot less.
4) I'm okay with those who don't care about over-paying, I'll just go ape-sh!t if they default on their loans and I end up footing the bill again!!
5) The house sold for $11k over asking. A cool $700K. This house sits across a huge lot surrounded by a chain linked metal fence. Wow. Speechless.
the problem is if all the eggs in the bay area are $6, then that's what people think the price should be even if it's selling for $0.20 in other states.
they'll tell you they aren't making chicken farms anymore, that bay area eggs are better because of the weather, that chindians are buying up all the premium eggs and that prices of eggs go up forever so the price is always right.
You know what would fix it? Social pressure!
If the buyer's friends made it clear that they think it is stupid to overpay like that, people would stop overpaying.
But even now, all the social pressure runs the other way. People get compliments for overpaying for a house. They get congratulated on foolish purchases. No one wants to make them feel dumb. They feel like part of the "owner's club" when they buy. And when the shit hits the fan, they can talk about how "no one could know" that prices were too high, etc.
What kind of public social pressure could be applied to stop overpaying?
How about a big neon bumper sticker that says "OVERPRICED" which you can slap on a for-sale sign at a jaunty angle? :-)
social pressure works both ways.
when everyone hates housing, you'll get a bargain priced house - although people will call you a moron for buying.
we're not there yet.
will call you a moron for buying.
LOL! And from what I have recently seen from speaking to some friends this weekend, its same people who were screaming for you to buy during the bubble. Why, because every lower sale price on comps cements lower and lower market prices.
i love patrick's bumper sticker idea...if nothing else than just a bit of comic relief.
i agree with vanilla sky, i just really dread another crash, and more bailouts, because yes, while there are lots of high paid workers in the bay, most of these people are still stretching to buy a house.
Those who can comfortably afford a $4k+ mortgage on top of everything else, are not buying a mediocre $700k house in alameda. Those who are are spending much more than they should for housing and it's like a ticking time bomb before they start missing payments.
most of these people are still stretching to buy a house.
Should read the latest news today in your local paper. Someone is going to pay for this and it may well be you and me.
Bankrupt Bay Area homeowners shed second mortgages
http://www.mercurynews.com/real-estate-news/ci_18011666
Stung by the crash of the housing market, some struggling homeowners are using a little known but increasingly popular provision of the bankruptcy code to eliminate second mortgages and avoid foreclosure.
Statistics are hard to come by, but bankruptcy lawyers say the provision has been used effectively on hundreds, if not thousands, of cases in the Bay Area during the past two years.
"It's a big thing in our valley," said James "Ike" Shulman, a San Jose bankruptcy lawyer. "But it's not widely known."
Shulman, co-founder of the National Association of Consumer Bankruptcy Attorneys, said he has helped a number of clients who have filed for personal bankruptcy use the law to hold on to their houses -- including three last week.
Cathy Moran, a Mountain View bankruptcy lawyer, said one of her clients had a $132,000 second mortgage voided by the court.
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with all the idiots out there buying homes. This post is completely useless but I just needed to vent. After all I've realized that all the logic, all the numbers, and all the news/reality can't change the one obvious fact....that in the bay area, there are too many stupid people with way too much stupid money.
I've been following the market quite closely, I've even started working with a realtor, and then I get my dose of reality this morning. 1231 court alameda, ca. Sold for above asking, sold for more than 2008, and sold for even more than what it sold for in September of 2006!! Wow!!!
Not know what else to say, but good luck to the rest of you, I'm officially done trying to make sense of this insanity.
#housing