patrick.net

Sometimes I feel like Noah, giving out “bad weather forecasts” LOL.

Do you guys think Noah includes "(Not weather advice)" in his forecasts?

"Sometimes I feel like Noah, giving out “bad weather forecasts” "

LOL!

And regarding SurferX's bowling alley bill, I totally believe it. We bought enough pizza in San Mateo recently to feed 4 adults and 3 kids, and the bill was between $60 and 70. I was stunned. Granted, it was "gourmet" pizza, but still. Pizza!

Just spotted a great posting on craigslist.
http://sacramento.craigslist.org/apa/98794861.html
The poster is looking for a family to rent a house he hasn't bought yet. Once he has the renters lined up, he's going to buy the rental property. How tight do you have to be financially if you have to line up the renter before you buy?? Pretty funny.

"gourmet pizza"

What a scam.

It's like saying "elegant living in a double wide."

The poster is looking for a family to rent a house he hasn’t bought yet. Once he has the renters lined up, he’s going to buy the rental property. How tight do you have to be financially if you have to line up the renter before you buy?? Pretty funny.

LOL

Good luck finding anyone. Better luck for him if he cannot find anyone.

“gourmet pizza”

Gourmet soup line! Parking spaces for your designer shopping carts!

It’s like saying “elegant living in a double wide.”

Why are the posts getting cut off??

I was going to say if you go to Malibu you can get the "elegant double wide."

CONGRATS Everyone! Fed Raises rates, signaling the economy continues to be robust AND the 10-yr yield actually dips a bit, making mortgage rates cheaper! BEST OF BOTH WORLDS!

Well, if this squeezes out marginal buyers while keeping conventional fixed rate mortgage borrowers untouched, I am fine with it. I guess the market will be healthier once the marginal homedebtors are forced out of the game, perhaps rightfully.

Marina Prime, quick question, is a Russian Hill condo a good investment for someone with cash but is not too concerned about risks? What are the numbers (price/rent) like?

I love Russian Hill, and would buy. But, ONLY if i had a view of the Bay.

So how much is a 2/2 on Russian Hill with a view going for? Usually what is the rent and HOA?

This is for a friend's friend. Thanks.

Love the Columbia/Wharton piece also.

You should love this too:
http://tinyurl.com/7fpdq
Sure smells robust to me.

Prime Meridian wrote "CONGRATS Everyone! Fed Raises rates, signaling the economy continues to be robust"

Fed is raising rates because inflation is getting out of hand.

Please don’t feed the troll. I thought this asshole was banned, more banned, and then double banned?

X--you're right. Take the effort to dig up data that's blissfully ignored.
So, who's the joke really on?

Guess what Escaped from the District… if inflation is ‘getting out of hand’, then guess what happens to real asset appreciation?

If only inflation is a single variable...

Thanks for the info. Russian Hill is District 8, by the way.

Sorry this question is off topic, but I thought I would ask it anyway. If home prices remain flat for a certain time, is there a chance that this would cause prices to eventually fall?

This is a MIRAGE vs ILLUSION question (see glossary). If the market is as speculative as we have thought, sustained non-appreciation itself will be sufficient to trigger a crash.

MP,

This one appears to be under $1000/sf:

http://www.sfarmls.com/scripts/mgrqispi.dll?APPNAME=Sanfrancisco&PRGNAME=MLSPropertyDetail&ARGUMENTS=-N291205560,-N176638,-N,-A,-N408075

Please do not use as an example if it sells for 400K above asking. ;)

Or does it have problems?

Housing prices never fall because no more land is being made.

Huh?

Yeah, but heck, I’ll tell it at least once to everyone I care about. Ain’t about to hear how I knew “all this” was coming and didn’t say squat to ‘em.

Do you guys remember the Will and Grace "I told you so" dance?

Just throwing fuel on the fire Peter since MP was here winding you guys up. That condo looks very nice. $682 / sf is a good deal? Jesus.

It is not for myself, of course. Is it a good deal? I do not know.

Considering that a San Jose condo next to the airport is selling for $480/sf with no view...

Shit that condo is SUPERPRIME. 1.15mil? Why not buy 2 and be twice as prime?

Multiply any prime number by two and you get a non-prime number.

How do you guys approach this one?

Depends on who the person I am talking to. Sometimes, I just pretend to be a bull in order to avoid "awkwardness".

"This is a MIRAGE vs ILLUSION question (see glossary). If the market is as speculative as we have thought, sustained non-appreciation itself will be sufficient to trigger a crash."

Thanks Peter.

But all of my friends have heard my bubble throey at least once.

"How do you guys approach this one?"

Well, I'm a big jerk with no sensitivity, so when the nosey neighbors asked about the sale, I'd get real loud and aggressive and say,

"this whole market is a giant bubble and you've got to be an idiot to buy real estate at these prices. Me, I'm going to pawn this big overpriced piece of ___ off on any sucker who will take it."

No kidding. Maybe a little less nasty, but I tried to get my point accross. Part of that was 4 years of having to put up with "this area will always be in demand because it's such a great place to live," and "the Redskins are going to win it this year."

1. Other than the schools and the good assortment of people, the place was a god-awful place to live. Traffic, high price, bad weather . . .

2. The Redskins suck and will never be any good with an old man at quarterback. Don't let the 2-0 fool you. They're going down.

Yeah, but heck, I’ll tell it at least once to everyone I care about. Ain’t about to hear how I knew “all this” was coming and didn’t say squat to ‘em.

Agreed--but anyone buying should go outside their realtor for ample cautionary information. That said, a coworker discussed how they want to buy a bigger home right now, despite knowing that prices could easily fall. He actually said he "worked the numbers" and they were in his favor. That is, until we did some calculations together, taking a moderate bust into account--and oops it didn't look so great after all. (I also cautioned this guy against buying Worldcom stock--to no avail)

I suspect a lot of home-buying decisions are not rational at all. It's just like someone eyeing that new sports car in the showroom. At first, it seemed out of the question; there were a hundred reason not to buy. But later, after thinking about the car, it becomes a "necessity" of sorts, and we concoct arguments to rationalize the decision. Been there, done that myself. The same goes for houses. They're are such visible examples of our self-image, financial standing, and daresay "self-worth" that people will do anything to "move up". It's just a part of the "ownership culture" that many people will pay dearly for.

Peter P? You "try to avoid awkwardness?" That must be a Cali sensitivity thing. There's nothing I like more than blasting the RE idiots.

"Yeah, you think house prices are going up?" I ask them. Then I reel off about 10 statistics that say otherwise. They never have an answer. It seems that 100% of RE bulls are either Realtors or clueless people.

I won't talk about realty with my friends, who on average own 2.5 homes per family, and most of them picked up the homes in the last 2 years. I just made my case earlier on and keep my mouth shut. There is no point talking about it once the deals are done. With my close family, all of us turn out to be quite financially prudent, so no worries there.

I bought my current home 9 years ago so unless my neighborhood loses 65% of the current value, I will be fine. This is my primary residence, and I am locked in with a low property tax.

I also think selling your only residence is kind of a gamble. If you buy in the last 3-4 years, it is worthwhile to do it. If you are like me, bought early at a low point, you'd be better off sitting through the bubble.

If you have an investment property, it will be stupid not to unload at this point. But don't talk too much about it until your transaction is done. You do want the buyers to think the party will last forever.

Kurt S, your post was dead on. Well put.

Do you guys think it make sense to take advantage of the price compression and move from a crash-prone/less-desirable area to a more desirable area?

I am trying to help out another friend who lives in a "sub-prime" area. Selling and renting is not a feasible solution.

Multiply any prime number by two and you get a non-prime number.

lmao!

Peter P? You “try to avoid awkwardness?” That must be a Cali sensitivity thing. There’s nothing I like more than blasting the RE idiots.

Not really. I am not sensitive at all. I just try to avoid unnecessary confrontation because it does not serve me any better.

Bud or bud light, sir>?

And I will do the "I told you so" line after the fact. :twisted:

Test

The problem is not reversing 47% on the stock of inventory of 3 years ago, it is about reversing the 47% on the much larger stock of inventory TODAY. That is entirely different beast from just rewinding backwards in time. The biggest time bomb is a lot of homes sold in the last 2 years were 60% interest-only loans at the current valuation, think about how many bad loans that will create for our banks!

That is why I said NOMINAL value won't drop that much, American government would rather depreciate USD to sustain the nominal value than upholding USD but letting many banks fall on bad loans. When the last S&L failure happened, the national savings rate of US was hovering around 7-8%. Our savings rate is negative if adjuted for tax today.

What I meant to say was, 60% of the homes bought in the bubblish areas were based on interest-only loans. Therefore, a slight dip in the valuation wipes out the equity for the owner completely. When Tokyo's bubble deflated, Japanese had an average household savings of 700,000 USD! What do you think the average household savings of Americans is? I would venture to guess, even for the high-earners of Bay Area households, if you don't count the CEOs and high level executives, the per household savings will not be over $100,000.

At this point, the Fed has no choice but to increase the interest rate. If it doesn't right now, when things turn really ugly, it will be running out of amunitions to use. What interest rate cuts can you give if you are at 2%? It is trying to manage a soft landing through signaling that we are going to enter an era of high interest rate, if RE will land at all. But when things go really bad, Fed will have to lower its rate again, that is why the yield is inverted, because most people still see the inevitable fate of the Fed's lowering its rate sometime in the future. At least that is the bond buyers' conscent.

Surfer-X sleeps with boomer port?

Well I may as well butt-in with some OT stuff:
Today I spoke w/obviously inexperienced realtor about a condo she's selling; I went to the open house on sat & she said offers were being accepted until monday. She mentioned early in the conversation that they were still accepting offers, they currently had 3 offers, and that the owner was counter-offering one of them.
Later on in the conversation, she mentioned to me that all the offers were over the asking price. So I says, "Maybe I'm not experienced enough in RE, but it seems odd that the owner is counter-offering a bid that's above the ask price". She replies: "Oh, did I say we were counter-offering?"
Am I missing something? Is this a common practice? Or did she get caught in her own BS?
I should also comment that the list price was 3% below the sale price of an identical unit (sold in August; 369K vs. 380K). At the open house, she told me that the owner was aware of the discrepancy, to which I replied: "well I should hope so". LOL she also made a comment about how the toilet flushed really powerfully which is good for guys. WTF? It was kind of twilight zonish.

RE agents full of BS? No way! Funny story.