California economy seen overcoming housing slump – Yahoo! News
The worst part of the housing market downturn may be over in California and how long it will weigh on the state’s economy may be shorter than expected, according to a report released on Monday.

Because of the drag from a slowdown in home building, the most populous U.S. state’s economy will grow by 3.2 percent next year, compared with 4.3 percent in 2006, according to the report by Union Bank of California economist Keitaro Matsuda.

[snip]

Meanwhile, California’s “service-sector growth engine remains well oiled and strong. That’s why overall employment growth is projected to continue in 2007, although at a somewhat slower rate than this year,” according to Matsuda’s report.

“Unless the health of the housing market takes a sudden turn for the worse, the service sector engine alone should be able to carry the California economy nicely through 2007,” his report added.

This caught my attention:

Mountain View Voice: School district deals with flood of transfer requests (December 1, 2006)
Local high school officials are scratching their heads over a growing flood of student requests to transfer from Los Altos to Mountain View high schools.

This year, there were 391 requests to switch to Mountain View High, a trend that cannot be sustained according to Mountain View-Los Altos School District officials. During the same period, only 180 students requested a move to Los Altos High.

The number of transfer requests to Mountain View has risen steadily over the past several years, a cause of concern because both schools are nearing maximum capacity. In addition, district officials say, very few students will be granted transfers in the years to come due to both schools reaching that maximum. The transfers are granted on a first-come, first-served basis.

So why all these transfer requests?

Part of the larger perception about the two high schools may be that Mountain View High is considered safer than Los Altos. While this reason has never been officially listed in a transfer request, Sarraf said that an informal survey she conducted resulted in several people telling her they believed the perception to be true.But both Sarraf and Superintendent Barry Groves said that it isn’t.

“It’s not accurate in terms of our statistics. The schools are almost identical” in terms of safety, Groves explained.

Ah, safety. But that’s interesting that parents think one is better when they’re both the same. Let’s just take a look at the median home prices:

Los Altos      94022      $1,588,000
Los Altos     94024     $1,520,000
Mountain View      94040      $815,000
Mountain View     94041     $825,000
Mountain View     94043     $660,000

Only in the Bay Area would getting a 40 year mortgage to pay off your $1 million dollar house mean that you have to be concerned about your child’s safety.

See? It really is special here.

It’s time to revisit one of Burbed’s favorite properties on the market:

Popular Ave in East Palo Alto – houses for sale galore! 2164 poplar ave price reductions! — Burbed.com: Your Silicon Valley Home and Mortgage Insanity Blog
2164 Poplar Ave, East Palo Alto Property Details – East Palo Alto Real Estate – East Palo Alto Homes for Sale – Movoto

That was back in August. So what’s new?

Here’s what Burbed Reader Squisita wrote in:

This place is being advertised on Craigslist as a 2 bedroom rental. Interesting that the for-sale description was “one legal bedroom, plus three bonus rooms.” I don’t even know what that means. I’m intrigued that they can squeeze all that (legal or not) into 480 square feet.

As my friend put it,
What does “one bonus bath not warranted by seller nor agent” mean?

If neither the seller nor the agent call it a bath, then who wrote that?

Why don’t they just advertise it like: 4BR, 3BA luxury home with heated pool.*

* (3 of the BR, 2 of the BA, and pool not warranted by seller or agent)

Seriously? Well, it looks like the ad has changed a little recently – still absurd though. Here’s the Craigslist post:

Very Clean – Beautifluly Remodled Home ++Pics++
2164 Poplar Ave, East Palo Alto

Virtual Tour Link http://www.ewalk.com/tour.cgi?id=2164

This Bungalow style home is located in East Palo Alto. This cozy home is conveniently located near shopping and transportation and the trendy University Avenue area.

The home has 2 bedroom and 1 Bathroom plus a bonus cottage. The House also has been fully remodeled with new paint, granite counter tops, and a large front yard patio.
• Pets are negotiable. • Lease negotiable • AVAILIBLE NOW • Security Deposit $1300.00 Please Drive by unit and take a look. If you have any questions please feel free to call 650 814 9666 or reply to this add.

There’s a guest house? For a house that has 480 sqft?? Is the guest house for a car perhaps?
But even more interesting is the rent: $1300 a month. Yet the sales price is $499,000 a month.

Let’s say you put down 20% (OH NOES! TRAPPED EQUITY!)… according to Dinkytown, your mortgage would be:

• $2,457.94 for a traditional 30% loan (boring!)
• $2,142.99 for a ARM loan
• $1,663.33 for an Interest Only ARM loan

Let’s ignore property tax, maintenance and insurance – just like everyone else. Just think of the big fat juicy tax break you’ll get on this. And when you sell in 5 years, this will be a million dollar house – so you’ll definitely make back the $62k that you’ve lost by buying.

Remember, now’s a great time to buy or sell a house!

(Thanks Squisita!)

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Signs of Lean Times for Home Equity, the American Piggy Bank – New York Times
MUCH of the growth of the United States in recent years has been financed by homeowners’ rising wealth. But now the growth in that wealth has almost vanished.
The government reported this month that it estimated the equity of Americans in their homes — what the homes are worth less the money owed on mortgages — rose a scant 0.1 percent in the third quarter. At an annual rate, that was just 0.5 percent, the smallest gain in more than a decade.

From late 2003 through the first quarter of this year, the gain in home equity was running at more than 10 percent a year, more than enough to keep Americans feeling richer and to provide cash — through refinancings or home equity loans — for other uses.

[snip]

Some of that borrowing came from home buyers who needed to borrow to pay the high prices, and some from homeowners refinancing their homes. But a lot also came from an increased willingness of Americans to use home equity lines of credit — and from the expansion of the asset-backed securities market that funds many such loans. The amount outstanding under them rose at a compounded annual rate of 22.9 percent over that period.

In my opinion this is a good thing – the best way to earn money is always to borrow it. And if you need more money, get a second job by returning things that you buy. You can’t lose!

ContraCostaTimes.com | 12/07/2006 | Brokers help borrowers untangle their mortgage options
“These exotic mortgages have kind of taken over,” said Mike Tacconi, president of the East Bay chapter of the brokers’ association.

Indeed, they have. In the Bay Area, 43 percent of loans taken out in 2005 were interest-only loans, according to San Francisco based LoanPerformance. Another 28.3 percent were payment-option, which can lead to a growing loan balance known as negative amortization.

Well, we love exotic foods. Why not exotic mortgages?

MLSlistings Property Detail for MLS number 669230
21641 ALMADEN RD
San Jose, CA 95120
$499,950

This Single Family Residence has the following features:
MLS#: 669230 Approx Age: Unavailable Approx Sq Ft: 1000
Detached Single Family 1 Story 3 Bedrooms

See that gap under the front door? I’m pretty sure that if you get bored of this location, that you can get a forklift and use it to move this house somewhere else. Great deal!

47152 MALE TER, FREMONT Property Details – FREMONT Real Estate – FREMONT Homes for Sale – Movoto
47152 MALE TER, FREMONT – Warm Springs

Bedroom: 2 Bathroom: 2 Square Footage: 926 $435,000
Status:
Active
Year Built: 1987 List Date: 11/22/2006 Lot Size: N/A
Parking Spaces: 1 MLS#: 40226700
Ask a Question Neighborhood Data Comparable Sale Data Email this to a friend
DESCRIPTION -
47152 MALE TER, FREMONT
Shows Well* Great Location within Complex*Near Shop School & Pubic Transit*Great Commute Location Minutes 680/880/237/084 / One of Owners ia a Licenced Real Estate Agent

There’s not enough to go on right now to make fun of this house – but the name of the street is mildly amusing. “What’s your address sir? Can you spell that please? Is this a prank call?”

3Q 06 First-time Buyer HAI
Housing affordability at 24 percent for first-time buyers in California

LOS ANGELES (Nov. 27) – The percentage of first-time buyers in California able to afford a median-priced home stood at 24 percent in the third quarter of 2006, compared with 28 percent for the same period a year ago, according to a report released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

C.A.R.’s First-time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of first-time buyer households that can afford to purchase a home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.

Sweet! Only 24%! A drop of 28%. As we all know, the less affordable California gets, the more special it becomes.

I can’t wait until it becomes 10%! San Mateo is on its way already…

Santa Clara County
Q3 2006 27%
Q2 2006 26%
Q3 2005 33%

San Mateo County
Q3 2006 20%
Q2 2006 19%
Q3 2005 24%

Update: Readers pointed out that the formula changed. It used to be calculated based on a 20% downpay and a 30 year fixed. Now it’s a 10% downpay and ARM. I wonder what the affordability rate would be if they used the old formula…

Update2: Another reader had this to say: There was another change -> the new way of calculating the “affordable” house price is pegging it at 85% of the median statewide price. The rational behind this move was that first-time buyers don’t buy a median price home.

Under the old standard—down here in the LA/OC area—the affordibility index was under 2%. So by jiving around with their index, CAR has magically made homes affordable to 12X as many (shee)people. We should all be grateful.

Sweet! Maybe the affordability for the Bay Area is actually just 1%. How awesome would that be? It’d mean that we’re very very very special!

Curbed SF: SF MLS to Shut Down Public Internet Access
In a move sure to make everyone feel warm and fuzzy this holiday season, the San Francisco MLS will shut down public internet access on January 1, 2007. The closure is expected to drive potential or casual consumers to realtor sites for information, removing access to the listings of small real estate firms and generally tightening control of listing information.

Realtors saw what happened to travel agents (online reservations) and stockbrokers (online trading) and they’re not going to let it happen to them, dammit. They’ve taken the position that the listing itself (the information about your house, or the house you want to buy) is proprietary; multiple listing services are mutual benefit associations, existing only for their members to share information, and as such are not required to share it with the public.

Aside from that, there’s never been recourse to listing inaccuracies or ommissions, deliberate or otherwise. The listing agents have always controlled the content, so what may look like two bedrooms and a porch to you really looks like three bedrooms to them. And let’s not get started on that other lump of coal, square footage. There’s no Listings Police (except maybe bloggers.) So perhaps it’s not such a big deal that you’ll get steered to the properties “your” realtor wants you to see. They’ll be positively giddy in 2007 with their new-found job security.

Remember, the industry is there to help you!

And remember, freedom is slavery! You just have to understand blackwhite…