One of Burbed’s favorite streets is Pamela Drive. In the last post on this street, this was the status of the 3 condos that are being tracked:

Well, it turns out that some other activites have been happening on Pamela Drive:

Mountain View Voice: Crime Watch (January 26, 2007)
Prostitution, 200 block Pamela Dr., 1/12

Police went undercover to investigate a business claiming to provide massages. Officers conducted a search of the premises and arrested three people on charges of prostitution and providing massages without permits. The suspects are from San Jose, Saratoga and Daly City.

So here’s the question: Will this help or hurt the price of these condos?

Are these condos currently a fair $465 per square foot because of the benefit of living near such facilities? Or would they be $600 per square foot (typical for Silicon Valley) if they weren’t?

What do you think?

Burbed has seen a lot of very very strange Bay Area houses. But my readers often times do a better job.

Here’s an entry from M C:

1 year old town house
$890000 1 year old town house (sunnyvale)

M C had this to say:

1. Does he come with the house?

2. Has he given the house a complete inspection

(*cough*) ?

3. Is the house good enough for a doctor to live in?

4. He’s there to administer CPR when you keel over at this price for a cheaply built spec townhouse.

Maybe there is some sort of cultural thing I’m missing here.

I dunno. Personally this is pretty damn creepy. I’m closing my browser window right now!

Burbed likes chocolate. While driving down Silicon Valley’s Champs Elysees, El Camino Real, Burbed stopped at See’s.

Burbed noticed a huge number of cars looking for parking down the street so that they could see this open house:

MLSlistings Property Detail for MLS number 703938
695 S KNICKERBOCKER DR #00009
Sunnyvale, CA 94087
$595,000

Homeowners’ Association Fee:$240
Open House Showing
Saturday, January 27, 2007 1:30 PM - 5:00 PM
Sunday, January 28, 2007 1:30 PM - 5:00 PM

This Townhouse has the following features:
MLS#: 703938 Approx Age: 21 Years Approx Sq Ft: 1321
Townhouse 2 Levels End Unit
3 Bedrooms 1 Master Bedroom Suite 2&1/2 Bathrooms

According to Zillow, this last sold 05/01/2003: $390,000. Since then, new carpeting, new paint, and new pergo flooring has been added.

But wait - does that add up to the $209,000 difference between the last purchase price and the current offering price? Of course not! That’s because the intangibles aren’t factored in yet…. For example:

• The retirement home down the street has become more special.
• The dumpster for Safeway that’s on this street has become more special.
• The abandoned store next to See’s chocolate (which has been empty since Stroud’s went out of business) has become more special.

All kidding aside though, people were practically waiting for parking spots to go to this open house. There were families with kids, couples, some older people - milling about. Some were waiting to go in, some were just coming out.

It’s not clear if a deal was made… but may I be so bold as to predict that there will be 6 offers and that the final selling price will be in the $600’s? Possibly $660,500?

How did I get this fair market price? Easy: $500 per square foot.

If it’s not $500 per square foot, it’s not Silicon Valley.

Is this the famed spring bounce? Did prices hit a low? Will 2007 be the year when the $600 per square foot becomes the norm?

I guess we’ll just have to wait and see.

On Long Island, More Are Priced Out of the Housing Market - New York Times
In 2000, 60 percent of the homes sold on Long Island could be classified as “affordable” for families earning up to $100,000 a year, under the old rule of thumb that buyers should spend no more than 2.5 times their income on places to live.

Last year, according to a new report, just 2 percent of the houses sold on Long Island were in that range for families with such earnings, which make up more than 60 percent of Long Island households.

Uh, nice try Long Island. You can try all you want to beat Cali in the affordability game, but let’s face it - you got lots to learn.

First, who uses the 2.5x benchmark anymore? That’s so 2000!
Get with it you old fashioned East Coasters! It’s 2007! Everything has changed! Income means nothing!

Here’s how you compute affordability:

The minimum household income first-time buyers needed to purchase a home at $478,710 in California in the third quarter of 2006 was $98,890, based on an adjustable interest rate of 6.58 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $3,300 for the third quarter of 2006.

See? You have to assume that first time buyers will get a house that’s 85% of the median price. Then you have to assume that they’ll only put down 10% (why trap your equity?) and then you have to assume that it rainbows and unicorns will appear.

That’s how you get that Santa Clara County has an affordability index of 27.

Long Island, I bet if you used the paradigm shifted formula, you’ll see that your affordability is 40… or even worse… 50. And as we all know, being affordable means being bad - because if you can afford it, it must not be good.

And here’s another shocker from the Times piece:

Even for families with incomes above $110,000, 43 percent report difficulty in paying housing bills.

Wow… you guys are so behind the curve. Don’t you know? When you fall behind, just refi or HELOC! And don’t forget, you can refi your car too! Unlock that trapped equity!

Long Island - it’s time to do it Cali style.

Any asset allocation formula is mostly arbitrary
Q: Like many renters in the Bay Area, I thought the rise in home prices in recent years meant that I would never be able to buy. But now that prices are declining, there seem to be a huge number of houses on the market, and sales even at reduced prices are sluggish or non-existent. Is this the time to buy?

A: I wouldn’t dare offer a one-word answer to that question. However, it appears that the real estate bubble could lose more air.

In many Bay Area communities, prices have fallen to where they were nearly two years ago. However, to get back down to the long-term trend line, they would need to fall considerably more, perhaps as much as 10 or 15 percent.

I wouldn’t push anyone to buy at current levels. If you buy a house with a 20 percent down payment, and the house’s market value then falls 10 percent, you will lose half your investment. That’s comparable to what happened when the stock bubble burst in 2000-02.

Many sellers seem to be in denial, pricing their houses as though the market were still at the top. They remind me of the Nasdaq diehards who refused to believe that their market was collapsing, and stuck with Cisco Systems stock all the way from $80 to $9.

If you want to dip a toe in today’s housing market, don’t be self-conscious about offering 10 or 15 percent below the asking prices. You need to protect yourself.

What do you think? Do you agree?

MLSlistings Property Detail for MLS number 654913
2253 GLEN WY
East Palo Alto, CA 94303
$419,900

This Single Family Residence has the following features:
MLS#: 654913 Approx Age: 52 Years Approx Sq Ft: 790
Attached Single Family 1 Story Cottage/Bungalow
2 Bedrooms 1 Bathroom 1 Shower over Tub

Seem familiar? It should! Here’s an October post to jog your memory:

What’s going on here? I thought East Palo Alto was supposed to be all special now. Are they making more land there? Better act now - the Realtors say the market is about to go back up!

(Thanks to Burbed reader Alex for this one too.)

MLSlistings Property Detail for MLS number 673252
2527 HAZELWOOD WY
East Palo Alto, CA 94303
$750,000

This Single Family Residence has the following features:
MLS#: 673252 Approx Age: 58 Years Approx Sq Ft: 1100
Detached Single Family 1 Story 3 Bedrooms

Was this a Photoshop gone bad? An attempt to catch the reader’s attention? Viral marketing? Doomsday in East Palo Alto?

You decide!

(Thanks to Burbed Reader Alex for this one)

Mountain View Voice: Stierlin project rejected (January 19, 2007)
Five residents spoke in favor of the 11-unit development at a February 2006 meeting, saying it would provide much-needed housing near major transit corridors and downtown. Developer Steve Lowenthal said the townhouse style homes would allow people to work from home and would be an example of “smart growth.”

In what way would townhouses allow people to work at home better than… say… a loft, a studio, a single family home, a condo?

And, if you were planning to work from home all the time - why move to Mountain View? Why not move somewhere else where you could afford a real home, or spend half as much for an equivalent townhouse?