This morning, Burbed Reader Liz posted a comment with this line:

Affordability is the lowest here of anywhere in the U.S.

Ah, just what I like to hear. Until I read the full comment:

$2800 a month rental is the norm here on Long Island. For some reason our housing prices arent as high as yours… although we make much less here. Affordability is the lowest here of anywhere in the U.S.

But our rents are EXTREMELY high for some reason. An average one bedroom apt. is now about $1700 a month. Houses rent for upwards of 3k and up.

liz

Wait a minute. Liz, when you say that Long Island has the lowest affordability of anywhere, it means that it is the most unaffordable place in the nation. And as we know “unaffordable” means “special” and “desirable”.

How dare you try to steal that mantle from the Bay Area!

Here’s a chart using the same data from this entry:

In particular, observe the wider blue and purple lines. Those show the ratios between home prices and incomes. Notice that the ratio is about 6.75 here in the San Jose area, versus 4.95 in Long Island.

That’s because the median home price is $655k with a median income of $97k in San Jose versus a median home price of $450k with a median income of $91k in Long Island. Also, as show in my previous bubble war piece, in desirable areas like Mountain View, CA (home of Google) vs North Hempstead, NY (home of LL Cool J apparently) -incomes are actually less.

(BTW, that rent is high is a good thing - it means that high home prices are rational. Though to be clear, a 1 bedroom apt in Mountain View is probably about $1300 at this point.)

Phew. That was a lot of work. I’m just glad I was able to show that the Bay Area is #1 in most unaffordable. We’re #1! We’re #1! We’re #1!

Sorry Liz! Thanks for your comment though!!

MLSlistings Property Detail for MLS number 701796
746 MOUNTAIN VIEW AV
Mountain View, CA 94041
$1,589,888

Open House Showing
Sunday, February 11, 2007 1:00 PM - 4:00 PM
Minutes to Downtown Mt. View & Google Corp.
Large landscaped lot, spacious rooms, hickory floors, stainless appliances. Granite & marble,cathedral ceilings, cat 5 wiring,…

This Single Family Residence has the following features:
MLS#: 701796 Approx Age: New Approx Sq Ft: 2800
Detached Single Family 2 Stories Contemporary
4 Bedrooms 2 or More Master Suites 3&1/2 Bathrooms

Remember: Houses are for Google employees. If you’re not a Google employee, please move to Gilroy and get a condo there. Got it?

MLSlistings Property Detail for MLS number 703258
1008 OLMO CT
San Jose, CA 95129
$888,000

Open House Showing
Saturday, January 27, 2007 1:30 PM - 4:30 PM
Sunday, January 28, 2007 1:30 PM - 4:30 PM
ORIGINAL OWNER, LYNBROOK HS, NEEDS WORK
POPULAR DURA STYLE FLOORPLAN - LYNBROOK HS
•Popular Dura Style Floor Plan •4 Bedrooms and 2 Baths •Original Owner •Roof is approximately 11 years old •Cozy family room with fireplace •Living room with view of back yard •Formal dining room •Breakfast nook conveniently located •Kitchen is located at the back of the home with views of the back yard •9 year old dishwasher, 8 year old stove and oven •Newly remodeled hall bath with Corian vanity, neutral floor, tub & enclosure •Walking distance to shopping, bus stop and schools •Lynbrook High, Miller Middle and Dilworth Elementary Schools •Opportunity to remodel home to your personality and taste

This Single Family Residence has the following features:
MLS#: 703258 Approx Age: 39 Years Approx Sq Ft: 1693
Detached Single Family 1 Story 4 Bedrooms
2 Bathrooms 1 Stall Shower 1 Shower over Tub

THIS IS THE HOUSE I’VE BEEN WAITING FOR!

OH

MY

GOD!

Finally! A house that I can remodel! I hate all those houses where you can’t remodel - where you can’t fit it to match your personality and taste.

Finally! The answer to my prayers is here! What a great opportunity!

Sharing the load / It often takes teamwork to afford a Bay Area home
After a decade of annual, double-digit growth in house prices, the Bay Area now ranks as the nation’s most expensive housing market, sporting a median home price of $749,000 for single-family homes and $600,000 for condos, according to the National Association of Realtors.

Woot! We’re #1! We’re #1! Congrats Bay Area!

Nothing proves we live in a special place like these kinds of stats. And these stats are only possible because we live in such a special place.

The Chief Economist of Quicken Loans has some good tips for people living here:

According to Walters, no more than 40 percent of your gross income should go toward a house payment (including principal, interest, home insurance and property taxes). That assumes you have little to no other debt such as car payments, students loans or credit card balances. If you do, expect that 40 percent allocation to drop, perhaps significantly.

That’s right… 40%! Remember, the Bay Area is so special you’ll never need to go on vacation again anyway. Or at least, make sure you have the right parents:

Amanda Stipe turned to the next best person, her father, when she bought her 800-square-foot, junior one-bedroom condominium in San Francisco’s lower Pacific Heights.

After several years of renting in the city, the marketing manager for a global law firm yearned for a place of her own. Although she had saved up for a down payment, the high cost of real estate meant carrying a home loan beyond her means.

“I definitely had sticker shock when I started looking at places,” Stipe said. “It was very discouraging.”

Fortunately, her father offered to help out financially. That allowed Stipe, who is in her 20s, to increase her down payment, which meant a lower, more affordable loan. In March, she bought her place, one of 36 units in a seven-story 1920s building, with a 20 percent down payment. Even with her father’s initial contribution, she still took on a roommate to help offset monthly expenses.

“Having a roommate helps, but it was really my dad’s money that made the difference in being able to buy something,” Stipe acknowledged. “I thanked him with a big hug and high five.”

Ah yes - there’s nothing as satisfying as owning a 800 sqft small 1-bedroom condo, and having a roommate thanks to your dad. (The question of “where does the roommate live?” is left as an excercise to the reader.)

Available Rental Properties
1540 Ben Roe Drive
x-Street: Park Hills/Fremont
Rent: $2800 Deposit $30003 Bedroom, 1.5 Bath House, Living Room, Family Room, Fireplace, Kitchen with Gas Range, Dishwasher (Refrigerator, Washer and Dryer are present but not warranted), 2 Car Garage, Large Yard - Great for Entertaining with Gardener, Cupertino Schools.
Terms: Year Lease
No smoking, No pets, Available now

Hm… let’s see - according to Zillow this house is valued at $1,201,541. So let’s see - assuming you put down a 10% downpayment, my mortgage calculator says:

• $6,658 a month with a 30 year fixed
• $5,805 a month with an ARM
• $4,505 a month for an IO ARM

Hm… so let’s see… let’s say you decided to pay $1,705 more than rent to get an IO ARM. What would you get for $4505?

1. Guaranteed 7% appreciation. (That’s what the famous Gary Watts said about the OC - and we all know that the Los Altos is more special than the OC)
2. The ability to say you own a home, even though after 30 years you won’t.
3. The abiltiy to change the house anyway you wany, even though you’re short $1705 a month.
4. The ability to do your own maintenance - which is cost and time free.

Sounds like a great deal!!

So don’t throw your money away by renting - offer to buy this house today!

Ashish’s Niti: Bay Area and House Prices
Burbed.com, is my favorite blog when it comes to housing market. It is witty, sarcastic and informative.

Thanks for the praise!

Business - Homebuyers ditching the down payment - sacbee.com

The Realtors group also says that 41 percent of first-time homebuyers in the state have abandoned the notion of putting their own money into the deal. Nationally, percentages are even higher.

Nearly 30 percent of buyers and 45 percent of first-time buyers no longer make down payments, says the National Association of Realtors.

“Frankly, I didn’t realize it was that easy to do,” says Doug Self, who used 100 percent financing last year to buy a house in Citrus Heights.

Well all the cool kids are doing it

Burbed reader Brendan sent this in:

MLSlistings Property Detail for MLS number 665117
906 S 9TH ST
San Jose, CA 95112
$770,000

This Single Family Residence has the following features:
MLS#: 665117 Approx Age: Unavailable Approx Sq Ft: 2000
Detached Single Family 1 Story 6 Bedrooms

Brendan had this to say about the house:

I love the description:

SUPER BIG HOUSE ,GOOD FOR 2 OR 3 FAMILIES , ALL TILE FLOORS ,GRANITE KITCHEN TOP ,COMPLETLY REMODLED , NEW COCRETE ,NEW WIRING , VACANT AND TOMOVE IN ,AN AS IS SALE …….REDUSED PRISE..

The place looks like an old corner convenience store or something. Hahahha.
I can’t really think of anything funny about it other than the fact that it’s really ugly and really expensive.

Gosh, I really wish there were interior pictures. I’d love to see how the 6+ bedrooms are configured. Glad to see that they got rid of the graffiti though!