February 27, 2008

Shea Homes hates the Real Bay Area – economic terrorists

Shea Homes halts development in Santa Clara, Mountain View – Silicon Valley / San Jose Business Journal:
Shea purchased both sites about two years ago when condo sales were still strong and the local economy was generating jobs.Shea’s project manager for the developments could not be reached but a message on the company’s Web site states there is a “temporary construction hold” on the projects. It cites current market conditions as the reason the developer has decided to hold off on any further development.

Are they f’ing kidding me? The local economy isn’t generating jobs? Hello, Apple/Google/Facebook are still hiring like crazy. Even Yahoo is hiring (srsly). Most of the In-n-out’s are hiring too.

I don’t know what evil nefarious agenda Shea Homes has, but clearly they hate the Real Bay Area and are acting as economic terrorists. A cynic would have to wonder if they’re doing this to get concessions from the City of Mountain View.

A non-strong local economy. A local economy that isn’t generating jobs. Pfh. Shea Homes is probably just jealous that they’re not a Web 2.0 company, or one focused on Mobile GPS UGC SOA. Haters.

That said, they are doing the right thing. Do we really need more homes in Mountain View? If anything, they should be tearing down homes. They should be taxing renters to buy out existing homeowners, and tear those houses down. Do we really want Mountain View to be Condo View? Good grief.

Thanks to Burbed reader Pralay for the find.

Comments (39) -- Posted by: burbed @ 3:28 pm

39 Responses to “Shea Homes hates the Real Bay Area – economic terrorists”

  1. Rick Allen Says:

    This isn’t SF Bay but it is California.

    Apparently Michael Jackson got caught up in the subprime refi. Hopefully Bush’s bailout will come to his aid.

    http://edition.cnn.com/2008/US/02/27/jackson.foreclosure/?iref=hpmostpop

  2. Real Estater Says:

    We don’t need these developers. All they do is build high-density housing that congests our traffic and crowds the schools.

  3. Pralay Says:

    That said, they are doing the right thing. Do we really need more homes in Mountain View?
    ————

    It got to be good news for existing homeowners in MV, considering the fact that builders start slashing down price much faster than stubborn homeowners.

    ——
    If anything, they should be tearing down homes.
    ———–

    I agree. :) That’s the only possible way to keep inventory low, hence keeping home price not going down.

  4. sg Says:

    RE,

    Looks like your self-interest is aptly captured by burbed in the last paragraph.

    BTW, what causes traffic congestion? High density housing or big employers?

  5. Pralay Says:

    BTW, what causes traffic congestion? High density housing or big employers?
    —————

    :) I missed that part. Yes, Google should miss their target. Yahoo should lay off more. No more job growth. That will make less traffic and schools less crowded. Who wants people from all over America moving to Bay Area anyway? Nobody!

  6. Real Estater Says:

    These high-density developers are like oil companies. They cater to their self-interest at the expense of the community. They drop hundreds of units into an already crowded area, without consideration of whether the infrastructure can support the added population. What they need to build is more retail, which brings tax revenue to the cities, rather than more housing.

    Besides, these high density homes are horrible to live in. You get 3 bedrooms on 3 different stories. You’re running up and down all day. There’s barely any land, and little to no yard. These are the worst kind of real estate to own. You’re also wasting money on HOA fees each month.

    Unfortunately, in the future high density is all they’re going to build. This is why single family homes in the real Bay Area is a increasingly scarce commodity that will only go up in value.

  7. GW Bush Says:

    This is like a slow motion train wreck. Or having a first class cabin on the Titanic.

    Either way the end results are the same.

  8. mtv-renter Says:

    I would really like to see the planet that RealEstater comes from. High density housing is necessary, and it’s a very nice thing if it’s done well.

    As population increases, and it is increasing very quickly in the US, Bay Area included, more housing is needed, and high density housing is pretty much the only way to add housing units to a dense area. Due to retarded CA building codes and zoning rules, this high density housing looks like a chicken coop and and is built nowhere near anything, which I agree leads to increased traffic and such.

    Now, look at some European cities for a comparison, think along the lines of Paris, London, Rome, Athens, Berlin, etc. All these cities are very dense, much denser than the Bay Area, but somehow the cities look great. High density housing is intermingled with shops, so you can get most things without having to drive, and the density makes convenient public transit cost effective to build.

    The US suffers from NIMBY (Not In My Back Yard) Syndrome, and California suffers from the lethal version of that disease known as BANANA (Build Absolutely Nothing Anywhere Near Anything) Syndrome. We need to get over this, stop zoning so that people have to drive everywhere, then maybe the Bay Area will feel like a real place instead of Legoland.

  9. JayDawg Says:

    @ mtv-renter

    You sound like a communist.

  10. Pralay Says:

    Unfortunately, in the future high density is all they’re going to build.
    ——————

    Because that’s the only thing affordable in overvalued market.

    ———–
    This is why single family homes in the real Bay Area is a increasingly scarce commodity that will only go up in value.
    ——————

    I love way you twist the logic to justify your point. And that last part “only go up in value” – those words were not necessary to prove your point.
    No, high-density homes are built because SFH are not affordable.

    But, Shea Homes knows it well – in “declining” market when SFH starts becoming affordable, nobody buys high-density condo.

  11. Priced-Out Says:

    Maybe it’s cause MV registered it’s 2nd Homicide for 2008 already. 2 shootings in areas where houses average 950K. Both seem to be gang related in MV…in MV!

  12. sg Says:

    We are forgetting high gas prices. It will be increasingly less affordable to commute from places like Brentwood/Tracy to Santa Clara, at least for the next few years.

  13. RealEstater Says:

    If you keep converting industrial/business lots to residential high-density, where are these people going to get the business services? Where are they going to work? It’s all very short sighted to do this without proper planning.

    Pralay,

    Don’t worry about price. Price is set by the market. The market does not care if someone is priced out.

  14. Pralay Says:

    If you keep converting industrial/business lots to residential high-density, where are these people going to get the business services? Where are they going to work? It’s all very short sighted to do this without proper planning.
    ————–

    And how exactly do you know that it was not “properly planned”?

    ———–
    Don’t worry about price. Price is set by the market. The market does not care if someone is priced out.
    ————–

    I am not worrying about price. And yes I know little bit about supply-demand market.
    High inventory + drop in sale = price drop

    Did you see the inventory level and drop in sales in some of the RBA cities in rereport.com?

    As I said before, Shea Homes people are not stupid. They make living by building homes. They realized well where the market is heading.

  15. RealEstater Says:

    Pralay,

    Those reports are looking backward, during the winter months where most people are not out shopping for homes. Current pause on the market shows activities are picking up. Prices are definitely not dropping regardless of sales volume.

  16. RealEstater Says:

    …current pulse…

  17. Alex Says:

    > If you keep converting industrial/business lots to
    > residential high-density, where are these people going
    > to get the business services? Where are they going to
    > work? It’s all very short sighted to do this without
    > proper planning.

    RE, you probably need to drop your mortgage to save money for overseas vacation one day. Surprise. Population density in Europe is many times higher than here in Bay Area. And they still cope with it. Your logic is undeniable for 5yo kids. But grown up people are not surprised that people in more dense areas like New York, Chicago, Boston, London, Paris and even Tokyo… suprise.. have better quality services, pay less for same things we pay here in Bay Area and even (god forgive them) are employed… :)
    American single family house dream is vaporizing along with world’s oil deposits, sky-rocketing fuel prices and failing US dollar. New american dream will be a flat in a high-rise in a walk distance from the work.

  18. ex-sunnyvale-renter Says:

    In-N-Out is hiring, starting at 10 bucks an hour! That’s good wages in the BA. Get 5 people working $10/hr jobs and it’s like one person making $50 an hour….

    Wow that’s over $100k income!

    Um, better get 10 people working at In-N-Out at $10 an hour to get that house and make it work…..

    And NO, don’t work for Stanford, their janitors are making what, $8 an hour? Go for the burgers, young man/woman!

    “New American dream will be a flat in a high-rise in a walk distance from the work” – Exactly.

  19. mtv-renter Says:

    JayDawg: Communist? Haha, that made my day. If you noticed in my posting, I mentioned removing zoning laws and changing building codes so that people can build good looking dense housing, not the same box that doesn’t differ from all the other boxes. This is definitely a pro-liberty, anti-communist position. I can barely tolerate CA because our politicians and laws are more communist every day, and I escaped from a communist country before the wall came down, so I know.

    My point was that our high density housing sucks, and I would never want to live in it, because it is isolated into a residential only zone and it tends to look horrible, but that high density housing can be quite nice and desirable, as it is in many parts of the world. We have a lot of land here, so single family homes will always exist, but it would be very nice to have dense urban centers like in Europe. Zoning is largely to blame for this.

    Well, enough from me, this tangent isn’t related to the original posting.

  20. RealEstater Says:

    SF has plenty of high density housing. I don’t think it’s any more affordable. Most high density areas like NYC, Tokyo, Hong Kong etc. are extremely expensive. Is that what you guys want?

  21. Pralay Says:

    Those reports are looking backward, during the winter months where most people are not out shopping for homes.
    ————-

    Why am I having feeling (again) that you are a real estate agent who thinks that his customer does not know anything about “seasonal changes” in sales volume?

    Is this winter season (2007) anything different from 2006 winter? Or 2005 winter? Come on! Then why should you think that 2007 winter sale will be different from 2006 winter or 2005 winter, unless some other factors playing their roles? Any clue what those factors are?

    ———–
    Current pause on the market shows activities are picking up.
    ————-

    Care to drop some honest number? Your opinion is not fact.

    ———-
    Prices are definitely not dropping regardless of sales volume.
    ————-

    About a years back, you could make very same statement for ANY part of SF bay area. Yes, including Contra Costa Country.

  22. JayDawg Says:

    @ mtv-renter

    It’s too bad there’s no sarcasm font.

  23. Pralay Says:

    SF has plenty of high density housing. I don’t think it’s any more affordable. Most high density areas like NYC, Tokyo, Hong Kong etc. are extremely expensive. Is that what you guys want?
    ———–

    It’s not a question of who wants what. High density housing grows where home price starts becoming unaffordable due to demand. This is how NYC, SF and all the big cities got their shares of high-desnity housings. If (a big “if”) PA or MV home prices start going up farther, in future you will see more and more high-density houses to keep up the demand (as result of job growth and population increase). But Shea Home backing off from from building high-density housing in MV indicates that the demand is disappearing.

  24. RealEstater Says:

    >>But Shea Home backing off from from building high-density housing in MV indicates that the demand is disappearing.

    Shea is backing off because they got burned by sub-prime. They’re just using market conditions as an excuse.

    PA and MV are expected to experience even higher demand, partly due to expansion of Face Book:

    http://www.paloaltoonline.com/news/show_story.php?id=7284

  25. mtv-renter Says:

    >> Shea is backing off because they got burned by sub-prime. They’re just using market conditions as an excuse.

    Which part of being burned by sub prime is not a market condition?

  26. Pralay Says:

    Shea is backing off because they got burned by sub-prime. They’re just using market conditions as an excuse.
    —————–

    A perfect example of delusion and self-denial. Anything contradicts your mindset got to be either “media-spin” or “excuse”. They clearly stated they are backing off due to “declining” market.

    Secondly, regarding subprime crisis, you are making a circular argument. In post #13 you mentioned that price is set by market. Hello! Subprime situation is part of the market. And I have a news for you. The subprime crisis you have seen so far is only tip of the iceberg.

    ———
    PA and MV are expected to experience even higher demand, partly due to expansion of Face Book:
    ———–

    Shea Homes must have missed this amazing news! :)
    In fact, except RealEstater, everyone including real estate industry, experts who monitor real estate industry must have missed the news. That’s why they are unable to provide optimism like RealEstater.

    Let me try to guess those new potential 550 employees who will be joining Facebook in 2008. Most of them probably already living in bay area (they will just swich their jobs, some of them ex-Yahoo who are getting laid off) – either they already have homes or they don’t. Freshmen from college? That’s a long way for them to buy home. Let them pay off their education loan first. In any case, I don’t see any change in market scenario in near future due to those additional 550 Facebook employees.

  27. Bad Advice Says:

    You’re are so misguided RE. For the last four months, I’d bike by the Mondrian on my way to Portola Valley. There was a signficant amount of foot traffice to visit the models. There are also a lot of folks at the open houses I go to. These visits are not translating to sales.

    You seemingly have no clue of the term “fundamentals” Even using a high ratio of 200, if rents are $2000 for a 3/2 home in Lakehaven, that equates out to $400,000 while the homes are in the sales range of 550-650k.

    Normal working folks like myself (which is a stretch since I have a top 5% income), but had to pay off undergrad and grad school loans, aren’t rushing to jump into this market.

    And please lay off the alcohol about using a VC partner buying in Palo Alto as a barometer for the Peninsula. That’s pathetic.

  28. RealEstater Says:

    Let me clarify. They got burned by sub-prime in other markets, which limits their ability to build new homes here. It’s really a cash-flow issue for them, not due to conditions in MV. Market slowdown in MV? Are you kidding?

  29. RealEstater Says:

    Pralay,

    >>Freshmen from college? That’s a long way for them to buy home.

    Do you read the news? Face Book is a pre-IPO company close to going public. Those young lads are a lot closer to buying their dream home in Palo Alto than you think!

  30. Pralay Says:

    Let me clarify. They got burned by sub-prime in other markets, which limits their ability to build new homes here. It’s really a cash-flow issue for them, not due to conditions in MV. Market slowdown in MV? Are you kidding?
    ————-

    Do you have any sense of business? If they really have cash-flow problem and they got burned out by “other markets”, isn’t the best way to recover from it by building homes in the BEST markets where things sale hot and quick? Am I missing something?

  31. RealEstater Says:

    Bad Advice:

    Where exactly is Mondrian, and when was the last time you went there?

    Based on my conversation with a local realtor this week, new home sales are starting to pick up.

  32. RealEstater Says:

    >>isn’t the best way to recover from it by building homes in the BEST markets where things sale hot and quick? Am I missing something?

    Yes, you are missing something.

    The “best” markets aren’t necessarily the most profitable. If you haven’t noticed, builders tend to build new homes in outlying areas such as Tracey and Mountain House, where land is significantly cheaper.

  33. Pralay Says:

    Do you read the news? Face Book is a pre-IPO company close to going public. Those young lads are a lot closer to buying their dream home in Palo Alto than you think!
    —————

    RE,
    It’s just a pre-IPO company. Getting stock options, getting cash out of it is long way. That’s why I said in earlier posts that is not going to change anything in *near future*. Of course you can get option ARM. But I think people learned their lessons in dot-com bust. And banks learned their lesson too in this subprime crisis.

  34. Pralay Says:

    The “best” markets aren’t necessarily the most profitable. If you haven’t noticed, builders tend to build new homes in outlying areas such as Tracey and Mountain House, where land is significantly cheaper.
    ——————

    Well, you can make profit only if you can sell. If your optimism is right (which is not), MV is THE place where they CAN SELL their homes – HOT AND QUICK. In this real estate market, it’s not even a matter of profit margin. It’s a question of whether they are able to sell or not.

  35. Pralay Says:

    Based on my conversation with a local realtor this week, new home sales are starting to pick up.
    ————–

    Yes, those truthful Realtor! :)

  36. RealEstater Says:

    >>It’s just a pre-IPO company. Getting stock options, getting cash out of it is long way. That’s why I said in earlier posts that is not going to change anything in *near future*.

    Pralay,

    See, this is why you are in the position you’re in. Face Book is in fact very close to going public. It says so right in the article. Microsoft already placed their bet sometime back. This is a sure thing that will happen soon!

  37. Pralay Says:

    See, this is why you are in the position you’re in. Face Book is in fact very close to going public. It says so right in the article. Microsoft already placed their bet sometime back. This is a sure thing that will happen soon!
    ————-

    So???????????

    :) Sometimes you post something as if you are providing an extraordinary information that nobody knows. No wonder that you think that home is the best investment.

    Do you have any idea what would be the common share value for the options all the new 550 potential employees going to get (keep in mind they are not even hired as of today)? And any idea how long it will take for them to get any good amount of cash out after selling their options?

    And existing employees who have already have options in low price which will make them instant rich (hence bidding for homes)? That’s not more than 200-250 employees. If they are not homeowners already, I am sure not all of them will be looking for homes in PA when they can get much cheaper homes in Sunnyvale, Santa Clara and surrounding areas. Overall, this number does not even make dent in this downward market.

  38. hedda Says:

    RE spreads more of his crack-pipe around.

    Mondrian’s in Mountain View, on Evelyn, by 85. They haven’t built a single unit yet except for the models.

  39. Pralay Says:

    Mondrian’s in Mountain View, on Evelyn, by 85. They haven’t built a single unit yet except for the models.
    ————

    That’s how builders delay paying off for their construction loans – they don’t complete the project.


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