February 2, 2008

San Francisco, Bay Area area inflation-adjusted housing prices, 1987-Present

San Francisco, California metropolitan area inflation-adjusted housing prices, 1987-Present


The above chart estimates the market value of today’s median-priced San Francisco, California metropolitan area house from 1987 until present. The red line represents inflation-adjusted house prices. The blue line represents nominal house prices.

Earlier this week, Burbed reader Pralay linked to this chart. Sweet!

It just goes to show that any minute now, the graph is going to shoot up again!

Want to join in the conversation? It’s here!

For example, how do you respond to this comment?

With 11% annual return in stocks, how many years will it take for you to catch up to the 300% return yielded by Bay Area real estate in the past 10 years?

Your 3.7% figure for real estate includes places like Iowa, Nebraska, North/South Dakota, Montana, etc. We’re not talking about those places. They don’t have Silicon Valley, and they don’t have our weather. If you focus on the Bay Area for a moment, you’ll find that on the average Bay Area properties double in price every 10 years, without exception. It will surely double again, and it doesn’t matter what happens in the next 2-5 years. So far, you have not been able to explain what would be the drivers for lower prices; you’re just making a claim based on your own guess.

One other comment about rents. Over time, rents will increase. However, if you have a fixed rate mortgage, your housing expense will not go up with inflation. Most people I know who bought say 10 years ago, are paying less for mortgage than what it would take to rent the house. In other words, the cost advantage of renting is only short term. Renting is like leasing a car. At the end of the day, you get nothing.

Agree? Disagree? Does this only apply to The Real Bay Area?

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Click here to post a comment -- Posted by: burbed @ 5:12 am

February 1, 2008

County gets $12 million for homebuyers

Mountain View Voice Mountain View Voice: County gets $12 million for homebuyers (February 1, 2008)
County gets $12 million for homebuyers

by Bay City News

Santa Clara County has received $12 million in state mortgage assistance funds to help first-time buyers purchase a home, county officials announced Monday.

The funds will be used to provide Mortgage Credit Certificates to qualified first-time homebuyers. The certificates allow qualified buyers to receive a federal income tax credit of up to 15 percent of the interest they pay on their mortgage.

“Housing is one of the biggest issues facing working families in Santa Clara County,” Santa Clara County Board of Supervisors Chairman Pete McHugh said in a statement. “Through the Mortgage Credit Certificate Program, residents can increase their buying power by reducing the amount of federal taxes taken out of their wages.”

In order to qualify, applicants cannot make more than $94,500 for up to a two-person household or $108,675 for a household with three or more people. The home purchase price cannot be larger that $630,000 for a new home or $570,000 for an older home.

Good work taxpayers! Together, we can all work to support housing prices!

What? You don’t like your tax dollars going to this?

Comments (16) -- Posted by: burbed @ 10:49 am

The ultimate $1.3 million Cupertino house

On Monday, we showed you what a $1.295 million dollar house looks like in Greenwich, CT where the income regularly tops $500k. Let’s look a house in that price range here in the Bay Area:

10245 SCENIC BL, Cupertino 95014 (Cupertino)
$1,300,000 Beds: 3 bed(s) Baths: 2 bath(s) MLS: 770273 10245scenic.jpg

Property Overview
Cupertino (Cupertino) 95014
Detached Single Family (Class 1)
Bed/Bath: 3 / 2
SqFt: 1,426
Lot: 12,196 sq ft
Age: 54 years
List Price: $1,300,000
Assoc Fee:
Well maintained home in desired Cupertino location. Spacious yard with over 12,000 sq. ft, mature landscaping and in-ground pool. 2 fireplaces, newer compostion roof, covered patio. Current schools include: Monta Vista High School, Kennedy Middle School, Stevens Creek Elementary.

In a word, Cupertino.

That word trounces Greenwich in every way.  In fact, if you read up on Greenwich, you’ll learn that’s where John Sculley, the former Apple CEO who got rid of Steve Jobs, currently lives in. Is that where you want to live? Near the guy who got rid of Steve Jobs?

No. Of course not. You’d rather live near where Steve Jobs works today… where $1.3 million dollar houses have interiors like this:


I don’t think you can get that anywhere anymore. And that’s what makes this house so special.

It’s been a long week, but I think by now, you too are convinced that Greenwich is a terrible place to live. Just because people there make tons of money and the houses look nice doesn’t mean anything.

If it’s not in the Bay Area, it’s no good.

Comments (13) -- Posted by: burbed @ 5:59 am