When is it a good time to buy a house in the Bay Area?
Has renting ever been cheaper than owning in the Bay Area? [Burbed.com]
madhaus Says:
April 6th, 2008 at 11:03 pm
The market is on its way down. By the time most people figure out it may be hitting its peak, it’s already jumped the shark.
So it appears there are no good statistics on the historical trends about rent prices vs mortgage prices in the Bay Area – so much for that.
The question persists… when is it a good time to buy a house in the Bay Area? Clearly 1991 is one answer… but what about the future?
April 12th, 2008 at 7:04 am
The best time is when you need a house for your own use for several years and the cost of ownership is within a 1.5x factor of the rent. That way you can keep the rental business going at a slight loss even if you have to move.
In Bay Area terms, this would mean a 40% decline in prices, maybe 2010.
April 12th, 2008 at 10:46 am
If the bulk of the rental stock in the Bay Area was purchased before the run up in prices, then the owners can continue to rent out the homes at a significantly lower monthly payment than what you would have to pay monthly for principal, interest, insurance, property taxes, maintenance, home owners’ association dues, etc. As long as the rate of people cashing out (by selling their home and leaving the Bay Area) remains lower than the rate at which folks have liquidity events (large bonuses, stock option grants, company sales etc), there will be enough demand to balance supply and keep the prices at the current level. In such a situation, home ownership may continue to cost alot more than renting for decades or a century – till some macro-economic shifts change the areas attractiveness. If you don’t believe this is the case, just read about the history of real estate prices in metropolises such as New York, Tokyo, Bombay, Paris etc.
April 12th, 2008 at 5:08 pm
Best time to buy =
1) when lending standards become
rational and all the garbage loans are flushed
out of the system in a few years
2) when house prices to rental prices to incomes
return to their long term moving averages
April 12th, 2008 at 5:23 pm
You’re both wrong — it’s a trick question because in the real Bay Area it’s always a good time to buy!!
I love Steve’s answer — so many people in the BA are sooo blinded by the thought of riches they can’t see that this entire bubble was caused by easy money. Just to survive the onslaught of jingle mail, the banks will be forced to once again require 20-30% downpayments and end interest-only/neg-am/B.S. loans. This by itself will cause massive pain as nobody in this country has enough for even the smallest downpayment at this point, as evidenced by the negative national savings rate not seen since the Great Depression. Glad I rent…
Rob
April 12th, 2008 at 6:56 pm
the only stats I could find on the rental market were this series from HUD.
This site has some graphs with HUD ratios (mortage vs rent) from 2001-2007. But each HUD number comes from a seperate chart, and in ’05 HUD reduced the amount it would allow for fair market rent (reduced it nationwide).
I’ve been trying to find the site I alluded to earlier which had a 10 year time series of the HUD San Jose nubmers without much luck.
April 12th, 2008 at 7:09 pm
The “best time to buy a house”, in my experience, is always six months after you buy a house. No matter what you bought, or when, or where, it always would have been “better” to wait six months. It’s incredibly easy to second-guess yourself on a big purchase like this.
April 12th, 2008 at 7:48 pm
Someone *could* come up with long-term data. It’d take paying someone living in the Bay Area to go through newspapers going back maybe 50 years, looking at rental and sales prices. Newspapers were the “internet” of the US up into the late 90s anyway, and should be reliable records. After the late 90s you have to look at other things too, although a good study could be made using newspapers alone even up to now, since there are people who just use the newspaper to advertise because they always have.
California state tax records, for individuals claiming the renters’ credit may be a valuable info source too.
I’d happily perform these studies for $10/hour if I were in the Bay Area, but I’m not. I do know more about trading in old Ford tractors than I’d ever have learned in the BA though so its’ not all bad.
April 12th, 2008 at 8:19 pm
The Mercury News’ weekly housing stats are out today, this time for the week of March 24th.
Here’s the zips with an actual increase in sales volume from last year. Ready?
(sorry I can’t format this better, I figure tables won’t work)
City / Zip Med_Price %chg $/sf sls %chg
San Jose 95139 $532,500 -14.3% $381 6 20.0%
Sunnyvale 94087 $994,250 19.8% $626 39 2.6%
Wow, that’s gotta hurt, only 2 zips with sales up over this week last year.
Out of 51.
Several zips with price increases from last year. All the usual RBA suspects. Surprises:
Cupertino 95014 $1,068,000 24.3% $652 33 -60.2%
up a lot, and sales down a whole lot
Los Altos 94022 $1,370,000 -34.2% $738 16 -5.9%
this is RBA, prices NEVER go down!
Los Altos 94024 $1,717,500 9.6% $733 12 -53.8%
oh look, prices up here. wait, sales down a lot.
Los Gatos 95032 $1,100,000 9.5% $529 18 -43.8%
this is not possible! This is Real Bay Area! Why are so few buying houses here?
Los Gatos 95033 $672,500 -21.6% n/a 4 -77.8%
I only include this one because it’s the biggest sales decline. And yeah, this is RBA too.
Mountain View 94040 $954,250 71.3% $586 20 -20.0%
this one has a huge price increase, due to improvement of the high school
Mountain View 94041 $933,000 13.8% $489 5 -44.4%
No high school improvement, big sales drop.
Palo Alto 94301 $1,010,000 -32.5% $826 17 -15.0%
it doesn’t get any more RBA than Palo Alto. Too bad the buyers don’t agree.
San Jose 95125 $840,000 9.8% $446 28 -64.6%
this is the first SJ zip code with a price increase, but… look at the volume again. this is Willow Glen.
San Jose 95129 $980,000 32.3% $637 24 -22.6%
here’s West SJ, many in Cupertino school district! Prices up a lot, again, sales down.
San Jose 95130 $780,000 5.3% $589 8 -52.9%
I don’t know where this zip is, but if the price is up, I’m reporting it. Sales way down.
San Jose 95133 $518,500 6.1% $364 19 -29.6%
Ditto, sales not as bad as above.
Santa Clara 95051 $607,000 8.4% $441 33 -46.8%
the only zip in the city with prices up. Sales plummeting.
Saratoga 95070 $1,565,000 19.9% $676 30 -33.3%
Look! Another RBA city with prices up and… sales off here too.
Sunnyvale 94089 $742,000 9.9% $469 23 -23.3%
unlike the RBA 94087 zip, this one is also dropping off and prices only up half as much.
Bottom line:
All homes $630,000 -8.0% $428 1,113 -42.3%
prices down, sales way down.
April 12th, 2008 at 9:34 pm
it doesn’t get any more RBA than Palo Alto. Too bad the buyers don’t agree.
————-
That’s because of media. Media is brainwashing potential buyers by publishing this kind of data.
“Pulse of market” indicates that it is “extremely healthy”. Any data or statistics contrary to that is “useless data”. Period.
April 12th, 2008 at 9:45 pm
Just talked to a loan agent and got some update on mortgage market. All banks require 20% down payment, or 25% for declining area such as east San Jose. Monthly total debt service (mortgage, auto loan, revolving credit card debt) amount can not exceed 45% of gross income. The rate for conforming jumbo load (b/w $417K and $729K) is 6.5% to 7%, 1% higher than that of conforming loan.
To qualify for a $800K house, someone must have $160K cash, debt free, and monthly income of $9K+ (annual income $108K+), assuming he could get a 6.5% 30 year fixed loan.
April 12th, 2008 at 10:25 pm
Renter, thanks for the loan info. A $108K income isn’t unusual for a software developer, but how many of them have $160K in cash sitting around, or even options worth that much? I think this says that an $800K home is a trade-up in most cases.
One thing I forgot to mentoin above about the zip codes, the zip that declined the most in price wasn’t in East San Jose. It was the Los Altos one, 94022. I guess it is full of junk houses.
April 12th, 2008 at 10:27 pm
>>Palo Alto 94301 $1,010,000 -32.5% $826 17 -15.0%
it doesn’t get any more RBA than Palo Alto. Too bad the buyers don’t agree.
Bunch of clueless amateurs. Go to mlslistings.com and search for that zip. You’d be lucky to find one house listed at that price. $1M can barely get you into 94087 (Madhaus’ neighborhood).
You guys can keep talking about sales volume. How many times do I have to repeat:
1. Sales volume is ramping up as we enter spring selling season.
2. You don’t buy a house based on sales volume. You buy based on price, and price is holding solid in the RBA.
3. Houses are taking longer to close, therefore many sales are not reflected in the numbers yet.
I already showed the latest data analysis published by Creekside Realty (See #30 in http://www.burbed.com/2008/04/07/rents-rocketing-up-in-san-francisco/), after which Pralay was left speechless for several days.
April 12th, 2008 at 10:32 pm
>>A $108K income isn’t unusual for a software developer, but how many of them have $160K in cash sitting around, or even options worth that much?
Madhaus, you need to expand your circle of friends. Most people I know easily have that much in cash. I think you do too.
April 12th, 2008 at 10:59 pm
I already showed the latest data analysis published by Creekside Realty (See #30 in http://www.burbed.com/2008/04/07/rents-rocketing-up-in-san-francisco/), after which Pralay was left speechless for several days.
————
RealEstater,
Actually when you spin or lie, atleast don’t post the link so that you can have the appearance of being truthful (or TRUTHINESS in Colbert’s term).
I already replied it in post #33.
How about post #36 where I asked:
And why don’t you look at those data and tell me if they are better than 2007 or not? I already saw them.
Did you reply it? NOPE.
Now, the real question. Who was SPEECHLESS exactly?
Hmmmm. Now I know why you posted the link to embarrass YOURSELF. Because, you are RealEstater The Delusional, who has no clue about reality.
April 12th, 2008 at 11:04 pm
Bunch of clueless amateurs. Go to mlslistings.com and search for that zip. You’d be lucky to find one house listed at that price. $1M can barely get you into 94087 (Madhaus’ neighborhood).
—————-
So why don’t you tell us how the number came like that, Mr real estate expert? Did SJ Mercury News misprint? or it got to be one more spin from media to brainwash potential buyers.
April 12th, 2008 at 11:05 pm
Even if you did have 160k cash, why in the world would you want to use it for a down payment that has a 0% return until infinity. Very poor financial choice. Put that 160k in a house, it’s worth 160k in 20 years. Put it in the stock market, its worth at least 4x that. You make money in real estate by effectively using leverage, which IMO means buying a house that you can comfortably afford with little down and a “standard” mortgage, be it a 30 year or 20 year.
And BTW, the sales data is year over year, thus the seasonal adjustment is already factored in. I do agree though that you can’t find much in PA for 1 mill. Guessing condos are skewing the numbers.
April 12th, 2008 at 11:16 pm
It’s gonna be really funny when burbed finally gets fed up, does some detective work, and finds that RealEstater is actually Pralay’s sockpuppet.
April 12th, 2008 at 11:16 pm
1. Sales volume is ramping up as we enter spring selling season.
———-
And what is the number? Is it close to 2007 Spring number? 2006?
————-
2. You don’t buy a house based on sales volume. You buy based on price, and price is holding solid in the RBA.
————
And you cannot tell the future outlook of market just based on current price. Drop is sale volume tells where the market is heading.
Drop in sale = drop in price. That’s the basic mantra of supply-demand market.
—————
3. Houses are taking longer to close, therefore many sales are not reflected in the numbers yet.
———-
Now that’s looks like a reasonable excuse from a real estate agent.
How long “longer”? One month? So a transaction which is supposed to be closed in February got closed in March, right? But March number is still not good enough compare to March 2007. Damn!
April 12th, 2008 at 11:27 pm
It’s gonna be really funny when burbed finally gets fed up, does some detective work, and finds that RealEstater is actually Pralay’s sockpuppet.
————-
Uhhh, please don’t denigrate RealEstater like that. He lives in “management class” neighborhood with “smart people” and he “waters his OWN lawn” every morning. And did I tell you that he is a real estate investor (hence knows “pulse of the market” better than “clueless amateurs”).
Calling “Pralay is RealEstater’s sockpuppet” could be more fair game.
April 12th, 2008 at 11:31 pm
3. Houses are taking longer to close, therefore many sales are not reflected in the numbers yet.
————-
Ok, let’s not count ONLY closed transactions. Do you have any stat for March 2008 closed plus pending transactions?
April 12th, 2008 at 11:40 pm
I do agree though that you can’t find much in PA for 1 mill. Guessing condos are skewing the numbers.
————
Does not matter. It’s median price. And we know that it is skewed one way or another. But the fact is that when median price goes up, Realtors love to show that number. But when it goes down, they say “oh, just lower end homes are selling more“. That indeed could be true, but it also says that demand for higher end homes are decreasing and drop in sale volume reflects that pretty well.
April 13th, 2008 at 12:09 am
When to buy: When prices decline 40% in a Real Bay Area Zip. Like mine.
When to rent: When the only person telling you to buy compares this month’s sales with last month’s instead of this month last year’s.
When to move to Michigan: Houses for $100!
April 13th, 2008 at 12:32 am
When to rent: When the only person telling you to buy compares this month’s sales with last month’s instead of this month last year’s.
————
And that is also with excuse “houses are taking longer to close”.
April 13th, 2008 at 12:42 am
>>Does not matter. It’s median price.
This is why data does not help a clueless person. Do you even know where is 94301? Go do some research before you speak. Perhaps you can start here:
http://www.altosresearch.com/research/CA/PALO+ALTO
I quote:
The median single family home price as of April 13 2008 for PALO ALTO is $1,922,234
The median price per square foot for homes in PALO ALTO as of April 13 2008 is about $974
April 13th, 2008 at 12:56 am
The median single family home price as of April 13 2008 for PALO ALTO is $1,922,234
————-
What is point, Mr. Delusional? SJ Mercury News published median price change for all types of homes, and you are showing ONLY for SFH. So what is the % change for SFH? Both median and volume of sale?
And needless you mention that you are still refusing to compare data with past years with excuse “homes are taking longer to close“.
April 13th, 2008 at 1:02 am
BTW, RealEstater, I am still waiting for your reply (to be precise “waiting speechlessly”) about the comparison between 2007 Spring and 2008 Spring market based on the data from Creekside Realty.
Make me speechless for next few days.
April 13th, 2008 at 1:19 am
>>BTW, RealEstater, I am still waiting for your reply (to be precise “waiting speechlessly”) about the comparison between 2007 Spring and 2008 Spring market based on the data from Creekside Realty.
Pralay,
Stop wasting my time. I gave you a link with all the data, and I will not spoon feed you.
Sales volume fluctuates based on a variety of factors. You’re jumping to conclusions regarding future price trend.
April 13th, 2008 at 1:21 am
Pralay,
For a change, you quote me the data, and you show me your analysis based on specific data.
April 13th, 2008 at 1:36 am
Pralay,
Still no answer?
April 13th, 2008 at 1:44 am
Still waiting…
April 13th, 2008 at 8:45 am
Looks like Pralay is speechless again.
April 13th, 2008 at 9:58 am
How does one attain non-amateur status? The saleperson and broker’s exams aren’t exactly rocket science don’t even required a college degree, let alone a grad degree. Yet being a Realtor automatically qualifies one as an exptert, or at least non-amateur?
April 13th, 2008 at 10:06 am
Stop wasting my time. I gave you a link with all the data, and I will not spoon feed you.
——————
Hmmm. This reminds me the children story I read long time back where an illiterate person was asking the head of the village to read the letter he just received. The village-boss says “I don’t have time to read your letter. Why didn’t you learn how to read, stupid?” Later it is exposed that the head of the village cannot read either. He was just pretending to be a literate guy.
Anyway, I would not expect serious data analysis from a guy who has only one data source – his grandmother.
Ok, let’s go to Creek Realty site. You are so pandering about it. Tthis chart is quite big (and could be hard for a guy who is not comfortable with too much data):
http://www.creeksiderealty.com/bay_area_real_estate/2008/santa_clara_county/4apr.htm
Here the volume of sale:
March 2005 sale: 1600
March 2006 sale: 1278 (that’s less than 2005)
March 2007 sale: 1079 (that’s less than 2006)
And March 2008? 869 (that’s lot less than 2007)
Let’s go to inventory (days of inventory):
March 2005: 48 days of inventory
March 2006: 61 days of inventory (more inventory than 2005)
March 2007: 80 days of inventory (more inventory than 2006)
And March 2008? 101 days of inventory (that’s lot more higher than 2007)
I understand you are going to have hard time to read such a huge chart. Let’s go to another agent’s site where data could be more simpified.
http://rereport.com/scc/
This one is with a funny title “Sales Continue to Rise in March”. Then it continues “Sales of single-family, re-sale homes rose 37.5% last month compared to February.” Amazing! The sale is “ramping up”!!!!!
But the moment of truth comes in next lines: Year-over-year, sales were off 35.2%. Year-to-date, home sales are off 38.2%.“. Gosh! Such a contrast between first line and next two lines. Let’s look at the chart. According their data
March 2007 home sale: 899
March 2008 home sale: 583 (that’s 54% less than last year)
Inventory?
March 2007: 3,372
March 2008: 5,522 (THAT’S 63% UP FROM LAST YEAR)
So, Mr. Real Estate Expert, how long the market going to sustain this way IF:
- inventory keeps going up from last year data
- sale volume keeps dropping from last year data?
Is it sustainable in long term unless price starts dropping? Those NINJA loans are gone. Banks are asking for 20-30% down. So don’t expect that there are too many people jumping into market to eat up that huge volume of inventory and make it look like 2003-2004 all over again.
April 13th, 2008 at 10:13 am
Sales volume fluctuates based on a variety of factors. You’re jumping to conclusions regarding future price trend.
———————–
And how do you define “fluctuation”? Is it your another vague definition which keeps changing according to your convenience? What is the difference between fluctuation and long term trend?
My conclusion could turn out to be false. After all, it is just a prediction based on current trend. But at least I clearly stated why I am concluding such a way.
But what about your conclusion about “market is extremely healthy”? Oops, I forgot! You know “pulse of the market”. So whatever you conclude, go to be correct! No data or serious analysis required.
April 13th, 2008 at 10:17 am
Looks like Pralay is speechless again.
—————
Indeed, Mr Delusional! I was indeed speechless for last 7-8 hours (because I was sleeping
).
April 13th, 2008 at 10:23 am
How does one attain non-amateur status?
————–
- Getting “pulse of the market” (of course data and facts NEVER going to match with it).
- Counting “sold” on the properties listed on Realtor’s glass window.
- Reading fellow Realtor’c colleague’s newsletter (just imagine how valuable they are!!!) with phrases like “dramatic improvement” (but no meaningful data to support that).
And last but not least
- Owning a home in inflated price at the peak of the market
April 13th, 2008 at 11:25 am
Pralay,
Regarding post #33, you’re just re-hashing the same stuff about sales volume, and then jumping to conclusions about future prices. Did you not read the article? They did a very thorough analysis. If you disagree with any part of their assessment, quote me the lines and demonstrate why they are wrong and you are right.
When people who are hoping for the market to go down are not getting their wish, they settle for the next best thing — hey, sales volumes are not the same as last year, prices must crash from here!
Come back to me when the prices are actually down.
April 13th, 2008 at 11:26 am
>>How does one attain non-amateur status?
For starters, someone who cannot tell the difference between 94087 and 94301 is a strong hint!
April 13th, 2008 at 11:47 am
Did you not read the article? They did a very thorough analysis.
————-
Was it an ARTICLE with “thorough analysis”? OMG, real estate agents do “thorough analysis” too? I thought they make living on commissions from of home sale transactions.
Well, it was a plain bullshit newsletter.
And RE, you are playing game again. Post #28. You asked “quote me the data”. I DID QUOTE DATA.
Now, as you cannot answer it, you shifted your argument and asking for something else – “quote me the lines“. Well, you asked for data, not “lines”. I have no reason to quote lines from a bullshit newsletter.
You are playing as usual games as Madhaus pointed out earlier.
If you really want to argue, please do it based on data. Don’t quote that bullshit newsletter.
April 13th, 2008 at 11:48 am
For starters, someone who cannot tell the difference between 94087 and 94301 is a strong hint!
————-
Then I have to assume that very USPS worker is a real estate expert.
April 13th, 2008 at 1:15 pm
R,
Even if you did have 160k cash, why in the world would you want to use it for a down payment that has a 0% return until infinity. Very poor financial choice. Put that 160k in a house, it’s worth 160k in 20 years. Put it in the stock market, its worth at least 4x that.
I really have to disagree with you here. This is rarely discussed on this thread, but the real reason houses have so greatly outperformed stocks in this decade is because houses are an inflation hedge. we have a severe inflation proglem and a dollar decline problem. The stock market can’t weather that well. Most of the analysis on real estate vs. stocks including that Motley Fool piece they quote here was during the great bull stock market, 1982-2000. Since 2000, making money in stocks has gotten much more difficult. If the dollar continues to decline- you will be surprised what houses will do. They will hold their value and rise, contrary to the stock market. Thats what I am betting on.
April 13th, 2008 at 1:20 pm
Renter,
Just talked to a loan agent and got some update on mortgage market. All banks require 20% down payment, or 25% for declining area such as east San Jose. Monthly total debt service (mortgage, auto loan, revolving credit card debt) amount can not exceed 45% of gross income. The rate for conforming jumbo load (b/w $417K and $729K) is 6.5% to 7%, 1% higher than that of conforming loan.
You need a better loan agent. I am able to buy SFH’s to live in with 10% down or as investment properties with 15-20% down (they require more for investment since you can walk away). San Jose is not a declining market (so peninsula would not be, either). 45% of gross income is also wrong, it is 50% and can be higher. Agency jumbos are 6.5% so that is correct. Nobody pays 7%.
I am somebody in the process of BUYING PROPERTIES, so my data is current.
April 13th, 2008 at 1:39 pm
>>Well, it was a plain bullshit newsletter.
There you go again. The reason I asked you to quote from the article is because I wanted to give you a chance to back up your arguments against their findings. As I expected, this is what you came back with.
Speaking of quotes, Creekside Realty is frequently referenced by local media. Here’s a article from March in the San Jose Mercury News:
http://www.mercurynews.com/news/ci_8569595
Between them and you, one of you guys is “bullshit” for sure, given the contrary viewpoints.
April 13th, 2008 at 1:43 pm
A notable point from the Mercury News article in March:
>>”It seems like in a nice area I’ve got to pay $1 million. I’m not trying to live in Palo Alto, but I’ve noticed prices there haven’t budged at all. They’re even more psycho. The places where you get the good deals are in the less desirable areas”
April 13th, 2008 at 1:47 pm
>>Just talked to a loan agent and got some update on mortgage market.
Just came back from viewing the new homes released by SummerHill Homes in Menlo Park:
http://www.summerhillhomes.com/find/lanewoods/features.cfm
There place was crowded, with shoppers scoping out homes in the $1.5M to $2.5M range. I suggest Pralay to go out there and have a look at the pulse of the market. Don’t worry, it’s free to look.
April 13th, 2008 at 1:54 pm
The article didn’t espouse any opinions on future prices, simply provided data. Data is data. Like the “article,” it doesn’t tell you what future prices will be but it can and is used by people to draw their own deductions about where the market is heading. That is the purpose of collecting it. Increasing inventory and decreasing sales leads me (and most) to conclude prices are heading lower. Pralay apparently ascribes to this view. RE has obviously drawn a different conclusion. We’ll eventually find out who’s right but I know where my money is sitting right now.
April 13th, 2008 at 1:59 pm
When’s a good time to buy a house in the Bay Area?
When it’s a cheaper monthly payment from day one, with a 100% 30 year fixed loan.
In Santa Teresa and Blossom hill, we’re almost here. We were last there in 2001, so it shouldn’t be a surprise that we’re there again.
When’s a GREAT time to buy a house in the Bay Area? When it pencils out as in the black as an investment property from DAY ONE.
We were last there in 1999, so it’s a little shocking that everyone thinks it couldn’t happen again.
It’s also a little surprising that everyone forgot this, in just the course of 9 years.
Are all the RE boosters under 30? Or just really bad at remembering things?
April 13th, 2008 at 1:59 pm
A notable point from the Mercury News article in March:
I have a much more notable point. The title and lede of the article was that February sales slumped, both in price and volume. Funny how a certain someone missed that in favor of a quote from one person that backs up a pet theory.
Hey RE, you gonna define RBA or not?
April 13th, 2008 at 2:28 pm
Good post Jim D, agree 100%.
April 13th, 2008 at 2:29 pm
>>I have a much more notable point. The title and lede of the article was that February sales slumped, both in price and volume.
But then you read the article, and you find out there’s much more to it than that. It tells you there’s a bump in demand, and you need a million dollars to get into a decent neighborhood.
As we’ve discussed here before, Jan and Feb are traditionally slow months. Sales volume down has had no affect on prices except in the bad areas.
April 13th, 2008 at 2:32 pm
>>The article didn’t espouse any opinions on future prices, simply provided data. Data is data.
Right, the article tells you about current market conditions in different parts of the Bay Area. It’s only Pralay who is jumping to conclusions about the future. My purpose here is merely to describe the market condition as it exists currently. That’s why I told Pralay to come back when prices have actually come down.
April 13th, 2008 at 2:37 pm
Prices already have come down. The very article you linked to says so. But when they come down you say they haven’t.
(smacks head) Oh yeah, that’s why you’re a troll. Shame on me for biting. Again.
I bet RE is actually burbed, keeping the comments level up for the blog.
April 13th, 2008 at 3:10 pm
madhaus,
You are the big troll here. The article I pointed to clearly says prices have not come down except in the bad areas. Also, I just spent several posts explaining that sales volume decreases have not translated to lower prices, and projections by Pralay are just his wishful thinking. Which part of it do you not get?
April 13th, 2008 at 3:25 pm
It’s only Pralay who is jumping to conclusions about the future. My purpose here is merely to describe the market condition as it exists currently.
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Wow! Someone is claiming that is he is NOT concluding anything and merely describing the market.
Ok, as I mentioned in post #33:
1. Inventory is up 63% from March 2007
2. Sale volume dropped 54% from March 2007.
That’s CURRENT MARKET CONDITION. Do you agree with this number? Say YES or NO .
And don’t piggyback your opinion with “useless data” or “amatuer info”. If you do, you are NOT “merely to describe the market condition as it exists currently“.
April 13th, 2008 at 3:28 pm
You are the big troll here.
———–
Madhaus is troll? Definitely not.
RE,
Should we have a vote if both of us (RealEstater and Pralay) trolls or not? I am definitely feeling a troll. And those who feed troll are trolls too.
April 13th, 2008 at 3:30 pm
There you go again. The reason I asked you to quote from the article is because I wanted to give you a chance to back up your arguments against their findings. As I expected, this is what you came back with.
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RE,
No more game (but I doubt you will stop). You asked to quote data and I did. Now YOU back up your point with data.
April 13th, 2008 at 3:34 pm
Speaking of quotes, Creekside Realty is frequently referenced by local media. Here’s a article from March in the San Jose Mercury News:
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Wow! Someone quoted in media got to be correct! What kind of theory is that? Is this the best argument you got?
Creekside Realty’s giving the perspective from RE industry side. That does not mean that media is subscribing his viewpoint or validating his viewpoint. I read NAR’s Yun’s bullshit forecast every month (“worst is behind us and sale will pick up”) in media. That does not mean he is right.
April 13th, 2008 at 3:42 pm
There place was crowded, with shoppers scoping out homes in the $1.5M to $2.5M range. I suggest Pralay to go out there and have a look at the pulse of the market. Don’t worry, it’s free to look.
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Just like you asked me come back when price drops, I should ask you the same:
Come back when those home are sold.You are just anticipating sale based on “pulse of the market”. You are concluding that somehow that “crowd” will translate to volume of sale.
Hey, didn’t someone just claimed he is “merely to describe the market condition as it exists currently“???
April 13th, 2008 at 3:46 pm
Also, I just spent several posts explaining that sales volume decreases have not translated to lower prices, and projections by Pralay are just his wishful thinking.
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Forget about those wishful thinking. I asked a very simple question in post #33.
how long the market going to sustain this way IF:
- inventory keeps going up from last year data
- sale volume keeps dropping from last year data?
Let’s see what kind of economic expertise you got (and I don’t think that’s requirement to get license for real estate agent).
April 13th, 2008 at 4:23 pm
>>how long the market going to sustain this way IF:
- inventory keeps going up from last year data
- sale volume keeps dropping from last year data?
How do you know inventory will keep going up from this point onward? How do know sales volume will keep dropping?
Only the undesirable areas are affected by this type of trend. In the real Bay Area, there is no inventory issue or sales volume issue of any consequence, and prices are holding solid (remember you cannot even find me 1 house that’s selling at bargain prices). In a supply restricted market where there’s no more land to build on, no one is stupid enough to sell his/her elite membership for anything less than full value. There’s always the option of not selling. Any kind of slowdown in the marketplace is just building up future demand. Sellers here know too well they can always get more money by selling later.
April 13th, 2008 at 4:38 pm
How do you know inventory will keep going up from this point onward? How do know sales volume will keep dropping?
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I don’t know. How about you answer, Mr. Real Estate Expert?
It’s not one or two months fluctuation. Inventory going up and sale dropping – that’s a long term trend (please read post #33 again).
Even if you think this trend is not going to last for long, what are the FACTORS that can play in role? So far, what I heard from you, these are the only factors that can put market in positive direction:
1. stimulus package
2. FHA limit increase
3. Facebook going public (that will eat only max 200 homes the market.
These are not my points.
Anything else?
I already mentioned that lending standard is stricter now and it will more in coming days. Those NINJA loans are gone. Buying home with zero down? That’s history. These all will affect (and already affecting) market negatively.
April 13th, 2008 at 4:46 pm
Sellers here know too well they can always get more money by selling later.
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Haven’t come across those flyers and ads “You home is losing $XXXX every months. If you want to sell your home now, choose me as your agent.”?
Yes, they are bay area agents.
April 13th, 2008 at 4:47 pm
In the real Bay Area, there is no inventory issue or sales volume issue of any consequence, and prices are holding solid
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Why don’t you quote some data to back up your claim?
April 13th, 2008 at 4:50 pm
There’s always the option of not selling.
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Market is not decided by the people who are not selling. It is decided by people who are selling (or trying to sell). The fact that inventory is high and getting higher every month.
April 13th, 2008 at 4:56 pm
>>I don’t know. How about you answer, Mr. Real Estate Expert?
Why are you trolling? I just told your observations are incorrect, and your predictions are useless.
Hear me out one more time: In the real Bay Area, there’s no issue with inventory or sales volume. Take Madhaus’neighborhood for instance, there aren’t too many homes to pick from. The excess inventory are in the undesirable places.
>>Even if you think this trend is not going to last for long, what are the FACTORS that can play in role?
I don’t think there’s any issue, and I don’t see any factors that will change current conditions in any significant manner.
>>I already mentioned that lending standard is stricter now and it will more in coming days. Those NINJA loans are gone. Buying home with zero down? That’s history. These all will affect (and already affecting) market negatively.
These things don’t matter to management class buyers in the real Bay Area. If you got good credit, a conforming loan with the right amount of down payment, who cares about those things you mention? If you don’t have credit and downpayment, what the heck are you doing shopping in the real Bay Area in the first place?
April 13th, 2008 at 4:59 pm
>>Why don’t you quote some data to back up your claim?
I already gave you the link to Creek Side Realty. Time and again when you don’t have any argument, you come back to stall for time.
Tell me, which cities /zips in the real Bay Area has such horrific inventory that cannot be digested? Don’t forget to show the DOM figure. Show me just 3 examples.
April 13th, 2008 at 5:01 pm
I can almost sense it. When you ask Pralay for any specifics, he’ll deflect.
April 13th, 2008 at 5:03 pm
Why are you trolling? I just told your observations are incorrect, and your predictions are useless.
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Ha ha! Now you are borrowing from Madhaus. The biggest toll is here who keeps making sales pitch like a cheap real estate agent.
As Madhaus mentioned earlier, anywhere price goes down you are labeling that as “undesirable area”. Basically your goalpost keeps moving.
You still haven’t defined your definition of RBA that Madhaus asked for.
April 13th, 2008 at 5:04 pm
I don’t think there’s any issue, and I don’t see any factors that will change current conditions in any significant manner.
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So in a way you are saying that long term trend of inventory built-up is NOT an issue.
That tells a lot about your basic economic knowledge.
April 13th, 2008 at 5:09 pm
These things don’t matter to management class buyers in the real Bay Area. If you got good credit, a conforming loan with the right amount of down payment, who cares about those things you mention? If you don’t have credit and downpayment, what the heck are you doing shopping in the real Bay Area in the first place?
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Didn’t someone already pointed out in recent past that a good number of loans issued in bay area in 2003-2006 are ARM? They are not subprime, but in the end they are ARM and about to be reset soon in coming years. Wait for their “oh, we will just refinance” moments.
April 13th, 2008 at 5:14 pm
I already gave you the link to Creek Side Realty. Time and again when you don’t have any argument, you come back to stall for time.
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Well, you pointed to the newsletter. A simple question – why do you run away from any statistics or data?
I quoted data from the very Creekside Realty that you mentioned. How about you quote some data from same site to make your point?
How about you show some statistics of so-called “DESIRABLE AREA” to prove your point?
April 13th, 2008 at 5:21 pm
Tell me, which cities /zips in the real Bay Area has such horrific inventory that cannot be digested? Don’t forget to show the DOM figure. Show me just 3 examples.
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Check Sunnyvale for example in this site:
http://rereport.com/scc/sunnyvale.html
Have you seen this kind of inventory in recent past in Spring time? I guess not. Therefore, your “digestable” point is mute. You simply don’t know it.
How about Santa Clara?
http://rereport.com/scc/santa_clara.html
How about Los Gatos?
http://rereport.com/scc/los_gatos.html
And I haven’t shown San Jose yet.
April 13th, 2008 at 5:48 pm
>>You still haven’t defined your definition of RBA that Madhaus asked for.
Burbed already did that. I did not invent the term, and won’t take credit for it either.
>>So in a way you are saying that long term trend of inventory built-up is NOT an issue.
Wrong. I’m saying there is no trend of excessive or concerning inventory build up in the real Bay Area.
>>Didn’t someone already pointed out in recent past that a good number of loans issued in bay area in 2003-2006 are ARM?
As we explained before, that’s if you include Contra Costa County and those outlying places as “Bay Area”.
>>How about you show some statistics of so-called “DESIRABLE AREA” to prove your point?
Remember these links?
http://www.julianalee.com/reinfo/sold-CU.htm
http://www.julianalee.com/reinfo/sold-PA.htm
http://www.julianalee.com/reinfo/sold-LA.htm
http://www.julianalee.com/reinfo/sold-SU.htm
April 13th, 2008 at 5:51 pm
Pralay, none of those are Real Bay Area. Any town with higher inventory this year is by definition full of junk houses. If I find you a house that’s priced 40% lower than the median for the zip code, it’s a junk house. If the entire county has a lower median sales price from last year with higher inventories, then most of the county is junk zip codes. Basically anything you find that supports your theory that prices are coming down is amateur data covering junk houses. So please stop feeding the troll.
April 13th, 2008 at 5:57 pm
Regarding #72:
Let’s talk about Sunnyvale, since I know the city well.
Chart shows Sunnyvale price trend is rising based on 12 month moving average. Inventory somewhat higher than back in ’06.
If you focus on the desirable part of Sunnyvale, 94087 Cupertino School District, you’d see that the picture is even rosier. Low inventory, million dollar homes, low DOM number.
April 13th, 2008 at 6:02 pm
If I find you a house that’s priced 40% lower than the median for the zip code, it’s a junk house.
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It is not junk by definition, but it is definitely “UNDESIRABLE”. From the picture I can easily see a dark supernatural aura on this house. That makes this house “undesirable”. No wonder the description says in listing:
“….$125k less than the next available house in this zip code,……..”
Dark Supernatural Aura = Undesirable = 125K less
April 13th, 2008 at 6:03 pm
So please stop feeding the troll.
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Wise advise. Point taken.
April 13th, 2008 at 6:04 pm
Pralay, allow the dark supernatural aura to engulf you for a while as you stop feeding the troll.
Um, hey, how about those local sports teams!
April 13th, 2008 at 6:08 pm
Pralay, allow the dark supernatural aura to engulf you for a while as you stop feeding the troll.
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I am already engulfed.
And that’s why I am “Priced Out Forever”, don’t have my own lawn to water and I am “living cold in winter”.
A blanket is please! Or I need a Spring Bounce (only for weather/temperature though)!
April 14th, 2008 at 12:09 am
There are two measures to go by: 3X median income, which in the Bay Area is about $50k, but woops, with the Depression on may go down to about $30k, and the other measure is, buying should cost the same as renting.
Theoretically, if you use the “same as renting” measure, and you’ve improved the place a bit, you can always get your money back out. Not make money, just not lose it.
April 14th, 2008 at 12:05 pm
“Burbed already did that. I did not invent the term [Real Bay Area], and won’t take credit for it either.”
Um, burbed did that as a joke…