May 14, 2008

Will stock options save the Bay Area?

A guide to the different parts of the Bay Area []
Name Says:
May 10th, 2008 at 11:46 pm

Burbed (and others waiting for a housing price “correction”),

I have a question for you:

The primary premise I have seen for why folks expect housing prices to correct is that people don’t have sufficient income to service their mortgage debt at the current home valuations.

However, anecdotally I know of many people in the Bay Area who have received several hundred thousands of dollars in stock option grants in the last decade. They use substantial portions of it as a down payment that leaves them with a serviceable mortgage given their incomes.

The question then is this:

Is it possible that these folks represent a large enough fraction that they can support current prices or let them drop only 10-20% (as opposed to the 60-70% some here seem to expect)?

Is it truly different now from the period upto a decade ago. Perhaps till then lay employees didn’t get the large option grants – with the companies’ profits going to the investors, whereas now more goes to the employees?

Does anyone have data of asset (not income) distributions for Bay Area towns?

Great question. I’m pretty sure everyone in the Bay Area has amazing stock options, like the masseuses from Google. But there might be a few people who don’t – and those people really ought not to be living here anyway.

In any case, does anyone have this sort of data?

Comments (81) -- Posted by: burbed @ 5:12 am

May 13, 2008

Additional dirty kitchen included in this Berryessa house!

301 Educational Park Dr, San Jose 95133


* Status: Active
* Bedroom: 4
* Bathroom: 2&1/2
* Year Built: 1980
* Lot Size: 3480
* Square Footage: 1681
* List Date: 4/1/2008
* Garage Spaces: 2
* MLS#: 788811
Close to school,grocery,shopping ctr.and hospital.Public trans. EZ to access to 680/101. Crn lot.newly renovated kitchen area.updated floor tile. Addtnl dirty kitchen(not recrded),Motivated seller. Offer subj to lender approval.

Let’s look at the key selling points of this house:

1. Amazing security system. You will not feel safer in any house. With bars on the windows and doors, you can be sure that your family will be safe at night – unlike those losers in neighborhoods that don’t have bars. Remember, it’s like the Bear theory – you only need to outrun your friend, not the bear. This tactic is guaranteed to send the criminals to Los Altos instead.

2. Check out the green-ness of this house. That’s right – no yard means no grass means no evil pesticides, wasting water, etc. Think globally, act locally by buying this house.

3. Stop sign. Everyone is going to have to stop at your house and look. Look at your house. PRIDE OF OWNERSHIP BABY!

4. This house comes with an additional dirty kitchen that’s not recorded. Everyone knows that real chefs have real dirty kitchens. Finally, you can explore your culinary skills and produce authentic food.

And for just $628,000! What are you waiting for!

Comments (23) -- Posted by: burbed @ 5:46 am

Winner of Friday’s Cupertino Story Writing Contest

Story writing contest for a Cupertino house []
It was another night with no stars. The marine layer covered the sky and left everything chilly, including the corpse in the driveway. The beat cop turned his notes over to me and went off to canvass the neighbors. But I knew it would be a waste of time. Nobody’s ever home around here, everyone working all day at their 60 hours a week engineering jobs and the kids parked in after school programs. Maybe there’d be a Chinese or Indian family with a grandma at home, but she wouldn’t be able to tell us a thing in English.

I looked in vain for a front door. The house was an Eichler, which meant cheap construction playing at Frank Lloyd Wright, but it also meant the entry was hidden behind a seven foot wooden gate. Eichlers had huge sheets of single-pane glass, and that let the neighbors see too much. If anyone was home to talk, they could have missed a murder in front of their own garage.

I found the gate itself, painted the same ugly blue-gray as the rest of the exterior. Fortunately, it was not locked. The front door stood open. The entryway was strewn with toys, but I didn’t get a sense of how many kids lived there yet. Not so many that they were running a preschool but at least two of the rugrats.

I called out but nobody answered. I couldn’t figure out why the front door was open if no one was home, and the uniform said he’d already interviewed a man here. I passed through the front entryway, imagining some ditzy real estate foof shouting “Light and Bright” at the high-ceilinged entry. No front hall closet, instead coats hung from hooks right on the wall. I saw a brochure at a small table. The house was for sale. For a goddamned $1.1 million.

Would someone kill over this ugly shack, with its single-pane energy-leaking windows and its horrible heating system?

I found the guy in the kitchen, looking as proud as a fourth grader who came in second in the spelling bee when he expected to be knocked out early. He knew about the stiff in his driveway from his earlier interview, but other than that claimed he’d been working and hadn’t heard a thing. He didn’t know who the dead guy was, had never seen him in the neighborhood. Yes, there had been realtor activity, but they had been told to call first and no one had come today. No one had come all week. The house had been on the market for more than a month and he was going to change agencies. He showed me the whole house, describing why some lucky family should be more than willing to drop seven digits on what was essentially a big garden shed. A light and bright garden shed.

It was in the baby’s room that I found my first clue. A cat box. Who the hell puts a cat box in a baby’s room? But there it was, same blue as the exterior paint, in the corner right of the crib. I didn’t think this dude had a baby and furthermore, some of the other items didn’t add up.

Why were the kitchen drawers open when I came in? He said he was working in his office, but the computer was turned off. Why did I feel vertigo looking at the back porch? And why did the kitchen suddenly look updated when I turned around and went through it again?

After inquiring as to the whereabouts of his wife and kids, and getting no definitive answers, I decided to pull out my Miranda card. Sometimes you just get a sense about these things, and this case just stunk. There was no way his shack was worth a million in this market. I doubted that anyone else lived there but him, and that the baby fittings were what the real estate trade calls “staging.” And I strongly suspected that the stiffy in his driveway was probably the agent who wanted to cut the price to $925,000.

Congrats to Madhaus for this amazing entry. You’re the winner!

And so is the seller and buyer for this amazing Cupertino house!

Comments (4) -- Posted by: burbed @ 4:41 am

May 12, 2008

What is curb appeal in Central San Jose?

780 E Taylor St, San Jose 95112

* Status: Active
* Bedroom: 3
* Bathroom: 2
* Year Built: 1938
* Lot Size: 4791
* Square Footage: 1686
* List Date: 2/27/2008
* Garage Spaces: 2

* MLS#: 781035

Wow… when I first saw this house I thought to myself “Whose castle is this?” Who’s the king? YOU ARE!

I mean, look at the construction. Very very spanish style. Very very classic. It’s like I’m in Europe, but in San Jose at the same time! No need to travel ever again!

With curb appeal such as this, how can anyone resist? Personally I think that you are so fortunate as to win this house in the inevitable bidding war, you really need to add a water fountain in the middle of the front yard. Ask the Vatican for references!

By the way, this last sold on 9/8/2004 for $629,000 – and I bet this will sell at that price again. You just wait.

Comments (29) -- Posted by: burbed @ 5:39 am

May 11, 2008

What is the reasonable rate of return on a house?

Story writing contest for a Cupertino house []
Elsie Says:
May 10th, 2008 at 12:21 pm

Looked this house up on Zillow

Last time sold: 11/08/1999: $500,000

Scary thought: Apparently also listed in the zip code and Cupertino at the “median” price
• 95014 ZIP code $1,175,500
• Cupertino $1,175,500

So question: did they overpay in 1999 or is it reasonable to get 8% per year (over 9 years compounded interest) in increase in their “investment”?

What is a reasonable rate of return on a house?

Good question… what is the reasonable rate of return on a house? I’m guessing 10% for a Real Bay Area House

Comments (15) -- Posted by: burbed @ 5:27 am

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Thanks readers!

Click here to post a comment -- Posted by: burbed @ 4:40 am

May 10, 2008

A guide to the different parts of the Bay Area

Thanks to Stevo for finding this. For those who are unfamiliar with our fine fine home of Silicon Valley, this should help you learn the basics of what’s what.

Santa Clara County Califoria Real Estate Market Conditions Bay Area Real Estate Market Newsletter, Northern California, Silicon Valley, Santa Clara, San Mateo, Santa Cruz, Monterey Counties-Current statistical market data when to buy or sell real estate
. The different areas are:

expensive – Saratoga, Los Gatos, Los Altos, Los Altos Hills, Palo Alto, Menlo Park & Atherton
moderately expensive – Almaden Valley, Cupertino, Sunnyvale and Mt View
moderate – Santa Teresa, Evergreen, Berryessa, Milpitas, Santa Clara, Willow Glen, Blossom Valley, Cambrian and Campbell
affordable – Central, South and East San Jose
South County – Morgan Hill, Gilroy and San Martin
townhouse/condo – is for the moderate priced areas listed above.

Alright! With that part over, let’s take a look at the numbers that go with those designations:

I like how the numbers are only called out for expensive. Well, that makes sense – look at how cheap the yellow one is for mod: just $625k by my judging.

So… do you feel insulted based on these classifications?

Comments (65) -- Posted by: burbed @ 5:17 am

May 9, 2008

Story writing contest for a Cupertino house

728 Stendhal Ln, Cupertino

* Status: Active
* Bedroom: 4
* Bathroom: 2
* Year Built: 1961
* Lot Size: 6000
* Square Footage: 1516
* List Date: 4/1/2008
* Garage Spaces: 1
* MLS#: 788429
Description of 728 Stendhal La, Cupertino
Charming Cupertino Eichler-styled home, Features include 4 bedrooms, 2 bathrooms, Wood Ceiling with Foam Roof, modern kitchen, spacious counters and lots of cupboard space, large living/dining room for entertaining. This home is perfect for a large family with school age kids – schools are within walking distance. Large front atrium with glass throughout for viewing common areas. Internet Access.

Sweet! It’s a see through home. And it’s got a foam roof. (Does that mean asteroids will bounce off of it? What the heck?)

But wait… there’s more!

Alright Burbed readers! It’s Friday! That means it’s: “Write a story day”

My challenge to you: write a short story that explains what’s going on in these photos, why this person is selling, and what the guy in the photo saying to the potential customers.

Ready? Get set! Go!

Comments (42) -- Posted by: burbed @ 5:10 am

May 8, 2008

Pick up trucks galore, metal bar doors, designer crown molding

1876 Luby Dr, San Jose 95133

* Status: Active
* Bedroom: 4
* Bathroom: 2&1/2
* Year Built: 1979
* Lot Size: 3480
* Square Footage: 1681
* List Date: 2/4/2008
* Garage Spaces: 2
* MLS#: 776136
Newer Carpet and Hardwood Flooring, Newer Furnace and AC, Newer Appliances and Garage Door (2006). French Doors lead out to Covered Patio with Hot Tub. Garage has been converted to Living Quarters (permits unknown). Current owner has added New Tile flooring in Dining Room and New Paint Inside! Beautiful Kitchen Cabinets and Designer Crown Molding/Base Boards.

Wow… just look at all the parking this house has. You can easily fit 2 pickup trucks and a car – maybe even more! And look at the metal gate on the front door – I feel more secure already.

Let’s face it, there’s really nothing terribly wrong with this house. It’s 1681 square feet, build in 1979, and is reasonably priced at $635,000. But what I think is most noteworthy is the fact that this house has designer crown molding and base board.

That certainly has my attention. Is is Armani? Cartier? D&G? Vera? Who is the designer? I simply must know!

And what happens when you have people from LA over? Do they ask “OMG, whose crown molding and base boards is your house wearing?”

Watch out – the TMZ might be camping out in your driveway if you buy this house!

Comments (15) -- Posted by: burbed @ 5:31 am

May 7, 2008

$1174 per square foot house in Palo Alto

746 Homer Ave, Palo Alto 94301

* Status: Active
* Bedroom: 2
* Bathroom: 1
* Year Built: 1926
* Lot Size: 1960
* Square Footage: 660
* List Date: 4/3/2008
* Garage Spaces: 1
* MLS#: 789008

Absolutely adorable cottage with gorgeous landscaping! Deck with built in hot tub, new lawn, gorgeous slate entry, wood floors, remodeled kitchen with corrian counters and cottage style cabinets, gas stove, fresh paint, and period details.

Thanks to Burbed reader Ross for this find. At $1174 per square foot, this Palo Alto house proves that everything is just fine in the Real Bay Area. Bubble bursting my ass. You’ll be lucky to win this house at
$775,000! I’m guessing it will clear an easy mil. Why?

Two words: period details

That’s right. This house showcases the best that the 1920’s had to offer. Just look at them in this photo. Oh wow! I feel like I’m in the 1920’s right now! It’s roaring! Roaring! And unstoppable just like the 1920’s!

Comments (16) -- Posted by: burbed @ 5:11 am