San Francisco economy is bulletproof – Oakland has carjacking problems
S.F. immune so far from struggling economy
There may be plenty of disagreements about the budget Mayor Gavin Newsom announced on Monday. But there was one statement I totally agree with.“The reality outside our 47 1/2 square miles is very different from the reality within it,” Newsom said.
He’s got that right.
The housing market is crumbling across the country – but not in San Francisco. Travel and tourism is down in many places but not here, where visitor spending, fueled by foreign tourists, reached an all-time high last year.
And despite a huge city deficit, Newsom still managed to sound upbeat Monday when he announced spending increases for the police force and a health care program that covers uninsured residents.
[snip]
“My opinion is that the Bay Area is 100 percent bulletproof,” said Carlo Middione, who has owned the Vivande Porta Via restaurant on Fillmore Street for 27 years. “I live in the Mission and when I go out at night for a meal, I can’t get in a restaurant. I think business is booming.”
Congrats! Further sign that house prices are going to start rocketing forwards. In the Real Bay Area anyway. Haters will undoubtedly point to Oakland… but clearly Oakland isn’t in the Real Bay Area:
Carjackings a symptom of Oakland’s problems
Oakland can now claim to be the nation’s King of Mayhem on public streets.
The city’s latest award is yet another dubious honor to bolster that claim: Oakland is among the nation’s leaders in carjackings – with a rate more than four times higher than San Francisco over a two-year period, according to a report in Monday’s Chronicle.
It is also one of the nation’s most violent and murderous cities. As midyear approaches, Oakland has reported 56 homicides, a pace that would exceed last year’s total of 127.
Georgia State University criminology Professor Volkan Topalli, who is writing a book on carjackings, found that Oakland’s high rate of that crime goes hand in hand with a laundry list of troubling crime statistics and social ills that make the city a prime candidate to be on the cutting edge of the next national crime surge as the economic downturn continues.
“I think violence rates are going up across the country, and in places like Oakland, the increase is going to be even greater because of existing problems,” Topalli said Monday in a phone interview.
The combination of poor public schools, high unemployment, and a lack of community cohesion amid open drug sales and prostitution on blighted streets can create “a perfect storm of problems,” Topalli said. In this category, at least, Oakland is ahead of the national average.
Already this year, a 10-year-old boy was shot at a piano lesson, the state Senate president pro tem was carjacked in the middle of the day (possibly by the same man who is accused of shooting the boy, police say), and impromptu illegal street races have ended in fiery crashes and multiple shootings.
Those don’t constitute normal, everyday occurrences in most U.S. cities, large or small. But in the most lawless parts of Oakland, such events are a part of everyday life.
[snip]
There were so many reported carjackings in East Oakland that it resembled an Auto Row for car thieves.
Worse comes to worse, I hear there’s a secret button that can transform the San Francisco – Oakland Bay Bridge to being just the San Francisco – Treasure Island Bay Bridge. We’ll probably also need to barricade 92 and the Dumbo, but that’s ok since the East Bay long fell out of the Real Bay Area.
June 6th, 2008 at 9:32 am
ahhh yes… here we go again. The ” California/the Bay Area/San Francisco/ My neighborhood/ My street/My house will NEVER fall in value. What people don’t get is that the dominoes have now fallen inward, almost completing the start of the downward cycle. Next up- SF.
Nice how the SF article again mentioned our saviors- all them pesky rich foreigner.
June 6th, 2008 at 10:32 am
ahhh yes… here we go again. The ” California/the Bay Area/San Francisco/ My neighborhood/ My street/My house will NEVER fall in value.
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Someway it’s true, because “My House” will NEVER fall in value, until I get the pinch WHILE selling it. I think there was a survey month back where majority of homeowners in America still believed that their home value increased in one year.
June 6th, 2008 at 11:09 am
We’ll see. We were on the GG bridge and in Sausalito this past week. GG bridge was real dead for a Sat. near June. SF is usually the busiest during the summer months, which are not that far off, and so far, I don’t see that much people out and about there during the weekends.
I think the economy is going to get hit here soon. The official #’s lag. Did anyone see the recent jobs report? C’mon, unemployment is 5.5% across the country. That’s just going to keep climbing.
If anywhere is in a boom, it’s the farm towns in the midwest.
June 6th, 2008 at 11:24 am
Yeah I know. I’m moving to Oakland anyway. Everywhere in the BA has drug deals, car thefts, and vandalism. Oaklanders just report it more often because they want it to stop.
June 6th, 2008 at 11:46 am
Oakland’s pretty nice actually.I like it better than SF by a long shot and spend a lot of time there. I live fairly close by. The thing about it is that I’d pair Oakland with Memphis.They’re practically sisters. Both have severe crime problems, but the crime happens in extremely localized areas. There are really nice parts of Memphis, but you have to pay quite a bit more to live in those areas. The same is true with Oakland, whereas in my opinion,some of the nicest parts of the BA are in the Oakland Hills, but then again, the houses there are often well over a million bucks. Oakland does offer “cheap” alternatives if you want to gamble and buy or rent in one of the “up and coming” areas that hipsters tend to gravitate towards. But I have several friends who either rent or bought in some of these areas and so far, two of them have had their homes broken into, and one heard gun shots only to find out someone was killed on their block. The other thing is that a lot of those up-and-coming areas are reverting right back into what they were before: crime infested hell-holes.
You take what I’d consider a completely unnecessary risk buying in Oakland unless you are very familiar with the neighborhoods there and know exactly what you’re getting yourself into. I’ve heard way too many stories of young couples buying in up-and-coming areas only to basically be living in a prison, scared to walk around their own neighborhood. But lord have mercy they got a cracker house for 450k versus paying 800k in SF or Palo Alto…
On the other hand, My Aunt has lived in Memphis for 30 years in a not so hot area. Her car has gotten jacked 5 times. But she was aware of what it would be like and just deals with it.
June 6th, 2008 at 3:19 pm
ACtually, considering Oakland has almost half the population that SF does, and SF has recorded 98 homicides last year, and is on track to beating that this year, I think Oakland has a much lower per capita murder rate than SF does. Go figure.
I dunno, I’d rather have my life than my car.
June 6th, 2008 at 3:21 pm
I’m buying in the Laurel which I’ve been told is a stable area with a lot of long-time residents. But within the past year there’s been about one carjacking a month either along Macarthur or near the corner with 35th Ave.
June 6th, 2008 at 3:51 pm
Not sure why you’re even considering buying in Oakland or the BA for that matter since what you pay now will definitely be worth considerably less in a few short years. It sort of sounds like you’re not exactly familiar with the area and doing just what I mentioned above- getting lured into something because it’s cheaper. The reality is that Oakland is just as overpriced as SF and in my opinion has much more pressures being applied to it that will assure double-digit plunges in value.
My advice is to rent a house in that area for at least a year, see how you like the area, see what the prices do, THEN think about buying. No need to rush into something that’s one of the biggest financial choices of your life. Just my two cents…
June 6th, 2008 at 4:10 pm
I had some friends who lived in the section near Berkeley in the flats, not Rockridge but near it. It seemed nice and quiet and they never had problems with crime there but that was the mid-80s.
The friends up in Piedmont and other Hills location… hoo boy, completely different story. How are those prices holding?
For that matter, how many zips in SF are dropping? Just like Santa Clara County, only some zips get to play in the RBA, fewer and fewer every day.
June 6th, 2008 at 9:39 pm
I think the economy is going to get hit here soon. The official #’s lag.
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Hmmm. 42% drop in profit for Williams-Sonoma. Even rich “immune” people are not buying.
June 6th, 2008 at 11:13 pm
In this type of national economy, opportunities abound. If one invests in the right sector, e.g. energy, there’s good money to be made. On a personal level, you can get a great discount on a nice SUV. An agile investor can thrive in any kind of environment. On the real estate front, if you don’t want to be affected by this downturn, you gotta be buying the real bay area. I agree with the mayor that we are bullet proof.
June 7th, 2008 at 2:09 am
OOps, i’m an idiot. Oakland does not best SF in murders per capita. Geezus, brain was not working this afternoon. Oakland has twice the murders per capita as SF does. Okay, fuck that, not moving to Oakland…
Well, you guys can talk about the BA’s economy being bulletproof, but I remember 2000-2002 and it wasn’t pretty.
June 7th, 2008 at 11:50 am
MSG that talk is called “wishful thinking.” There’s plenty of evidence that real estate here is taking many bullets.
Here’s the April (monthly) DQ/San Francisco stats. Some up, some down.
Community Zip Sales % Chg Median Price % Chg High Price $/SqFt % Chg
San Francisco 94102 16 -36.0% $585,000 6.6% $861,500 n/a n/a
San Francisco 94103 24 300.0% $682,500 1.1% $1,660,500 n/a n/a
San Francisco 94105 60 361.5% $660,500 -26.6% $3,300,000 n/a n/a
San Francisco 94107 48 -2.0% $675,000 -10.0% $1,974,000 $670 -10.9%
San Francisco 94108 3 -40.0% $479,558 -33.9% $1,400,000 n/a n/a
San Francisco 94109 33 26.9% $785,000 -4.3% $2,400,000 n/a n/a I lived here long ago, it’s a mix of Western Addition and some Pacific Heights
San Francisco 94110 30 11.1% $800,000 -11.8% $1,725,000 $693 7.0%
San Francisco 94111 7 40.0% $665,000 -24.0% $1,190,000 n/a n/a
San Francisco 94112 45 -29.7% $610,000 -12.9% $925,000 $513 3.7%
San Francisco 94114 36 125.0% $1,100,000 -15.4% $5,625,000 $945 -8.1%
San Francisco 94115 18 -41.9% $895,000 16.8% $4,200,000 $840 -1.9% This is Presidio Heights/Laurel
San Francisco 94116 29 7.4% $752,000 -6.0% $1,995,000 $560 -18.5%
San Francisco 94117 15 -59.5% $875,000 16.6% $2,800,000 $2,280 173.0%
San Francisco 94118 27 92.9% $1,375,000 11.3% $9,500,000 $898 3.4%
San Francisco 94121 19 5.6% $1,039,000 15.5% $1,584,500 $613 3.1% I think this one’s north of downtown
San Francisco 94122 30 25.0% $828,000 3.6% $2,350,000 $629 0.2%
San Francisco 94123 26 18.2% $1,485,000 -5.4% $5,050,000 $1,150 -25.5% This is Marina, a zip I would have expected to stay in the RBA
San Francisco 94124 12 -45.5% $486,750 -28.8% $1,200,000 $436 -7.2%
San Francisco 94127 14 -26.3% $1,220,500 -3.9% $2,200,000 $756 1.0%
San Francisco 94131 27 -22.9% $952,250 -1.6% $2,200,000 $771 -20.6%
San Francisco 94132 15 36.4% $673,500 1.7% $1,320,000 $530 -2.2%
San Francisco 94133 6 -40.0% $700,000 -23.9% $1,000,000 n/a n/a
San Francisco 94134 18 -50.0% $540,000 -0.6% $630,000 $406 -19.1%
Run that by me again about San Francisco real estate being bulletproof?
June 8th, 2008 at 11:26 am
“Not sure why you’re even considering buying in Oakland or the BA for that matter since what you pay now will definitely be worth considerably less in a few short years. It sort of sounds like you’re not exactly familiar with the area and doing just what I mentioned above- getting lured into something because it’s cheaper. The reality is that Oakland is just as overpriced as SF and in my opinion has much more pressures being applied to it that will assure double-digit plunges in value.”
This particular house already is off 40% from where it was in ‘05, and it has already seen at least 4 bids. It’s a tossup whether I’ll even get it at its current price.
June 9th, 2008 at 10:23 am
Strong ‘Spring bounce’ has been reported today regarding the national housing market. Anyone who is simply “analyzing the data” or extrapolating past results without getting in touch with the pulse of the market would be caught by surprise.
June 9th, 2008 at 11:09 am
Renters,
Check out this article by one of the experts on Yahoo Finance:
http://finance.yahoo.com/expert/article/yourlife/86643
It basically agrees with everything I’ve been saying here. Check out these quotes:
1. appreciation even after the recent correction, has been dramatic. By my rough measurement, the gains since 1990 here in Southern California have been by at least a factor of three. That is, homes that were selling for roughly $400,000 in 1990 would be selling for about $1,200,000.
2. In addition, the owners got the benefits of imputed rent, tax deductions, and no tax at all on the imputed rent, which is really a benefit.
3. Residential real estate can not be counted out as a smart investment or maybe even as the smartest one you’ll make.
4. Even if you buy at the peak, if you wait long enough, you will generally make out well.
5. in today’s low interest rate world, the interest rate on the mortgage is almost surely higher than the interest on your savings, so that you will in effect earn higher interest by paying off your indebtedness than by keeping it in a savings account or money market or a CD.
June 9th, 2008 at 11:56 am
This particular house already is off 40% from where it was in ‘05, and it has already seen at least 4 bids. It’s a tossup whether I’ll even get it at its current price.
40% off? so what. Homes in Oakland were 150k or under when I moved here 8 years ago, and were so until more recently. 40% off means there’s probably another 20-30% left to go.I wouldn’t be giddy about buying a house in the part of Oakland you’re referring to because there’s a good reason why that area is having such a reduction in prices. That’s just my advice though. I assume you’re gonna’ buy a house as soon as you can anyway.
Spring Bounce? What we’re really dealing with here is the fact that for the last 2 years, each successive month was the “worst on record”. March was the worst. ever. We’re dealing with a MASSIVE amount of foreclosures, fire sales, massive price reductions in places like Oakland, Manteca, and Stockton. Hell- there were 3 “Bank owned” houses in my neighborhood that were open this weekend, and I live in one of those “good” neighborhoods ( Alameda).
So ya, I wouldn’t be surprised that some people are in fact buying. A huge chunk of those sales are foreclosures or bottom of the barrel scraper homes.
RE shills are reading this the wrong way. It does not mean that suddenly, RE is going to appreciate. The supply is still at a 11.5 month supply. Home prices are still falling rapidly, and less money is available for loans. SO yes- prices are falling, which for those of you who think that any sort of bounce is your savior are delusional. We will see further price reductions, and yes- appreciation will not be happening until that supply is knocked in half, which at the current rate won’t be until late 2009, 2010.
The spring bounce proves nothing other then that when prices fall, people will buy, and that early on, there’s a large number of hand-wringing knife catchers.It doesn’t mean that the good ole days are back. sorry.
June 9th, 2008 at 12:02 pm
One more thing RealEstater,
That Yahoo article is referring to more recent appreciation per the 10 year housing bubble, which as we all know was fueled by loose lending practices. Banks, lenders, and Wall Street, along with countless foreign financial firms are paying very dearly for that mistake. In other words, that kind of lending environment will not be returning the the marketplace, hence that level of appreciation experienced in the last boom will not be returning. More normalized appreciation? At some point, yes- this will turn around. But rampant appreciation that grossly defies fundamentals? Nope. Ain’t gonna happen.
June 9th, 2008 at 1:29 pm
Spring Bounce? What we’re really dealing with here is the fact that for the last 2 years, each successive month was the “worst on record”. March was the worst. ever.
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One more ‘Spring Bouce’! The funny thing is that RealEstater did not even bother to refer to the data/report he is pointing.
Let’s look at the CNN/Money report with title “Pending home sales up 6.3%; prices seen falling”. Falling? You got to be kidding! We are talking about S-P-R-I-N-G B-O-U-N-C-E!
Ok, forget title and let’s read the article. First para:
Bargain hunting? What? There is no price drop. Where is this f***ing “bargain” coming from?
3rd para:
13% drop from last year’s April? Does not matter. All that matters is it is higher than last March. That’s called “Spring Bounce”! I simply don’t understand why media has to compare with last years’ April number. Last year is gone – past, history. Hence last year’s data is irrelevant.
Let’s go farther down:
Unbelievable! Now NAR is getting influenced by media spin and predicting more pessimistic outlook.
Bottomline, it’s all media’s fault.
June 9th, 2008 at 1:34 pm
that piece on yahoo is from ben stein.
he’s right sometimes. but not always.
he funded a movie about intelligent design – he does not believe in evolution. maybe he believes in faith based real estate economics.
June 9th, 2008 at 1:56 pm
The other rather BIG thing is that this is basically another article making much ado about nothing. We’re talking PENDING sales, which if my neighborhood, which as mentioned before is one of those ‘good’ neighborhoods that attract nervous do-gooder parents, then 50% of those pending signs will revert back to “for sale”. There have been 4-5 pending signs around my block as of late. two have already gone back on the market. One has been pending since early March. Anyone can make an acceptable offer. The sinker will be the fact that most of these people will not qualify.
Ben Stein mentioned about a month ago that we should save all the big banks at all cost. I’m not sure if I agree with his line of thinking.
June 9th, 2008 at 2:16 pm
“40% off? so what. Homes in Oakland were 150k or under when I moved here 8 years ago, and were so until more recently. 40% off means there’s probably another 20-30% left to go.I wouldn’t be giddy about buying a house in the part of Oakland you’re referring to because there’s a good reason why that area is having such a reduction in prices. That’s just my advice though. I assume you’re gonna’ buy a house as soon as you can anyway.”
Yes, I am going to buy as soon as I can, because the PITI on the house I want is $100 less than the rent on my 1-bedroom apartment in the SFO airport flightpath. It’s not a question of getting my own personal piggy bank – believe it or not, it actually is a question of value. Oakland is a great value right now.
June 9th, 2008 at 3:58 pm
he funded a movie about intelligent design – he does not believe in evolution.
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Now I know while designing God forgot to add intelligence on another person. Not so intelligent design then.
June 9th, 2008 at 5:28 pm
Are we talking about the same Ben Stein, the one who is an “economist” (per Yahoo) is the same one who is an actor (the teacher in Ferris Bueller) and a game show host and now produced and stars in the creationist propaganda lying-sack-of-sh** movie Expelled? It is entirely possible there is more than one dude named Ben Stein. And also possible that the Ben Stein who wrote this article is a NAR shill.
You all (yes you Pralay, and you bob, and Crossroads and who else did I leave out?) really should know better than to feed the troll. Haven’t you figured out that every article the troll ever posts always proves the opposite of the claim? It’s part of the game, just like he implies he lives in Palo Alto (but since he seems to know nothing about any particular neighborhood…) or drives a Porsche or whatever. I’m sure he’s chuckling over getting you to “bite” again. Stop it. Now.
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| DO NOT |
| FEED THE |
| TROLL! |
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June 9th, 2008 at 6:22 pm
ben stein did write a great editorial in the nytimes a few weeks back about how the lack of regulation on wall st is nutty. so, he has some hits and some misses.
June 9th, 2008 at 8:39 pm
Crossroads, is it the same Ben Stein? Are the economist and the actor the same person?
June 9th, 2008 at 9:37 pm
And don’t forget he is a comedian too. So when he misses something, he would just say “I was just joking”.
June 9th, 2008 at 9:51 pm
Madhaus,
You’re the one who is trolling feeding us useless, misleading aggregate data. This complaint has already been raised before by multiple people, yet you continue on with your propaganda. WTF?
June 9th, 2008 at 9:56 pm
>>just like he implies he lives in Palo Alto
Madhaus,
I hate to keep responding to your nonsense, but I’m curious about this one. Where did I imply anything about where I live? Do I need to imply anything? Usually I just tell it as it is, which you label as “trolling”. If you don’t enjoy the alternate opinions here, may I suggest that you go to a bubble site where you will always get the applause you are looking for?
June 9th, 2008 at 10:02 pm
Madhaus,
I think you are surprised by my familiarity with just about every RBA neighborhood that come up for discussion. I know every street in your neighborhood too. No, I’m not implying I lived on your street…
June 9th, 2008 at 10:10 pm
Pralay,
How are your investments doing? Did you follow my advice a few weeks ago to invest in energy?