June 25, 2008

Case-Shiller housing index for San Francisco of 04/2008

Burbed reader Renter tersely said:

It is back to the level of 04/2004.  Please post it.

What’s he referring to?

To that, I say bah. Does it really feel like prices have dropped back to their 2004 levels to any of you?

It certainly doesn’t for me!

Comments (67) -- Posted by: burbed @ 5:36 am

67 Responses to “Case-Shiller housing index for San Francisco of 04/2008”

  1. Brian Says:

    I won’t buy until they fall back to 1999 prices!!! muhahahahaha

    Seriously though, this is a entertaining to watch this graph fall, cause I’m not seeing the prices fall.

    What exactly are they including in “San Francisco”? The RBA is not falling. East Bay? Yes. San Jose? A bit. San Francisco? No way. I notice Case-Shiller doesn’t have a San Jose market or an Oakland Market to graph.

  2. Brian Says:

    In addition, some big markets are actually showing signs of the bottom. Chicago, Boston, Charlotte, Cleveland, Dallas and Seattle have all gone up in April.

    Then again, that’s not saying much, because most of these markets weren’t going down for very long. Charlotte hit it’s peak in Aug 2007, Dallas in June 2007, Seattle in July 2007.

  3. Name Says:

    Burbed of course knows this. I’m posting for the benefit of readers who don’t.

    Case-Shiller’s San Francisco index covers a *large* region the city, including the localities in the vicinity that have dropped by dramatic (40%) amounts.

    My hypothesis is that these drops have more to do with the rising cost of gas, leaving less for mortgage payments etc. If the family was at their budget’s limit, the extra few hundred dollars a month for gas is putting them over the top and into foreclosure.

    In areas closer in, there has not been such a dramatic effect from the rising cost of gas since people commute less.

  4. Name Says:

    Correction:

    … a *large* region AROUND the city …

  5. bob Says:

    I think it’s still about 2 years too early to be calling any sort of a bottom anywhere. Indeed, there was some sort of Spring bounce, as there tends to be every year, but I’d put money on it that sales will be down for the upcoming June report. Anecdotally, nothing is selling at all out in my East Bay neighborhood whereas there was an initial bit of activity. Also interesting to note that I just counted the fifth house that went up for sale that was sold just a year ago. Lots of people hurting out there.

  6. WillowGlenner Says:

    REOs are already priced at 2001 levels, at least that was where I got mine. 2001 was not the boom here in bay area real estate that it was in some of the rest of the country- remember the dot com bust, half the county lost their jobs (I did). So 2001 is pretty good pricing. REOs tend to be the really speculative less desirable properties and that is always the issue. Anyway for that Case Schiller graph to go back to 99 would mean the REOs would be priced at 1994 levels because they represent the deep discounting that brings the overall graph down. And come on, houses here are not going back to 1994 levels- lets be reasonable. The low end is selling well and sales are brisk, because the price is right, now.

  7. DensityDuck Says:

    Sales being down doesn’t mean that prices are going to go down. There are ten million used Fords for sale, but that does not affect the price of Ferraris. Properties with actual value (as opposed to million-dollar teardowns and shitbox “condos” converted from thirty-year-old apartments) will maintain price.

  8. Jim D Says:

    San Jose prices are falling “a bit”?

    AHHHHAHHAHAHAHHAHAHAHHAHAHHAHAHAHAHHAAHAHAHAHA!

    Oh, you’re funny. So funny. *sniff* *wipes tears*

    600k houses selling for 450k. Yeah, just a bit. A trim, if you will. Just a bit from the top.

    And it’s just getting started. This is in a *good* jobs environment. What happens when the *bad* jobs environment happens?

    Don’t think jobs are going to be a problem? What color is the sky in your world?

    Of course, the “Ferrari of houses” in the RBA will of course only continue to go *up*, so none of us Google millionaires need to worry, right?

  9. Jim D Says:

    Oh, and yeah – some of the CSI prices went up in April – because the data isn’t seasonally adjusted, and the prices tend to go up in the spring. Look at the dataseries from the last couple years, you’ll see it there.

    But hey, if you think we’re at the bottom, go ahead and buy. Please, be my guest.

    I’m waiting for 150x rent. We’re getting close in some places… When we’re there, it’ll be *close* to a bottom – but still not there, since it’ll probably hit 100x rent before it’s done (it hit 120x rent last bottom in ’91, this one will be worse).

  10. passthebubbly Says:

    Wait a sec, that graph says Bay Area houses didn’t budge for EIGHT YEARS, from 1990 to 1998. What explains the Bay Area being nondifferent and unspecial for so long?

  11. Renter Says:

    Case-Shiller housing index for San Francisco includes the following counties: San Francisco, Marin, San Mateo, Contra Costa, and Alameda.

  12. burbed Says:

    Contra Costa, and Alameda

    ’nuff said.

    Case-Shiller should recompute to show only San Francisco, San Mateo, Santa Clara (excluding Gilroy/Morgan Hill)

  13. bob Says:

    I consider 2001 to be in the middle of the bubble. The tech boom drove housing upwards. Afterwards, everyone conveniently jumped from tech to RE, thus continuing the bubble. So 2001 prices aren’t anywhere close to bottom.

  14. Ross Says:

    Wait a sec, that graph says Bay Area houses didn’t budge for EIGHT YEARS, from 1990 to 1998. What explains the Bay Area being nondifferent and unspecial for so long?

    In short: the end of the cold war. Closure of Mare Island, Alameda NAS, Hamilton AAF, Fort Ord, SF Presidio, Concord Naval Weapons Station, Moffett NAS, and probably some others I’ve forgotten. Silicon Valley was hit hard. Before there were PCs and the Internet, there were missles, satellites, aircraft avionics, radar, flight simulators, submarines, and other warfighting goodies. The RBA was a major beneficiary of cold war spending. The Central valley was hit too, with the closure of Mather, McClellan, Castle, and Crows Landing. A lot of well-paying jobs, both military and civilian, evaporated.

  15. madhaus Says:

    Yeah prices were pretty flat from 1990 to 96 down here (actually they went down from 1990 to 1992). 2004 prices? I’m seeing them in the bottom half to two-thirds of zips, especially in Foreclosureville and REO Vista. The top end is flattening. It will be our turn soon enough.

    Case-Schiller does cover Santa Clara county, you have to pay ‘em for it. They give away certain metro regions to encourage sales of what you really want.

    Ross, I used to know a bunch of folks who worked for Lockheed. Wonder where they all went?

  16. RealEstater Says:

    >>Case-Schiller does cover Santa Clara county, you have to pay ‘em for it. They give away certain metro regions to encourage sales of what you really want.

    Madhaus,

    Can you please pay for them and show us the results? We don’t need the free information, which we can find ourselves.

  17. WillowGlenner Says:

    Hey Jim D, I own a ton of san jose property and your hyperemotional rant is not really reflective of the true picture. If you look at the good areas of san jose, we are down about 10% or so from peak which occurred in summer 2007. Even after this crash the median for the good zipcodes is more than paid for my last house (prior to the recent one) in 12-2006. You are way too emotional.

  18. madhaus Says:

    Tell you what, WG, let’s meet here in a year and see just who was right, ‘kay? I don’t think Jim’s too emotional, I think you’re literally too invested in your recent purchase to accept a contrary take. But that’s the fun of forecasting, and that’s checking your work. Until we have know where prices end up after Spring Dead Cat Bounce 2009, Jim’s got just as much right to make a prognostication as you do. If you don’t agree with him, ask him to support his reasoning, but don’t play the condescending game like RE, it’s really beneath you.

  19. abc Says:

    If you search craigslist RE, there are houses in Oakland, Richmond, Pittsburg Vallejo and other parts of Contra Costa for around 100K to 150K. Even under $100 – it is astonishing…like the world is breaking down into two parts, or has already.

    Boomers depending on their house’s value for retirement may be surprised – just a little.

  20. Aaron L. Says:

    The C-S data for SF totally doesn’t include the RBA most of you know and love, so feel free to disregard it :-).

    But if you want to try to learn something from it, download the free 3-tier data. I think it looks a little more like what we talk about here – the homes in the high tier ($750k+) are sort of close to RBA homes – think of them as on the edge of RBA, maybe?

    The summary for the high tier in SF is – held very steady for ’07, but showed a real drop in 1Q08. Is it flattening, or going to dive again in 2Q08? C-S is a sort of 3 month running average anyways, so it actually LAGS reality a bit. I predict even the high tier will show a big drop 2Q08…We’ll wait and see…

    I’m doing some spreadsheet work with the free data, and I’m going to make some charts showing what kinds of gains/losses you would have had buying/selling at different periods in the SF region.

    If I make anything readable/interesting – is there a way to get it to you, Burbed, if you’re interested?

    Thanks for the site,

    -Aaron

  21. burbed Says:

    Just email it to me. burbed@burbed.com

  22. steve Says:

    Does anyone have access to historical annual media sales data by city or zip? I wonder if prices were flat Jan ’91 to Jan ’97 in the RBA as the CS graph above implies for SF.

  23. Real Estater Says:

    What we need here is a graph for some of the RBA cities. I’d like to volunteer Madhaus to create one, so that he can convince himself all of his efforts using aggregate data is useless.

  24. WillowGlenner Says:

    Oh Madhaus, give me a break. Can you show me even one RE bull here – and there are very few of us if you even want to include me as one- that write like this,

    AHHHHAHHAHAHAHHAHAHAHHAHAHHAHAHAHAHHAAHAHAHAHA!
    Oh, you’re funny. So funny. *sniff* *wipes tears*
    What color is the sky in your world?

    Admit it, this is “angryrenter” material. There is not much correlation to this kind of thing from the other side. But it is every other post, every day here.

    As to my recent purchase, sheesh. I don’t know what to think about you madhaus. My recent purchase was $420K. Tiny compared to my overall portfolio. I put almost nothing down on it. I have tried to explain this to you and you just can’t accept it. You bought a house in sunnyvale 15 years ago so why do you think 420K is such a huge endeavor? Its gambling money. When I mentioned what I bought to you a few days ago- I fully expected you to say “oh! WG I thought you had just bought a $2mm place in Almaden or something. You bought a place in 95124 zipcode that is cash flow positive on a 8000 sq ft lot for so little- well dang you can’t go wrong with that!”. That is what I expected, particularly since every cheap house with those characteristics sells in a day. But instead you actually tried to argue that this was not a good investment based on some webpage with median incomes in it!

    I think you are arguing with that DreamT person and have gone off the deepend. Your arguments make no sense.

  25. Frank Jewett Says:

    WG, if you’re going to tout your investment, you should provide some details so that we can track it over the next twelve months to see if you knew something the “angry renters” didn’t. I can’t imagine $420K bought a single family home in a desirable area (Willow Glen, for example) so was it a condo, townhouse, bungalow, fixer? If you’re living in it, it doesn’t have to be a great investment as long as the lifestyle is worth the mortgage and taxes.

  26. Pralay Says:

    Does anyone have access to historical annual media sales data by city or zip? I wonder if prices were flat Jan ‘91 to Jan ‘97 in the RBA as the CS graph above implies for SF.
    ———–

    There is one for SF metropolitian area – featured on burbed.com in last Feb.

  27. Pralay Says:

    Sorry for the wrong link. This is the correct link.

  28. Jim D Says:

    “Hyperemotional”?

    Dude, have you read this blog?

    If any comment seems out of place, it’s your comment full of prim disapproval, rather than my joyous mocking noise.

    If houses lost 10%, what’s that in dollars?

    50K? 75K? I don’t know about you, but it takes me months and months to make that kinda cash after taxes… when I’m not collecting my Google millions, of course.

    BTW – since it’s really not hard to find the homes that went from 600k to 450k, why do you insist on ignoring them? Why don’t they count?

    Oh yeah, they’re not special enough.

  29. Jim D Says:

    Ooo! Willow Glenner quoted me to prove my Hyperemotionality! Golly, I sure do feel chastised.

    Seems like a fun game though – let’s play!

    “that does not affect the price of Ferraris”
    (Ooo – Palo Alto crackerboxes are actually Ferraris!!!)

    “The RBA is not falling. ”
    (Because we define it as only being areas that don’t fall! See! Magic!)

    “San Jose? A bit.”
    (Sorry – I need a minute….
    ……………………….
    ……………………….
    OK, I feel better now. Again, if San Jose prices are falling “a bit”, then it’s really going to bite once the recession settles in, isn’t it? I’ll repeat, 600k down to 450k. Blossom Valley, Santa Teresa, Evergreen. Coming soon to a Cambrian near you, as well. And East San Jose?)

    How am I expected to hear such silliness without becoming raucous? I ask you…

    No emotion here except mirth, I assure you.

    150x rent baby, 150x rent. Already down from 400x rent, closing on 225x. Hit 120x last bust, no reason for it to not hit that again.

  30. WillowGlenner Says:

    Frank Jewitt, I didn’t tout my investment. Madhaus earlier asked me about itthis new house I bought and I replied- he obviously doesn’t think it is a great investment which is fine.

  31. WillowGlenner Says:

    geez jim d, thanks for making my case for me. Its almost painful reading your rants. What a bore.

  32. That DreamT person Says:

    WG – Was off hiking @ Mt. Tamalpais. What am I being blamed for, in absentia?:) Messing with madhaus’ brain from one city away? Geez sorry for spoiling your party. :P

  33. SiO2 Says:

    Somewhat off topic, but interesting:

    Best Cities for Tech Jobs

    1. San Jose/Silicon Valley

    Jobs per 1,000: 285.92
    Total: 225,343
    Rank: 3
    Growth: 3%
    Average wage: $144,828
    Salary Rank: 1
    Biggest sector: computer systems design
    Area employers: Google, Intel, Hewlett-Packard, Apple

    posted today on Yahoo Finance, titled Technology: It’s Where the Jobs Are. Source is BusinessWeek.
    I’m not putting the URL as I’m not sure if it would block the post.

    So, perhaps this helps to explain why we’re not seeing significant price declines in Cupertino / Saratoga etc.

  34. bob Says:

    I think there’s more considerations to be made besides what cities are the best tech job markets in regards to the number of jobs and the salaries. If considering the cost of living, I’d say the BA actually takes a back seat. I know for a fact that if I look on the Austin Craiglist jobs section for positions available in my field, there’s a fairly decent amount. Not anywhere near as many as the Bay Area,But enough for me to believe that I’d probably have no problem finding a job that I liked fairly easily given my experience. better still- the cost of living in Austin is a fraction of what it is here. Plus the salary for those jobs is actually not that far off from here. I’d be taking a 20-30k cut, but big deal. A house is 150k or so there. I’d actually be saving more in comparison.

    Given that consideration, I’d probably line tech cities up this way:

    1: Austin TX
    2: Raleigh Durahm, NC
    3: San Jose,CA
    4: Boise ,Idaho
    5: Denver,CO
    6: Huntsville,AL

  35. austindweller Says:

    bob,
    I can’t believe you ranked San Jose 3rd. I don’t really know about other cities. But I was thinking San Jose would go beyond 10 if onw was to compare cost of living/qualityof life. So are the other cities so bad ?

  36. bob Says:

    Well, I can’t deny that the BA has a fantastic job situation. I’ve never had problems finding another job rather quickly, and usually with several companies to pick and choose offers from. So despite the huge cost of living, I’d still rank it quiet high. In the case of some of those other cities, you might be out of work longer and not have the ability to be as picky.

    The city that nobody seems to know much about yet has a surprising number of startups is Huntsville,AL.

  37. Aaron L. Says:

    WG, I think the point is not so much that you didn’t find one of the better deals around in the month you bought it (it sure sounds to me like you did), but a lot of us housing bears think the price will decline further, maybe even much further, over the next 6-24 months, and then be flat for a number of years beyond that before appreciating.

    So I’m totally willing to give you props for yoru $420k purchase right now. But I can speculate, if I want, that if you had waited (like I’m waiting), you could have bought the same house for less, and then done even better.

    Also, there is a general kind of ‘argument’ on this blog about buying a home more as in investment, or buying a home more as a place to live.

    A) If one is buying as a place to live, I think that means you shouldn’t try as hard to time the market, because your 30 mortgage will cover lots of ups and downs – so just find a good deal now and get the joys of ownership. If you have a reason to want a home ‘now’, that’s important to you, so may have added incentive vs. the average person to buy now.

    B) If one is buying for an investment, then the obvious thing is buy low and sell high, and the whole point of discussing it would be to speculate on whether “Now is a good time to buy”. Or whether now is a good time to sell, or keep your money in some other sector.

    From your last couple of posts, it sounds more like B than A, so we can ‘criticize’ your purchase if we think the bottom is not yet here. I don’t think anyone should be rude about it, but if you are making the argument that it’s a good B-type investment, we can make the counter-argument. We can also argue things like B-type investments are not that great in general. I hope to present you some evidence to that effect as I work with the C-S data…

    If it’s more like an A kind of purchase, then I’ll be happy to say in the 10+ year time frame, I think you’ll be very happy. You might have saved some cash by waiting a year or two, but you’ll still be in good shape, and if you like the home, that’s worth something – probably a lot. It will be to me and my wife and kids if we can ever afford to buy a place.

    Most of us also know there are people out there wondering “is it a good time to buy?”, and in reading these comments, they might get an idea (poor souls). Since many of us reason, based on evidence, that it is not a good time to buy, we will argue against it, and we will scrutinize evidence against it.

    And, of course, a lot of us feel that people’s unfounded belief that RBA RE only goes up over the last 8 years had driven prices much higher than they ‘ought’ to be, which sucks for so many of us in society (and benefits some we don’t like – like Realtors and brokers taking their 6%). We want to counter that belief, and we want prices to come down, which will certainly benefit us, but also, I argue, benefit MOST of society. Of course, there’s plenty to argue about in that paragraph, but there you have my opinions, heavily generalized.

    Having said all that, I’ll try to make you believe I’d also listen to good evidence that it IS a good time to buy. You don’t read a lot of solid stuff on this blog (though it sure is fun! Props to burbed!), but folks like yourself actually made a Real purchase, and that’s solid. So thanks for sharing your story with us, and we would like as many details as possible.

    Lastly, many of us read many RE-related sites on the web, and have concluded there is a population of RE-bull trolls, who lurk these sites, and take any opportunity to make claims that RE always goes up and it’s a good time to buy, and being highly leveraged is a good thing, etc – WITHOUT VALID EVIDENCE. I am not talking about well-meaning people who honestly think now is a good time to buy. I’m talking about nefarious folk, here. We conclude they are invested in bad RE, or make commissions on RE, or both, and are just being greedy, to the detriment of others.

    So you know, we gotta fight back against the monied interests, you know? For the little guy!

    Best to all, and I’ll try to keep it civil.

    -Aaron

  38. bob Says:

    My take is that I think WG already answered his own question as to whether right now is a good time to buy, and make money from it in a timely manner. You mentioned that there seems to be a magic number in regards to what sells and what doesn’t in the low end. 450k seems to be what you see as a magic number. Anything else in the lower end market doesn’t sell. Thus I assume that you realize that you won’t get much more than what you paid, if at all in the current market because as you’ve said here, the 450k seems to be the tipping point where people jump in. That in itself indicates that the bottom hasn’t been reached yet. I also suspect anyone buying lower market housing for those prices are jumping a bit early.

    In my opinion, making such a purchase is more of a gamble because you’re more than likely going to be in a buy and hold situation. Even the housing bull experts expect a bottom by 2010, which even if that occurs, doesn’t mean there will be any upward movement in prices. We’re probably talking more like 2012 before any sort of upward appreciation might happen, and in my opinion, it’ll only be in the median housing and upper level housing areas. Lower end housing stock tends to appreciate last since the priced-out white yuppies will then start to ‘consider’ areas like west Oakland and so forth as viable housing alternatives. Classically, such markets are the last to rise and the first and hardest to fall.

    So in the meantime, I’m not sure how you expect to monetize this house because rent isn’t going to come close to covering the payments. If you bought it to actually live in as a house for yourself, then that’s an entirely different story. If you bought it for mere monetization, then I think you’re going to have a 4-5 year stretch before you’re going to break even, and perhaps another 2-3 before you realize any real profits come the time to sell.My assumption is with the best case scenario and that the house doesn’t depreciate any further. That’s my two cents.

  39. WillowGlenner Says:

    That DreamT person, I thought really hard about the saluation I was going to use for you…. went through many iterations “That DreamT babe” etc, and for political correctness reasons chose “That DreamT person”!

    You can never be TOOOO PC in the RBA, comrades!

  40. madhaus Says:

    bob, WG says the house is already cashflow positive (although since I don’t have the numbers I don’t know what assumptions this includes). If I were looking at the purchase as an investor, I’d have a lot more questions on that but it’s hard to draw the line between interested and nosy.

    But here’s a few general questions you should ask on any investment property, and WG can feel free to answer any of them or not.

    – Is the property currently rented?
    – If so, what is the GRM? (this is what Jim was talking about in post 29. 160 is healthy, Bay Area GMSs have been above 200 which is whacked and shows pricing has lost sight of fundamental value.
    – If not, how did you determine what you can get for rent, and how long do you expect to take to find a good tenant?
    – Is the cashflow positive before depreciation or after?
    – Is this property a 1031 exchange, so you’ll eventually have to deal with taxes at some point down the road?
    – What interest rate did you pay on the mortgage, given that this is investment, not homeowner mortgage? Investment property mortgages are usually higher.
    – What % did you put down on the property? I got the impression it was very little. But the more you borrow, the higher your cost — pushing against that cashflow. Remember I was quite surprised when you said it was positive.

    WG, now you are transferring your anger at Jim to me. Yes, I bought a house in Sunnyvale 15 years ago. I also did deal with one rental/investment property, and I did not succeed with it — my 12 year ownership period lost to the market. Long story. If I’d held on 5 more years I’d have done well. But I can’t look back. So, I’m not unfamiliar with investment property, and I’m interested in hearing from those who succeed with it. That’s why my questions. But please, calm down. I’m a housing bear right now, and I’ve always given my reasons why I think so. This doesn’t have to get personal.

  41. rick Says:

    madhaus,
    What does 100 mean in the graph? How come everything is below 100 prior to 2000? Maybe 100 is the reference point?

  42. madhaus Says:

    Yes rick, it’s an index with 100 defined as prices at the beginning of year 2000. All cities have the index set there, so the numbers change before and after it in different ways. Take a look at the tiered pricings, huge price rise and crash in the cheaper third.

  43. cardinal2007 Says:

    Jan 2000 is the reference point it is set to 100, this is the case for all Case-Shiller data sets. Everything is below 100 for the SF Bay Area prior to 2000 because real estate was cheaper then.

    I’m still thinking it will settle into the 140s, this apparently is higher than current futures contracts, so I suppose I should try to find one of these and buy it? That way I can make money off the futures contract?

  44. Jim D Says:

    Tch, tch, when did this blog’s comments get so serious? Where’s the joviality that once matched that of our gracious host’s?

    I guess everybody doesn’t feel as “special” as they used to. So sad.

    But to comment on Madhaus’ statement:
    - If so, what is the GRM? (this is what Jim was talking about in post 29. 160 is healthy, Bay Area GMSs have been above 200 which is whacked and shows pricing has lost sight of fundamental value.

    While 160 may be considered healthy for the economy, it’s not very healthy for an investment unless you factor in expected appreciation (or healthy rent inflation). A return of 7%-8%, is, I’m told, considered the magic number, and you really aren’t going to get close to that with 160x rent unless rent inflation bails you out in this market. (And while it might, I wouldn’t count on it – remember what happened to rents here the last time we weren’t special, in 1999-2002?)

    I talked about translating ROI percentages into GRM in other posts (when I too, wasn’t feeling so jovial), but I’m sure it wouldn’t be so hard to Google something up if you’re really interested, for those who are curious and don’t know (though I’m certain madhaus and WG know already).

    120x is what the market was at for a couple of years in the early 90’s. The numbers made sense to buy investment properties from day 1 – and there’s little reason to think that the world has changed in such a way that it won’t come back that way again. But even still, for personal consumption, I’m waiting on 150x… After all, I’m willing to pay a premium for having to mow my own lawn – just not a $150k premium.

    BTW – 80x is considered “normal” in most of the square states, so 120x is still a considerable premium. We’ll still be special, don’t worry. Gotta pay for all that sunshine somehow. But the 400x multiples of 2005 are gone, and they’re not coming back in your lifetime. Or my kid’s lifetime, God willing. Read the history of the Roaring 20’s to see what happened the last time we had multiples like that.

    In the meantime, I’m in double short ETFs while I wait. Today was a great day. (Hint: check out SDS, DXD, SKF, QID, and maybe SRS, though it’s not tracking the index so well anymore). The party’s just getting started, no need to give up and buy RE so quickly!

  45. WillowGlenner Says:

    Aaron there are no real estate bull trolls that troll this site. There are 10 bearish posts for every one that is even remotely bullish. The thing to do if you want to prove my investment is a poor one- is find some equivalent properties on an 8K flat lot in that zipcode selling for 420K or less. If the only thing that comes close to that that you can find is $550K and up, your logic about discussing the *median* property values and where they will erode too, falls short.

    I actually welcome any replies here with houses in 95124,95125,95008 etc with 8K+ lots for 420K and less, because that saves me time trying to look for these.

  46. sonarrat Says:

    1759 Branham is the closest I could find, and that’s right behind Highway 85. If it were my money I’d pay the extra for 974 Kingfisher Drive, but if you got a similar deal for $420K then you made off like a bandit.

  47. rick Says:

    WG, so rumors about the troll is not true? Did you ask Pralay and madhaus? It is true a lot of us are bearish, but it does not cover the fact that there is someone who has been bullish without any grounds.

    If you buy that $420k property in a good neighborhood that does not require major make-over, good for you! That is certainly not what the market is, yet, as you point out, that is not easy to find. You are acknowledging that if a house is priced right it will sell quickly.

    I think so far most people on this blog has been pretty calm, you certainly are a model on this site, and we should not expect less of you.

  48. madhaus Says:

    The thing to do if you want to prove my investment is a poor one- is find some equivalent properties on an 8K flat lot in that zipcode selling for 420K or less. If the only thing that comes close to that that you can find is $550K and up, your logic about discussing the *median* property values and where they will erode too, falls short.

    Two words.

    Shadow inventory.

  49. Jason Stanford Says:

    Jim D. – thanks for keeping reality in check around here. You are the correct one, and not being “overly emotional”, as someone suggested. My sister-in-law and her husband bought a 53-year shit box in San Carlos in Oct 2006 with an Interest Only loan. They paid $578 per square feet. Problem is, a neighbor’s house is now going to kill the comps with $394 per square feet. They’ll end up losing this house, it is all but inevitable. But lucky for them, they get to live in the Real Bay Area (and rent from the bank) until then.

    Also, some dear friends bought paid $650k for a place in San Jose in late 2005. They’ve sunk $75k into it, and Zillow now has it approx $75k lower than what they paid — and we know Zillow is WAY too high. They may be able to “keep” the place, but their net worth will be blasted in the long run because of it.

    The RBA is not immune. Jim D. is right — the game is over, and de-leveraging is happening around the globe. George Soros called it — this will be an epic “unwinding”. The RBA is in the 3rd inning of a 9 inning, or possibly extra-innings, game. Watch and see.

  50. RealEstater Says:

    I watched a bit of HGTV tonight. They showed some pretty nice homes priced in the $300K range, and the buyers were saying it’s at the top of their price range. WTF? It looks like a few of these people have found their way to this website.

  51. Crossroads Says:

    there’s a house in San Carlos that’s 394$ per sqft? is it next to 101, caltrain, or el camino? that’s unusual.

  52. sg Says:

    RE, sorry but your Realtor business is doomed for now.
    Banks won’t lending many of those I-O loans.
    HGTV propaganda won’t save you either.

  53. RealEstater Says:

    >>there’s a house in San Carlos that’s 394$ per sqft? is it next to 101, caltrain, or el camino? that’s unusual.

    Must be on Old County Road…

  54. RealEstater Says:

    sg,

    Those homes were in flyover country, BTW.

  55. cardinal2007 Says:

    Between El Camino and the 101 is not RBA in Belmont and San Carlos.

    Outside of that, we have 300 and 400 Davey Glen Rd.,and 1101 Continentals Way in Belmont, also the stretch of North Rd. between Beresford St. and El Camino (near Planet Granite), they are not in RBA.

    As for the $/sqft, I know where there is a townhouse at ~$325/sqft in Belmont.

  56. DreamT Says:

    WillowGlenner babe – “DreamT” will do. Isn’t “That” typically used as a pejorative? :P

  57. Frank Jewett Says:

    WG, I wish you luck with your investment. I personally cringe every time I drive through Cambrian to go to Target. Lots of dead laws, rotting fences, and yard debris. Not where I would want to live, but price is the problem that fixes most other problems and 8,000 SQ FT is a good sized lot.

    You made the existing structure sound like a long term tear down when you called it a small, “uber fixer.” Here in Willow Glen no structure is too small for some crazed flipper to pour money into it. You seem to understand that the land is driving the value, so I’m hoping you aren’t going that route.

    Rent now and build a McMansion later? I’ve seen a bunch of McMansions springing up in Cambrian. It’s not as obvious as Rancho Rinconada, where they tore down faux Eichlers (yes, even cheaper copies of the original cheap house), but it still seems like an odd neighborhood for a luxury home.

    Please don’t think I’m trying to pick on your house site unseen. I’d tear down a good chunk of Willow Glen as well. It simply doesn’t make sense to pay $900,000 to live in an “affordable” fifties ranch or an Eichler, even though the Eichler’s here are legit. Too much money in the land and not enough lifestyle, but I’d rebuild rather than trying to dress up the ranch with the latest bad flipper cliches.

  58. bob Says:

    “Those homes were in flyover country, BTW.”

    You know, I’m going to have to coin a term for areas like the BA, NYC, and other places that are full of stupidly overpriced RE with equally stupid people to buy them. How about what we used to call California back when I was living at home. We used to call it

    The land of fruits and nuts

    So perhaps I can call it “nuttyland”. That’s sort of stupid. Any other suggestions?

    Oh- and by the way, HGTV is headquartered in my home city, Knoxville, TN. It is also the home of DIY, Fine Living, and Great American Country. A lot of the shows are in filmed within the general vicinity because its obviously more convenient. 300k in Knoxville is the equivalent of 700k in the BA. The difference is that for 300k, you get an actual house and not some piece of crap all doctored up to look nice out here.

  59. WillowGlenner Says:

    I watched a bit of HGTV tonight. They showed some pretty nice homes priced in the $300K range, and the buyers were saying it’s at the top of their price range. WTF? It looks like a few of these people have found their way to this website.

    HA! That would be me, RealEstater! Hey- Don’t knock eating at the McDollar menu 5x a week until you’ve tried it!- you can meet all your future jobsite workers there.

  60. WillowGlenner Says:

    sonnorrat: I was meaning to post a few things to your earlier. Redfin has a nice blog post about your area I believe.
    http://blog.redfin.com/sfbay/2008/06/oakland_lets_compare_in_the_laurel.html

    Redfin has just added Google street view on their detail page. This is a GODSEND. For the cheap properties that I buy, RE agents don’t like to put a picture thinking they can describe their way out of bad curb appeal. Now that redfin has street view- GOTCHA! It shows more too, with a 360′ view of street.

    You mentioned you know the Senter/Monterrey area of San Jose. This is technically east San Jose. This is one of the hot places that bottom feeding RE investors are looking at now. Yes it looks like Tijuana but there is actually open space there to be had… personally I wouldn’t be surprised to see some new office bldgs pop up on Umberger. They are building this new shopping center called “The Plant” on Curtner and Monterrey with a home depot, best buy, target, Chevys, Panera bread, Ross etc. and even though it is a strip mall they are trying to keep the feel of the art deco period of the original GE plant that was there. This is across the street from the cemetery if you remember the area.

  61. WillowGlenner Says:

    Frank Jewett, I am just starting to look in the Martha Gardens area of San Jose which is on the other side (the wrong side) of WG between first, 280, 8th and Hollywood (I believe) at the bottom. The city has designated this the “arts district” and permitted some new condos there. Its a wasteland of course. I’m trying to find some evidence of young families moving in for the cheap prices. To your point there are a lot of people that really love the old architectures like they have in WG and Downtown, and they are hesitant to tear these things down even though many should be. I just made a decision along these lines myself on windows for my new place. The windows there have the old rope and pulley and all are damaged. The contractor wanted to put all new windows in- I am actually paying a little more to repair the old ones, even though they are only single pane- because the ornamental frame and overall look of the windows is so much better than you can get today.

  62. WillowGlenner Says:

    Cardinal2007- I know Continental in Belmont. All I can say is -does the name WILLARD mean anything to you? LOL. For those that don’t know the issue, Continental is a street with these really old junky “high rise” apts- probably built in the 50s because too new to have any charm. They do have views like a lot of Belmont but old, rundown apts with an indoor hallway/lobby etc can get really nasty if you don’t keep them up. Over the years a wonderful neighborhood infrastructure of roof rats has developed there. There are houses above continental which are nice/expensive that have rodent problems- in fact once I knew somebody who got up and car wouldn’t start… dead rat in there- disgusting!

    As to old county- hmm. I would consider buying there. The rural feel to it appeals to me.

  63. Crossroads Says:

    willard?

  64. bob Says:

    Reading how some of you “real estate investors” buy, trying to guess where young families and so forth might buy and what I assume put money in your pockets sort of proves precisely why the housing market crashes so fantastically.

  65. WillowGlenner Says:

    heh I knew I was giving away my age with the Willard comment. But when I googled it, it looks like they actually remade Willard in 2003 with Crispin Glover! Pretty good casting I’d say. I guess the movie was a real rodent.

  66. madhaus Says:

    WG, I got the Willard comment, guess you’re my age or older, heh heh. Not everyone in the Valley is a twentysomething at teh Google, ‘kthnxbai.

    I mentioned that some friends of mine were renting in an area south of Hedding/14th, a lot of the houses had some beautiful period detail, built-in glass cabinets, niches, some stained glass, etc. Don’t know how you like that area for rental property but the 2/1 they are renting suits them fine (but they are now looking to buy and don’t care about schools).

  67. Jim D Says:

    San Jose. A bit. Dropped a bit. Just a bit.

    Nope, still funny.


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