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.

I just wanted to let all you Burbed readers know that the site slowness and outage issues are being investigated. It appears that this site has been causing significant CPU usage spikes on the shared hosting. For reasons that I can’t explain.

Initial investigation seems to indicate that there is a lot of hits from a set of IP addresses in Philippines and Germany.

Which only goes to show that there’s a long line of foreigners waiting to scoop up Bay Area houses with the awesomely strong currencies.

Thanks for sticking it out…

1058 Montgomery Ave, San Bruno 94066 (Live Oak)
$299,900

* Status: Active
* Bedroom: 2
* Bathroom: 1
* Year Built: 1948
* Lot Size: 2500
* Square Footage: 722
* List Date: 5/2/2008
* Garage Spaces: 1
* MLS#: 806475

Description of 1058 Montgomery Ave, San Bruno
Great value for the price. Cozy home for small family or investor. Needs some work and TLC . Priced to sell. Property will be sold ” as is” Seller will not pay for home warranty or survey. Located near Freeway and Airport and local industrial area.

This house sold in 2006 for $600,000. Now it’s on the market for $299,900. Now granted, we don’t know how overbid this house will get – it could get pretty crazy, but still I have feeling it might not clear $600k.

And if that happens, that’s fantastic for you – you whiny buyer always complaining that real estate is unaffordable! Finally, here is your chance to get in before the Fall Bounce takes place. Once that happens, the lucky owner of this house, who will have amazing access to 380 will see up to $300k of instant equity. Just look at how close it is South San Francisco, the city of industry and the heart of biotech!

Didn’t you hear? San Bruno is the next up and comer. And all it needs is a little work and it’ll be set for move in:

Sweet! It even comes with a fridge in the garage! Especially with food prices going where they are today, this is a great opportunity for you to stock up as well!

It’s only a matter of time before the next big blockbuster drug comes out to finally solve Restless Leg Syndrome – and you know it’s going to be from the Bay Area. When that happens: boom. You will be one friggin’ rich San Bruno homeowner. What are you waiting for?

50 Theta Ave, Daly City 94014
$499,000

* Status: Active
* Bedroom: 2
* Bathroom: 2
* Year Built: N/A
* Lot Size: 4900
* Square Footage: N/A
* List Date: 7/21/2007
* Garage Spaces: 0
* MLS#: 740690
*
very close to public tranportation,freeway 280,shopping center,bart 2 bedrooms 1 full bath and kitchen. now rental $1700.00 month to month.seller will carry 2nd

So right now this rents out for $1700 a month. Now, you could rent it, or you could buy it for $499. $499000/(1700*12) is only 24! That’s a pretty good ratio don’t you think?

Not only that, but the seller will carry the mysterious 2nd.

Frankly, this is a fantastic investment opportunity if you ask me. It’s all about cashflow, and cash will be flowing for sure. Wouldn’t you agree?

“California ranks toward the bottom of the barrel” [Burbed.com]

tenspeedSF Says:
May 29th, 2008 at 9:58 am
Every year around this time, scores of San Mateo parents wait in line for 3-4 days outside the “best” elementary school hoping to enroll their kiddies into its kindergarten class. This what paying property taxes on million-dollar homes gets you?

I’m not even sure I’m going to have a kid, but I’m already planning my escape. I’m not drinking the Kool Aid. Fahgetaboutit.

#  bob Says:
May 29th, 2008 at 10:11 am
Same thing out here. You’ll see parents sitting in lawn chairs out on the curb all weekend waiting to enroll their tots. The school itself was “upgraded” a few years ago-complete with new trailers. The old building is from the 30’s.

Most of my friends who have kids had to get them into some sort of lottery in order to get into kindergarten. I’ve never lived anywhere where parents just about knock each other out just to have what is seriously a given in most other areas across the country.

#  madhaus aka guitar hero Says:
May 29th, 2008 at 11:39 am
I’ve heard in Palo Alto that some of the kids simply aren’t allowed in their neighborhood schools because they are “full” and the parents have to drive them to other schools up to 5-6 miles away. They don’t keep siblings together, either. Then they ding you for huge “voluntary” contributions to the PTA or whatever.

Cupertino district also has overflow schools. And I’ve heard Monte Vista high isn’t taking everyone even those who live in its boundaries.

This is not about the parents. It’s about the selfish jerks who brought us Prop 13 and ruined our school systems. California was not always at the bottom of the barrel, we used to be at the top. Thanks a lot. [Note: madhaus clearly hates senior citizens and corporations - things that make California excellent.]
#  Pralay Says:
May 29th, 2008 at 11:54 am
Knocking other parents? Damn! My parents had to do it in India to enroll me in a good school. Do I have to do that for my kids too (if happens at all)- in C-A-L-I-F-O-R-N-I-A? My father must be laughing at me “Is that all you achieved after moving to other side of the planet – standing in line for your kids enrollment?”

Wow… fascinating stuff. I’d love to hear more stories about this – if anyone wants to write an entry on “How to get you kid into a public school in California”, I’d be more than happy to post it.

You really can’t get valuable life lessons like this in any state. Imagine if your children didn’t have to face hardships like this – they would think life is easy, and not work hard. How would Silicon Valley be the leader it is without people with drive and dedication?

But in the end, this is kind of depressing because Manhattan still has us beat:

Shortly after Grubman upgraded AT&T, the company announced it was spinning off its wireless division, in what would become the largest IPO in Wall Street history. Salomon Smith Barney was chosen as one of the underwriters and Citigroup made $63 million on the deal. Six months later, Grubman downgraded his rating on the stock to “neutral.”

The upgrade had been controversial at the time, but Spitzer’s investigators uncovered a bombshell. They discovered an e-mail that Grubman had sent to a social friend on Jan. 14, 2001, in which he wrote:

You know everyone thinks I upgraded [AT&T] to get lead for [AT&T Wireless]. Nope. I used Sandy to get my kids in 92nd ST Y pre-school (which is harder than Harvard) and Sandy needed Armstrong’s vote on our board to nuke Reed in showdown. Once coast was clear for both of us (ie Sandy clear victor and my kids confirmed) I went back to my normal negative self on [AT&T]. Armstrong never knew that we both (Sandy and I) played him like a fiddle.

According to Grubman’s e-mail, Weill was motivated by a necessity to obtain Armstrong’s vote in a boardroom battle with Citigroup co-CEO John Reed, who resigned in February 2000. After the e-mail was leaked to the press, however, Grubman disavowed it and said he had been showing off to impress a friend.

However, Spitzer’s investigators also discovered a memo from Grubman to Weill entitled “AT&T and the 92nd Street Y,” dated Nov. 5, 1999, in which Grubman reported back to Weill on a meeting with Armstrong, and reiterated a request for assistance in gaining the preschool admission for his children. Although Weill admits that he asked Grubman to take another look at his position on AT&T, both he and Grubman deny that there was a quid pro quo. Armstrong also denies that the stock upgrade had anything to do with his board vote.

Sigh. Some day we’ll beat Manhattan. Some day.

Again, I’d love to hear more stories about this topic – if anyone wants to write an entry on “How to get you kid into a public school in California”, I’d be more than happy to post it.

L.A. Land : Los Angeles Times : In Escondido: Buy one (house), get one free.
In a sign of how difficult it is to sell new homes in Southern California right now, a San Diego developer is offering a “buy one, get one free” deal, pairing million-dollar homes with less expensive homes.

“We thought, ‘Why does it just have to be on Pop Tarts and restaurants? Why not buy one home, get one free,’” Dawn Berry of Michael Crews Development told 10 News in San Diego.

I really didn’t want to link to this, but about 5 different people emailed this to me.

Frankly, from what I understand, no one has actually taken this developer up on this offer. Personally I believe this is nothing more than a publicity stunt. And it’s working rather well given that this is appearing on every single blog.

Still one question seems to be: can this happen in the Bay Area?

Obviously not! It’s different here. Didn’t you see the Gable’s Ends homes in Mountain View?

Thanks all the people who sent this in though.

Remember this from two weeks ago?

I noticed on a drive down 101 that the two units directly facing the Bay Area’s best highway had giant signs in the window that said they were sold.

But wait, there’s more!

That’s right! Prices have gone up 4% already – in just 2 weeks! That’s right, the days of 4% monthly appreciation are back baby.

Didn’t buy yet? Better hurry! You are about to be priced out forever! This was the last time they will ever make new land in the Bay Area.

Here’s a preview of where your future town home will be:

Congrats to Regis Homes for selling out Gables End – soon!

10220 STERLING Blvd Cupertino, CA 95014

Price: $890,000
Beds: 3
Baths: 1
Sq. Ft.: 1,342
$/Sq. Ft.: $663
Lot Size: 10,659 Sq. Ft.
Age (Years): 54
Year Built: 1954
Type: Detached Single Family
Stories: 1 Story
Neighborhood: Cupertino
County: Santa Clara
MLS#: 785483
Source: MLSListings
Status: Active
On Redfin: 51 days
Price just reduced. Value is mainly on the land. This property has already obtained city permit for building a house of two stories for a FAR of 44.7%, which is 3437 SF, including a 2-car garage. The approved blueprint of the plan is available to review upon request. The house currently has no PG & E; sink and toilet been removed. Time to build your own.

Frankly, I like dealing with professionals a lot more than amateurs. Clearly this Realtor and Seller know what I’m talking about. When you deal with novices, people who aren’t serious about buying, they tend to want to see things like… the house… the yard… the street… the door… the garage.

You know. All the BS.

Professionals know that when it is a plot of land in the Real Bay Area, it doesn’t matter what the photos look like – it’s in the RBA. You buy it. Period. Full stop. ’nuff said.

By not providing photos of this PG&E-less, sink-less, toilet-less house, this seller is doing you a favor. They’re telling you “Hey big boy flush with VMWare money… this is your house. Because you’re a pro. And so am I.”

Professionals. That’s what this house is all about.

But just for those of you who might be novices, here’s a gratuitous picture of your future dream home:

Look at that. Now don’t you wish you hadn’t seen this?

Novices. Sheesh.
(Thanks to Burbed reader AnonyMouse for this find.)

Burbed reader Chris pointed this listing out recently:

$275,000 (Sale Pending)
San Jose, CA 95123
MLS# 789208

2 bedroom(s) 2 bathroom(s)
Approximate Sq ft : 812

Description
Nice clean coner unit perfect for first time buyer. Great location in complex. Close to shopping, easy access to freeways. Spacious open floor plan

This caught Chris’ attention because he sold a similar unit that was larger for $341k. In 2002.

Apparently, units like these were selling at $520k back in 2005. The current Zillow estimate is approximately $419k.

Chris wanted to point out that perhaps Zillow is overestimating values.

To that I say NICE TRY.

Let’s look at this listing – did you notice that Sale is Pending? Now, we don’t have the full story yet of course, but it’s quite possibly that this house was purposely under priced so that a bidding war would start. Who knows! This house might be in contract for $400k! Maybe even $500k!

This could be a grand psychological strategy crafty by a genius Realtor. GENIUS!

Also, let’s not forget, this is a coner unit. You know who would love this unit?

Thanks Chris. We’ll just have to wait and see how this turns out.

The other day there was a rather heated discussion of prop 13 in the comments. This WSJ snippet reminded me of it:

Pinched Consumers Scramble for Cash – WSJ.com
Daniel Petelin, 62, lives in a roughly $1.8 million house in Redwood City, Calif. His mortgage debt on the place, about $16,000, is minimal. But the freelance public-relations and event manager, who has an income of about $47,000, is still feeling pinched. “Eggs a few months ago were 79 cents a dozen. Now they’re $1.79.” With gas in his area about $4 a gallon, he’s planning car trips carefully. He has cut back on eating out. And next year, his health-insurance premiums are going up to about $600 a month.

Single with no children, Mr. Petelin doesn’t want to sell the four-bedroom house where his parents lived for nearly 70 years. He’s not interested in a home-equity loan, as he doesn’t like the idea of making monthly payments. Instead, he’s planning to take out a reverse mortgage backed by the equity in his home.

He has shopped around with a few lenders, but has yet to take out the loan because in the midst of the credit crunch, he’s found some banks hesitant to lend the amount he’s seeking — roughly $580,000. Still, he intends to take a loan in the near future because he says he needs the cash.

So many questions.

1. How does Daniel have a $16k mortgage if his parents lived in it for 70 years?

2. Was Daniel living with his parents for 62 years?

3. If Prop 13 were repealed, wouldn’t people like Daniel – who worked so hard to live in their parent’s home – be screwed?