$205k – “Home is in deteorirated condition and is not livable”
87 BELLEVUE Ave San Jose, CA 95110
Price: $205,000
Beds: 2
Baths: 1
Sq. Ft.: 864
$/Sq. Ft.: $237
Lot Size: 6,287 Sq. Ft.
Age (Years): 110
Year Built: 1898
Type: Detached Single Family
Stories: 1 Story
Neighborhood: Central San Jose
County: Santa Clara
MLS#: 80817162
Source: MLSListings
Status: Active
On Redfin: 24 days
Fixer-upper
Total fixer-upper, As Is Sale, Home is in deteorirated condition and is not livable, has been disconnected from utilities. Check with Building/Planing for permits. .. Property been sold is APN 434-24-041 Lot 11, certificate of compliance has been approved by city, new APN not yet available.
Burbed reader Brian had this to say:
Yet it is still $205,000! And it’s not even in a good zip code!
Check out the street view for a picture of the house. Remember when we had that burned down house in Detroit? Well…. apparently THIS is how much it would have gone for in East San Jose.
Alright. Now I’m really intrigued!
Drum roll please!
This is another proud Bay Area moment. Maybe not REAL Bay Area, but Bay Area nonetheless.
That said, clearly there’s a lot potential. Just look at the sweet house next door. Hey, is that pickup lowered?
Thanks Brian for this great find. The only thing that would’ve made this better: “great opportuneity for investers”
July 24th, 2008 at 7:57 am
Hey- you could buy one of those plastic tool sheds from Home Depot and live in that. Just tear this one down. Instant equity!
July 24th, 2008 at 9:18 am
Oh dear. That area around Monterey & Alma is super ghetto.. every bit as bad as East Palo Alto in my book. Harkens back to the gold-rush days when speculators built their shantytowns so they had a place to crash while they were trying to strike it rich. Hey wait a minute..
July 24th, 2008 at 9:46 am
Hey, but there’s no damage to the land below it.
July 24th, 2008 at 9:56 am
Awesome listing.
But just to be serious for a minute, empty lots do have value, even in bad neighborhoods. So it’s not like we should expect the price to trend towards zero when the structure is effectively worth zero.
I want to hear what 0.1 and 0.3 acre lots should be worth, on a ‘dirt-only’ basis, in various zipcodes (in and out of the RBA).
And then what are construction costs in these areas? I have heard that in fly-over country, you can build houses for $75-$100/sqft. I have heard that in fancy areas of the RBA, it’s $250/sqft at a minimum. Anyone have some real numbers?
Then we can say what fair pricing is on a lot that’s an obvious tear-down.
-Aaron
July 24th, 2008 at 10:21 am
And then what are construction costs in these areas? I have heard that in fly-over country, you can build houses for $75-$100/sqft. I have heard that in fancy areas of the RBA, it’s $250/sqft at a minimum. Anyone have some real numbers?
Then we can say what fair pricing is on a lot that’s an obvious tear-down.
I pulled out of a deal I was looking at in Oakland’s Laurel district, but not before I learned about homeowner’s insurance. In that area, they cover you based on a rate of $200/sf. But contractors usually charge $250/sf in Oakland. Anyway, nevermind what would happen if your house should be destroyed and you’ll have to come up with $50/sf out of your pocket in addition to the deductible. This is about what the land should be worth. So let’s assume you get a buildable plot of land in the ‘hood for free (a 4000-sf lot in 94603 runs about $150K). You build a brand-new 2100 sf house, which costs you $525,000. Then you try and sell it at a profit. Oh wait a minute.. you can’t.
July 24th, 2008 at 10:28 am
Don’t forget that that $250/sqft price doesn’t include the price of the teardown.
Yes, lots can go to zero – there’s several in Detroit and Flint that are effectively zero for that reason – the cost of the teardown exceeds any expected profit from a build.
It will happen here, before it’s over.
July 24th, 2008 at 10:31 am
Want to visualize what’s happening with foreclosures in the greater Bay Area? See this SF Chronicle page:
http://www.sfgate.com/maps/foreclosures/
July 24th, 2008 at 10:33 am
(straight face) But Zillow says it’s worth $672,500!
bwahahahahahahahahahaha!
July 24th, 2008 at 10:45 am
“(straight face) But Zillow says it’s worth $672,500!
bwahahahahahahahahahaha!”
Lol, well played sir.
July 24th, 2008 at 10:49 am
“Hey, but there’s no damage to the land below it.”
Wrong, Mr. Slimeball speculator. The damage is the home and the surrounding environment.
July 24th, 2008 at 10:51 am
Holy —-, that looks like Jack London’s cabin! You can’t judge a book by its cover in this case, think of its’ nostalgic value!
July 24th, 2008 at 11:29 am
If the pickup truck/van park in front are still drivable, i’m willing to pay $210K for both. Pls contact me.
July 24th, 2008 at 12:30 pm
I hate to spoil this “bay real estate is out of control” pity party but this is probably an accurate price for this shack. As it turns out, since financing is impossible to get for unliveable properties at this moment in time, they will probably have to lower it to $150K but thats about the floor.
LOL just the fact that there are posts here claiming that lots will go to zero like Detroit is testament to how silly you all are.
It does not cost $250 sq ft to rebuild this. You can probably get something up for something around $100K.
July 24th, 2008 at 12:36 pm
I want to hear what 0.1 and 0.3 acre lots should be worth, on a ‘dirt-only’ basis, in various zipcodes (in and out of the RBA).
Typically 500K and up. Not here, this is in the low end section of San Jose. This is one of the worst hit zipcodes of the housing crisis along with 95127. But if you want to see what lots are worth in the bay area, just look at some of the areas discussed often here-
- Rancho Rinconada in Cupertino- these houses were built for literally $5K when they were built, and built to last 30 years MAX, in the 50s and 60s. The entire price you pay for RR is the lot price. The houses are worthless. Its ALL LOT. Same with many bay area locations. Willow Glen, my area is one place where the existing structures are worth something due to the “charm factor” (lots of redwood houses in WG, termites won’t eat redwood, most of these are not teardowns no matter how bad they get- its worth rebuilding them). But other flat roof destinations, pick your poison- the entire price of the house is LOT.
July 24th, 2008 at 12:42 pm
I have to agree with WG on #13. In this economy and in Oakland? If you are building just one level you don’t even need a licensed contractor, lots of people just do it themselves, this is especially a popular past time outside of BA. I’ve seen pretty all kinds of such developments in LA.
The only thing different maybe regulations and fees, which is part of the insaneness in BA.
July 24th, 2008 at 12:48 pm
I don’t know whether $150k is the floor price or $100k can build a 1000 sq house though. I think it can go lower than $150k and it would be tough if you hire someone (even a Vietnamese won’t do it) for $100 per sqf.
July 24th, 2008 at 1:08 pm
btw with regards to my last post I am assuming the foundation and some of the framing of the house is acceptable. This house isn’t just a lot – because it has a foundation. Thats a big difference in cost to rebuild.
July 24th, 2008 at 1:54 pm
Perfect spot to construct a training facility of Urban Warfare for the US army. you have the torn down building like in Iraq, nearby Aggressor squads armed w/ Ak & lowered trucks, what else do you need? with defense spending sky high, buy this for 200K and resell to US DoD for 20 million, instant profit!
July 24th, 2008 at 2:34 pm
Woot! Front page!
July 24th, 2008 at 4:36 pm
Don’t forget the “scraping cost” to remove the old structure(s). The “home” in this listing is worth less than zero because it will cost money to have it knocked down and carted off to the dump (future home of the Landfill A’s).
July 24th, 2008 at 4:48 pm
Lol, the idea of land being worth _less_ than 0 probably just caused RE’s head to implode.
On the plus side, there is NOWHERE TO GO BUT UP!!!
Therefore, it is a good time to buy.
July 24th, 2008 at 4:58 pm
Happy news from Fitch Ratings –
“Some MSAs such as San Diego and San Francisco, CA are expected to experience home price declines by as much as 47 percent and 33 percent over the next five years..”
As John Belushi once so eloquently stated: “Sayonara, suckers!”
July 24th, 2008 at 4:59 pm
^^^ Awesome.
Can you link the source?
July 24th, 2008 at 5:04 pm
For those of you too blind to see, the obvious pitfalls of “buying” real estate right now become more obvious daily. You think your overpriced crap shack in Shallow Alto is immune? Just wait. First up, last down; last up, first down. Anybody with half a thinking brain can see that everywhere now. It just takes more time for some areas to fall. Hint of things to come: I bought 2-yr-old home in south Sac for $335K in 2004 (near the top of that market, at the time, but I was drinking the Kool-Aid at the time); 10 months later, I decide to sell, and guess what? Market had begun to collapse. I bailed out of it at $370K in July 2005 and was extremely lucky. You want to see the future here? Check out this link to THAT very property: http://www.zillow.com/search/ type in 7901 Neyland Way, Sacramento, CA 95829. Imagine, 100% decline in value over what I paid. Yes, you can check back to see MY SALE of 9/1/2005. Welcome to the future! Enjoy the ride down, fools. I was almost one of you.
July 24th, 2008 at 5:07 pm
Attention, dumb real estate investors: Here is the updated link showing that some fool already lost this house after “buying” it in June for $187K! It is bank-owned after a mere one month, and for sale for $22K less than that fool paid! Amazing! http://www.zillow.com/HomeDetails.htm?zprop=50894927
July 24th, 2008 at 5:07 pm
It is discussed here
http://www.housingwire.com/2008/07/24/fitch-updates-ratings-model-projects-steep-price-declines/
July 24th, 2008 at 6:00 pm
You guys are not making any sense, there is no bubble in BA. 33% future declines in SF? Over Lawrence Yun, LAY, RE’s dead body!
I have great sympathy for this person:
http://wcco.com/national/suicide.home.foreclosure.2.778404.html
There, you guys happy now? This is a live you’ve destroyed!
July 24th, 2008 at 6:27 pm
Wow, that is so sad.
This is on your head, scumbag speculators, brokers and lenders. May you all rot in hell.
July 24th, 2008 at 6:30 pm
^^^ Awesome.
Can you link the source?
Found it on Calculatedrisk
July 24th, 2008 at 6:38 pm
buckborden – you should heave a HUGE sigh of relief that you sold when you did. And that transaction from a month ago was the bank taking it back. (A house can’t go from purchase to foreclosure in 30 days.)
July 24th, 2008 at 9:09 pm
man you guys are reduced to posting links from Zillow in SACRAMENTO now? What does that have to do with here? try nothing.
You guys sound like the the bitter permabears that missed the 90s stock market. Man LIGHTEN UP!
July 24th, 2008 at 9:14 pm
Anybody who’s betting against the Bay Area is betting against 50 years of proven history. It’s incredibly stupid to do that.
July 24th, 2008 at 11:14 pm
Wow, I’ve heard of negative equity, but property with negative value? Happens all the time, it’s called a Superfund site. Think of all those gas stations they fence off because the soil is toxic. Just wait 20 years and then you can build a bunch of townhouses and watch the
suckerscustomers line up.July 24th, 2008 at 11:45 pm
RealEstater: I’m not arguing with you that the RBA still shows strong real estate appreciation, but I would add that betting against national US real estate would *also* be going against 50 years of history. And it’s looking like a good bet.
July 24th, 2008 at 11:54 pm
rick, re: the woman who shot herself because her home was foreclosed, this is why women shouldn’t handle the finances. If a man kept family finances secret from his wife, rather than the other way around in this story, he would sooner blow up the bank and the courthouse than shoot himself. The car chase would be more exciting, too.
I wonder if the insurance company will find an excuse not to pay.
Is there anyone here who handles the finances whose spouse knows little about them? Is it their choice or yours? I gotta tell ya, mine took one look at my 65 page tax return and said, “They’re all yours, honey.
July 25th, 2008 at 1:49 am
sonarrat, how bad is the area? Is it dangerous? Are we talking EPA bad?
I am interested in that area a bit because of the proximity to SJSU Stadium and CalTrain (walkable), and there’s some affordable condos there.
Right across 87 there’s Willow Glen (a good neighborhood) in a better zip code, which would be a better place to buy, but is it that drastic of a difference in lifestyle?
July 25th, 2008 at 2:17 am
“Anybody who’s betting against the Bay Area is betting against 50 years of proven history. It’s incredibly stupid to do that.”
You want to know what’s incredibly stupid? To assume that 15% appreciation will maintain when for the past 50 years real estate has appreciated at about 6%.
July 25th, 2008 at 8:08 am
Some of you RE “barons” might be surprised to find that Anon is actually correct. Bay Area real estate goes up an average of 4-6% annually after inflation considerations. I wasn’t able to find a chart dating back 50 years, but I did find one dating back over 30.
http://www.housingbubblebust.com/OFHEO/Major/NorCal.html
To break this down a bit, You’ll notice a widely swinging pattern of short spurts of massive appreciation followed by prolonged patterns of depreciation and then a long period of flat to negative growth:
1976-1981 saw some fairly robust growth.
1982-1986 saw negative to small gains.
1988-1990 saw a bubble.
1990-1997 saw a long period of depreciation.
1997-2001 saw fairly healthy appreciation.
2001-early 2004 was almost flat.
2004-2006 showed the rise of the latest bubble.
late 2006-present shows losses.
So if we look back over 30 years, close to 20 of those years were spent in depreciating or stagnating cycles.
If you break it down, the un-sexy result is that you get an annual return of 6% per year. Historically, that’s 1-2% above the typical average for most metropolitan areas. I know for a fact that Nashville tends to have a reliable appreciation cycle of 4-5%.
Here’s the irony. The appreciation cycle in the BA is extremely choppy. This isn’t the case in many other metros where appreciation is steady and slower. Its just that buyers tend to only pay attention to the shorter appreciation cycles rather than the often mower prolonged depreciation and flat cycles.
July 25th, 2008 at 8:17 am
Good work Bob. Very useful chart and info.
July 25th, 2008 at 8:27 am
>>So if we look back over 30 years, close to 20 of those years were spent in depreciating or stagnating cycles.
If that is true, why is it that people here are priced out? Sounds like buying here should be a piece of cake.
July 25th, 2008 at 8:49 am
If that is true, why is it that people here are priced out? Sounds like buying here should be a piece of cake.
Easy explanation. As you can see in the charts as well as recalling how appreciation occurred in this last boom, appreciation rapidly outpaced real incomes. But that doesn’t mean that this is a permanent situation as you seem to be suggesting. At the peak of the 1988-90 bubble, the affordabilty index- as in the Percentage of people who could afford homes in the BA based on real income dropped to around 15-20%. At the end of the depreciation cycle from 1990-1997, the affordability index increased to almost 67%. This coincides with what I mentioned earlier, which is that appreciation and depreciation in the BA is extremely choppy. The bottom line is that appreciation in short bursts is fast and extreme, but it also has the effect of temporarily pricing itself away from real economics.
What we’re in right now is one of those corrective cycles. The affordability index was around 17% in 2006. That has increased to about 30%. I suspect we’ll be back to 60-70% when all the cutting is done.
July 25th, 2008 at 8:52 am
RealEstater: People are priced out because prices are still at a peak after the last bubble. Incomes have not risen in pace with prices.
And look, I *agree* with you that we have seen *no* price pressure in the RBA. Palo Alto, Los Altos, Menlo Park, Cupertino, etc. are *not* distressed areas, there are no firesales, and those sitting on the sidelines waiting for prices to fall have, so far, been disappointed.
I think where you and I differ is in what 2008-2018 bring. I don’t think the cheap financing that drove prices higher from 2000-2008 is going to come back, so you maintain appreciation you need poor people to leave and v. rich people to move in from elsewhere in the US. I can see this happening in SF, which is a fun city, but I can’t see this happening in Los Altos.
-zanon
July 25th, 2008 at 9:01 am
“If that is true, why is it that people here are priced out? Sounds like buying here should be a piece of cake.”
What do you mean if that is true, are you saying the numbers are incorrect?
I actually think Bob’s explanation is spot on. Real estate is cyclical but over time, the up and down cycles tend to net out, leaving your “normal” appreciation. You can do very well if you buy real estate at the bottom, or even over the longer term if you just don’t buy at the top of a bubble. Conversley, you can do very poorly if you buy when prices are still going down. All charts and data I have seen suggest prices in most areas are still going down, or will go down, a LOT. Looking at the chart Bob linked, it is pretty easy to draw a historical price line (see inflation line) and derive where prices are likely headed. It is not hard to see how much of a bubble we were in and how far left we have to fall.
July 25th, 2008 at 9:15 am
Additionally, even if the best case scenario unfolds in certain BA sections and there is essentially zero movement up or down, you would still be experiencing an approximate 3% depreciation due to the effects of inflation- which is one measurement most people don’t consider. I can say that in the East Bay, which experienced prices that were every bit as insane as the “RBA”, that we’re seeing 30-40% declines in some cases from the median of 2006. So taken into considerations, prices are already starting to approach 2004 levels. If they fall further, then we’ll be back to 2002 prices, which is barely above the previous period of stagnation.
July 25th, 2008 at 9:43 am
sonarrat, how bad is the area? Is it dangerous? Are we talking EPA bad?
I am interested in that area a bit because of the proximity to SJSU Stadium and CalTrain (walkable), and there’s some affordable condos there.
Right across 87 there’s Willow Glen (a good neighborhood) in a better zip code, which would be a better place to buy, but is it that drastic of a difference in lifestyle?
It’s like EPA is now, except it has been that way for almost a century.
July 25th, 2008 at 9:49 am
R says,
“You can do very well if you buy real estate at the bottom, or even over the longer term if you just don’t buy at the top of a bubble.”
If this is true, then shouldn’t people be buying now? For the RBA, the bottom means a period where the market is not rapidly appreciating. According to the bubble guys here, that is the current situation. Why are they against buying now?
When the market is up – There’s a bubble, can’t buy now.
When the market is down – Bad market, don’t buy now.
This is kind of mindset that caused these people to become life-long renters, or as I call them, “professional renters”.
July 25th, 2008 at 9:52 am
Imagination runs wild! Quote of the day:
“I can say that in the East Bay, which experienced prices that were every bit as insane as the “RBA”, that we’re seeing 30-40% declines in some cases from the median of 2006. So taken into considerations, prices are already starting to approach 2004 levels. If they fall further, then we’ll be back to 2002 prices”
Author: Bob from Alameda
July 25th, 2008 at 10:00 am
RE,
Why is it wild? What I mentioned is reality in many parts of the East Bay. As you can recall from what Sonnaret has mentioned a few times, she’s moving to Oakland and hoping to buy a house because many are already 50% of what they were in the boom.
Besides- from what you say here, you’re pretty ignorant and uninformed when it comes to Real Estate anywhere except the narrow confines of the “RBA”. So you really don’t have any authority to refute my local observations.
July 25th, 2008 at 10:06 am
Bob,
I did not say it isn’t accurate regarding current state, but look at how you extrapolate one thing after another. The funny thing is, you don’t realize what you’re doing.
July 25th, 2008 at 10:07 am
bob, on that chart you posted, does it look in any way suspect to you? All these angryrenter bubble bust blogs post charts like that, fairly devoid of facts.
First of all, that chart has inflation- the green line at the bottom- as a flat ascending line…. RED FLAG anybody?
That chart makes it look like the 1997 price for San Jose real estate was slightly, ever so slightly more than 1989. HA HA HA. Anybody actually living in the bay area can see the fallacy in this, its a case of lying with statistics and a waste of time.
July 25th, 2008 at 10:10 am
bob,
you would still be experiencing an approximate 3% depreciation due to the effects of inflation- which is one measurement most people don’t consider.
This has to be one of the most offbase things I have ever heard. As I have told you repeatedly – inflation is the real estate investors friend. thats why I am jumping in wholeheartedly in this correction. Bushonomics has caused massive damage that will lead to significant inflation (it already has). There are few places to hide.
July 25th, 2008 at 10:11 am
Let me continue with your story…
After it falls to 2002 levels, if support is broken below trend line, it goes back to 1995 levels. Suicide rate increases, home owners flee the bay area. There will be vacant homes everywhere. Anyone who wants a house will get one, or two. Folks from the South will come in and be able to trade their 1 acre in Nowhereville for 1 acre in Atherton.
July 25th, 2008 at 10:18 am
Realestater
I actually bought a house at almost exactly 2001 pricing recently. So bob is not completely wrong there. There are listings in San jose that are down to 99 levels. Here’s something interesting look at this. the peak pricing on this house was $900K and now it is selling for $313 (I actually think there are some data errors here).
http://www.redfin.com/CA/San-Jose/1887-MACDUEE-Way-95121/home/704888
But anyway, yes there are massive firesales in these REOs, and the hard hit REO areas, which are *not* in the RBA, anywhere. Every RBA city has a few REOs but if the number is in the single digits then they are irrelevant. Its only east san jose and EPA that have a real REO problem.
But the problem with Bob’s “assessment” is he extrapolates the REO pricing with a normal market based correction which it is not. The REOs are being dumped at a dump-at-any-cost approach, which is not typical. in fact most REOs including mine do so little repairs and staging that they literally sell fo r 40K below what they could just based on that fact alone. REOs are not a normal market force, is my point. When they go away, these price drops go away. It is not a situation where REOs are going to be a *permanent* fixture in BA real estate. It is a short term phenom.
July 25th, 2008 at 10:18 am
RE,
Don’t play like you’re stupid. Is it possible that prices in certain areas approach 2002 levels? Absolutely because for one, this bubble was tied very heavily to unsound financial lending practices and less with actual local wage and income purchasing power. Will it happen? let’s see.
Did I say that this is an absolute? No. But I can guarantee that if you had asked any RE Bull in my part of the East bay that prices would fall to 2004 levels, they would have looked at me as if I had lobsters coming out of my ears. You see, the Koolaide was drunk in just as large a quantity 30 miles away out here as it was out where you live. Its just that your all’s hangover is just starting.
July 25th, 2008 at 10:25 am
REOS aren’t necessarily the singular evil-doers in this market. In our area, there was only a handful of REOs, one which is near where I live. It was priced at 620k at the peak, and sold for 380k. But at the same time, there are houses that sold for 650-700k at the peak that now sit with asking prices of 450-550k, representing an equally impressive slide. None of these are REOs however.
It depends on the area and how long the owner has had the house. What I’m seeing a lot of is that there are many houses being put on the market that have been owned for long periods of time. These tend to be marked down considerably more than some that I’ve seen that sold a year or so ago. In that case, the more recent owner is trying to get exactly what they paid or more. The old timers are undercutting them severely because for many, a home they paid 30k for will still give them a 500k profit. Most just want to get it sold.
REOs on the other hand are heavy and thick in the “bad” parts of Oakland. But at the same time, many bad parts of Oakland only got a whiff of the bubble towards the end. You could still buy a house for 400-450k in West or East Oakland at the peak. Now those homes are 300k or so, so as you can see, the drop is about the same as it is elsewhere.
I don’t deny that REOS are trumping the markets right now, but its also important to realize that REOS also affect local values too.
July 25th, 2008 at 10:29 am
WG,
Many of those charts come from the NAR or CAR. That or they come from DQ. The appreciation and depreciation cycles are in lock step with what I’ve seen on chart after chart. They aren’t totally one-sided. As any economist will tell you, Real estate over time has a annual appreciation nationally of around 4%. In the Bay Area, it’s 7%. So you’re already beating the national odds by 3%. So shouldn’t you be pleased with that outcome?
July 25th, 2008 at 10:30 am
You know how we’ll know when it’s almost time to buy? When RealEstater and the other bulls on here quite posting.
Anyone what to start a dead pool on when that is? What might trigger it? 20% decline in Palo Alto?
Most of the other housing bear blogs have lost all their bulls, where they used to be numerous… Even Craigslist housing discussion is starting to slant bearish, after having resisted so long.
Sigh. It’ll be so sad when the bulls leave. I already miss you guys!
July 25th, 2008 at 10:49 am
yes of course those charts come from somewhere perfectly capable of producing charts. But the point is that anybody can see the flaws in the methodology. yes indeed if you took **all of san jose, including east san jose plus the satellites like Hollister, Gilroy etc** and lumped them together and looked at the average price in 1989, and then looked at it in 1997, maybe there was only a 10% difference between the 2 prices. Thats what aggregates do- they normalize things. But anybody, and I do mean anybody, can see that San Jose prices were not flat between 89-97. 97 was smack dab in the middle of the internet bubble. We lived here during the period and all remember the time. To claim that those charts represent a meaningful assessment of the property values we talk about on this site is folly.
July 25th, 2008 at 10:53 am
JimD
there is a term called dumb money that means herd style investing, and just from reading your post, you are identifying yourself as a member of the herd.
Which is usually not where you want to be.
Remember, RE bought in Palo Alto 03 or something, and I just recently bought my new investment property which was an REO priced at 2001 levels. Its not like these are bad decisions in RE investing. on the other hand the relentless whining you see here coming from the bears is mighty tiring.
July 25th, 2008 at 11:22 am
…following the herd is not necessarily that bad, you can still make a profit. I feel its still much better than going reverse from a herd thats making profit (becoming a loser holding the bag) I guess its all about getting out before the herd falls off the cliff.
July 25th, 2008 at 11:31 am
WG, insulting others do not make you more correct. There are always bulls and bears.
It is amusing to me that you bought at 01 price level and call people whining at overall prices at 04 levels. What, they are not as good as you to deserve 01 prices? Why don’t you buy at 08 RBA price (like the recent Sunnyvale and Cupertino houses) then stop whining? What do people whine about? Is it a down market or not? So people who has been right with the market is whining, then what is the market doing? Deceiving the buyers?
I have a lot of respect for you but it is getting difficult with this kind of name calling. The only bulls (who talk decent, as comparing to that Ear Your Heart Out dude) who have been insulted here is RE, and that is not primary because of his view but the personal exchanges between him and others.
Please, just stay focus on the talks and have fun, otherwise we will just see another angry person here.
July 25th, 2008 at 11:42 am
WG,
If you read all the way down that page, there are very detailed results qrt to qtr showing specific areas. You’ll notice that indeed- areas like San Jose had more appreciation that areas like the East Bay. But they also in many cases had more depreciation and periods of flat growth. All consistent with the overall areas in general, which as mentioned, returns roughly 6-7% annually. Make of it what you want. If you’re arguing against this, then I am assuming that you must be hungrily hoping that 15-20% appreciation is sustainable for the long term. Personally, if I had a return of 7% per year on an investment, I’d be content with that. Nevermind that stocks usually go up 7-10% over time, but still, 7% is alright. So if you’re not happy with 7%, then what are you expecting to get from your little REO investment? I’m sort of curious. Perhaps you haven’t thought about that, and if you did, you might actually see that the charts aren’t showing anything too shabby given a long term perspective. Are you really hoping to buy and run with the cash in 3-5 years? I would hope not…
July 25th, 2008 at 11:50 am
I have a lot of respect for you but it is getting difficult with this kind of name calling. The only bulls (who talk decent, as comparing to that Ear Your Heart Out dude) who have been insulted here is RE,
RE is a class act. You just can’t see it, because he doesn’t represent your POV.
July 25th, 2008 at 11:53 am
hey burbed: you should put a little green thumbs up, red thumbs down next to our names, so we can proudly disclose what kind of sentiment we have (bull/bear)
hehehe..
July 25th, 2008 at 12:08 pm
“there is a term called dumb money that means herd style investing, and just from reading your post, you are identifying yourself as a member of the herd.”
Isn’t this precisely how we got here? The masses saw Real estate was going up and were desperate to jump on the bandwagon. That desperation caused them to pay too much and over leverage themselves.
July 25th, 2008 at 12:23 pm
on the other hand the relentless whining you see here coming from the bears is mighty tiring.
—–
I find it more tiring when a real estate agent is showing a TV image to tell how “prefessional renters” are throwing away money. We get enough flyers in our real life from those agents. We certainly don’t need them to use Burbed.com as their platform.
July 25th, 2008 at 12:25 pm
Actually, I agree that RE is a class act (except when he lets Pralay push his buttons).
WG, OTOH, has been pretty consistently rude to me.
Hey, WG, there’s a term that you should know about, too – “knife catcher”. You’re encouraging people to do that, you know.
As for herding behavior, for personal reasons, I first decided to own a home in 2005.
I looked. And looked. And decided, despite the herd behavior of the time, that it would be a very, very bad idea.
Good thing, too – I saved six figures in downpayment since then, by renting, and avoided an awful lot of depreciation – most of the places I’m looking at are back to 2004 prices now.
Now the people who told me I was a fool not to buy are telling me I’m lucky. Yeah, luck, that was it. Luck.
I think the term you’re instead looking for was “trendsetter”.
From 400x rent, we’re now at 200x rent. Pretty good, but not good enough. 150x rent is shop, 120x rent is buy. Getting there, but not there yet. Pretty soon, cash on hand (from renting, and investing wisely) will exceed the price of a home. Imagine that, buying a home cash, just because I didn’t follow the herd.
Huh, guess WG and I agree on something after all.
July 25th, 2008 at 12:35 pm
RE is a class act.
—–
Indeed! Someone who works 9-5 to earn frequent flyer miles and if he was not living in 94301 he would be ashamed to tell his zipcode to his colleagues . A class act indeed!
July 25th, 2008 at 12:47 pm
Pralay,
Just to be clear, I never cared to talk about zip codes. The only reason I even bothered to mention it is because your friend Madhaus begged for the information repeatedly.
July 25th, 2008 at 12:52 pm
Just to be clear, I never cared to talk about zip codes. The only reason I even bothered to mention it is because your friend Madhaus begged for the information repeatedly.
—–
You got to be kidding. This one? Of course that post does not have TV image. So I guess that was a different “RealEstater” – may be a real estate agent.
July 25th, 2008 at 1:21 pm
Pralay,
Sorry, no more responses to your trolling.
July 25th, 2008 at 1:27 pm
“Remember, RE bought in Palo Alto 03 or something, and I just recently bought my new investment property which was an REO priced at 2001 levels. Its not like these are bad decisions in RE investing.”
WG, when property in the RBA drops to 2001, or perhaps even 2003 levels depending on when the neighborhood’s bubble started, I would agree that it might be a good deal. However, many places on the peninsula down to Sunnyvale haven’t started to drop yet, let alone reached pre-bubble prices. I have no doubt that there are deals to be had in certain areas, just not in the “RBA,” which will be the last to fall. Buying in the East Bay right now? Perhaps a decent investment. Ditto parts of SJ. Buying in the RBA right now? A terrible investment IMO which will probably lose 20% by 2010.
July 25th, 2008 at 1:32 pm
R,
The RBA market has very little relationship to East Bay or Central/South SJ. Totally different demographics, different income level, different educational level, etc. It’s like if GM/Ford reduces prices on its vehicles, it’s not going to cause a BMW/Porsche buyer to take a second look.
July 25th, 2008 at 1:33 pm
“Indeed! Someone who works 9-5 to earn frequent flyer miles and if he was not living in 94301 he would be ashamed to tell his zipcode to his colleagues . A class act indeed!”
Seriously. RE is a prime example of the human trash that has been able to profit from the real estate bubble.
July 25th, 2008 at 1:41 pm
Anon is a prime example of someone who is “not a class act’. Rather than debating the points, he’s dishing out insults.
July 25th, 2008 at 1:53 pm
“Anon is a prime example of someone who is “not a class act’. Rather than debating the points, he’s dishing out insults.”
Why thank you. Does your limited brain capacity have the ability to comprehend that all you did there is return an insult?
July 25th, 2008 at 2:16 pm
Sorry, no more responses to your trolling.
—–
RealEstater,
Post#70 is only a reply to your post#69. He he!
July 25th, 2008 at 2:17 pm
“R,
The RBA market has very little relationship to East Bay or Central/South SJ. Totally different demographics, different income level, different educational level, etc. It’s like if GM/Ford reduces prices on its vehicles, it’s not going to cause a BMW/Porsche buyer to take a second look.”
While there is a different demographic, I disagree that prices in the East Bay and SJ are irrelevant to RBA prices. At some point, when the premium becomes to great (which it will soon become), people will start moving out. It always happens. In fact, that is how Tracy came into existence. I don’t dispute that the RBA will sell at a premium like it always has, but there is a limit. Even if I work in Mt. View, if the same place costs 400k in San Ramon or S SJ and 900k in Mt. View, I will commute. The RBA simply isn’t worth THAT much more then other Bay Area communities. Never has been, never will be for any extended period of time.
July 25th, 2008 at 2:24 pm
While there is a different demographic, I disagree that prices in the East Bay and SJ are irrelevant to RBA prices.
——-
R,
Not long ago this same guy was arguing for whole Santa Clara country and telling people that only “outskirts” like Concord and Stockton are having trouble. Now the distance of troubled area came down from 60 miles to 20 miles.
July 25th, 2008 at 2:31 pm
“Not long ago this same guy was arguing for whole Santa Clara country and telling people that only “outskirts” like Concord and Stockton are having trouble. Now the distance of troubled area came down from 60 miles to 20 miles.”
Soon it will be limited to the specific properties he owns.
Zillow’s estimates will be dismissed as inaccurate. Comps will be ‘distinguished.’ Arbitrary “micromarkets” will be created. Real Estate’s Really Real bay area will soon become part of the common vernacular. I propose it be termed RERBA.
It’s easy to crap out a number and make assertions. It’s a wholly different thing to find a sucker willing to pay it. Especially in this market when the suckers are the ones with no money.
No matter, it will all play out its course.
July 25th, 2008 at 3:54 pm
Jim D Says:
“Actually, I agree that RE is a class act (except when he lets Pralay push his buttons).
WG, OTOH, has been pretty consistently rude to me.”
That might be correct recently.
WG seems to be running out of patience with us dirty bears lately (he has only recently turned violently bullish), and RE has been insulted by too many to keep that attitude of being the wisest man on board.
Who the heck is OTOH?
July 25th, 2008 at 4:05 pm
when property in the RBA drops to 2001, or perhaps even 2003 levels depending on when the neighborhood’s bubble started, I would agree that it might be a good deal.
Err, no. When rents and prices align such that it makes economic sense to buy on day one, that is the time to buy. Since a lot of that will depend on where rents go, it’s not possible to say what arbitrary year backward that will be.
With an 8% debt carry cost, that’ll be somewhere around a 10% CAP rate. Which is about 120x rent… which is about where the bottom was last time.
You’ll know it’s hit bottom because prices will stop going down. For a long, long time – last time, it was two years. Plenty of time to buy when that happens, no sense getting caught up in the herd, as WillowGlenner always says
P.S. RBA still has about 250x rent. So either rents will double during a recession or… (fill in the blank, all you supersmart Burbed readers!)
P.P.S. Extra credit question, multiple choice: Last recession, rents:
1) Went up 20%
2) Dropped 30%
3) Who cares, I bought a house that’s still above water after 7 years! Never mind inflation!
4) No one rents in the Real Bay Area, you hippie!
(A: Trick question, We’ll accept any answer except 1
July 25th, 2008 at 4:36 pm
The only person who has been drawing conclusions based on aggregate data is Pralay. I have never said entire Santa Clara County is immune; only he is talking entire Santa Clara County. No one in their right mind would put Central San Jose and Gilroy in the same bucket as Cupertino/Sunnyvale 94087.
July 25th, 2008 at 4:37 pm
Reminder: Real Estate is always local.
July 25th, 2008 at 4:53 pm
“Reminder: Real Estate is always local.”
Of course it is! Who would want to live 10 miles further from the RBA if it means they can save $100,000 on a house?
Answer: Nobody.
July 25th, 2008 at 4:56 pm
RE the garbage that you spew is why the whole counry is in this mess. I cannot stress this enough.
July 25th, 2008 at 5:00 pm
>>Of course it is! Who would want to live 10 miles further from the RBA if it means they can save $100,000 on a house?
Actually if you move 0.5 mile east of Palo Alto, you can save a million dollars by living in East Palo Alto. Do you get the point now? Real estate is always local.
>>RE the garbage that you spew is why the whole counry is in this mess. I cannot stress this enough.
You think I’m that powerful?
July 25th, 2008 at 5:01 pm
Market update: the house I just bought in San Jose (not the RBA, a satellite town to RBA) is cash flow positive with rent.
Remember, rents that people are paying by people who have rented the same house for 2+ years have almost no relationship to what a new rental is going for now.
July 25th, 2008 at 5:19 pm
Jim D, you are probably correct, I have been rude to you (along with bob). Thats because I believe you post a lot of baseless assumptions and try to pepper these opinions with McNugget statistics from the web. Pretty much everything you say I disagree with. From your latest,
Err, no. When rents and prices align such that it makes economic sense to buy on day one, that is the time to buy. Since a lot of that will depend on where rents go, it’s not possible to say what arbitrary year backward that will be.
Try today. This has been discussed here. A few recent buyers chose to buy vs rent to save money. But anyway, rents and prices do not need to align in the bay area, this has RARELY happened in the past- in fact I can only think of ONE TIME when rents and purchases were aligned and this was the peak of the dot com boom and it was RENTS that were out of control then. This would have been an ok, but not great time to buy. You would have been better off buying in the early 90s or many other times.
With an 8% debt carry cost, that’ll be somewhere around a 10% CAP rate. Which is about 120x rent… which is about where the bottom was last time.
120x was never the bottom in a good part of the bay area, unless you are talking about 99 when the obscene rents drove that equation berserk.
P.S. RBA still has about 250x rent. So either rents will double during a recession or… (fill in the blank, all you supersmart Burbed readers!)
Rents already have skyrocketed (my opinion is your average good rental house in a desirable area has moved from $2200 to $2900 THIS YEAR) so I guess the answer is the first option.
I don’t know how long you have lived here, or what you base your opinions on but they are wrong.
July 25th, 2008 at 5:23 pm
“Actually if you move 0.5 mile east of Palo Alto, you can save a million dollars by living in East Palo Alto. Do you get the point now? Real estate is always local.”
Right. It has nothing to do with the quality of the properties. It’s all about location.
“You think I’m that powerful?”
I think that you, like many ignorant Americans, are one of the masses who have successfully propagated the lie that real estate doesn’t go down. Do you wield any more power than any other schmuck? No. Are ignorant people such as yourself responsible for propagating a lie and creating this bubble? Yes.
July 25th, 2008 at 5:47 pm
Wow, I leave town and the board goes berserk! WG, you’re turning into an Angry Landlord! anon, you’re to WG as Pralay is to RealEstater. Incredible!
Everyone, I’m stuck in NJ. Prices are down here. They had one of their 5 good days of weather here, everyone going on and on about how wonderful it was, it wasn’t as good as a typical day in Sunnyvale. Too humid for me, but for NJ pretty nice.
Oh my gawd I am stuck in NJ! What if I actually had to live here! There’s no good tech jobs or anything!
July 25th, 2008 at 6:02 pm
>>Right. It has nothing to do with the quality of the properties. It’s all about location.
It has to do with the quality of the local community. That’s why people tear down old houses in PA to build new, high quality homes, but they won’t touch EPA just 0.5 mile away.
July 25th, 2008 at 7:05 pm
“anon, you’re to WG as Pralay is to RealEstater. Incredible! ”
I don’t get it – I don’t find WG’s statements nearly as preposterous as what RE says…
In fact, I haven’t directly addressed WG once as far as I can recall. Granted my memory isn’t what it once was…
July 25th, 2008 at 7:20 pm
I think Madhaus meant Jim D.
July 25th, 2008 at 8:28 pm
yeah rick, right, I swear, coming out to NJ is like swallowing 64 oz of stupid. I can’t even tell the bloggers without a scorecard anymore. Also I have to use this tiny craptop instead of a real monitor with acres of real estate and 15 windows open so I can read as much data as I want to prove the Vegetable Housing Index is down .006742 percent this week.
God Gawd I’m going to TENAFLY on Sunday, no telling what will happen there. hey burbed, you want me to check the for sale signs?
July 25th, 2008 at 10:24 pm
madhaus, to make Jersey worthwhile, have dinner in Newark. Can’t get great Portugese food like that in the RBA.
July 25th, 2008 at 11:31 pm
The only person who has been drawing conclusions based on aggregate data is Pralay. I have never said entire Santa Clara County is immune; only he is talking entire Santa Clara County.
——-
Of course RealEstater never said that. But, hey let’s look at my earlier comment where I mentioned RealEstater’s shift of argument.
Ha ha! If you take RealEstater to Jan 2008 using a time-machine, he would still be talking about whole Santa Clara County and “aggregated data”. It seems in last six months the market situation changed so much the he has to disown some area of Santa Clara County.
And regarding “aggregated data”, RealEstater does not use it either. For example, just last week he was talking about “typical mortgage payment in Santa Clara County”. You know what, that’s just “typical” and has nothing to do with “aggregated data”.
July 25th, 2008 at 11:37 pm
Prices are down here.
——
I can’t believe that you did not find some homeowners in NJ who think their local area is special and there is no downturn there.
July 25th, 2008 at 11:57 pm
Frank, haven’t you been to Alum Rock? I used to work with a large group of Portuguese folks and they told me that’s where the good food is! I know there’s an awesome bakery over there!
July 25th, 2008 at 11:59 pm
Pralay,
Since Jan, you’ve been talking about falling prices. It’s already July, why are you still renting? Prices too high where you want to live?
Since Jan, I asked you to find 1 bargain house in 94087. Where is it?
Since Jan, how many flat screen TVs have you given away?
July 26th, 2008 at 12:08 am
Since Jan, you’ve been talking about falling prices. It’s already July, why are you still renting? Prices too high where you want to live?
——–
Isn’t it falling, RealEstater? Santa Clara County to “Core Cities” to some small pockets of bay area – your are disowning pretty fast. It does indicate something, isn’t it? I am pretty sure that pretty soon you will be defending ONLY a few block of your neighborhood.
————
Since Jan, I asked you to find 1 bargain house in 94087. Where is it?
———–
Actually you asked Madhaus and he showed you. As usual you started changing rules of the game in middle like a kid – “oh, that’s not CUSD”, “oh, that’s just close to freeway”.
———-
Since Jan, how many flat screen TVs have you given away?
——–
You would like a real estate agent, isn’t it?
July 26th, 2008 at 12:10 am
Correction in earlier post: You
wouldsound like a real estate agent, isn’t it?July 26th, 2008 at 12:32 am
>>Isn’t it falling, RealEstater? Santa Clara County to “Core Cities” to some small pockets of bay area – your are disowning pretty fast.
You didn’t answer the question. With so many areas drowning, you still can’t find a place that you can afford?
>>Actually you asked Madhaus and he showed you.
I’m not asking Madhaus. I’m asking you. You’re the one without a house, not him.
July 26th, 2008 at 12:39 am
You didn’t answer the question. With so many areas drowning, you still can’t find a place that you can afford?
——
And why do you think I have to answer you? I just showed the contradiction of your “Santa Clara County” comments. That’s pretty much. Anymore comment?
And what makes you think that I am trying to “find a place”? Another assumption.
——-
I’m not asking Madhaus. I’m asking you. You’re the one without a house, not him.
——
Damn! You got to be a reformed kid who won’t start crying in the middle of game and will try to change the rules – “oh, that’s 4000 sq-ft”, “oh, that home is not desirable”.
July 26th, 2008 at 12:46 am
>>As usual you started changing rules of the game in middle like a kid – “oh, that’s not CUSD”, “oh, that’s just close to freeway”.
You guys are the ones trying to play the game. I said “bargain”. A bargain is with respect to the subject in question. A house in a low-achiever district on a main artery for $900K is not a bargain. If you think it is, then you should buy it.
Is $50K a bargain price for a car? It is if the car is a Porsche. Different story if the car is Honda Fit. Understand?
July 26th, 2008 at 12:48 am
Damn. Even have to explain the most basic thing to this guy!
July 26th, 2008 at 12:50 am
>>And why do you think I have to answer you?
>>And what makes you think that I am trying to “find a place”?
Talk about juvenile comments…
July 26th, 2008 at 12:52 am
RealEstater,
No matter how many ways you try to change topic it does not change the fact you said you never talked about aggregated data of SCC (post#83). But post#97 shows that you did use aggregated data in different times according to your convenience.
July 26th, 2008 at 12:56 am
Pralay,
Good try. Suddenly changing topic without answering any of the questions, and accusing the other party of exactly what you’re guilty of.
July 26th, 2008 at 1:00 am
You guys are the ones trying to play the game. I said “bargain”. A bargain is with respect to the subject in question. A house in a low-achiever district on a main artery for $900K is not a bargain.
———
Well, the meaning your “bargain” is very subjective and you change it according to your convenience. It’s just like RBA, which expands/shrinks according to convenience.
July 26th, 2008 at 1:00 am
There’s a house in Palo Alto for $890K that Burbed showed. Is that a bargain? Even cheaper than 94087. What a deal. Of course, let’s not mention the fact that it’s on Alma, with training running every few minutes.
July 26th, 2008 at 1:01 am
Correction: with train running
July 26th, 2008 at 1:02 am
Good try. Suddenly changing topic without answering any of the questions, and accusing the other party of exactly what you’re guilty of.
—–
Really? In that case you should stick to original topic. No defence for post#83?
July 26th, 2008 at 1:04 am
>>Well, the meaning your “bargain” is very subjective and you change it according to your convenience.
No, it’s not very subjective. Perfectly fine to call a house located next to the fwy a bargain if it’s priced accordingly.
The only true bargains are the properties WillowGlenner bought in San Jose. That’s why I recommended them to you.
July 26th, 2008 at 1:09 am
>>No defence for post#83?
I will answer your trolling question just once.
When I mention Santa Clara, do you really think I’m thinking about Gilroy? I hardly ever consider places that are not real Bay Area. What you’re trying to pick on is a technicality. In other words, you’re just trolling, wasting my time.
July 26th, 2008 at 1:10 am
There’s a house in Palo Alto for $890K that Burbed showed. Is that a bargain? Even cheaper than 94087.
——-
Damn! In any good day that PA home would be snapped up with multiple offers within a week. Afterall PA is a the “destination city”, right?
Something must be changing in the market which is causing this home not to be sold even after reducing the price multiple times.
July 26th, 2008 at 1:14 am
>>Damn! In any good day that PA home would be snapped up with multiple offers within a week. Afterall PA is a the “destination city”, right?
You’re using such a marginal property to judge market sentiment? You must be really desperate to prove a point that’s not there.
July 26th, 2008 at 1:16 am
When I mention Santa Clara, do you really think I’m thinking about Gilroy? I hardly ever consider places that are not real Bay Area. What you’re trying to pick on is a technicality. In other words, you’re just trolling, wasting my time.
———-
Of course you did not. You always considered Real bay area – an undefined place. Wait a minute, there is a definition, but it changes. Example, SCC to “core location” (cities like Sunnyvale) to only South Sunnyvale.
July 26th, 2008 at 1:19 am
Pralay,
As I already showed you, Sunnyvale is having overbidding in all ranges. Still, it doesn’t change the fact that South Sunnyvale is better than North Sunnyvale.
July 26th, 2008 at 1:20 am
You’re using such a marginal property to judge market sentiment? You must be really desperate to prove a point that’s not there.
——
Hey, it’s PA. How could that be “marginal”? What you call “marginal” is nothing but the reflection of market condition. I bet a few years back you would not use this word for this property.
July 26th, 2008 at 1:20 am
RealEstater – if the frequency of your postings is any indication, getting your time wasted must be absolutely blissful. Hope you use the RSS feed at least (I hear some people reload the main page every few seconds ad nauseam)…
July 26th, 2008 at 1:21 am
>>You always considered Real bay area – an undefined place.
We talked about that as well. Madhaus drew a map, and I gave some amendments. Been through all that. You’re just trolling again.
July 26th, 2008 at 1:22 am
As I already showed you, Sunnyvale is having overbidding in all ranges.
—–
Didn’t notice that the number of such properties are shrinking every month? It shrinked so much that even tech gal can’t keep SP/LP above 100 (and that is after taking reduced listed price into account).
July 26th, 2008 at 1:25 am
Madhaus drew a map, and I gave some amendments.
——
That was just a joke (ask madhaus). Therefore I assume your “amendment” was a joke too.
July 26th, 2008 at 1:25 am
DreamT,
When can I do? If I don’t answer the question. The distortions gets repeated over and over. If answer the question, I’m wasting my time.
Now that you’re here, I’m sure the conversations will be elevated to a higher level, with correct grammar and all that.
July 26th, 2008 at 1:27 am
if the frequency of your postings is any indication, getting your time wasted must be absolutely blissful.
———-
That’s the advantage of having trophy wife doing laundry. You never understood it, DreamT.
July 26th, 2008 at 1:31 am
I’m actually off to bed. Didn’t mean to interrupt, but this conversation was just… fascinating. I’ve been taking notes, and will ponder in my sleep. No doubt I – along with everybody else – will wake up wiser in the morning.
In fact, this thread is an intellectual BARGAIN, I feel humbled that I was not able to contribute something useful to it.
July 26th, 2008 at 1:32 am
The distortions gets repeated over and over.
——-
Poor RealEstater. All he wanted to do is to help all the renters.
July 26th, 2008 at 1:33 am
>>Hey, it’s PA. How could that be “marginal”? What you call “marginal” is nothing but the reflection of market condition.
You’re talking as a completely clueless outsider.
The house is a tear-down, on the off ramp of Oregon Expressway, facing Alma, where cars travel at high speed, and a train track runs across the street with horns blowing every few minutes.
July 26th, 2008 at 1:36 am
>>Poor RealEstater. All he wanted to do is to help all the renters.
Of all people you need a lot of help. Sometimes when you say something, you don’t even realize how far in left field you are. If you listen to me, 10 years from now you’ll be posting a thank you note here daily.
July 26th, 2008 at 1:39 am
The soft core guys are all off to bed.
July 26th, 2008 at 1:49 am
The house is a tear-down, on the off ramp of Oregon Expressway, facing Alma, where cars travel at high speed, and a train track runs across the street with horns blowing every few minutes.
——
Of course I have seen the feature. But you would not use this description a few years back. For example, not long ago your were telling people that it’s ok to get stuck with a TINY property at PA. Is 600sq-ft is “margina” NOW?
So I guess not long ago you would tell people “Is it really so bad to get stuck in a tear-down, next to Oregon Expway property at Palo Alto?“
July 26th, 2008 at 1:55 am
Look at the above, all coming from the same guy:
- First he complains that RBA is not a well defined place, and it keeps changing
- When someone defines it with a map, it’s a joke of course!
Seriously, my “definition” of RBA is the parts of the BA where professional people would like to live. With this definition, RBA has remained pretty much the same for a long time.
July 26th, 2008 at 1:58 am
>>not long ago your were telling people that it’s ok to get stuck with a TINY property at PA. Is 600sq-ft is “margina” NOW?
Again you’re making amateur comments. A property’s location cannot be changed, but it can always be torn down and rebuilt. These two situations are like apples and oranges.
July 26th, 2008 at 1:58 am
If you listen to me, 10 years from now you’ll be posting a thank you note here daily.
——–
Is it the primary reason for you to visit this site regularly? That’s explains your ulterior motive. Do you get paid for posting messages here? I am curious. I am asking because your relentless effort to convert all the renters to homeowners. I have seen that kind of conviction in some religions and their followers – to convert people. Of course I understand their ulterior motive which is: going to heaven. But for you?
July 26th, 2008 at 2:03 am
Seriously, my “definition” of RBA is the parts of the BA where professional people would like to live. With this definition, RBA has remained pretty much the same for a long time.
——–
Atleast in burbed.com talking serious about RBA itself is a joke. Needless to say that “professional people would like to live” is a vague way to define some area. If home price doubles every 10 years I guess pretty soon East San Jose will be a place where “prefessional people would like to live”.
July 26th, 2008 at 2:06 am
A property’s location cannot be changed, but it can always be torn down and rebuilt. These two situations are like apples and oranges
——–
I am pretty sure 1700 sq-ft lot size will grow to a “desirable” lot size – just like apple or orange tree. It seems they are making more land in Palo Alto.
July 26th, 2008 at 2:13 am
If you listen to me, 10 years from now you’ll be posting a thank you note here daily.
———
BTW, instead of using burbed.com as your propaganda platform to make people “listen”, why don’t you start your own blog and let us know? I will definitely post a thank you note after 10 year in your blog.
July 26th, 2008 at 2:18 am
RE, do you seriously not see that you appear both stubborn and ignorant?
What is a professional person? College educated? Graduate school educated? Educated in the school of hard knocks? One making 45k? 450k? Your “definitions” are subjective and fuzzy, and your reading comprehension is seriously lacking.
Pralay has completely eviscerated you on nearly ever point you assert. Why do you persist? You honestly think 15% appreciation can occur in perpetuity?
July 26th, 2008 at 9:16 am
Ah, here we go again.
Madhaus, don’t forget that you and bob is another duo, I am waiting to see a shooting challenge or something.
July 26th, 2008 at 9:24 am
Pralay has completely eviscerated you on nearly ever point you assert. Why do you persist?
This is untrue, anon. You are just extremely biased.
July 26th, 2008 at 10:15 am
I may be tempted to say the same about you, WG.
July 26th, 2008 at 10:47 am
>>What is a professional person? College educated? Graduate school educated? Educated in the school of hard knocks? One making 45k? 450k? Your “definitions” are subjective and fuzzy, and your reading comprehension is seriously lacking.
According to Pralay, the “RBA” concept is a joke, and anyone who takes it as seriously as you do is a “low IQ guy”. Is this what you’re agreeing with?
July 26th, 2008 at 10:53 am
>>I am pretty sure 1700 sq-ft lot size will grow to a “desirable” lot size – just like apple or orange tree. It seems they are making more land in Palo Alto.
First of all, show we where I suggested buying a property with 1700 sq-ft lot. You’re just making things up left and right.
Secondly, many town homes and condos priced close to a million occupy land less than 1700 sq-ft. Thus, depending on the context, a 1700 sq-ft lot in a downtown location may still be usable.
July 26th, 2008 at 11:26 am
austindweller, comparing me to anon is just silly. I am here to disperse and receive real information, because I have a vested interest in BA real estate. I am not here to insult everyone who disagrees with me, which is all but one other person here.
Realestater, thats why I always look at lot size as my number one criteron for buying a house. Of course at my pricepoints I am looking at mostly little shacks anyway, that are usually priced at close to lot value. But what *amazes* me is that if you go to places like Danville or San Ramon, where there is plenty of land available and significant new construction, most of the new houses are built on TINY LOTS! 3500 sq ft lot with a 2 story mcmansion is common. The 7000 sq ft lots of the past have gone by the wayside. When you ask people who buy Mcmansions on tiny lots they will say they don’t care about a yard- but I think they don’t realize that without a good size lot, your neighbors are right on top of you.
July 26th, 2008 at 11:38 am
First of all, show we where I suggested buying a property with 1700 sq-ft lot. You’re just making things up left and right.
——–
Cannot click on the link given in post#132, hitech guy?
July 26th, 2008 at 11:44 am
According to Pralay, the “RBA” concept is a joke, and anyone who takes it as seriously as you do is a “low IQ guy”. Is this what you’re agreeing with?
———
Ha, this guy is still taking it seriously. In fact he amended the RBA map. Madhaus, did you put “thank you” note for this guy?
July 26th, 2008 at 11:45 am
It seems that those people who are dishing out the insults rarely have any real information to contribute. Given that most of these people have never bought a single piece of property, it defies logic why they don’t try to learn from those who have “been there, done that” a few times, and experienced how real estate works.
July 26th, 2008 at 11:46 am
WillowGlenner -
I’ve lived here since ’96, have been coming here for business since ’92, and have any number of friends and aquaintences who are lifetime residents.
Since we’re now disagreeing about facts, instead of opinions, I’ll consider that progress.
In addition to 1999, when it was cheaper to buy than rent, it was also cheaper to buy than rent in 1992-93, at the last housing bust.
Or do you disagree with this fact?
July 26th, 2008 at 11:47 am
>>Cannot click on the link given in post#132, hitech guy?
It clears says 3000 sq. ft. in that post. Do you want to follow Madhaus’ footsteps by insisting on your mistake?
July 26th, 2008 at 11:50 am
Given that most of these people have never bought a single piece of property, it defies logic why they don’t try to learn from those who have “been there, done that” a few times, and experienced how real estate works.
——–
Here you go.
Burbed, can you make it a rule? Only homeowners will be allowed to post here, after showing proof of homeownership. All the renter are not allowed to post and they will only “listen” and “learn”.
Soon enough Burbed.com will be sponsored by NAR and CAR.
July 26th, 2008 at 11:58 am
Keep on fighting, Pralay, The more you refuse to learn, the longer you’ll remain in status quo. These days, RBA homeownership is a self-selecting process. When I look around, I don’t see many people who’re unintelligent or unrefined. They are here for a good reason, not by accident.
July 26th, 2008 at 12:00 pm
It clears says 3000 sq. ft. in that post.
————-
As you cannot follow the main feature from the link, here goes link to feature:
http://www.burbed.com/2008/02/08/proof-that-palo-alto-is-prime-1204-per-square-foot/
Bad/bath: 2/1
SqFt: 660
Lot: 1,742 sq-ft
July 26th, 2008 at 12:01 pm
When I look around, I don’t see many people who’re unintelligent or unrefined.
——
You just need to buy a mirror.
July 26th, 2008 at 12:05 pm
whoa whoa whoa, everybody CHILL already!
as to comment on RBA=where professionals want to live, I have to tell a funny (to me) story about my supposed RBA neighborhood.
So my kid, years ago, makes friends with a neighbor kid, and I meet the parents. They are weird, I don’t really want to go on and on about why. But really stuck with me was that the dad blathering on about “I’m an executive, this is NOT an executive neighborhood, I am moving back to San Diego where my house will LOOK LIKE an executive house!” He didn’t like paying $600K (this was in the late-90s) for a second rung home. Of course the house is probably worth almost $1.2 mil now. I think he made it to San Diego before 2003, so he might still have his Executive Neighborhood house above water if he didn’t drink the Fool-Aid and buy something even more Executive Neighborhood for nothing down.
rick, no shooting matches with bob, all I have to do is write song lyrics and he backs down. Don’t laugh, everyone, I rented a guitar and amp so I could stay in practice out here.
I write the songs that make the whole blog sick
I write the songs that use stats from Dataquick
I write the songs that make the renters cry
I write the songs, I write the songs
See, 64 oz of stupid. Why else would **ever** use **anything** by (spit) Barry Manilow?
July 26th, 2008 at 12:08 pm
The more you refuse to learn, the longer you’ll remain in status quo.
——-
How many visitors come here to “learn”? Your primary reason for posting so many massages is futile. As I said before, you have more changes of getting success if you go to University Ave, catch a random guy and convince him to buy home.
You have argument, please make it (WG is a prime example). Your intention of making people “learn” is misplaced.
Didn’t you say you have kids? It’s Saturday. What happened? They are refusing to “listen” and “learn” from you too? Too bad! Poor dad!
July 26th, 2008 at 12:15 pm
>>Didn’t you say you have kids? It’s Saturday. What happened? They are refusing to “listen” and “learn” from you too? Too bad! Poor dad!
If you really want to know, the kids are out swimming, while I’m at home taking delivery of a complete set of kids furniture bought from Stanford mall.
July 26th, 2008 at 12:17 pm
I really have to make fun of our favorite troll.
Tune: Secret Agent Man
There’s a man who lives a life of prestige
Everyone he meets sips lattes and eats quiche
Oh and every one he meet’d
On his thousand per foot street
Odds are they think he’s a shallow wanker
Palo Alto Man!
Palo Alto Man!
He bought in at the bubble, and he thinks he’s Donald Trump!
Careful of the renters on the blog site
They need his advice if they hope to buy right
Don’t let the wrong town slip
They’ll end up in bad zip
Odds are that they think he’s a big wanker
Palo Alto Man!
Palo Alto Man!
His property has doubled and he thinks he’s Donald Trump
(guitar solo — all pentatonic bs)
Swinging through University on payday
It’s three times too much for lunch he’s calling Mayday
It’s a priv’lege he has won
To live in 94301
Odds are that we think he’s a big wanker
Palo Alto Man!
Palo Alto Man!
He gives the blog his trouble and we treat him like Forrest Gump!
(Fadeout on intro riff)
July 26th, 2008 at 12:28 pm
But really stuck with me was that the dad blathering on about “I’m an executive, this is NOT an executive neighborhood, I am moving back to San Diego where my house will LOOK LIKE an executive house!
———
Are you still in touch with this guy? May be you can invite him in this blog – so that RealEstater@SanDiego and RealEstater@RBA can argue which place is more special.
July 26th, 2008 at 12:32 pm
@madhaus, lol. sadly I’ve spent 96-on waiting for those overpriced 94301 houses to drop, refusing to get in on a bidding war. I have friends who were less cautious back then — and the worst part is that they will forever pay much less in property tax on their now $3M+ homes than I will pay on whatever crappy house I trade up to next.
Do you take requests? Can you work on some “Prop 13 Blues”?
July 26th, 2008 at 12:35 pm
Tune: Secret Agent Man
There’s a man who lives a life of prestige
——-
Trophy wife? Porsche?
BTW, Madhaus, did you stick a “thank you” note for his amanedement in your RBA map? If you didn’t, you are such an ungrateful person!
July 26th, 2008 at 1:41 pm
[...] I’m at home taking delivery of a complete set of kids furniture bought from Stanford mall.
While you’re waiting, can’t you do laundry?
And you had to mention it was bought from Stanford mall, not just any mall. Is it Pottery Barn Kids?
July 26th, 2008 at 1:52 pm
it was also cheaper to buy than rent in 1992-93, at the last housing bust.
Or do you disagree with this fact?
Yes I do disagree with your purported “facts” JimD, because I was living in San Carlos at the time, renting a 400-500K house (which now would be over one million or so- hard to say), and paying $1600 rent, which was typical. There were 2 houses on our street for sale in the $400K range, so with interest rates where they were then you were looking at literally double the rent I was paying to buy. I was not interested in buying then for personal reasons and didn’t- obviously I regret that now.
So in closing, I think I disagree with your opinion.
July 26th, 2008 at 2:25 pm
But really stuck with me was that the dad blathering on about “I’m an executive, this is NOT an executive neighborhood, I am moving back to San Diego where my house will LOOK LIKE an executive house!” He didn’t like paying $600K (this was in the late-90s) for a second rung home.
If he really was “an executive” then he should have understood that san diego has far fewer opportunities for wealth creation vs here. If I had to guess I would say its like 20-1. San Diego reminds me a little of Florida, where Real Estate IS their industry, except in and of itself, RE doesn’t create wealth, it only captures wealth from elsewhere (with the exception of RE as destination like Disneyland or Las Vegas).
I actually know a fair number of those “I’m an exectutive… ” types. Where their attitude really stands out is in the workplace. They move here from San Diego or somewhere where being a MIDDLE MANAGER at some big company is actually a prestige job, and they are shocked by the adjustment to here, where middle management is basically a working stiff. Boo hoo.
July 26th, 2008 at 3:48 pm
Herve,
I wouldn’t care to mention anything, except I was asked. Again, if you really want to know, I got’em from Crate and Barrel.
I don’t understand what do these mundane, everyday stuff have anything to do with prestige. I guess that’s why it’s good to be with your peer group, so that you don’t run into some envy crap.
July 26th, 2008 at 4:05 pm
RealEstater – I think the sentiment here is that Palo Alto isn’t a peer group for tech guys turned mid-level managers – although maybe it was 15 years ago. This peer group has been buying mainly into Mountain View and Sunnyvale. But you did state your strategy a few months ago: acquire a house in a neighborhood beyond your peer group, so that your equity increases in correlation with their economic success rather than yours.
July 26th, 2008 at 5:01 pm
>>I think the sentiment here is that Palo Alto isn’t a peer group for tech guys turned mid-level managers – although maybe it was 15 years ago. This peer group has been buying mainly into Mountain View and Sunnyvale.
I totally agree!
July 26th, 2008 at 5:17 pm
RealEstater – then your glorification of prestige and your yearn for belonging in your own peer group are antinomic.
July 26th, 2008 at 5:21 pm
>>But you did state your strategy a few months ago: acquire a house in a neighborhood beyond your peer group, so that your equity increases in correlation with their economic success rather than yours.
Right. That’s always a good initial strategy. Since my previous house was also in PA, that wasn’t so much of an issue. I cared more about finding something on a top street within walking distance of University Ave.
July 26th, 2008 at 5:23 pm
DreamT,
Let me make it clear one more time. An average tech guy has no use for prestige. What you and that southern boy perceive as prestige is just everyday life here.
July 26th, 2008 at 5:32 pm
RealEstater – You’re maybe right for “an average tech guy”, but you personally care about prestige and proved it multiple times here (prestigious address, no respect in 95051). It’s also easy to claim you don’t care about status or prestige when you’ve “arrived.” Lots of people who arrived conveniently dismiss the ambition that drove them to achieve in the first place. Your past posts betray you real sentiments as well as this revealing slip about “peer group.” You probably meant “my neighborhood.”
July 26th, 2008 at 5:36 pm
RealEstater – let me cut to the chase to avoid the further exchanges you delight in: I’ve caught you red-handed being hypocritical. You may disagree but others will be the judge(s).
July 26th, 2008 at 5:46 pm
I don’t understand what do these mundane, everyday stuff have anything to do with prestige.
The “bought from Stanford mall” made me think of “this one is imported Italian leather“.
July 26th, 2008 at 5:59 pm
acquire a house in a neighborhood beyond your peer group, so that your equity increases in correlation with their economic success rather than yours.
This is a popular theme in the media today- not just with houses but a lot of things “buy what the rich buy those things are going up”. However in terms of real estate on a percentage basis it is more lucrative to buy an emerging neighborhood than buy an established “rich persons place”. This was discussed on another thread here earlier- oen of the reasons houses in East san jose are crashing so hard, and RBA is barely touched, is because RBA never had a bubble quite like the cheaper areas in the first place. It is actually commonplace to see some houses in San Jose neighborhoods that quadrupled in a few years in this decade, while Palo Alto basically doubled.
July 26th, 2008 at 6:31 pm
>>the “bought from Stanford mall” made me think of “this one is imported Italian leather“.
I would never have guessed someone would make an issue out of Stanford Mall. I go there because it’s the closest mall to me. I get most of my stuff there. It’s not green for me to go somewhere else. majority of the shops there are national chains anyways, so it’s not like there’s any exclusivity attached to it.
July 26th, 2008 at 6:45 pm
>>no respect in 95051
DreamT,
You’ve brought this point up quite a few times, so let me address it frankly, as it evidently bothers you a lot.
My remark was half joking, and it’s only to point out that spending a million dollars there does not give you the best bang for the buck. With real estate, the advice to buyers is that it’s better to get into the “bottom of the top”; e.g. cheaper house in the most expensive neighborhood; smallest house on a street of mansions. Buying into the top end of Santa Clara goes against this principle.
July 26th, 2008 at 6:48 pm
One follow-up comment: We’re talking real estate here. Prestige is totally useless unless it’s within the context of a sound financial decision.
July 26th, 2008 at 8:13 pm
WG, the implosion of the bubble is emphasizing the importance of location, location, location. Yes, you can make higher percentages if you catch “emerging” neighborhoods at the right time, but the key is to find a neighborhood that is actually emerging.
Silver Creek was an emerging neighborhood. When those houses first started selling, builders had a hard time convincing people to live that far outside the path of progress. Silver Creek eventually became a destination. North Valley appreciated rapidly in recent years, but it was never a destination and now much of the gain has been wiped out.
It’s risk vs reward, like most investments. My concern is that you are focusing on the potential reward when the downside risk is a total wipeout. The smart investor never got away from location, location, location, but spotting emerging locations like Silver Creek and parts of Almaden early on while staying away from North Valley and South County.
July 26th, 2008 at 8:14 pm
RealEstate – You’re weathering criticism very cooly as always. My posting was exclusively about your demonstrated sentiments about prestige, not about me.
So since we’ve moved on to 95051, I find myself again agreeing with your premises yet disagreeing with your conclusion. Where’s the mis-step? The “top end of Santa Clara.” First, your statement is designed to apply within a neighborhood. Santa Clara is a city. Even 95051 does not comprise of a single neighborhood – not as demonstrated by neighborhood names, but by real estate market dynamics (absorption rate, average day on market, price and sale movements, etc…).
Second, if you study your Santa Clara real estate, you’ll find that the top end is St Tomas Woods (South-East), where all properties sell beyond $1M. And I agree that if you’re to squander $1M, it’s not a great choice in my opinion, but I’d be hard pressed to call this a general rule as you do. Finally, your opinion about any specific neighborhood or zip in the bay area does not bother me (not sure it bothers anybody on this board), but reveals a lot about how you mix perceived prestige and choices with real estate. In other words, you seem to be the emotionally-driven one, not me..:)
July 26th, 2008 at 9:06 pm
Prop 13 Blues, huh? Let’s see if anything ever comes out of that, steve.
Sorry to say, Mr. I’m An Executive (I swear, we don’t even remember his name, that’s what we call him) moved back to San Diego assuming he’d get more respect there. There’s any number of good real estate implosion boards there, in particular I like Jim the Realtor’s blog and BMIT. Wonder if his place will be featured in the Island of Lost Equity.
WG I think you nailed the guy.
DreamT, nice going, but remember, you can lead a donkey to water, but if it falls into a pit, it’s an a****le.
Pralay, why don’t you write a song about a little Porsche coupe and the Trophy Wife who’ll have fun fun fun since her hubby won’t dare take the credit cards away.
July 26th, 2008 at 11:17 pm
RE, you had me agreeing that Pralay was pulling your chain and anon was being biased until post #157… your chink in your armor is clearly the need for “prestige” and trying to subtly point out that you drive a Porsche, etc. Then you try to keep your cover by protesting that they were just casual comments. (And no, I don’t “envy” you or your circumstances. That’s a rather condescending accusation to make and is beneath you.)
Those with a comfortable level of wealth don’t feel the need to mention their “stuff” on a semi-regular basis. In fact, in the bay area, the wealthiest can often be the most discreet.
I’d just give up on your project (Pralay); he clearly isn’t ready to buy property. Time will tell if he’s being foolish or not.
July 26th, 2008 at 11:18 pm
Oh yeah, anon, no one is seriously claiming 15% YOY appreciation is the norm. That would have prices doubling about every 5 years.
July 27th, 2008 at 8:30 am
“I was living in San Carlos at the time, renting a 400-500K house … and paying $1600 rent, which was typical.”
Despite what you may think of me, I really do try to make these arguments based on facts – and I can say that you’re the *first* person in *years* of asking that’s come up with data that runs counter to what I’ve been saying. (And I’d love to hear more people with counter data.)
To give you a taste of *my* dataset:
http://www.huduser.org/datasets/fmr.html
You’ll be looking for line 1554 on that chart.
While this chart isn’t too useful for actual prices, it’s useful for relative prices in a yearly series. You’ll note the real run up in rents only happened in ’99, though ’98 saw significant rises as well.
I note this because I remember trying to rent in Cupertino in ’96 – $1700 for a two bedroom condo. $2500 for a 2br home. But how much were houses selling for then?
As it turns out, 2br Condos were selling for about $190k. No, that’s not a misprint, and yes, I’m sure. In fact, I just checked again on Zillow, since I wanted to be sure. In 10 minutes, I found 5 2br condos in cupertino on zillow, sold for $190k in 2006. I wasn’t too careful in my reasearch, but I don’t have to be with those numbers – it’d be cheaper to buy at 30% higher, wouldn’t it?
So, buy at $190k, or rent for $1700. Hmm.
And this in Cupertino, RBA.
I have other examples, would you like to hear them?
It ain’t opinions, dude, it’s facts.
You have one datapoint that runs counter – that’s great, and I’m glad to hear it. I’ve literally heard dozens that match my theory, so you’ll pardon me if I don’t drop it over a single datapoint. I’d love to figure out why your experience is so different from everything else I’ve heard… maybe you were overpaying? Maybe prices there just didn’t really fall? Maybe prices there *rose* for? Any of those explanations fit. Since I really don’t follow San Carlos, I couldn’t say. I’m mostly interested in Santa Clara County, since that’s where the tech jobs are (as opposed to the VC jobs in San Mateo).
Anyone have other examples from the last bust? Educate the young’uns who’ve never seen a bust.
July 27th, 2008 at 9:14 pm
Second, if you study your Santa Clara real estate, you’ll find that the top end is St Tomas Woods (South-East), where all properties sell beyond $1M. And I agree that if you’re to squander $1M, it’s not a great choice in my opinion, but I’d be hard pressed to call this a general rule as you do.
I was curious so I looked this up. It’s a little neighborhood centered around Tanoak Drive, one block from San Tomas Expressway. Very attractive ’70s-vintage ranchers on 9-10k lots. Only one has recently sold – 2656 Birchtree Lane. $935,000 on 2/15/08.
There is another one on the market for $1.5M. Not bloody likely..
July 27th, 2008 at 10:48 pm
sonarrat – Yes that’s the one (and the south side of Pruneridge is almost as nice). Established neighborhood and prime compared to the surroundings (the golf doesn’t hurt), so very few sales. The other recent sale is
2684 Maplewood Ln: $1,508,00 on 06/04/08 (is this the one that was not bloody likely?)
The $935k surprises me considering comparables sold for $100k more the same month. I doubt we can draw conclusions on the health of the neighborhood based on only two sales, one $900k and one $1.5M.
That neighborhood is 95050 and not CUSD, yet is higher-end than Santa Clara 95051 CUSD. If I had access to $1.5M, I’d personally rather spend it in the Cuesta Park neighborhood of Mountain View for example, or a small ranch in Los Altos – unless Santa Clara gets its act together and doubles the number of trees in the city.
Another detail: the houses there have faux-rock facades. I think it was WG who said today or yesterday he hated it. I don’t see why: they greatly add to the neighborhood character and most are very nicely done, covering only the bottom half of the facade, sometimes in wavy shapes.
July 27th, 2008 at 11:59 pm
sonarrat – your unfortunate ‘not bloody likely’ makes you look like the type of person who’d use a lower-than-expected sale price as a proof that the market’s tanking, and a higher-than-expected sale price as an anachronism caused by a foolish buyer. Hardly an objective stance. Correct me if I’m wrong.
July 28th, 2008 at 6:27 am
For anyone who’s interested, the SC 95051 neighborhood that you’re discussing is known as the “Birdland” neighborhood to it’s residents.
And Sonarrat’s comment made him sound like someone who saw a down comp in a down market, and expected that the next comp wouldn’t be wildly swinging up – hardly tinfoil hat material. That you didn’t perceive it that way says quite a bit about you. That you decided to be snide about it says even more.
July 28th, 2008 at 7:48 am
DreamT, I don’t know that area very well but I too am VERY surprised that a 3BR/2.5BA with Santa Clara schools would sell at that high of a price. I’ve seen houses in Los Gatos (similar size) struggle to sell at that level. I hope that house was like new inside for that price.
July 28th, 2008 at 8:24 am
2684 Maplewood Ln: $1,508,00 on 06/04/08 (is this the one that was not bloody likely?)
Actually it is, I didn’t realize that it had sold because for some reason Zillow didn’t include it in the recently sold search I did. Not only did it sell at $1.5M, but the list price was $1.25M and it was only on the market 11 days. The overbids vaulted it over the brand-new, and larger, Rivermark properties which were listed higher. That’s special. I’d love to see what it’s worth at this time next year.
July 28th, 2008 at 8:51 am
To Jim D,
I rented a house in 95051 (CUSD) in 93. $1800 per month. I recall thinking that it was worth $360k but have no real evidence to back this up. It was a 4/2.5 with about 2k sqft, in reasonable condition. But this is the internet right??
So for swag. assume 8% interest, assume 100% mortgage. 100% probably not possible then, but we need to put some value on the downpayment. Payments are $2400 per month. Plus prop tax of of around $330.
Definitely cheaper to rent then. Even if I add in a factor for tax deductions. For sure prices have gone up faster than rents since then, but it was more expensive to own on a monthly basis even then.
My guess is that SFHs will be less favorable to rent than condos, since most people if possible would prefer to buy an SFH vs a condo which is usually viewed as transitional. There’s exceptions of course, no insult intended towards long time condo dwellers or renters.
July 28th, 2008 at 9:03 am
Nomadic,
I have also seen nice Los Gatos houses at $1.5m languish for a while. However, keep in mind that Los Gatos has Los Gatos schools, but also Union and Campbell. Union and Campbell are fine but not as good. Easily a $100k difference in house prices, even the same street that crosses the border. Check out the Blossom Manor neighborhood on the NW corner of Blossom Hill Road and Union. As you go west, you enter LG schools, and the prices step up.
July 28th, 2008 at 9:59 am
Jim D – We are discussing a neighborhood in 95050, not in 95051. It’s “its residents.” You also prove my point to sonarrat: if you call the $935k sale a “down comp in a down market”, what do you call the neighboring $1.5M sale? Unless you know the specifics of the $935k house, you’re just talking out of your a$$.
And I stand by my statement that two sales don’t make a trend, esp. when they’re so different. That you don’t it perceive that way says quite a bit about you.
July 28th, 2008 at 10:00 am
nomadic – I encourage you to drive around there and find out a little bit more about the area and the immediate neighborhood. I know where you’re coming from – at one point I didn’t even know Santa Clara had any SFR in the first place.
July 28th, 2008 at 10:11 am
sonarrat – I actually visited Rivermark for the first time yesterday. In my view these are ugly, glorified mctownhomes cramped together, very similar in style to 95051′s newly build and overpriced Enclave (can’t wait until they hide it behind trees, but for now they’re still struggling to sell all the units) and similar in layout to 94043′s whisman station (partly built on contaminated land).
I realize many Americans would rather wipe out yard space and double their house size – a la Palo Alto. Some Asian families also insist on buying new, new, new – a la Evergreen. Others such as me will always opt for an older place with front & back yard, because space is more important. So I think Rivermark and St Tomas Woods are for two different kinds of buyers and the prices movements aren’t necessarily directly correlated.
If anybody here’s interested in SC’s neighorhoods they’re aptly described here.
July 28th, 2008 at 10:13 am
You have one datapoint that runs counter – that’s great, and I’m glad to hear it. I’ve literally heard dozens that match my theory, so you’ll pardon me if I don’t drop it over a single datapoint. I’d love to figure out why your experience is so different from everything else I’ve heard… maybe you were overpaying? Maybe prices there just didn’t really fall? Maybe prices there *rose* for? Any of those explanations fit. Since I really don’t follow San Carlos, I couldn’t say. I’m mostly interested in Santa Clara County, since that’s where the tech jobs are (as opposed to the VC jobs in San Mateo).
JimD, heres the big difference between you and me. I have lived here, ALL MY LIFE. I don’t need to look up reports and stats on RE here to tell what was happening in 92, because I lived through it. You dismiss my information as “one datapoint” HAHAHA. Meanwhile you have your charts and graphs. The reason my experience is so different from what you’ve HEARD is because you hear what you want to hear, vs my case where I was actually living here, trying to rent a place, then.
And no, I was not overpaying or underpaying to live in San Carlos, and San Carlos was right in the middle of tech jobs, not VC jobs, then.
Believe what you want, but suffice it to say I think most of your “analysis” needs work.
July 28th, 2008 at 10:27 am
SiO2, your rental experience in 93 is consistent with my experience. I was renting in San Carlos but the houses up there are smaller, and ours had only 1.5 baths so a cheaper rent.
The lure of cheaper rent vs own is how bay area RE tricks people. It is almost never cheaper to buy vs rent, although it was in 99- but that was due to the rental side of the equation going through the roof which is not ideal either.
I believe we may be heading towards very expensive rentals again though, maybe because the offshored jobs are coming back? Everytime I look on CL to decide where to price my new property it seems like rents have increased another $100-$200 or so.
DreamT- that was Frank Jewitt that doesn’t like faux rock facades. I actually like them, and might redo my house that way! OK I’m tacky.
And on the Asian families buying new- since I do a fair amt of remodelling I can understand the predisposition to buy new. Remodelling can run upwards of 60K for a room or two esp if its a bathroom and kitchen, and the quality of the remodel doesn’t present itself for years until after the contractor is gone. A lot of people don’t want to risk it. There is nothing worse than buying a property that was remodelled by a do-it-yourselfer. Lots of times you have to tear it out and redo it.
July 28th, 2008 at 10:42 am
but don’t new builds have problems that only expose themselves long after the developer is gone?
July 28th, 2008 at 11:43 am
WG – my apologies. It’s “good tacky” in my book:) I second Crossroads on the same type of concern with new houses, esp. when they’re on a flood zone, landfill or contaminated land, or just “Far away” as is very often the case with new developments.
July 28th, 2008 at 12:19 pm
For anyone who’s interested, the SC 95051 neighborhood that you’re discussing is known as the “Birdland” neighborhood to it’s residents.
I don’t know SC that well (esp the non-CUSD portion), but I know Sunnyvale very well, and it has a “Birdland” neighborhood adjoining Santa Clara. So are you sure about that? The Sunnyvale “Birdland” area north of the Hewlett-Packard campus (Homestead) and as far west as Saratoga-Sunnyvale in places, also as far east as the border with Santa Clara, which varies depending on how far north you are (in some places Lawrence, in others, further west).
So I would be somewhat surprised if Santa Clara has a neighborhood with the exact same name that adjoins Sunnyvale’s birdland. I think you’ve confused Sunnyvale for SC, but then again, I am open to finding out otherwise.
July 28th, 2008 at 12:33 pm
Yeah- I hear you guys about the new developments. Issues there too- but remodels have different issues I guess.
One thing I have seen numerous times in a remodel which is rarely present in new construction are forced air heat noise issues. I have a remodelled house with forced air heat out of a closet that literally sounds like an airplane taking off. The prior resident probably said- “I need a closet- oh theres one right in the middle of the family room- its too expensive to put the unit in the attic, I will put it here”. Now, the house is remodelled with this unit- I will need to redo a lot of the ducts etc if I want to change it.
When people buy remodelled houses, they usually assume the work is done well. Often it isn’t- sometimes it isn’t even to code. New construction is always to code, at least.
July 28th, 2008 at 1:01 pm
Pralay, why don’t you write a song about a little Porsche coupe and the Trophy Wife who’ll have fun fun fun since her hubby won’t dare take the credit cards away.
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I can try but as I will be doing it for first time, it will take some time (year?). Meanwhile burbed.com will be sponsored by CAR/NAR and only “been there, done that” people will be allowed to post. So my whole effort will be pointless.
July 28th, 2008 at 1:06 pm
’d just give up on your project (Pralay); he clearly isn’t ready to buy property. Time will tell if he’s being foolish or not.
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Ha ha! Do you think he really has a such project for a guy whom he hates most? He is targeting general visitors for his propaganda. And I won’t be surprised if he is getting paid for that.
July 28th, 2008 at 6:23 pm
LOL
Enjoy not watering a lawn in the meantime!