August 7, 2008

Time to do your Christmas Shopping in Redwood City – sales are on!

170 Northumberland Ave, Redwood City, CA 94063 MLS# 80780395 – Property Details
170 Northumberland Ave, Redwood City, CA 94063


$249,000

* Status: Active
* Bedroom: 2
* Bathroom: 1
* Year Built: 1905
* Lot Size: 2625
* Square Footage: 630
* List Date: 2/25/2008
* Garage Spaces: 1

* MLS#: 80780395
Charming doll house very well maintained, granite tile counter tops in kitchen area.Walking distance to Target Regency Shopping Center, Bus & train station.2nd bedroom converted into a Livingroom. A must see, make offer before it’s gone!!!

In today’s edition of “The Bottom Of The Real Estate Market Has Been Reached”, Burbed reader Pralay has shared with us this fine dollhouse located in Redwood City. At 630 sqft, this is the perfect buy for the Atherton princess who has everything! Maybe Barbie really needs granite countertops so she can make fantastic meals for Ken!

Christmas sales happens earlier every year, so now is the time to stock up and save, save, SAVE! Heck, this house even comes with a Christmas wreath so you don’t need to wrap it up or anything. Plus, as this house was last sold on April Fools Day in 2005 for $485,000, you can be sure that this is an investment in your daughter’s future. Did I just hear a certain Barbie doll earn $236,000 in instant equity?

Doesn’t your little princess deserve the best?

Comments (121) -- Posted by: burbed @ 5:56 am

121 Responses to “Time to do your Christmas Shopping in Redwood City – sales are on!”

  1. RinkRat Says:

    Hey now…630 square feet. I’ve seen living rooms bigger than that. Get the bunk beds ready!

  2. Lionel Says:

    There’s a lot of chatter here about how the RBA has no subprime, so there won’t be many foreclosures. Prime is starting to take a hit now —

    http://online.wsj.com/article/SB121805947661818327.html

    Mortgages issued in the first part of 2007 are going bad at a pace that far outstrips the 2006 vintage, suggesting that the blow to the financial system from U.S. housing woes will be deeper than many people earlier estimated.

    An analysis prepared for The Wall Street Journal by the Federal Deposit Insurance Corp. shows that 0.91% of prime mortgages from 2007 were seriously delinquent after 12 months, meaning they were in foreclosure or at least 90 days past due. The equivalent figure for 2006 prime mortgages was just 0.33% after 12 months. The data reflect delinquencies as of April 30.

  3. bob Says:

    Thanks for posting the link Lionel.I suppose you also saw the big story today that AIG lost another $5.3 Billion dollars due to housing related write-downs.

    http://www.nytimes.com/2008/08/07/business/07insure.html?partner=rssnyt&emc=rss

    Additionally, Wal-Mart posted disappointing results. The ‘stimulus’ checks are all gone now.

    http://moneynews.newsmax.com/headlines/retailer/2008/08/07/119860.html

    Anyone that thinks housing is going to recover anytime soon is mistaken.

  4. bob Says:

    Now for comments on the house. Buying this would be sort of like…. what’s the point? What would you gain? I mean seriously: 630 square feet? That’s maybe a little bigger than the downstairs of the house I rent now.

    But, it is interesting that even though the “bottom” has been called out for months on this site, the “bottom” seems to be creeping downward further. Why- you could buy this, slap on a coat of paint, and demand $6,000 a month in rent. There’s probably zillions of Google employees begging to rent it now.

  5. RealEstater Says:

    More signs of bottom:

    NEW YORK (AP) — Stocks have pared their losses following a report that pending U.S. home sales rose in June, rather than declining as expected.
    The National Association of Realtors says its seasonally adjusted index of pending sales for existing homes rose 5.3 percent to 89 from 84.5 for May. The reading for May was revised downward in this latest report.

  6. bob Says:

    RE,
    There are several things that you have to look at in regards to the health of the economy, which is tied directly to the health of real estate.

    First is unemployment. As of today, jobless claims are the highest since 2002, which was during the last recession. As long as unemployment rises, spending slows, which transitions into the next important thing, which is consumer spending.

    As the link I posted above indicates, consumer spending is weak, per the report from Wal-Mart. Wal-Mart is the largest retailer in the US ( and world) and is larger than the no.2,3,4,and 5 retailers combined. When Wal-Mart falters, that’s a general indicator of how consumer spending is behaving.

    Lastly, less consumer spending means they also spend less on houses,rent,mortgages, etc.Without consumer strength, real estate doesn’t perform. This is precisely why the government and Fed have spent billions and billions of dollars bailing out banks and delinquent homeowners: Without a healthy housing market, the US economy won’t function. That’s a rather sad statement because since the avg US consumer relies very heavily on their homes for retirement and leveraging rather than industrial production, we have no real economy unless house-swapping is revived.

    Lastly, despite the fact that housing is the third leg of the US economy, the stock market tends to recover a full 6-9 months before Real estate recovers. So as long as the market is down, so too will RE, and thus the bottom will not be reached until such a turnaround is seen. We’re pretty far from that mark yet.

  7. R Says:

    How about year-over-year RE? As you certainly know, month-over-month sales are meaningless.

  8. sonarrat Says:

    This is a pretty rough neighborhood, and you get the rumble of Caltrain all the time (in fact, the best way to see the whole neighborhood is to look towards the west as you’re coming out of the Redwood City station going south). Even the rest of Little Mexico shuns the Dumbarton area.

  9. steve Says:

    @lionel, there is a lot of chatter here about their being no subprime is the RBA because there isn’t. No REOs in Palo Alto, Los Altos, Atherton, the non-EPA eqivalent of Menlo Park, Woodside, Portola Valley, …

    so, I’ve been hearing a lot of chatter about Alt-A. Can someone break down how that will impact a city like Palo Alto? If I made a bad mortgage decision because I just had to overpay for my 1800 sq ft house on my 7200 sq ft lot in mid-town, two things can save me:

    1) ability to refinance. my sense is that if you have large chunks of equity in a house, access to capital isn’t a problem, but, for arguments sake, let’s say it is and I am facing a big reset.

    2) ability to sell. given that buyers continue to outpace sellers in the RBA, there is likely enough pent up demand to cover the “panic.”

    An added point, the number of sales in the RBA has been so low the past 5 years I don’t see any way for massive distress to be coming. The excpetion would be if RBA-ers having put giant jack down to beat other offers and secure their “prize” turned around and used their house as ATM machines Irvine-style. Does anyone know how many Palo Alto-ans puchsased for 1.2 (say with 400 down and 800 as a jumbo) a few years ago and now have 2.2 worth of debt?

  10. Lionel Says:

    Re: RE’s typically imbecilic note, from Calculated Risk —

    This shows the impact of foreclosure sales – according to the NAR, “short sales and foreclosures [account] for approximately one-third of transactions”. This foreclosure activity will probably keep existing home sales (and the pending home sales index) elevated for some time.

  11. bob Says:

    Well, as of 2005 during the peak, something like 70% of all loans made within the BA were some variety of exotic loan. While it would be incorrect to assume that all of these, or even a majority of these will result in default, 70% is a very high number, and as we’ve seen with other areas like Marin and SF, foreclosures are happening at all levels. Wealthier neighborhoods have had less foreclosures. But all it takes is a few to start affecting local sales and asking prices. Nobody knows exactly what’s going to happen. It’ll be interesting nonetheless.

  12. steve Says:

    Perhaps I misunderstand, but I think that focus on “exotic” loans is misplaced. If you follow the Irvine housing blog — and if you don’t you missing out on great schadenfreude — the biggest issue seems to be that the amount of debt >> market value on the homes.

    each day they feature a different property but the basic story is the same. person buys home for 5000K. a few years ago as the market rises, person piles on re-fi’s and HELOCs, courtesy of lazy underwriting and rediculous appraisals until they have taken their down and all of their appreciation out. they have “sold” their house to the bank long before the first notice of delinquency arrives. so, person now has $1M in loans on their $500K purchase.

    Now, their “exotic” loans reset, and they may have a qualification issue for a new loan, but the much bigger problem is that the house won’t appraise out for anywhere near the owed mortgages. obviously, the house won’t sell for that either and the HELOC money was long ago spent on cars and vacations. the owners’ choices are keep paying or mail in the keys.

    of course, as properties become REOs the appraisal issues snowball, the market is flooded and prices collapse further. but, the key points from my read on irvine are:

    1) the large turnover during the peak in many neighborhoods, and
    2) the even larger HELOC, second, etc debt activity

    If Irvine folks had stuck to their original financing my guess is that there would be far fewer properties on the market. The only-time-will-tell question for the RBA is, how much did rediculoulsy easy credit fuel high-end property purchases?

  13. steve Says:

    oh, I would now like to assert that my inability to spell ridiculous was some funny RE joke. sadly it and the other errors are a function of poor typing and proofreading skills

  14. bob Says:

    There’s really no way of knowing. I’m assuming that you’re hypothesizing that since people who buy in areas like Palo Alto are probably richer, they wouldn’t have the need to Heloc their houses. But I can recall that all during the boom, financial shows, newspaper articles, and banks heavily promoted the idea of taking out equity lines of credit. I know quite a few people; even those making good incomes, who did exactly that. The attitude was ” Why let all that free money sit around?” So I’m placing my bets that a lot of people- even in the RBA did do an awful lot of borrowing against the future. Secondly, think of just how many old people live in the RBA, who bought cheap and suddenly had 6-700k worth of “equity” to play with. With their more limited income, I bet a lot of them also used Helocs and such.

  15. RealEstater Says:

    >>First is unemployment. As of today, jobless claims are the highest since 2002, which was during the last recession.

    Don’t be distracted by aggregate data. Unemployment in BA is not a concern at this time.

    >>As the link I posted above indicates, consumer spending is weak, per the report from Wal-Mart.

    Wal-Mart is a minor player in the RBA. I’m only aware of one Wal-Mart around here (in MV). It’s definitely not a good indicator of real estate health in the RBA.

    >>Lastly, less consumer spending means they also spend less on houses,rent,mortgages, etc.

    Again, don’t look at useless aggregate data.

  16. bob Says:

    RE,
    you seem to be under the impression that National Data doesn’t affect local data. Look at it this way: If Wal-Mart sells less products, then that means that they will sell less Ipods, Computer games, Computers, and subsequently less back end support products like servers, retail software, and so on. All of those mentioned above are Bay Area products. If you sell less of those items, the companies in the Bay Area that produce them will make less money, which means layoffs, lower profits, lower salaries, and yes- ultimately less health for the housing market.

    If you’re dismissing this type of data, then you’re not much of an economist are are going to be prone to disappointment.

  17. Pralay Says:

    Don’t be distracted by aggregate data.
    ———-

    I would not, until you posted some news saying “the National Association of Realtors says its seasonally adjusted index of pending sales for existing homes rose 5.3 percent” (post#5).

    That’s “aggregated data”, isn’t it?

  18. Pralay Says:

    If Wal-Mart sells less products, then that means that they will sell less Ipods, Computer games, Computers, and subsequently less back end support products like servers, retail software, and so on. All of those mentioned above are Bay Area products.
    ———-

    And don’t forget Walmart.com’s IT division is located at San Bruno.

  19. zanon Says:

    I think the RBA’s susceptibility to home price declines will come down to how leveraged homes are here (so what’s the LTV) compared to other areas.

    It’s hard to get this info, as Alt-A loans don’t necc. mean high LTV, and even prime loans, with enough HELOC financing, can be high LTV also.

    Either Madhaus or Pralay posted a link on an earlier forum that had Alt-A data, but it was only for California, and, along with RealEstater, I don’t think California data tells us much about RBA.

    So, does anyone know where to get LTV information on RBA mortgages?

    -zanon

  20. anon Says:

    “Don’t be distracted by aggregate data. Unemployment in BA is not a concern at this time.”

    You’re hilarious:
    http://www.kcbs.com/pages/2625271.php?

    Cliff’s notes since you’re an imbecile:
    Bay Area Unemployment Rate Rises Steadily.

    The June figure increased from 5.3 percent a year ago and from 6.8 percent in May, the Employment Development Department said.

    The national unemployment rate was 5.5 percent last month.

    Since you clearly need things spelled out, I’ll speak in monosyllabic words where I can:

    6.8 is more big than 5.5. BA unemployment is higher than the national average.

  21. Pralay Says:

    6.8 is more big than 5.5. BA unemployment is higher than the national average.
    ——–

    Don’t be so silly, zanon. That’s just East Bay, RWC, EPA and San Jose. It does not affect RBA.

    Don’t be distracted by aggregated data. :)

  22. TNTinCA Says:

    If you’re dismissing this type of data, then you’re not much of an economist are are going to be prone to disappointment.

    Well of course he’s not an economist! He is a real estate troll! :-)

  23. Roxboy Says:

    That’s NOT xmas decoration. Actually, it’s Halloween.

  24. Real Estater Says:

    Look at who is the imbecile that cannot read.

    The article says the following:

    “California’s unemployment rate reached 6.9 percent in June” – Note: This is talking about California overall; ie useless aggregate data.

    “Still, the Bay Area has the lowest jobless rate in the state.”

    “the San Francisco metropolitan area had a five percent unemployment rate in June”

    Compared to:

    “The national unemployment rate was 5.5 percent last month.”

    “The construction industry has posted the biggest annual loss, shedding 86,000 jobs for a 9.5 percent decrease. The manufacturing sector dipped 1.8 percent during that same period, losing 26,600 jobs. The financial sector lost 32,000 jobs, down 3.5 percent.”

    Got that? The aggregate unemployment figure includes construction, manufacturing, and finance. This is what distorting the result. BA high tech is booming. We’re not talking blue collar jobs here.

  25. anon Says:

    Oh. Right. Crap. Let’s look at the number 6.8 in a vacuum.

    Well, I guess when you put it in that context (or lack thereof) it doesn’t seem like that bad of a number. It’s a single digit number so it could be worse. It’s got an 8, which is lucky…Plus 6 is nearly 8 so its probably 6/8 or 3/4 as lucky as 8 which is probably pretty lucky still.

    I guess when you put it that way, Pralay, looks like RBA’s doin’ fine to me! Let’s all go out and enjoy the weather. This isn’t Texas. Or Antarctica. or Iraq. or my bunghole.

  26. Real Estater Says:

    Pralay says,

    “I would not, until you posted some news saying “the National Association of Realtors says its seasonally adjusted index of pending sales for existing homes rose 5.3 percent” (post#5).

    That’s “aggregated data”, isn’t it?”

    Yes! I was obviously talking about the national market hitting bottom. The RBA market, as we all know, never tanked, so there’s no “bottom” to speak of.

  27. burbed Says:

    imbecile

    Could we all cut back on the name calling? Thanks!

    Just trying to keep a certain level of civility here. This is the Bay Area after all. :)

  28. Real Estater Says:

    Guys,

    If you look at things objectively, it’s pretty obvious that the RBA market is standing strong in the face of an unprecedented national real estate downturn. Buyers should be more convinced than ever that their investments are safe here. This in turn makes the market here even more solid.

  29. Pralay Says:

    Yes! I was obviously talking about the national market hitting bottom. The RBA market, as we all know, never tanked, so there’s no “bottom” to speak of.
    —–

    Therefore, don’t be distracted by aggregated data. RBA market has long way to go, even if national market is hitting bottom.

  30. bob Says:

    RE,
    You’re a real estate agent. Plain and simple. Anyhow, just to make a point in regards to how national, and even international economics are tied at the hip regardless of where you live, last week Toyota, BMW, Nissan, and Mercedes all posted losses, primarily tied to slow sales in the US. So if your argument is that what happens across the country or state isn’t important to the BA, then how do you explain how a Japanese or German company can show declines from sales in the US?

  31. steve Says:

    @zanon, great question

  32. Hellboy Says:

    Re :”Since you clearly need things spelled out, I’ll speak in monosyllabic words where I can:

    6.8 is more big than 5.5. BA unemployment is higher than the national average.”

    That’s prett funny!

  33. Hellboy Says:

    Ooops, I didn’t read to the end of the thread. I take my funny comment back, score one for RE…:-)

  34. RealEstater Says:

    >>last week Toyota, BMW, Nissan, and Mercedes all posted losses, primarily tied to slow sales in the US. So if your argument is that what happens across the country or state isn’t important to the BA, then how do you explain how a Japanese or German company can show declines from sales in the US?

    Bob,

    I don’t know about you, I have never bought a car built in the BA (there is one electric car company in San Carlos, but that’s beside the point). Car company sales doesn’t affect BA economy.

  35. RealEstater Says:

    >>how do you explain how a Japanese or German company can show declines from sales in the US?

    Because their factories are here in the US, to build cars for the US domestic market.

  36. bob Says:

    RE,
    I find it hard to believe that you don’t understand such a simple economic principal. What happens nationally does/will affect the BA. What I mentioned above was an example, and need I repeat it again, but the US and international economy are in fact consumers of BA goods, services, and products, as is the BA consumers of goods, services, and products from other states and countries. To state that the BA is a closed circuit economy is ignorant because out of any other major metro area, the BA is actually far more susceptible to economic fallout from the loss of domestic or international business.

    Oh- and I forgot: One of Toyota’s largest manufacturing plants is in Fremont.

  37. RealEstater Says:

    Bob,

    I never said BA has a closed circuit economy. However, you are exaggerating the impact. Car sales going down affecting BA real estate? Never heard that connection before. The typical RBA buyer is not employed in the auto industry, certainly not working in some factory in Fremont.

  38. rick Says:

    Burbed, you listed this several months ago.

    In the previous post, you mentioned that it is getting more difficult to find insanely priced properties. Maybe you haven’t looked at the RBA? According to some people, there has never been a decline in those areas, and they are selling fast. Or maybe you think they are priced pretty reasonable?

    I have no idea why people call bottoms, if there is no decline, then there is no bottom right? Or the RBA folks are genuinely interested in non-RBA areas?

  39. sg Says:

    Here is an article about alt-a on redfin. If you know anyone who has a loan from Dawney, there is a big chance that it’s an alt-a loan.

  40. anon Says:

    Burbed, As this is your blog I will respect your wishes in spite of the accuracy of that particular word.

    87,000 construction jobs…Hey, wait. 87,000 is > 1. That’s aggregate data, sir and therefore irrelevant.

    On a more serious note, do you honestly believe that homes in the RBA are only purchased with ‘tech’ money?

  41. zanon Says:

    ANON: I think it’s fair to say that most of the more recent RBA housing transactions were purchased with tech money. Certainly teachers and farmers aren’t buying houses in Cupertino.

    The question is, how much of that was tech money, and how much was borrowed money.

    If the purchases were very leveraged, then even slowing, or zero appreciation will put pressure on houses. If the expectation of future price increases goes away, then high LTV mortgage holders have negative cash flow assets. As RE says, and I agree with him, who cares about rent if prices go up 10% a year.

    But if prices do not go up 10% a year, you start caring about cash flow a lot UNLESS you are low LTV. Low LTV does not care. Low LTV can survive anything and refuse to sell at a price below asking.

    There is some low LTV in the RBA, but I have no idea how much. I think it’s this last element, leverage, that will determine what house prices here will do, not BMW sales or whatever.

    Does anyone have RBA LTV data for ’04-’07?

    -zanon

  42. bob Says:

    Yes RE,
    the typical BA resident isn’t employed in an auto factory. But a majority of them aren’t employed in tech either. Make that over 70% of the BA is employed in another industry. Secondly, just because you work in tech doesn’t mean you’re suddenly empowered with house-buying money. A majority of the tech workers in the BA still make under 100k per year, which is not enough to purchase a house.

    In any regards, you’re still totally missing my point, and I’m not sure how to make it any more clear: When the economy falters, ALL major metros- including the BA- gets affected. Anyhow, one more thing: A report in the SF chronicle mentioned the sales and price numbers for the BA: The BA- which includes the Peninsula and SF- is the 6th worst performing housing market in the country. That’s right: its right up there with Miami, Las Vegas, Phoenix, San Diego, Detroit, and Sacramento. So exactly HOW is that such a great sign to people in regards to buying a home here? I don’t care how you spin it. The market is bad here, and you fully well know it.

  43. bob Says:

    More fuel for the fire from Ben’s blog:

    The Palo Alto Daily News reports from California. “In a dubious distinction amid the nationwide foreclosure meltdown, East Palo Alto has the highest number of properties in default and in bank ownership per capita than any other city in San Mateo County, according to a report. Three other cities in the county – Daly City, South San Francisco and Redwood City – also have high foreclosure rates.”

    “East Palo Alto council member and real estate agent David Woods said that in the most extreme cases this year, some homes lost almost 60 percent of their value before foreclosure.”

    “He said a small, two-bedroom house on the 2300 block of Oakwood Drive was appraised at around $600,000 just 18 months ago. In February, Woods said it went to auction for $189,000 and didn’t sell.”

  44. anon Says:

    Ah hahaha

    Can’t the people feel the weather?

  45. zanon Says:

    BA != RBA

    RE and I have our differences, but comparing BA with RBA makes as much sense as comparing EPA with PA.

    -zanon

    PS. Just a gratuitous addition: EPA must be the worst run 20 sq miles I know of. It’s 10 minutes from one of the richest areas on the planet earth, yet it has drunk shirtless men wandering down the middle of the street shouting and swearing in the middle of the afternoon, lowering property values all around. Pathetic.

  46. bob Says:

    Honestly, I think the whole RBA thing is ridiculous in of itself. Isn’t it simply a long-running joke on this forum anyway? All areas are susceptible to being affected by neighboring ones. Sort of like the domino effect that’s been progressing nationally to state-wide, to reigon, to city, and now zip code. I don’t buy that no area is impervious, and that includes the “RBA” if I’m to even entertain that area as being special.

  47. RealEstater Says:

    >>When the economy falters, ALL major metros- including the BA- gets affected.

    Bob, if you’re not feeling the pinch, and I’m not feeling the pinch, then what’s the problem we’re having?

    >>Anyhow, one more thing: A report in the SF chronicle mentioned the sales and price numbers for the BA: The BA- which includes the Peninsula and SF- is the 6th worst performing housing market in the country.

    LOL. Using aggregate data to prove your point again? Don’t forget, when they talk about BA, it also includes Alameda and Oakland.

  48. RealEstater Says:

    Bob,

    What’s your point about East Palo Alto anyways? Are you thinking it has some relationship to Palo Alto?

  49. Pralay Says:

    The market is bad here, and you fully well know it.
    ——–

    Bob,
    When some people have to keep pandering “market is healthy, market is healthy“, then it is not. Healthy market does not require that kind of pandering (or report from NAR).

    As Frank mentioned before, nowadays there are lots of MLS listings with description “not going to last long“. In good housing market, when sellers used to get multiple offers on very first day of open-house, they never used those kind of words. So, what does those words actually?

  50. Pralay Says:

    For #49, ignore last sentence.

  51. nomadic Says:

    RE says: Bob, if you’re not feeling the pinch, and I’m not feeling the pinch, then what’s the problem we’re having?

    Just wondering – does that mean the RBA is your house, Bob’s house and a scattering of others where people don’t feel pinched? ;-)

  52. RealEstater Says:

    >>For #49, ignore last sentence.

    Don’t worry, I’ll just ignore the whole post.

  53. RealEstater Says:

    What I see around me is lots of people remodeling their homes, lots of people rebuilding from the ground up, and homes that come to market being sold in 2 weeks or less. Whatever you call it (healthy/not healthy, last long/last short), I’m not seeing any sign of downturn.

  54. Pralay Says:

    and homes that come to market being sold in 2 weeks or less.
    ————

    It’s more than 2 weeks and your “desirable” home at 1353 Flicker Way is still in market. Are you sure CUSD is still part of RBA? :)

  55. DreamT Says:

    “Don’t worry, I’ll just ignore the whole post.”

    Masterful! I bet the rush you felt posting this must beat getting laid! Notwithstanding the similarities in concept.

  56. Pootie Tang Says:

    RealEstater is an idiot. What freaking moron would believe that somehow the bay area is isolated from the rest of the country?

    I know plenty of people who are cutting back on spending because of job insecurity. Yes, they are engineers in the high tech industry.

  57. Stepford Says:

    I was in dowtown Menlo Park last week in a boutique store and the owner and I were discussing the state of the down town. The owner was telling me about a store in town which sells $700.00 shoes (shaking her head in disbelief) that was having a sale. I commented that selling expensive shoes shouldn’t be a problem around there even with the economy the way it is. She said hah, even the rich aren’t spending now. I guess she is seeing a drop off in sales which I thought was interesting.

    “Bob, if you’re not feeling the pinch, and I’m not feeling the pinch, then what’s the problem we’re having?”

    I would have agreed with RE before I had that conversation. I’m not feeling the pinch either…yet. I know you can’t base anything on one small business owner, but I must say it scared me a bit.

    I still see remodeling going on too, but it has somewhat decreased from prior years. I saw a huge amount in 2006-2007. Spring of 2008 not as many.

  58. Pralay Says:

    I bet the rush you felt posting this must beat getting laid!
    ——-

    LOL, after being accused of housing market downturn, Burbed will be accused of running a blog for cyber-orgasm.

  59. R Says:

    Anybody seen Burlingame Ave? Lot’s of empty stores that have gone out of business in the last few months. Anybody hear about Financial Title Company? All CA branches closed last week. Lot’s of tenants are falling behind in rent and closing up shop…lots, including in “nice” areas. I also fear that things are going to get worse before they get better.

  60. DreamT Says:

    I used to live in Burlingame (circa 2002) and both Burlingame ave. and Broadway were in way worse shape than they are today. I’m curious how much of the retail and restaurant turnover is related to recent (< 5 years) shops. Restaurant turnover is equally high in downtown Mountain View, yet I’d say the downtown is healthier than ever (and the overall quality better than ever). Anyway, to the point I’d mitigate shop turnover statistics based on how long the shop’s been in business.

  61. Stepford Says:

    Coincidentally, I just read an article about downtown Burlingame discussing what you have observed R.
    http://www.redwoodcitydailynews.com/article/2008-8-3-downtown

  62. Stepford Says:

    To Dream T’s question < 5yrs – I think these stores have been there awhile, but don’t know length of time. Maybe you could remember back to when you lived there. The Sharper Image, Talbots, Ann Taylor Loft and Burlingame Stationers are the ones that have left, maybe more.

    Don’t know much about the restaurant turnover there. That is a different animal.

  63. WillowGlenner Says:

    You guys need to stop with the Alt-A boogeyman. I’ve explained here on many occasions that Alt-A only means a “light” doc loan. THATS IT. And no, people who use light doc loans do not need to lie in order to use them. I have used Alt-A myself, many times, because I am self employed. My guess is most IT contractors in the bay area, and there are thousands of these, have Alt-A loans. Alt-A is also NOT synonymous with adjustable mortgages. Many Alt-As are fixed, so those people won’t be experiencing any significant need to refinance. The most egregious examples of the mortgage meltdown were SUBPRIME, not Alt-A. In fact I haven’t seen a single high profile foreclosure of an Alt-A- you know, some kind of article saying a janitor at Google got an Alt-A posing like he was a VP there- and nobody checked, etc. There are no stories like that with Alt-A.

  64. WillowGlenner Says:

    My wife has some of those $700. shoes. The store in Santana Row is called Tarin Rose. Honestly I’ve bought a few $450 pairs of shoes myself. If there is one piece of clothing worth the bucks, its shoes.

  65. Stepford Says:

    Ahh, finally a man who loves shoes too :)

  66. zanon Says:

    WillowGlenner is right — Alt-A by itself does not tell you much about LTV, and it’s LTV that matters

  67. anon Says:

    I love it. Economic woes everywhere. How do governmental bodies mitigate the damage? Tell people they don’t exist. People like RE believe them, keep spending and help the economy sputter along.

    Not feeling the crunch during times like this is simple. All you have to do is 1) make sure you have a valuable skill and 2) not live beyond your means during YOUR good times. (whatever those may be)

  68. DreamT Says:

    Stepford – these sound like old-timers that can no longer balance rent and retail profit. I don’t know very much about commercial real estate, but if commercial rents are going up (with stores closing as collateral damage), it’s a general sign of local economic health isn’t it?

  69. nomadic Says:

    Sounds to me like WG and RE ought to go shoe shopping together. LOL.

    Some wealthier people are growing more cautious, and are even trimming their exposure to real estate. From the Financial Times regarding a Merrill Lynch report: “The report shows that wealthy investors last year scaled back their exposure to property, allocating just 14 per cent of their portfolios to the asset class, down from 24 per cent in 2006. The shift is partly the result of the poor performance of property investment trusts and other such investment vehicles, which have been hit hard by the credit squeeze.

    And in more general terms:
    http://wcbstv.com/topstories/Wealthy.Spending.Down.2.786657.html

    I have three houses within a couple of blocks that are undergoing major renovation but I still wouldn’t say things are booming. Houses priced aggressively (low) have sold in 7-10 days, others with more optimistic (higher) prices are sitting a few months. Pretty good but not great.

  70. Stepford Says:

    I don’t know about commercial real estate either. Is it they could afford the rent until there was a downturn in the economy or rents are going up because the economy is healthy and someone else can successfully fill the space? I guess only time will tell.
    I did notice the regular Ann Taylor store in Burlingame had less inventory, but at the time I didn’t think much of it.

  71. Stepford Says:

    Nomadic – What city are you in if you want to share?

  72. RealEstater Says:

    >>Sounds to me like WG and RE ought to go shoe shopping together. LOL.

    I only own 2 pairs of shoes. I totally don’t care about shoes, clothes or other girly stuff. I go shopping about once a year (for myself), usually right after new year.

    I think it’s a joke that people talk about “rich people cutting back”. If they cut back, it’s not going to be reflected in everyday retail stuff. They might postpone the purchase of a new car or a home remodel, but not a pair of shoes. If they’re trying to save that kind of money, they’re not that rich.

  73. bob Says:

    I agree that by themselves, Alt-A loans aren’t automatically bad. But what’s bad is the fact that a huge number of these types of loans were made to borrowers with bad credit, or mis-stated incomes. An awful lot of that happened in the Bay Area too, hence the large numbers of foreclosures, which are currently affecting the entire spectrum of the market.Thus when people talk about Alt-A loans and other such loans, they’re referring to the fact that so many of these were given to unqualified applicants, hence a likely negative fallout as a result.

    and RE, in regards to your continued assumption that Palo Alto and other what I guess must be considered infallible in your book, All I can say is that people over here in Alameda- which despite what you think- is in fact an upscale, predominantly white-washed neighborhood, were saying exactly the same things as some people here say about the “RBA”: It would NEVER lose value, slow, or be affected by the surrounding areas. I don’t hear much of a peep out of those folks anymore because you know what? They were wrong. The same is happening to the last holdouts of the bubble as we speak.

    Lastly, I don’t feel a pinch at all because after being here for 9 years, I know fully well how extremely volitile the economy in the BA is, and it is always wise to be well-prepared. As far as fashion, I buy most of my clothes from Goodwill. You wouldn’t believe how many brand-new, never worn pairs of Banana Republic jeans, or other famous brand clothing I’ve bought for $5. Most still have the original sales tags. $60-$70 pairs of pants…. for $5-$10.

  74. steve Says:

    @bob, your point on Alameda is one that we would be all be wise to remember, but you write:

    the large numbers of foreclosures, which are currently affecting the entire spectrum of the market.

    this is just not true at the mid to high end of the market. as an experiment, walk into any real estate office. tell them you have a 1.2 in cash, are pre-approved for another 800K and ready to buy. they should get that used car salesman caught a live one twinkle in their eye. Mention you are especially interested in short sales, REOs, distressed opportunities and you can move fast. Since you are 510, the twinkle might get even brighter. Then explain you would only consider property in Saratoga, Los Altos, Palo Alto, Atherton, Woodside, Hillsborough, Pacific Heights, Seacliff, Tiburon, Belvedere, … What do you think will happen to that twinkle?

    again, as I can confirm after spending the last 4 months looking at property in parts of the RBA, there are way more buyers than sellers for good property. until this changes, it will remain a sellers’ market.

  75. DreamT Says:

    Second that for Goodwill and Salvation Army. If only Goodwill could sell Porsches as well, we would all live like RealEstater. Wouldn’t the world be a better place?

  76. anon Says:

    But, we all can live like RE – Just buy as many RBA homes as you can get your hands on!

  77. steve Says:

    @anon, RE is an easy target, and I understand why you poke fun, but this:

    Just buy as many RBA homes as you can get your hands on!

    is pretty much the best possible financial advice you could have given anyone starting from about 1932 and continuing at least until 2005. no one can know what sales prices will look like in 09, 10, etc, but if I bought in 06 or 07 in Palo Alto I’m pretty sure I could get my money back even after the 5% agent fees. I am certain I own stocks that I can’t say that for.

    if you are going to write a sarcastic statement like that you should at least point to example of PA homebuyers who have lost money on re-sales. I understand is is cheaper on a cash flow basis to rent, but it is also undeniable that there is property in Palo Alto that was 500K circa 1997 is $2M now.

  78. bob Says:

    Steve,
    Yes, I buy that wealthier parts of the BA, or any area for that matter tend to fare better than less wealthy areas. But all areas are ultimately affected by property values from surrounding areas. The same is true for Alameda, Berkeley, Marin, and Palo Alto- even the nice parts. Marin had just as much denial in the air as anywhere else in the BA, having the dubious distinction of having the highest median for several years. The market has caught up there as well. I have no doubt that if it hasn’t caught up to the RBA, it will, if it hasn’t already. It would be impossible for neighboring areas such as EPA to fall 60% without having any effect on the other parts of PA.

    Additionally, other pressures are coming from other areas like the East Bay. Many families are going to stop looking in the Peninsula and go for the East Bay because as of now, you can get a nice house in a safe neighborhood for a fraction of the cost in the RBA- a cost that will be too drastic in reduction to ignore.

    Anyhow, the domino effect has been going on for about a year in the Bay Area. It will catch up to the RBA. Just like it has to everywhere else.

  79. anon Says:

    True, but the advice isn’t and never was good advice. People who followed that line of thinking often ended up over leveraging themselves.

    I suppose you’re right, but what the advice really should be is to acquire as many as you can carry, rather than get your hands on.

    Also, can you link the property that was actually 500k in 1997 and now 2mil? That seems a little high even for this area and the fact that it is RBA.

  80. steve Says:

    @anon, absolutely agreed.

    on 4x appreciation, the next time I’m looking at recent sales I’ll try to find one. I’m thinking about the mid-town stock — and the price increases for these average houses has been staggering. It is possible the appreciation in South PA has been even higher on a percentage bases, but it is hard to get more than 1.8 for one of these.

    btw, I just saw a RWC house in the hills that was listed below or right near its 2004 sale price. should have bookmarked it.

  81. anon Says:

    Well, it doesn’t have to be an actual sale…

    The reason I am asking is that I know a number of people who bought their homes in the early to mid 80’s for 600-700k. Their homes are currently estimated at worth 1.8-2mil now…which is about 6% compounded.

  82. bob Says:

    Their homes are currently estimated at worth 1.8-2mil now…which is about 6% compounded.

    Exactly! We were discussing this a few weeks ago, and the reality is that even though everyone seems to be under the impression that RE in the Bay Area is an infallible gold mine, the actual median appreciation over time is around 5-6%… or out in another way, roughly 1-2% less than the same amount of median return on stocks over time.

  83. Real Estater Says:

    Quote of the day:

    “It would be impossible for neighboring areas such as EPA to fall 60% without having any effect on the other parts of PA.”

    Author: Bob

    Those of you who are not clueless will agree, this is the funniest statement that’s been posted here in a long time.

    For those of you who are clueless, this thread will help:

    http://www.trulia.com/voices/Home_Buying/Is_East_Palo_Alto_the_same_as_Palo_Alto_-6299–

  84. anon Says:

    Well, if a real estate broker said it..it must be true!

  85. bob Says:

    RE,
    Let me let you in on a little secret: Trulia and Zillow are often completely inaccurate. The fact that they overestimated my parent’s house by over 50% is reason enough for me not to even bother reading the link.

    Anyhow, don’t you have some houses to show today? Be on your merry way! -don’t forget to smile!

  86. Real Estater Says:

    Anon and Bob,

    What exactly are you guys disputing as inaccurate?

    Is there still some illusion that EPA and PA are part of the same city? Did you catch that they are not even in the same County?

  87. anon Says:

    Those people are simply proferring conclusions that amount to : nope they’re different cities. Different counties too. They are separated by 101. They are world apart. (I love the fact that the re brokers can’t even formulate a coherent sentence)

    The fact that they are different cities or different counties does not mean that they are in different worlds.

    Sir, the entire world is feeling the effects of the credit crunch and real estate down turn which originates in the United states. It’s hilarious that you are making assertion that Palo Alto exists in some sort of vacuum.

  88. bob Says:

    I’m disputing that the perception that real estate values in the RBA never goes down- something that you day in, day out, you claim as being true. Well, they have gone down in the past, and they will very likely go down in the future-perhaps the very near future, as a result of downward pressure from neighboring areas that have experienced massive reductions. But I’m not surprised that you claim so, since your business counts on having consumers believe that real estate never goes down, and that its the best investment.

  89. steve Says:

    @anon, here are a few that I think aren’t skewed by massive improvements, split lots, etc. I’d add links but I’ll get caught up in the burbed spam filter

    707 De Soto 94303
    Mar 26, 1996 $485,000
    Jun 30, 2008 $1,708,000
    I saw this house and know that there were no improvements 96 to 08

    365 N California Ave 94301
    Oct 23, 1998 $850,000
    May 28, 2008 $2,400,000

    781 Marion Ave 94303
    Mar 08, 1996 $464,000
    Oct 11, 2007 $1,595,000

    760 Colorado Ave 94303
    Aug 10, 1994 $387,000
    Oct 17, 2007 $1,548,000
    (note, ’89 buyer lost money on this one)

    2642 Ramona St 94306
    May 16, 1996 $588,000
    Jun 05, 2008 $1,799,000

    1121 Parkinson Ave 94301
    Apr 07, 1994 $620,500
    Jul 24, 1998 $838,000
    Apr 30, 2008 $2,250,000

    3652 Arbutus Ave 94303
    Oct 21, 1994 $380,000
    Mar 20, 2006 $1,400,000
    Apr 03, 2008 $1,550,000

    1344 Tasso St 94301
    Feb 21, 1997 $435,000 + cost of new house
    Mar 18, 2008 $2,875,000

    I’ll concede 500K to 2M was a sligh exaggeration, but still… Also, things were reasonably flat 90-94 (some stuff down, some up slightly, so that can account for your friend’s experience)

    Check this one out, though. Brand new construction in 01, so it is a ripe apple

    516 Georgia Ave 94306
    Oct 28, 2003 $1,500,000
    May 07, 2008 $2,305,000

    Finally, to blow Bob’s mind, how does this sell for 2.7? http://www.redfin.com/CA/Palo-Alto/1925-Bryant-St-94301/home/1258028

  90. anon Says:

    Bob, what you’re really trying argue here is that the value of Actual Palo Alto properties hasn’t gone down in the recent past.

  91. anon Says:

    wow, those numbers are ridiculous.

    Can’t argue with the numbers, tho.

  92. bob Says:

    Well Steve,
    Not sure what showing a few specific houses really proves, if anything. That still doesn’t explain that the RBA- including those juicy areas I assume you are linking to- has and does go down in value, returning the exact same long-term returns. 6%.

    But hey- maybe I’m a dope, should dump all of my stock, buy 5 RBA houses, and quit my job. While I’m at it, I’ll make sure and stop at the local grocery store and buy a vaue-pak of kool-aide for the fridge.

  93. DreamT Says:

    EPA and PA aren’t in different worlds and aren’t worlds apart (only one street apart technically). But I doubt there is one person who could afford PA who would consider buying in EPA instead. So as far as real estate goes, these are worlds apart. The PA person might consider MV instead, the MV buyer might consider Sunnyvale, who might consider Santa Clara, who might consider nice areas of San Jose, etc. and etc. It takes a lot of next-neighborhood downgrades until you reach EPA. Add to this that there are literally no foreclosures in PA and literally only foreclosures in EPA: a PA shopper is primarily driven to buy the location and wouldn’t settle for a place where everybody and their neighbors are liable to foreclose.
    I’m not claiming these two markets live in parallel worlds, but they’re so insulated from each other that anything happening to EPA will likely take years and show greatly reduced amplitude before it even has any impact on PA, and that’ll be overshadowed by the different economics governing the decisions of PA’s typical buyer.

  94. steve Says:

    @bob, is that all you are left with? advice to never buy a house anywhere for any reason because the historic rate of return of stock is higher?

    I’m not advocating RE as an investment. I’m just trying to explain how the market works and learn more myself. To you, though, I must point out that in anon’s friend case, even after you subtract the property tax, mortgage interest, oppty of their down and maintenance costs of their house, when you add back in their rent savings and recognize that their capital gains are tax-advantaged, they are doing a little better than stocks historically. a key point is difficult to get your broker to give you 5x margin leverage. however, even if you treat their purchase as if it was all cash, I think the analysis holds.

    Will it hold in the future, who knows? That is why you should either buy a house you won’t need to sell for at least 7-10 years or you should recognize that you are speculating with all of the risks that entails.

  95. bob Says:

    Steve,
    I think we do see eye-to-eye that homes are not strictly investment tools and made for long-term inhabitation.I couldn’t agree more.
    I guess I’m old-fashioned. To me, making investments means you invest the maximum on the best return and divert as little as possible to physical assets. You live in the house. Your retirement plans pay for your retirement and subsequent healthcare.At some point, those house becomes a burden and must be sold.Retirement homes cost over $100,000 per year these days, not including any other forms of healthcare.

    So if you were to save for this eventuality ( lets face it, we all get old) then what would you choose? The investment that returns 6%, or 10%?Take away how that money is made, and I guarantee most would choose 10%.Compounded over time, that’s a lot of money. Of course I cannot deny that there are probably people in the area who make millions of dollars and a house is simply an everyday purchase.

    Of all the areas I’ve lived in ,I’ve never witnessed so many people who view their homes more heavily as an investment rather than a convenient asset. That makes me strongly believe that more people here count on their homes for retirement more than actual retirement plans.

    Anyhow, I suppose I shouldn’t care about what happens in PA anyway. If I were to buy in the Bay Area, I’d choose the East Bay.

  96. RealEstater Says:

    Bob,

    If you’re looking at East Bay, what’s the challenge to buying now anyways? I see tons of homes selling under $500K from Fremont to Alameda.

  97. bob Says:

    Why? Because 500k is still overvalued for what the prices will very likely be once the dust clears.It just sounds “cheap” since the bubble overinflated the hell out of everything. There are homes selling in the 400-450k range that are almost passable in my opinion. Once they hit 350k, and if I actually entertain the idea of staying here, I might consider biting then. Otherwise, there’s zero reason to buy since the sales and prices are still falling dramatically.

  98. Renter4 Says:

    Of all the areas I’ve lived in ,I’ve never witnessed so many people who view their homes more heavily as an investment rather than a convenient asset. That makes me strongly believe that more people here count on their homes for retirement more than actual retirement plans.

    The Charles Schwab investment company actually had that on their billboards a couple years ago.

    “‘My House Is Worth A Million Dollars,’ is not a retirement plan.”

  99. nomadic Says:

    stepford (re post 71), you could say I’m in the “sort of RBA” part of Los Gatos. (Not that RBA really means anything, just that I’m not close to downtown.)

    5 sales in my neighborhood since March.
    1 at full selling price (after a price reduction; 3.5 mos on market)
    1 $25k above with 10 DOM
    1 $19k below with 12 DOM
    1 $25k below with 9 DOM
    1 $35k above with 4 DOM

    Price range $1.0M – $1.6M.

  100. bob Says:

    The other phenomenon that I’ve noticed since living here is that people don’t actually stay in the houses they buy for very long. I recall reading some stat that mentioned the avg homeowner in the BA lives in the same house for 5 years or less. Back home, people tended to buy the house they also died in. It was THE house that you planned to live in for decades. Yet I personally know 3-4 people who’ve bought and sold their houses in less than 3 years. What’s the point?

  101. sg Says:

    > The other phenomenon that I’ve noticed since living here is that people don’t actually stay in the houses they buy for very long.

    That is the main reason why ARM is so popular here.
    People take ARM for 5/7 years. And when it resets, they “trade up” to another place.

    The music continued for a while, and started getting louder in the last 3-4 years. It has still been going on in RBA market I suppose.

  102. Stepford Says:

    Bob, do you think that people staying till death in their houses vs moving several times might be generational rather then regional? Our grandparents/maybe parents kept their houses in this area too, but this generation moves around more and doesn’t care if they stay in the same area.
    If you think about it, most of our grandparents didn’t feel the need to do the big remodels we are doing now if the peninsula is any indication. If you walk through an open house recently vacated by an elderly person it looks pretty much the same as it did when they bought it. Maybe even in TN in the less rural areas the younger people are now doing the same thing as you observed here and are moving around not staying in the same house.

  103. anon Says:

    The point is that nobody buys homes with the intent to pay them off anymore. They just want their name on the deed so they can collect free money when they sell it. This is why the actual number that the loan was for became irrelevant. Who cares what the total cost of the house was when if all you have to do is pay 6% interest a month when you could sell it for 15% increase?

  104. steve Says:

    @anon, upthread I mentioned seeing a listing in Redwood City at the 04 sales price. I couldn’t find it, but I did find these:

    668 VISTA Ct
    Price: $1,395,000
    Last Sale: $1,770,000 (08/17/2005)
    DOM: 152. Ouch!

    522 SUNSET Way
    Price: $1,499,000
    Last Sale: $1,515,000 (07/31/2006)

    620 VERA Ave
    Price: $1,188,000
    Last Sale: $1,150,000 (01/06/2005)

    For the record, RWC has never been RBA (except for the slice right next to Menlo CC and a tiny patch near Whipple and Edgewood that contain some very old homes). location, location, location…

  105. steve Says:

    bob writes:

    I recall reading some stat that mentioned the avg homeowner in the BA lives in the same house for 5 years or less.

    I could believe this, and I would subscribe to the generational theory. But, this is yet another way the RBA is different:

    houses in palo alto: 26,155 (according to city data)
    sales in the past 12 months: 874 (zillow)

    houses in los altos: 10,730
    sales in the past 12 months: 475

    houses in atherton: 2,505
    sales in the past 12 months: 80

  106. bob Says:

    It might very well be a generational thing, like so many other things. I’d attribute it to the availability and economy of the job market. I’m a young fellah- 31 years old, and I’m already a grizzled veteran with six jobs under the belt. Just the nature of the biz these days. So if the average person only stays with jobs for say- 1-2 years each, then that also means you’re very likely going to be moving to another area/state/city within your lifetime.

    This same house trading thing sort of happens where my parents live too. My folks are one of the few people in their Sunday School class who don’t have a mortgage payment simply because everyone else keeps on moving and moving. Some of these people are in their late 50’s and recently bought another larger, better, fancier house in some other look-alike subdivision. Sort of like cars. My Grandad used to “re-paint” his truck with house paint every 10 years. People don’t even keep cars 10 years anymore, and the usually lease them anyway.

    Guess I’m old-fashioned. I plan on finding a place I like, buy it, fix it up, and if it needs another room, I’ll add one. Basically, I plan on staying put. Hell- I’ve probably rented the house I live in for longer than half the people around me have “owned”. I swear most of the houses for sale this year were bought just last year.

  107. RealEstater Says:

    Steve is right. Some houses in Palo Alto are passed down from generation to generation. I see very few turnover around me, and low inventory has been the norm for as long as I can remember.

    Once people reach the destination neighborhoods, there’s just nowhere better to go.

  108. RealEstater Says:

    BTW, immigrant money from Asia is definitely coming to the RBA by the truckloads. Cupertino/Sunnyvale has been experiencing that for at least a decade now. Same thing is happening in Palo Alto/Los Altos now. A Chinese family (not Asian-American, but Chinese) just moved in to a nearby $2M home.

  109. bob Says:

    RE,
    you know what your responses remind me of? Do you remember those old Carnival Cruise Line ads where Kathy Lee Gifford would sing, throw her arms in the air, and say how “Great the food was” and on and on?

    That’s what you sound like when you continuously go on and on and on about the RBA, and how there’s no better choice, and blah blah blah blah….

    I can think of about 100 better places to live than Palo Alto, Sunnyvale, or any other BA city. So just like Carnival Cruise ships, you can make a claim that “It’s great here”, but many will see it for what it is and think otherwise.

  110. bob Says:

    And one more thing- Pretending you’re not a real estate agent and coming here to blow rose colored smoke out of your rear about how flawless and wonderful overpriced Real estate is in some lame attempt to perhaps make some of us with half a brain change our minds is not working. Anyhow- off you go to your open houses tomorrow. Good luck!

  111. RealEstater Says:

    Bob,

    It’s long been established here that I never pretend anything. When I say something, it always turns out to be true. Doubters have been shot down in flame again and again. That market condition I’m conveying is absolutely true, as can be attested by anyone who’s been out shopping. If I tell you any differently, I’d be lying.

    If I were doing the Carnival Cruise thing, I’d be saying that it’s a piece of cake to buy in Palo Alto now. Come take a look. Work with me. Sellers are giving discounts and treating buyers to Disneyland!

  112. sg Says:

    > Doubters have been shot down in flame again and again

    All I can say is “LOL!”

    RE, please keep the entertainment going. You are equivalent to Bush on comedy central.

  113. nomadic Says:

    Bob – are you planning to retire to TN or go much sooner? I’m wondering because your post made me think of a software guy I know who’s around 40 and was so tired of changing jobs and having to move because of that, that he quit the field and bought a pizza place. Just so he could put down some roots and stop moving around.

    Given your job volatility do you think it’s realistic to buy a place in the next ten years and stay put? Particularly in a place that doesn’t have a concentration of tech jobs?

  114. madhaus Says:

    Hoo-boy, lots of comments to cover. Let’s see how many I can get into one message.

    First of all, this house was already featured in burbed back in April ’08! And back then it was listed for $299K! Another $50K in instant equity in just 4 months!

    As to the economy, I am seeing empty storefronts all over, not abandoned stripmalls, but they are not all filled either. When I go shopping, there are not a lot of other customers these days. Even Guitar Center isn’t as loud as usual (I just bought a new Strat, woo-hoo, doing my best to keep the US economy going, and since I said it’s made in the US you have an idea how much it cost). Let’s just say when I shop I am not having having to wait for service very long.

    nomadic sez: I have three houses within a couple of blocks that are undergoing major renovation but I still wouldn’t say things are booming. Houses priced aggressively (low) have sold in 7-10 days, others with more optimistic (higher) prices are sitting a few months. Pretty good but not great.

    n’s in Los Gatos, but I am seeing that in SW Sunnyvale too. Places priced a little low sell quickly, places priced too high sit for months. And the correct price has moved a bit down. I had earlier said I thought 1353 Flicker was overpriced, didn’t I? Well, it’s still for sale. I also told the agent that this place was overpriced and she insisted it wasn’t, and furthermore that my house was worth $200K more than I thought it was. Well, look here, it’s still rotting on the market vine. Originally listed for $1.48m (what a joke), now they lower the price every few weeks. 2 new properties came up this week in 94087/Homestead, both for $1.28 or so. The one on Kennewick, MLS 80826276, is a court off a busy street, the one on Klamath, MLS 80826194, is smaller but quieter street. Looking at the pictures I’d go with Kennewick to sell first. Both homes are B&Ks which sell for a premium, construction quality is better than other 1950s homes. I think they’re priced a little high but could go $1.2-1.25m. (I’m not making links so I don’t get moderated out.)

    Hey RE, all this talk from you, why don’t you tell us about stuff for sale in your part of the RBA? I think this is about the 8th time I’ve asked but you still don’t say anything specific. Now why is that?

    Oh this is cute, bob thinks Alameda is comparable to Palo Alto. No, bob, you’re wrong. PA compares to Piedmont, or Bekeley hills, or Montclaire. NOT Alameda. Alameda compares to San Carlos. Face it, the town’s raison d’etre was housing for the Naval Yard and shipbuilding. A mite different than a world-class university town.

    Home appreciation: I bought 15 years ago for over $300K. Comps tell me my place is worth about $1.1m, maybe a little less (because I sense prices are softening). That’s an 8.20% annual appreciation. I’m sure people in Palo Alto did much better than we did because we could afford 94306 then. (Well, we could afford it now too, but we’d have to throw more money in as well as sell this place.) But we were lucky, we bought at the end of a bubble during the quiet time. Needless to say, this is a great return for real estate and it is NOT 10%.

    anon sez: The point is that nobody buys homes with the intent to pay them off anymore. They just want their name on the deed so they can collect free money when they sell it. This is why the actual number that the loan was for became irrelevant. Who cares what the total cost of the house was when if all you have to do is pay 6% interest a month when you could sell it for 15% increase?

    Not completely true, we’re paying this place off as fast as we can. It will be all paid off in less than 6 years. Right now we own 90% of it.

    bob, I don’t think RE is a broker, but could be CAR or NAR twit. I’m also laughing that you’re already looking at properties to buy when you hate it here so much. If you hate it, would just please shut up and leave already? Since you don’t shut up, and you don’t leave, it’s pretty clear you’re staying, and you probably like the East Bay because you just hate us upper-class twits who live in the RBA. I really think you’d have been happier in Jollye Olde England nurturing your Working Class plaint.

  115. anon Says:

    “Not completely true, we’re paying this place off as fast as we can. It will be all paid off in less than 6 years. Right now we own 90% of it.”

    Perhaps, but how long have you been in your current home? The people who had this attitude are the ones who are really hurting now, and it doesn’t appear as though you are one of them.

  116. Pralay Says:

    When I say something, it always turns out to be true. Doubters have been shot down in flame again and again.
    ———

    RealEstater,
    Does anybody else think so? :)

    Post #54 in this thread. You would be true only if you kick out CUSD from RBA or redefine “short order”.

  117. DreamT Says:

    anon – no doubt you aptly described more than a few serial refinancers out there, but I’d caution against assuming this was always the case. I refinanced our condo twice within three years, because at the time the interest rates were doing down so quickly (and the original loan was so bad) that it just made sense and we’d recover the refinancing cost within months. We never took out a cent from our HELOC. Same thing has happened with our second mortgage since we bought our house, and again the purpose was purely to get a better rate, with not a cent cashed out.
    Now I’ll venture I’m part of a majority in the bay area. I know you see it the other way around.

  118. Lionel Says:

    “Same thing is happening in Palo Alto/Los Altos now. A Chinese family (not Asian-American, but Chinese) just moved in to a nearby $2M home.”

    A whole family? Wow. That is quite a trend.

  119. Prof. Bleen Says:

    Sorry, I’m a bit late with this, but:

    RealEstater wrote in #5:
    More signs of bottom:

    NEW YORK (AP) — Stocks have pared their losses following a report that pending U.S. home sales rose in June, rather than declining as expected.
    The National Association of Realtors says its seasonally adjusted index of pending sales for existing homes rose 5.3 percent to 89 from 84.5 for May. The reading for May was revised downward in this latest report.

    And then in #15:

    Don’t be distracted by aggregate data.

    Again, don’t look at useless aggregate data.

    Pot, kettle, black?

  120. RealEstater Says:

    Prof Bleen,

    You get a F. The question you raised was already covered by post #26.

  121. madhaus Says:

    anon, replying to me:

    “Not completely true, we’re paying this place off as fast as we can. It will be all paid off in less than 6 years. Right now we own 90% of it.”

    Perhaps, but how long have you been in your current home? The people who had this attitude are the ones who are really hurting now, and it doesn’t appear as though you are one of them.

    Um, anon, you REALLY have to do something about that reading comprehension thing. Look, in the same post you were replying to:

    Home appreciation: I bought 15 years ago for over $300K.

    This is the lede in the graf right before the one you clipped to reply to. And like DreamT, we refi’d a few times for the same reason: rates were going down, terms kept improving, and each time we paid the total loan down more and more, while shortening the term. I would not say this was majority behavior, but I wonder how many Bay Areans drank the ATM Kool-Aid we see on Irvinehousingblog.

    Mr. Mortgage said in a recent (this week) post that 65% of all Alt-A loans are POA – Pay Option Arm. How likely do you think it is that ALL of them are down south? Especially with the new July foreclosure data out. Big spike up for our fair state.

    I haven’t had any more luck in finding LTV data by zip code.


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