September 21, 2008

Bay Area home sales sluggish, prices continue to slip

Bay Area home sales sluggish, prices continue to slip
PDT SAN FRANCISCO — Bay Area home sales stagnated in August as the median price continued to drop under the weight of bargain-priced foreclosures, according to a real estate report released Thursday.

In the nine-county region, a total of 7,232 new and resale homes and condos changed hands in August, according to MDA DataQuick of San Diego. That was down 0.9 percent from last August, and down 4.7 percent from the prior month. It was the slowest August since 1992.

A total of 36.1 percent of all resold homes had been foreclosed upon in the past 12 months, compared to 4.4 percent a year ago, MDA DataQuick said.

The median price dropped 31.8 percent to $447,000, compared to $655,000 a year ago. It now stands at the lowest point since January 2004 when it was $440,000.

Sounds gloomy until you realize that this is about the Bay Area – not the Real Bay Area. Proof:

As has consistently been the case, counties with the most foreclosures saw the most sales activity and the biggest drops in prices. Contra Costa County sales rose 35.5 percent, to 1,733 compared to 1,279 last August. The median price plunged 42.1 percent to $330,000 from $570,000 a year ago. More than half – 54.4 percent – of Contra Costa resale homes were foreclosures, MDA DataQuick said.

Contra Costa? East Bay? Seriously! That’s totally flyover country. Might as well be Ohio or Detroit.

Typical Main Street Media (MSM) reporting.

Comments (92) -- Posted by: burbed @ 5:28 am

92 Responses to “Bay Area home sales sluggish, prices continue to slip”

  1. Prof. Bleen Says:

    RealEstater will be quick to confirm your point (but not as quick as me! Ha!), these are aggregate data, and thus say nothing about the Real Bay Area. If the statistics aren’t broken down block by block, I’m not buying it (so to speak).

    Note that the median Contra Costa sale was a foreclosure. Several months ago, the median sale price in Cleveland, Ohio proper (not including suburbs incorporated under different city names) was a mere $11,000 (not $110K, but $11K) for the same reason.

  2. Prof. Bleen Says:

    Oops—meant to say above, “Note that some foreclosures for Contra Costa had to be above the median.” At first, I assumed, probably incorrectly, that the bottom 50% were all foreclosures.

  3. DreamT Says:

    Sluggish? Well I can’t believe how sluggish this website is during weekends.
    Workdays – the backbone of burbed’s success!

  4. RealEstater Says:

    A key different between the Bay Area and the Real Bay Area is that the Real Bay Area can sustain sluggish sales without changes in price. Sellers in the RBA simply stay put if they can’t get the price they want out of the house. Sellers know that economic conditions are temporary, but the supply constrained nature of the RBA is permanent. It’s a matter of time before buyers get more desparate.

  5. madhaus Says:

    RE is referring to sticky pricing above. The problem with sticky pricing is that sellers are stuck. If they have to move, they will lower the price or no sale.

    The really funny thing is that a lot of people just like RE posted permabull comments like these in Irvine back in 2005 and 2006. Those sorts don’t post to IHR anymore. In a couple of years, RE won’t be posting here either.

  6. nomadic Says:

    This time, RE is correct. If the areas with a high number of foreclosures are seeing increases in sales volume but there is an overall decrease for the bay area, then sales rates in the RBA must really suck.

    Prices are sticky. But that can only last so long before people cannot wait to move any longer and drop their prices. It’s simply a question of how many households that is versus the demand to absorb them. Y’all better hope employment remains as strong as it’s been. A hiccup that sends people out of the area could be disastrous. Then there’s the boogeyman of Alt-A that may or may not exist.

  7. RealEstater Says:

    >>Prices are sticky. But that can only last so long before people cannot wait to move any longer and drop their prices.

    This sort of logic doesn’t apply to RBA, because RBA is a destination place. There isn’t a compelling reason to move without a financial incentive. People such as Madhaus would like to move if there’s an opportunity to move up. If they can’t move up, they’re not desparate to sell their houses.

  8. RealEstater Says:

    >>The really funny thing is that a lot of people just like RE posted permabull comments like these in Irvine back in 2005 and 2006.

    Those people are stupid. RBA is certainly not Irvine. Irvine has a vast amount of land without an industrial base like BA has.

  9. anon Says:

    You said your response with such conviction that I almost believed you.

  10. madhaus Says:

    He’d believe you more if you said it while sitting in your Ferrari.

  11. anon Says:

    Too bad it’s gone. I do have suit and cane, however.

  12. DreamT Says:

    “In a couple of years, RE won’t be posting here either.”
    That still gives us two years to enjoy his trolls. Not a bad deal at all.

  13. RealEstater Says:

    To paraphrase Mark Taiwan, RE’s predicted demise is greatly exaggerated!

  14. RealEstater Says:

    Mark Twain…

  15. RealEstater Says:

    I applaud these PA homeowners fighting new condos to be built:

    http://www.paloaltoonline.com/weekly/story.php?story_id=9469

    Enough is enough.

  16. DreamT Says:

    Well while a Google search on “Mark Taiwan” does yield 9,180 results, a search on “predicted demise is greatly exaggerated” yields exactly 0 results. Maybe this was just a deeply obscure paraphrase.

  17. RealEstater Says:

    DreamT,

    As we all know, you never make any mistakes with the English language. Your Google skill proves it.

  18. DreamT Says:

    That does not exactly clarify where the quote came from… :)

  19. DreamT Says:

    Google skill, as in “Please hire me, I am talented in Google?” :)

  20. RealEstater Says:

    Let’s all have a celebration when DreamT will be hired :-)

  21. DreamT Says:

    You bet! If that happens at all.

  22. anon Says:

    wow, RE said something mildly clever.

    Mark twain said that “the reports of my death are greatly exaggerated” when his obituary was inadvertently printed.

  23. anon Says:

    Yes, I say we go to Dynasty.

  24. DreamT Says:

    I hope nobody’s wishing for RealEstater’s death. It seems to have been misconstrued so by the victim.

  25. DreamT Says:

    I’m not too fond of Chinese food, being nowhere as sophisticated as RealEstater. But heck why not.

  26. RealEstater Says:

    DreamT,

    As with anything, be open minded. You’ve probably never had Chinese food, without realizing it.

  27. DreamT Says:

    RealEstater – You’re no doubt right, considering your extensive experience with and intimate knowledge of French cuisine.

  28. anon Says:

    When you’re not open minded, you can fail to draw obvious conclusions.

  29. RealEstater Says:

    anon,

    #20 is more clever. If you don’t see it, check for the answer here:

    http://www.burbed.com/2008/09/15/finally-a-real-bay-area-house-in-burlingame-commuters-dream/#comment-26500

  30. DreamT Says:

    Actually Herve was clever. You’re merely a spoof on this one.

  31. anon Says:

    No, I’m pretty certain #13 is the one semi-clever thing you have been allocated for this year.

  32. steve Says:

    some pricing news from the field: 2250 amherst in palo alto, mentioned here in the comments of a previous thread. 2377 sq ft and a very odd layout – one very large bedroom, one small one and one too small even for a daybed or a closet. 2 levels with a basement workshop and a garage. funky, interesting, but bad for families unless you sink $250K in it to fix the floor plan. it photographed well, but check the kitchen, the acoustic tile ceilings in many of the rooms, the lack of a master bath, the 6000 sq ft lot.

    anyway, listed at $1.495M, open 1 weekend, sold with 6 offers for more than $1.7M.

  33. nomadic Says:

    Wow, Steve, thanks for that update! After the discussion here I went back to look at those pics again and realized how ridiculous that kitchen was. Still, I guess it’s a fair price given the location and square footage. I’m no longer surprised by the horrible floorplans people will accept for the extra space in the Bay Area.

  34. bob Says:

    I think the tech funny money gravy train is possibly in for derailment. I was listening to NPR on Friday and there was a news report which mentioned that with the collapse of the financial industry, tech startups were starting to have difficulty obtaining cash. The situation also has investors in such companies spooked. The number of startups this year over last year is dramatically lower.

    The RBA up until now has had some luck since the tech industry wasn’t as affected by the crash in RE. But if tech also falls, then that’s it for the RBA and prices will decline more rapidly.

    Of course the tidy 700 billion bailout plan could “save the day”… that is unless the inevitability that flooding the market with artificial cash causes rampant inflation.

  35. nomadic Says:

    RE said: This sort of logic doesn’t apply to RBA, because RBA is a destination place. There isn’t a compelling reason to move without a financial incentive. People such as Madhaus would like to move if there’s an opportunity to move up. If they can’t move up, they’re not desparate to sell their houses.

    RE, you’re starting to make the Bay Area sound like somewhere out of horror novel where no one can leave. While you may have sold your soul to the area, there are job opportunities elsewhere, people retire, others die and some just decide to move for a slower pace of life. Not to mention, some people lose their jobs and move on.

    Next you’re going to say that not only is there an “RBA” but a special type of person who can only exist here. If they sell they aren’t a “real” RBA-er. Hell, in my tiny office we had one person sell her Los Altos destination home to move back to the East coast to live near family. (They had two young children that I imagine they wanted to raise with more family around.)

  36. Herve Says:

    > Actually Herve was clever. You’re merely a spoof on this one.

    Render to Caesar the things that are Caesar’s. Matthew 22:21.

  37. Real Estater Says:

    Bob says,

    >>The RBA up until now has had some luck since the tech industry wasn’t as affected by the crash in RE.

    Wow, is that your concession speech?

    >>But if tech also falls, then that’s it for the RBA and prices will decline more rapidly.

    So do you think NYC is having fire sale right now? I’ve been eyeing an upper east side apartment for a while now.

  38. Herve Says:

    > No, I’m pretty certain #13 is the one semi-clever thing you have been allocated for this year.

    Don’t overestimate RealEstater. He was merely paraphrasing Steve Jobs ;-)

  39. Real Estater Says:

    Nomadic says,
    >>While you may have sold your soul to the area, there are job opportunities elsewhere, people retire, others die and some just decide to move for a slower pace of life.
    >>Hell, in my tiny office we had one person sell her Los Altos destination home to move back to the East coast to live near family.

    I don’t deny that people move for various reasons. However, if the conditions aren’t quite right, your friend wouldn’t exactly feel trapped in Los Altos. They’d simply stay put for a while or rent the place out for more than their mortgage payment.

    The number of people who wish to live in a place like Los Altos far exceed the number that wants to leave. RBA is the easiest place to leave, and hardest place to enter. Post #32 gives you some idea. It’s not just in PA or LA either. I visited some open houses in 94087 over the weekend, and witnessed the feeding frenzy first hand. It will take a lot for all these potential buyers to disappear.

  40. Real Estater Says:

    Herve,

    Are you sure it wasn’t Chuck Norris?

  41. nomadic Says:

    I propose a new definition for RBA: “any house in the SF Bay Area which sells in less than 10 days with multiple offers.”

    The drawback – you don’t know if your house is “RBA” until you try to sell. And it can be manipulated based on where you set your asking price… hmm, which I guess could technically make houses sold at auction RBA! ;-)

  42. bob Says:

    RE,
    No speech. All the trouble on Wall Street is starting to affect Silicon Valley. I have no doubt that there’s a lot of rich people here. But if the job losses and industries affected move from construction and RE to tech, then that will more likely than not create problems for the small scraps of the BA that has yet to have significant falls in pricing. Rich people or not, jobs that enable the salaries that can afford million dollar starter homes are the key to housing prices going up or down.

    Now I’m not exactly sure what the government has in mind with this bailout. Up until now I’ve sort of figured the fall was a good thing; to shake things up and return the country to more healthy growth patterns in which money would flow since families could once again afford to buy homes. But after seeing the kind of bailout money being discussed- 3/4 of a trillion, which by the way we don’t even have that amount in the treasury to start with, I see this as being way more potentially devastating than simply having a housing market implode. Buying houses will be the last thing on most people’s minds if the bailout doesn’t work. The truth is that the US economy was on the verge of being phucked in a big way. It could still be.

    I’ll say that putting myself into an asset(house) that has more chance to dramatically fall in value versus being more flexible at this time by renting is something I don’t care to do.

    And yes- people move sometimes for a change of scene or a different pace of life.Even for the weather. We had a family friend who had a son that lived in the BA for 30 years. He taught school, had a condo, and when he retired, sold the condo, bought a farm in TN and remarked about how nice it was to see rain in the summer.

  43. Real Estater Says:

    >>But if the job losses and industries affected move from construction and RE to tech, then that will more likely than not create problems for the small scraps of the BA that has yet to have significant falls in pricing.

    This is what you keep doing: Making extrapolations of what might happen, imagining things, or making up random hypothesis. You might as well say your car may get squashed by a semi so don’t buy a house, since it’ll get foreclosed upon after you die.

  44. zanon Says:

    RE: You have a point. As we can see from Steve, PA is still alive and kicking.

    -zanon

  45. madhaus Says:

    I propose a new definition for RBA: “any house in the SF Bay Area which sells in less than 10 days with multiple offers.”

    The drawback – you don’t know if your house is “RBA” until you try to sell. And it can be manipulated based on where you set your asking price… hmm, which I guess could technically make houses sold at auction RBA!

    nomadic, yeah, so to prevent cut-throat under-market pricing to jigger a quick sale, your definition needs a little refinement. I propose:

    A house is in the RBA if:
    – It is in the Bay Area
    – The median price for the zip code has not declined more than 5% in the last 12 months (that knocks most of them out of contention)
    – Open houses in the immediate (1/4 mi or less) area attract more than 25 families per day (see “feeding frenzy”)
    – A house on the same block sold in less than 10 days with multiple offers, and was not priced more than 5% below comps within 1/4 mile
    – It is not on a busy street or near an intersection with one
    – It is not in front of a bus stop
    – It is not an undersized lot compared to the neighborhood
    – It is not near (less than 1/2 mile) a noise source such as an airport, train station, or freeway
    – There are no heavy transmission lines within 1/4 mile
    – It has not been written up on burbed
    – It is not so overstated as to become laughable, e.g. touted by Chuck Norris

    What did I leave out?

  46. Knicks Fan Says:

    You can’t spell Manhattan, but you want an UES apartment? You’ve got to be kidding me. You wouldn’t last a day in Manhattan you’re so soft.

  47. bob Says:

    RE,
    You can believe what you want. The fact is that capital is more difficult to get, which is vital if you’re running an IT company. Many investment groups who fund tech companies get their money from companies like Lehman Brothers or Bear Stearns, which now no longer exist.
    http://www.popularmechanics.com/technology/industry/4284158.html

    Large companies are being affected too. I don’t suppose you missed the big story that HP is laying off 15,000 employees? That’s a biggie.

    So yes- the “unthinkable” could happen. The job market could very easily sour in even the juiciest parts of the BA.I saw what happened the last time it did back when I first moved here in late 2000 when so many people lost their jobs that there was a sea of moving trucks on every block.

    The question is if this happens, then what new sexy technology will sweep in to bolster the bubble here? The truth is that the tech world has changed greatly in just a few short years. It will make less and less sense to cram the majority of it here when the same work can be done virtually anywhere else for far less.

  48. nomadic Says:

    madhaus – you need to add a school API requirement. Or do you suppose that is already built-in to the house’s price? (I think you covered all of Chuck’s objections!)

    bob – next bubble for the area: green technology, green energy… ;-)

  49. RealEstater Says:

    Bob,

    From the Mercury News:

    Seshan Rammohan, executive director of the local chapter of The Indus Entrepreneurs network, isn’t ready to hit the panic button over Wall Street’s heart attack. Far from it.

    TIE Silicon Valley, which mentors South Asian entrepreneurs and helps them turn ideas into companies, might see event sponsorships fall somewhat because of last week’s bank failures, takeovers and other financial fiascoes, but not too much. “I don’t think the drop will be steep,” he said.

    It might take the start-ups that the nonprofit group counsels a bit longer to get funded, but the roiling economic news won’t prevent Silicon Valley venture capitalists from bankrolling a good idea.

    “There might be a little bit of a haircut in the amount of companies that are funded, and the VCs might do a little deeper due diligence before they actually write the check,” Rammohan said.

    “But they will always give money to companies that have sound business plans, great markets and great teams.”

  50. zanon Says:

    Hear hear for greentech being the next bubble.

    I already have my money in place

    -zanon

  51. bob Says:

    RE,
    It doesn’t matter if the next “boom” is greentech,biotech, or the engineering of little ponies that blow smoke out their behinds. Business requires capital to run. No capital= no startup money.

    It goes back to bare bones basics. Anyhow, this is already having an affect on business here. In the meantime, whatever new bubble is supposed to occur has yet to show up yet. In the meantime, expect your home’s price to fall further because since all those slick startups aren’t materializing at as rapid a rate, the supply of fools is dwindling in order to buy those overpriced homes by the day.

    It amazes me that out of what is unquestionably the worst financial situation in the US in well over 70+ years, you still remain to be the ever-optimistic housing permabull. Will you still show up here when your house starts falling dramatically in value or will you make up some other little tidbit of fore site?

  52. Pralay Says:

    Bob,

    From the Mercury News:

    Seshan Rammohan, executive director of the local chapter of The Indus Entrepreneurs network, isn’t ready to hit the panic button over Wall Street’s heart attack. Far from it.
    ———–

    RE,
    I can’t believe you posted this. How could this be? RBA is not affected by economic downturn, right? But this Rammohan is using all pessimistic words

    “I don’t think the drop will be steep,”

    ““There might be a little bit of a haircut in the amount of companies that are funded….”

    Drop? Haircut? What is he talking about? Ok, I get it, I get it. He might be talking about in the context of HP, Mattson, possibly EBay.

    However, there is an assuring word in the end for RBA.

    “But they will always give money to companies that have sound business plans, great markets and great teams.”

    Yes, they will ALWAYS give money, like they have given in past – for sound business plans (whatever that means). Anybody has historical data for VC funding? I bet RealEstater has one which demonstrates that VC funding is not dropping in RBA.

  53. madhaus Says:

    Sound Business Plans are the RBA of the VC Market. Didn’t get funded? You must not have had a Sound Business Plan!

    RICK ROLL REMOVED

  54. anon Says:

    Hey, if you could replicate the prevalence of that video on the internet reliably, that would be a sound business plan indeed.

    “Hear hear for greentech being the next bubble.
    I already have my money in place”

    Hopefully. It’s already nice to see people toning down their raging consumer appetites. How have you positioned yourself for this?

  55. RealEstater Says:

    Pralay,

    Is this a new concept you’re introducing? Businesses being in the RBA vs. those not in RBA?

  56. RealEstater Says:

    Bob,

    Where are you in the evenings? Getting your beauty sleep?

  57. anon Says:

    Hopefully. Guy’s got an awful commute.

  58. nomadic Says:

    Money fled the tech bubble for the real estate bubble. Why not stagger back? That is, now that we’ve gotten wiser… ;-)

    2007 VC investment in the valley was $9.6B.
    Q108: $2.637B
    Q208: $2.995B
    Q308 forecast: $3B

    That run rate is pretty impressive!
    Data source:
    https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=historical
    Be sure to pick our region down at the bottom!

  59. nomadic Says:

    oops, my 2007 total year source doesn’t quite jibe with the linked source. PWC says the total was $10.871B. Still, we’re looking at a $11.456 run rate for this year. A 5.4% YOY increase. As long as the bottom doesn’t fall out with the Wall Street firms distracted.

    I think Kleiner Perkins, Sequoia, et al probably aren’t too consumed by the bailouts, but I don’t know much about the VCs. Opinions?

  60. DreamT Says:

    RealEstater – bob abhors discussions, if you hadn’t noticed. Evenings are too free-flowing to his taste. He’d much soliloquy, as he does during the day.

  61. DreamT Says:

    Correction… He’d much rather soliloquy

  62. Pralay Says:

    Is this a new concept you’re introducing? Businesses being in the RBA vs. those not in RBA?
    ——-

    Damn, I never knew SJ is included in RBA. Last time I checked EBay and Mattson are located in SJ.

  63. DreamT Says:

    Correction: He’d much rather soliloquize. And damn it’s contagious!

  64. RealEstater Says:

    Anyone want to guess which direction the stock market will take tomorrow? My guess is it’ll be either up a lot or down a lot.

  65. anon Says:

    Yes. I, too, think the stock market will change tomorrow.

  66. DreamT Says:

    RealEstater – Are we guessing direction or amplitude? You seem to confuse both.

  67. anon Says:

    Neither. We’re making necessarily true, unhelpful, and irrelevant statements!

    Yep, I’m pretty sure the sun will rise in the morning. If I’m wrong, then I won’t be seein’ ya.

  68. DreamT Says:

    anon – In the latter case, I’ll let you borrow my flashlight.

  69. Palo Alto houses - overbids are still very common [Burbed.com] Says:

    [...] Alto houses – overbids are still very common Bay Area home sales sluggish, prices continue to slip [Burbed.com] steve Says: September 22nd, 2008 at 7:55 [...]

  70. bob Says:

    Here’s an interesting article that’s more recent.JUst two days ago.
    http://www.thestandard.com/news/2008/04/21/silicon-valley-vc-confidence-index-falls-four-year-low

    Some quotes from the Article:

    “Respondents indicated that declining confidence was linked directly to the growing scarcity of exit opportunities for venture-backed firms. Focusing on declining opportunities for liquidity events, Eric Buatois of Sofinnova Ventures communicated that “we continue to see good deal flow with innovative entrepreneurs, but the shutdown of the IPO window will make investors a bit more cautious.” Dan Lankford of Wavepoint Ventures concurred, saying that while he sees a bright long-term future, economic turmoil in the present has created a “challenging exit environment.”

    Declining confidence may impact the valuations that entrepreneurs receive when negotiating the terms of venture investment. To this point, Dag Syrrist of Vision Capital made this calculation:

    “There is significant capital in funds raised over the last several years that needs to be deployed. However, valuations are likely to be reduced, but the investments will be made nonetheless. However, if economic pessimism continues through Q3, it will result in fewer investments made, similar to 2002-03.”

    So this goes back inline with what I was saying earlier. Is there money? Yes. But SV fuels itself from continued and endless optimism ( not unlike some of you housing perma-bulls) and without a high level of confidence, the number of new business falls and investors seek safer bets.

    A news report on the radio today mentioned that if the 700 billion dollar bailout passes, it along with the price tag of the Iraq war to date will mean that as tax payers, we will owe $37,000 each. I can almost guarantee you that inflation will likely be rampant, interest rates will be raised, foreign investors will stay away from US debt, and we will be in for some leaner times. In other words- a recession. Not exactly the best time to be throwing money around.

  71. Herve Says:

    > Yes. I, too, think the stock market will change tomorrow.

    Obviously if you agree with RealEstater you are guaranteed to be right. You are not taking any risk here ;-)

    If a blind man leads a blind man, both will fall into a pit. Matthew 15:14.

  72. madhaus Says:

    >> Yes. I, too, think the stock market will change tomorrow.

    Obviously if you agree with RealEstater you are guaranteed to be right. You are not taking any risk here ;-)

    If a blind man leads a blind man, both will fall into a pit. Matthew 15:14.

    Plus ça change, plus c’est pareil. And something about stopped clocks and blind squirrels.

  73. Pralay Says:

    If a blind man leads a blind man, both will fall into a pit. Matthew 15:14.
    —————-

    But if one of the blind man is Chuck Norris, the price of the pit doubles in 10 years.

  74. madhaus Says:

    And if you lead a donkey to a pit, not only won’t it drink, it will demand a finder’s fee.

  75. RealEstater Says:

    Bob,

    You’re worrying about things that you need not to be worried about. As we speak, there are powerful policy makers making sure everything is going to be alright. There are also powerful scavengers that will inject new life into the system. For example Berkshire Hathaway just announced they are buying a $5 billion dollar stake in Goldman Sachs. What you should be thinking about is how you can capitalize on the current environment for your personal finances. For example, how you can take advantage of the current low interest rate and affordable home prices in many parts of the Bay Area.

  76. DreamT Says:

    RealEstater – How could he be thinking about that? They don’t broach that topic on his morning news radio, and we know verbatim what they discuss.

  77. nomadic Says:

    Yeah, bob, look at these FANTASTIC jumbo rates from Wells Fargo:

    Jumbo Loans – Amounts that exceed conforming loan limits
    30-Year Fixed 9.000% 9.176%
    15-Year Fixed 8.250% 8.512%
    10-Year ARM 8.625% 7.913%
    5-Year ARM 7.500% 6.606%

    Oh, that’s right, RealEstater says rich people don’t get jumbo loans…

  78. madhaus Says:

    Must be poor people getting foreclosed on, then.

    The Finest Foreclosures
    The housing crisis is spreading to many luxury neighborhoods, as mansion-size defaults stun the industry. Robert Frank on who’s suffering, what places have been hit hardest — and who could be next.

    Perched on the edge of Silicon Valley, the tony suburb of Los Gatos, Calif., is lined with mansions and is home to tech entrepreneurs, venture capitalists and software tycoons. It’s also home to a foreclosure: a 3,000-square-foot, four-bedroom home on Loma Vista Avenue whose buyer stopped making mortgage payments before he could finish a major renovation.

    The house was purchased in 2005 for $815,000. After assuming ownership the home’s lender finished the renovation, which includes Brazilian-wood floors, vaulted cathedral ceilings and high-end Electrolux appliances. The home is now on the market for $1.6588 million.

    “This is not a neighborhood where you hear the word ‘foreclosure,’ ” says real-estate agent David Mortaz. He and the bank declined to identify the buyer.

  79. nomadic Says:

    OH NO YOU DIDN’T! Picking on my ‘hood?! (Or general vicinity…) ;-) We don’t have foreclosures here. We have “clearance sales.”

    Here’s another one for you. Got a letter in the mail yesterday extolling the virtues of this bargain and its $350k of instant equity. It was appraised at $2.2M in March ’08. It is one block over from Loma Vista. Not a foreclosure (srsly), but new construction that a builder is selling.

    http://www.15710lindaavenue.com

  80. nomadic Says:

    (Oh, school lady – they’re both in Campbell Union school district.)

  81. nomadic Says:

    (Now I’m rambling to myself…)
    OMG – did you see the slideshow in that article? Hilarious (in a tragic way). They show all of these palatial homes at those high prices… then you see the picture of the one on Loma Vista. It has ZERO curb appeal. That’s the nicest way I can say it.

    They have “burbed” humor, unintentionally.

  82. anon Says:

    Yep…the foreclosures are working their way up the price ladder. The first few will be dismissed as anomalies. We’ll watch as they become increasingly common.

    This whole thing makes me wonder: where are they face booglers!? Greedy bastards not propping up the market!

  83. anon Says:

    “Obviously if you agree with RealEstater you are guaranteed to be right. You are not taking any risk here ;-)

    If a blind man leads a blind man, both will fall into a pit. Matthew 15:14.”

    Ah, Herve, what makes you think that RE is blind? Is that how he avoids getting Rick Rolled?

    I’d just like to point out that the market did, in fact, change today. Yesterday, Both RE and I said it would change. We were both correct. From the fact that my prediction was correct, I believe it is fair to extrapolating that every thing that I have ever said must be correct.

    This is, after all, the type of thinking that gets one into a destination home, after all – isn’t it ?

    One last un-sarcastic point I’d like to make. The overall market change overall today was significantly less than yesterday. What can we take from this situation? Well, even in making a completely garbage statement (it’ll go up a lot or down a lot), RE still finds a way to be wrong.

  84. RealEstater Says:

    nomadic,

    Typically people check Bankrate.com for the average mortgage rates. Try again.

  85. R Says:

    I know of a 2m+ house in Saratoga and 1.5m house in Burlingame that have fallen into foreclosure this week. Things are going to get real interesting.

  86. nomadic Says:

    Shucks RE, you don’t want me to have ANY fun!

    Actually if I want to see “happy” mortage rates, I look at ING. They only offer 5- and 7-year ARMs but they are suitable for a nomad like me. AND they offer the same rate for any balance over $500k. None of that ugly jumbo stuff for me. ;-)

  87. Herve Says:

    > Is that how he avoids getting Rick Rolled?

    Actually I think RealEstater rickrolls his house every morning:

    Never gonna give you up,
    Never gonna let you down,
    Never gonna run around and desert you.
    Never gonna make you cry,
    Never gonna say goodbye,
    Never gonna tell a lie and hurt you.

  88. Herve Says:

    Tough times for businesses too:

    http://www.paloaltoonline.com/news/show_story.php?id=9380

    http://www.paloaltoonline.com/news/show_story.php?id=9390

  89. R Says:

    I have seen so many commercial establishments, from restaraunts to furniture stores, falling behind in rents and closing shop it is not even funny. And its only getting worse.

  90. madhaus Says:

    Hmmmm. There’s a comment on the second PA Online article from one zanon, a resident of Esther Park. Is that the zanon who posts on burbed?

    I remember all the stores closing in the early 1990s, and again in 2001. Get ready for more.

  91. nomadic Says:

    Update on the house referred to in #76 above. Apparently the bank finished the remodeling. It’s still for sale – listed in December.

    http://www.redfin.com/CA/Los-Gatos/LOMA-VISTA-Ave-95032/home/18357139

    An un-RBA cost of $417/sf. Hey, if MV Bound likes this one, it’s in his price range! (I’d still recommend renting for a year first.)

  92. Herve Says:

    nomadic, lot size is 3,087 sq ft. I know lot size is only important in the Palo Alto market, but still…


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