The bottom has been reached in San Jose’s housing market! Unreal!
Welcome to Day 1 of San Jose week here at Burbed! Let’s look at our first entry:
2022 Huran Dr, San Jose, CA 95122 Alum Rock MLS# 80785678 - Property Details
$249,900
* Status: Active
* Bedroom: 3
* Bathroom: 1
* Year Built: 1960
* Lot Size: 5670
* Square Footage: 912
* List Date: 3/17/2008* Garage Spaces: 2
A single family home for this price!! Unreal! Ideal home for first time buyer * Large back yard * convenient location * A little TLC will go so far * Check out this price * Why buy a condo when you can buy a single family home at this price * Hurry don’t wait.
Seriously! A 3 bedroom, 1 bathroom house for just $249,000? This is completely unreal! And it’s in a very, very, very convenient location.
What’s even more unreal is the instant equity you’ll gain when you buy this fine piece of real estate! Let’s look at what the Big Z has to say:
ZESTIMATE®: $363,000
Sold 09/12/2007: $515,056
OMG OMG OMG!
$256k+ of instant equity can be yours!
What’s stopping you now? Oh I see - you have to get married so you can get that additional $6k of profit tax free! Alright… but after that, it’s straight to this house, got it?
September 22nd, 2008 at 10:20 am
Frist?
OMG is right, this house is selling for less than the instant equity you could get when you sign on the dotted line. Which means we’re soon heading for Detroit pricing, where they’ll pay you to own it!
Oh wait, I think I made a math error somewhere.
September 22nd, 2008 at 4:57 pm
Yea, and you can rent your driveway to Reid-Hillview in case they need it for emergency landings!
September 22nd, 2008 at 8:01 pm
Unreal. Unreal, indeed.
I really like this ad. It’s special in that the description is essentially devoid of information. Take a look:
* A single family home for this price!! Unreal!
* Ideal home for first time buyer
* Large back yard
* convenient location
* A little TLC will go so far
* Check out this price
* Why buy a condo when you can buy a single family home at this price
* Hurry don’t wait.
Oh, wait I’m sorry. It says the backyard is large. Yep, looks like they covered their bases. It almost appears as though they are stealing burb’s homepage catch phrases. Are they just cut and pasting here?
Far. So far, will your TLC will go if you purchase this home. Far, far away. Farther than the farthest thing that you could ever know - which is now near, in comparison to how far…your TLC will go.
one more thing..rickrolling and calling first, eh? Has someone taken up WOW?
September 22nd, 2008 at 8:55 pm
These houses in East San Jose (and this is, in the worst part of ESJ) sold for about 70K all through the 90s. Its a bit of apples and oranges because the housing bubble caused a lot of places to get upgraded and improved, and that can add up to another 70K easily but ignoring that, these houses are worth very little. The only thing that is even remotely appealing about this is the rental market means you could probably buy this and be cash flow positive. But the kind of renters you get in ESJ can easily damage a place to the tune of $5K/mo, so it isn’t worth it.
September 22nd, 2008 at 9:04 pm
Sounds like running a rental there is like running a jail!
September 22nd, 2008 at 9:28 pm
#3 anon - is WOW World of Warcraft? Never touch the stuff.
September 22nd, 2008 at 11:17 pm
Mark this day on your calendar. THE BOTTOM HAS BEEN REACHED.
WillowGlenner,
You’re right on the money again. Nobody but illegals and S-8 Asians would rent in a place like this one, but at least it makes them feel good that they are within 20 mins of the RBA.
September 22nd, 2008 at 11:35 pm
S-8?
September 23rd, 2008 at 9:30 am
S-8 = Section 8. Jeez, burbed, how can you run a real estate board and not know about that little wrinkle? It’s welfare rent subsidies.
September 23rd, 2008 at 10:05 am
Didn’t know it was kewl to shorthand that. Plus, Section 8 isn’t something that is discussed in proper circles like the Real Bay Area.
September 23rd, 2008 at 10:23 am
Didn’t know it was kewl to shorthand that. Plus, Section 8 isn’t something that is discussed in proper circles like the Real Bay Area.
says the slumming sysadmin as he posted yet another East San Jose featured property. Even when those places were tripling in value, they were never, never, never in the RBA.
September 23rd, 2008 at 2:13 pm
PermaBear’s comment seems offensive to Asians. This area has both Vietnamese and Mexican.
Actually the rental market is going pretty crazy, this area on craig’s list is asking not that far from RBA rents, which is totally ridiculous. Who the heck is going to pay $1200 for a 1/1 in this neighborhood while $1400 they can get Mountain View? Some are asking $2000+ for 2 to 3 bedroom.
September 23rd, 2008 at 2:38 pm
Desperate people trying to weather the storm. The same people who made the awful decision to buy these trash homes at over inflated values also think that they are entitled to charge a higher rent because of their bad decision.
Too bad it will be more than 20 years before these shit boxes are worth half a mil again.
Sorry, I can’t rent it to you for market value - it won’t cover my costs. I’ve literally had a potential landlord tell me that. Too bad the market determines what he can get. This person ended up renting for $200 less per month than I was offering them and went 3 months with no tenant. Now that’s someone who is smart with money.
I think end of 2009 will be a good time to leave the bay area. As to where to go…I think I’ll be following the wind.
September 23rd, 2008 at 3:58 pm
I think end of 2009 will be a good time to leave the bay area. As to where to go…I think I’ll be following the wind.
Or sooner, depending on how well/bad the bailout thingy goes. Paulson was warning today that unless it is passed like NOW, the US economy will essentially lock up completely. I think he’s being a bit extreme with that statement, but its not half wrong either. Its damned if we do, damned if we don’t. There will be pain regardless of what happens. Yes- even in the good ole’ Bay Area. A lot of people are going to find that their expensive mortgages are going to feel more like a giant albatross around their necks. No way to sell it, nobody to sell it to either.
September 23rd, 2008 at 10:27 pm
Why am I not surprised that bob is believing Paulsen’s sky-is-falling FEAR FEAR TERROR FEAR rhetoric?
Hey bob, you wanna know why Paulsen wants that bill passed right away? Like $700 billion is going to fix the problem of $62 trillion, yes, trillion owed in the credit default swap market? Because of this lovely little Section 8 easter egg:
Oh yes, let’s have Congress pass this pronto!
September 23rd, 2008 at 10:53 pm
bob - The albatross reference is from Coleridge. He’s less famous than Paulson nowadays but still, if you’re going to quote one of your sources, why not the other?
“Use the Force” (Alec Guinness, 1977 - hasn’t made the Bible just yet)
September 23rd, 2008 at 11:06 pm
Bob,
If the US economy locks up, all of you guys who have put your money in stocks instead of real estate are going to be routed big time. No matter how you diversify your portfolio, you will still lose money. The fact of the matter is that the stocks market is beyond your control, or even the government’s control. Right now, the government is pumping billions into the financial system, which is highly inflationary. During inflationary times, only assets such as gold and real estate can keep up. Those of you who are trying to save money by renting are fighting a loss cause.
September 23rd, 2008 at 11:15 pm
I agree, Bob. Sooner’s better than later, but I’m with madhouse in that the bailout isn’t going to do much. Hopefully it will be enough to keep the entire economy from seizing up, but not so much that it will let people off the hook.
Nice article MH. Yes, let’s give those same overcompensated assholes on wall street complete discretion to “remove” (read: exacerbate) this program behind closed doors. Let’s not subject them to any sort of review as that will only “lengthen” the process and harm their public image.
Dear Lord, please do not let this pass in its current form.
September 23rd, 2008 at 11:16 pm
JESUS H CHRIST RE
WHAT PART OF PROPERTY VALUES ARE DROPPING DO YOU NOT UNDERSTAND?
September 23rd, 2008 at 11:42 pm
Jesus Herod Christ? No, that would be too ironical. Jesus Hyacinthe Christ? Jesus Hedwig Christ? Jesus Herve Christ?
September 23rd, 2008 at 11:46 pm
“Holy Crap”
Why am I reminded of the old saying about arguing with certain types of people?
Never argue with a(n) , they will drag you down to their level and beat you with experience.
I had no idea this existed: http://en.wikipedia.org/wiki/Jesus_H._Christ
September 23rd, 2008 at 11:48 pm
I realize now that all I had was run a Google search. So it really means Haploid. Interesting.
September 24th, 2008 at 12:27 am
Anon,
WHAT PART OF RBA ARE YOU FINDING PROPERTY VALUES DROPPING?
We already went over this multiple times, with people sharing on the ground reports. In any case, does any physical part of your house disappear when values drop? Does it matter if you’re just going to live there?
September 24th, 2008 at 12:38 am
Food for thought:
Has anyone calculated whether it’s cheaper to offer a trillion dollar bail-out plan (which it will eventually add up to), or to simply dismiss the mortgage of every homeowner in America?
September 24th, 2008 at 12:50 am
The RBA is a fabrication of your imagination, nothing more.
Yes, it matters if you are going to just live there. This is because you will have overpaid on a home and as a result have less to spend on other things, reducing the quality of your life.
Also, if you try to move you will be stuck.
September 24th, 2008 at 8:18 am
Bob,
If the US economy locks up, all of you guys who have put your money in stocks instead of real estate are going to be routed big time. No matter how you diversify your portfolio, you will still lose money.
Not really. I called my financial adviser yesterday to be exact.Most of my stocks are in very conservative investments, bonds ( which are similar to CDs), and international funds. As of now, I’m only down around 2% for the year. I expect it’ll be down more. But considering that it was up on average of 10-15% for the last 5 years, the performance has been decent. My Wife’s accounts have been performing about the same.None of that matters anyway since these are multi-decade long term investments. Stocks go up and down. Again, its the median performance you look at. Not what it does day to day.
Secondly, I have an awful lot of cash and CDs. I did so for the very reason that if the absolute worst occurred, me and my Wife could move to any one of those places I’ve mentioned, buy our house outright, live close to town, get intermediate Joe jobs, and basically have zero debt or obligations.Plus we would still have all of our retirement plans in place. We’ve even talked about having vegetable gardens and livestock.
I saw the writing on the wall several years ago when all those real estate infomercials were running 24/7 and began preparing accordingly. The reality is that for people who saved money, they will have significant leverage in the coming years in the event of a recession.So I’m not horribly concerned. But I certainly wouldn’t want to be counting on my house for my financial well being or be living in the country’s most expensive city during such a time. You people that have overpriced homes will be sitting on a rapidly depreciating asset that nobody will buy. Thus you would simply have inextractable equity, which is worse than having nonperforming stocks.
September 24th, 2008 at 8:25 am
Bob,
If the US economy locks up, all of you guys who have put your money in stocks instead of real estate are going to be routed big time. No matter how you diversify your portfolio, you will still lose money.
In a market like this, options can be quite lucrative.
September 24th, 2008 at 8:48 am
http://public.globecartoon.com/cgi-bin/WebObjects/globecartoon.woa/wo/2.0.9.3.11.3.3.4.0
September 24th, 2008 at 8:57 am
> dismiss the mortgage of every homeowner in America
From Wikipedia (2nd best source of information after Chuck Norris himself): The mortgage market is estimated at $12 trillion with approximately 9.2% of loans either seriously delinquent or in foreclosure through August 2008.
[CERTIFIED RICKROLL-FREE]
September 24th, 2008 at 9:10 am
>>Not really. I called my financial adviser yesterday to be exact.Most of my stocks are in very conservative investments, bonds ( which are similar to CDs), and international funds. As of now, I’m only down around 2% for the year.
Let’s see…
1. You need to call your financial advisor to find out what he has invested for you?
2. You don’t have online access to your accounts?
3. Your advisor somehow put together portfolio made up of only bonds and international funds? I seriously doubt it. Only an individual would construct such a portfolio. A financial advisor would put 30-50% in stocks for a conservative portfolio.
4. Do you realize that international funds are down this year?
September 24th, 2008 at 2:36 pm
A portfolio primarily in bonds is a disaster in times of inflation. When money is worth less next year compared to this year, the future value of the bonds’ payment stream will deflate quickly. During inflation, new bonds will be issued paying higher returns, further deflating older bonds.
But thanks for playing Beat the Bears!
September 24th, 2008 at 3:02 pm
If you want me to be completely specific, no- I don’t have all bonds and international. I have small, medium, and large cap American funds. I have American mutual funds. I also have a 401k. I have CDs. I have European, Asian, and South American funds. I have world stocks tied to everything to companies like Royal Dutch Shell, fast food restaurants,and and I have another assortment of mixed funds. I called my adviser because I’m thinking of adding more cash to mutual funds, so conveniently, I asked for a perspectives instead of (gasp) using the internet. My Adviser has been in the biz for over 50 years, managed my Wife’s Mother’s, her Grandmother’s, and her Father’s accounts. They are all pretty well off now as a result. So I trust her judgment and I can guarantee she knows a hell of a lot more than any of you here.
So as I said, the bottom line is that I’ve lost hardly anything, have quite a bit of flexibility ( no house to sell) and leverage.
In any regards, to me it seems to be getting dumber and dumber to talk about housing these days anyway. Priorities are shifting rapidly.Home values will probably be the last thing on your minds in the coming months and more about your actual financial well-being and if you actually have a job. For some of you who think that right this minute is a great time to buy overinflated RBA RE… god bless you. But don’t let me get in the way.. I’ve heard from the NAR that ” Now is a great time to buy a home!”
September 24th, 2008 at 3:04 pm
My Adviser has been in the biz for over 50 years, managed my Wife’s Mother’s, her Grandmother’s, and her Father’s accounts. They are all pretty well off now as a result.
A lot of the analysis I’ve been reading has seemed to indicate that the growth in the last 25 years have been a credit expansion anomaly. That it was unsustainable.
I guess another way of saying this would be that 50 years ago, you’d have to be really bad at what you’re doing to lose money.
September 24th, 2008 at 3:34 pm
Unsustainable? Microcredits are a booming industry.
September 24th, 2008 at 3:54 pm
Bob,
Yes, I’m sure you trust your financial advisor. I’m sure Mike Tyson trusts his too.
September 24th, 2008 at 4:03 pm
“managed my Wife’s Mother’s, her Grandmother’s”
Your great-great-grandmother? This brings us close to the civil war. Fortunately little has changed since then with regards to managing personal finances.
September 24th, 2008 at 6:48 pm
I hope she bought stock for you in Western Union, Pan American, and White Star Line.
September 25th, 2008 at 7:54 am
Was the last 25 years of earning a “fluke” due to credit expansion? If so, then that’s an incredibly simplified analysis of the market. Put into another context, if the market is now done and nobody is going to make anymore money, then I suppose we wouldn’t have economy would we? I suppose Warren Buffet should just shut Hathaway Berkshire down, tech companies in SV should stop going public, and we should go back to trading sheep and cows as currency because haven’t they heard? The stock market is a big hoax!
Every time that a recession sets in, people tend to focus on only one aspect of the economy. During the tech boom, it was deemed the “new economy” I recall when it failed. The feelings out there was that the US economy was done. We had really screwed the pooch. But instead another bubble took its place- the housing bubble. Now everyone is focusing on financials.Once again, the feelings are that we’re all screwed, the stock market is dangerous, and we’d better find “Safe” investments to hide our dough- like buying gold for example.
But the reality is that financial corporations are only part of the economy. In many cases, its often the un-sexy companies that do well in times of financial pain. Look at railroad transport companies. Diesel prices are too high, but shipping freight by rail costs a lot less than truck. Thus they’re taking advantage of the situation. That’s also why Mr. Buffet bought a bunch of RR stocks. Another example are fast food joints. Not only are they growing overseas, but when the economy goes down the crapper, people tend to eat cheaper. So once again, another opportunity. You also have to be aware of the growing world around you. While the US might be reeling, China is growing massively. Any company that does business there that’s tied to their growing middle class is a good consideration.
What I’m getting at is that disasters create opportunities. Its up to you to see that or panic and run the other way. I myself don’t even bother with choosing companies or making decisions. I let my adviser take care of this for me because as I mentioned- she has more experience than I do, plus she is only one part of a huge group of people involved with trading and buying these funds and making adjustments to them that fit the current situation.