October 19, 2008

“Prices, sales of Bay Area high-end homes may fall next year, Realtor group predicts”

Prices, sales of Bay Area high-end homes may fall next year, Realtor group predicts – San Jose Mercury News
Expensive Bay Area communities — some of the only pockets of California real estate that have remained relatively unscathed by the housing downturn — may see fewer home sales and lower prices next year if mortgage financing for big-ticket homes does not improve, an economist for a real estate trade group said this week.

“The higher end of the market may be a little more at risk than in the past because of the question mark about jumbo financing,” said Leslie Appleton-Young, chief economist for the California Association of Realtors, in an interview Tuesday, a day before delivering her statewide housing forecast for 2009.

Ever since the “credit crunch” began late last year, interest rates for “jumbo” loans — which currently means those of more than about $730,000 — have been significantly higher than rates for smaller, “conforming” loans, leading to fewer sales of expensive homes. And as of January 1, because of economic and housing recovery legislation passed in Congress this summer, it’s likely that the higher rates will apply to all loans of more than about $625,000, which may further chill the market for high-end real estate.

[snip]

Ever since the “credit crunch” began late last year, interest rates for “jumbo” loans — which currently means those of more than about $730,000 — have been significantly higher than rates for smaller, “conforming” loans, leading to fewer sales of expensive homes. And as of January 1, because of economic and housing recovery legislation passed in Congress this summer, it’s likely that the higher rates will apply to all loans of more than about $625,000, which may further chill the market for high-end real estate.

While the group does not create separate forecasts for different regions of the state, Appleton-Young said the Bay Area “in general has been the strongest market in the state over last four or five years.” But, it is vulnerable to the uncertainties still facing the credit markets, especially in high-priced markets that rely on jumbo loans. Sales have been speeding up in places like Solano and Contra Costa counties, where foreclosures have been plentiful and prices have dropped sharply.

“The Bay Area is a mixed bag, depending on what market you’re looking at,” she said.a

Comments (234) -- Posted by: burbed @ 5:17 am

234 Responses to ““Prices, sales of Bay Area high-end homes may fall next year, Realtor group predicts””

  1. sonarrat Says:

    Ridiculous! You mean luxury items will become less desirable during a recession? What are the odds!!!!

  2. R Says:

    I was about to say the same thing. It’s like no **it Sherlock.

  3. Herve Says:

    > may fall
    > may see fewer home sales
    > may be a little more at risk
    > may further chill the market for high-end real estate

    How can one be wrong when so many statements use “may”?

  4. PC Says:

    It’s good to point this out. I’m looking at forums and blogs on these realty websites and the realtors love make the argument that certain areas (like Palo Alto and Menlo Park) are immune to the downturn. Or they spin their argument such that they won’t accept the facts: It’s a bad time to buy anywhere right now and prices will fall.

  5. anon Says:

    “> may fall
    > may see fewer home sales
    > may be a little more at risk
    > may further chill the market for high-end real estate

    How can one be wrong when so many statements use “may”?Well, luxory items may not be less desirable I don’t know if they are less desirable.”

    The irony is that these are the same shitbags who were unequivocally certain that home prices appreciate to infinity.

  6. austindweller Says:

    Folks,

    How are you BA folks doing ? It’s been a more than 2 month hiatus. Well, leading a happy life in Austin. Still very much happy about the decision to move. No worries of rent increases. Saved a lot of money. Is bob is still there and cursing the same way ?

    So looks like BA’s turn is coming close. Thank god I am not there to feel the pinch. BTW, made some money buying puts in WM, FNM, FRE, LEH. My mututal fund losses have been thue compensated. I asked my friend if there was any way to bet against RE in CA. He told me to do this. I think now the limited time opportunity is gone since US govt decided to fund RE with public money.

  7. RealEstater Says:

    Generally these are useless predictions. Look at how many conditional clauses are there:

    may see fewer home sales and lower prices next year if mortgage financing for big-ticket homes does not improve”

    “The higher end of the market may be a little more at risk than in the past”

    “There’s a lot of unknowns now”

    “depending on what market you’re looking at”

  8. RealEstater Says:

    austindweller,

    Indeed long time no see. How was hurricane Ike? Had some trouble with internet access at the rescue shelter?

  9. RealEstater Says:

    >>the realtors love make the argument that certain areas (like Palo Alto and Menlo Park) are immune to the downturn. Or they spin their argument such that they won’t accept the facts

    The fact is that there is no downturn in Palo Alto and Menlo Park up to this point. Everything else is conjecture, not fact.

  10. anon Says:

    “Generally these are useless predictions. Look at how many conditional clauses are there:”

    Those conditionals are only there to ease the dissuasion of buying that results in depreciating home values. Remember who is making these statements.

    It is huge for a Realtor group to even acknowledge that home prices may come down.

  11. RealEstater Says:

    anon,

    Realtors don’t care if home prices are up or down. As long as there are transactions, they will make money. Therefore, realtors and others claiming the market will go down are trying to get sellers to drop the price so that it will be easier for them to complete the transaction.

  12. anon Says:

    Austindweller,

    It’s not bad here – a very pleasant fall-ish day.

    As you can see, RE is still up to his usual bullish bullshit. Bob’s still enduring his commute.

    “I think now the limited time opportunity is gone since US govt decided to fund RE with public money.”

    I seriously doubt that this is going to keep up home values around here. Even with the cash infusions, banks are still hording the cash because they’re looking out for number one. Maybe they’re worried about the continual ARM resetting! LOL

  13. anon Says:

    “Realtors don’t care if home prices are up or down. As long as there are transactions, they will make money. Therefore, realtors and others claiming the market will go down are trying to get sellers to drop the price so that it will be easier for them to complete the transaction.”

    Right. Well, they do care about the prices marginally as it affects their commission.

    Didn’t I already state that they are saying prices are going down so people will be more realistic in their “wishing prices?” Why are you telling me this as if I didn’t know it already?

    A scared buyer is a non-buyer. The prospect of taking the hit on someone else’s idiotic decision is about as appealing as, say, running a luxury car into a wall.

  14. Um Says:

    RE said:

    “The fact is that there is no downturn in Palo Alto and Menlo Park up to this point. Everything else is conjecture, not fact.”

    I don’t think that’s true.

    My sibling made an offer two months ago that was just $100K below the asking price for a home in a very nice part of Palo Alto. The sellers rejected it at the time.

    Last month they put it back on the market for $100K less and have been continuously inquiring with my sibling’s agent about whether they are still interested – they aren’t since the drop in the NASDAQ resulted in a portion of their down payment being wiped out.

    By any standard, the price for the home is very reasonable – if you look at $/sq.ft. or compare it to other homes sold on the street, etc.

  15. anon Says:

    “Why are you telling me this as if I didn’t know it already?”

    I guess I should answer my own question…How about:

    Parroting for lack of independent reasoning ability?

  16. anon Says:

    LOL – One more thing:

    By being ‘conservative’ with their depreciation estimates, the realtors are going to help the FBs chase the market down!

  17. RealEstater Says:

    Um,

    Let’s not talk in generalities. What price range was this home? $100K could mean a big or small percentage, depending on the price range.

    What exactly is a “very nice part of Palo Alto”? Is this north or south of the Oregon Expressway? What’s the name of the neighborhood or do you even know?

  18. austindweller Says:

    RE,

    Did you do geography in school ? Austin is not Houston.

  19. nomadic Says:

    austindweller, it’s all the same considering what a small state Texas is. ;-)

  20. DreamT Says:

    “it’s likely that the higher rates will apply to all loans of more than about $625,000, which may further chill the market for high-end real estate.”
    I’m so thrilled that, per the Murky News, Santa Clara CUSD is now officially “high-end real estate”. Tract housing rules!!!

  21. Um Says:

    RE asked:

    “What price range was this home?”

    $100K was just a few per cent of the home’s asking price.

    RE asked:

    “What exactly is a “very nice part of Palo Alto”? Is this north or south of the Oregon Expressway?”

    North of Oregon Expressway. In Crescent Park.

    “What’s the name of the neighborhood or do you even know?”

    Does that passive-aggressive barb make you feel bigger?

    Honestly, you have real self-esteem issues. Or you wouldn’t keep returning to Burbed since you aren’t in the market to buy or sell.

    (Please don’t stop posting because you provide much of the drama here and others would be most unhappy if you left. I suspect Burbed’s readership would dwindle to naught without your Socratic witticisms.)

  22. Um Says:

    RE said:

    “Let’s not talk in generalities.”

    Please hold yourself to the same standards you expect of others. AFAIK, you’re one of the most reticent posters when it comes to posting any morsel of information that might possibly compromise your privacy. Yet, you’re happy to ask it of others.

    (BTW, I understand why you want specifics – it’s hard to argue a point without them. But it’s the same reason others don’t take you seriously – because you don’t provide them about yourself.)

  23. RealEstater Says:

    Um,

    How is privacy an issue here? I don’t know who you are, nor did I ask about the name of the street. Aren’t you over-reacting?

    If 100K is “just a few percent” of the asking price, then wasn’t your original misleading?

  24. DreamT Says:

    “What’s the name of the neighborhood or do you even know?

    It ain’t easy gaining RealEstater’s respect! Guilty until proved innocent.

  25. WillowGlenner Says:

    It does sound like they are predicting the fannie and freddie jumbo loans will be made permanent then. Which is only fair.

  26. RealEstater Says:

    DreamT,

    Did you notice the question mark? If he’s “guilty” why would I ask?

  27. WillowGlenner Says:

    PC and all, I just want to make a general statement here. I don’t think ANY area is immune to a real estate downturn except maybe a 6 block area in Manhattan or Honolulu. Even PA or Menlo Park. And we HAVE had a whomper of a real estate correction in bay area properties in general. What happens in the most desirable areas is, when prices fall, people hold off on listing their houses. Consequently the statistics show the area as flat, where in reality you would see the declines if there was inventory. Thats what is happening to my Willow Glen neighborhood, I can’t prove I deserve a property tax cut because there have been no sales since July 07 which was the peak of the microcosm where I am. I have had 2 property tax increases on a house that was purchased in Winter 2006, so the little area where my house is in WG is exhibiting the same characteristics as PA or MP I suppose. This is also why timing the market to get into these areas doesn’t work as well as you’d like. Because the inventory is quite poor in bad real estate cycles.

  28. DreamT Says:

    RealEstater – Excellent point. From now on, any question I’ll ask you will be appended with “or do you even have a clue?” without of course forgetting the redeeming question mark.

  29. RealEstater Says:

    OK, since I don’t like to beat around the bush, I will put myself out there and make some predictions.

    If there is a serious recession with job losses in the BA tech sector, I believe Palo Alto and Menlo Park will be affected moderately. The areas that will be affected the most are the middle class professional strongholds such as the various parts of the CUSD. The low end areas are already down, so I think further downside there will be constrained.

    Why do I say the high end will be largely unscathed? Because people in these areas are generally financially well off (which is why they are living in these places). They don’t need to sell, and they have plenty of cash in the bank to ride out the economic ups and downs. On the other hand, the working class people who live in places such as zip 94087 will be concerned about their jobs, and they know they don’t have enough cash in the bank to ride out a deep recession, so they would tend to hold back on buying million dollar shacks.

    OK, just to make sure there is no confusion: the above predictions are based on the assumption that there is a deep recession in Silicon Valley itself with associated layoffs. As of now these conditions have not materialized.

  30. nomadic Says:

    Oh. My. God. Has hell frozen over? I think I just saw a pig fly past the window.
    :-)

    Good thing that was tempered with a small disclaimer at the end.

    (That said, you may be right about the very high end. I’m talking $3M-5M and up.)

  31. anon Says:

    Lol, nomadic, have you become more cynical in your stay here? ;)

    RE, if you had a (single) clue you would have written what you wrote in post 29 over a year ago. As it stands, it is contrary to the majority of the drivel you have written on this blog.

    Suffice it to say that your ‘predictions’ are a day late and a dollar short.

  32. sonarrat Says:

    There’s going to be a consolidation at the top, just like there is everywhere else right now. There’s still a lot of people with filthy, blood-stained money who would love to spend it on estates in Shallow Alto. Their property taxes can prop up the public schools (which their children will, naturally, never attend). But as in #14, with the stock market tanking that pool may be shrinking.

  33. bob Says:

    “The higher end of the market may be a little more at risk than in the past because of the question mark about jumbo financing,” said Leslie Appleton-Young

    This woman has understated the outcome every single time she opens her mouth. Of course she’s head of the CAR, so naturally what she says is always going to be the absolute best case scenario. So when she says” we MIGHT have some declines in places like PA, and others… you better count on it because she’s been wrong on all occasions.

    I tend to disagree with RE also. I think its just as likely to assume that the upper end will get nailed just as bad as the middle class areas. There’s simple way too many homes in these areas that were bought with fragile startup money. I know an awful lot of people who bought in the last few years making outright assumptions that their incomes and funding were permanent. The truth is that the tech economy in the RBA is incredibly prone to dramatic shifts. Money in the ever-diluted spread of tech related business is made and lost quickly.

    As someone in the know, most of these businesses are dependent almost entirely on outside funding which has suddenly become scarce. I would not be surprised if there is a dramatic fall in prices in the next several months.

  34. R Says:

    Is Yahoo going to be the first to announce layoffs? I heard on the news this morning that Yahoo is expected to announce 1000 layoffs tomorrow morning. I can’t imagine they will be the last local company to do so.

  35. R Says:

    BTW, I think your analysis in 27 is spot in WG. People in “destination” neighborhoods hold off selling as long as they can. However, as people eventually list their properties, the market price drops to reflect the much lower prices in the neighboring areas. PA will always sell at a premium over Sunnyvale. However, once that premium gets too big, prices in PA have to drop. Substitution very much applies in real estate.

  36. RealEstater Says:

    anon says,
    >>RE, if you had a (single) clue you would have written what you wrote in post 29 over a year ago. As it stands, it is contrary to the majority of the drivel you have written on this blog.

    If you paid any attention, you would’d noticed that the views I’ve expressed here usually turn out to be true, over and over again. Post 29 does not contradict with a single thing I said earlier. If you want to make that claim, I need to hear some specifics.

  37. RealEstater Says:

    anon, nomadic,

    Knowing your level of comprehension, I think what you’re saying is that post #29 contradicts with Pralay/MH’s distortions of my views.

  38. anon Says:

    RE, even if I clearly demonstrated to you that this is contradictory to your previous statements, you wouldn’t be able to wrap your head around it.

    Again, the only things that you say that turn out to be true are statements that are necessarily true.

  39. nomadic Says:

    Knowing your level of comprehension, I think what you’re saying is that post #29 contradicts with Pralay/MH’s distortions of my views.

    Not at all. It’s the first remotely moderate statement you’ve made on here regarding real estate. It’s like Lawrence Yun putting out a press release saying it’s a bad time to buy. Shocking.

  40. RealEstater Says:

    anon,

    You clearly demonstrated nothing, as I still have not seen any specific point that is contradictory.

  41. anon Says:

    Alright, you half-wit.

    Contrast:

    “If there is a serious recession with job losses in the BA tech sector, I believe Palo Alto and Menlo Park will be affected moderately. ”

    with your previous statement that PA is a “recession-proof area.” Saying it is a “recession proof area” means: if recession then no affect.

    Extrapolate what your limited intelligence allows you to. I am not putting any more time into this.

  42. RealEstater Says:

    Bob says,
    >>I tend to disagree with RE also. I think its just as likely to assume that the upper end will get nailed just as bad as the middle class areas.

    The reason you disagree is because you do not think like a “rich dad” upper end buyer, and don’t understand their circumstances.

    Imagine yourself as the chief of surgery at a local medican center (I know it’s very hard, but please try), a partner at a local law firm, or a Sr. VP at Cisco. Do you think these people will be strapped for cash during an economic downturn? The smart money knows this is precisely the time to “make the leap” into the destination investments, not only because they will encounter a lower level of resistance than during normal times, but also because such investments will weather the storm better than most (see post #29).

    OK, I know the above logic may be challenging for you to comprehend, so let me give you an analogy.

    During normal times, it’s quite difficult for one country to invade/occupy another without serious condemnation and consequences (Just look at what happened to the previous Iraqi regime). However, during times of chaos and world-wide weakness, national boundaries can be easily re-drawn. Think about the period right after WWII. The Soviets used that window of opportunity to take over the Eastern Bloc; the North Korean and Chinese Communists also took control of large parts of Asia with Soviet help. By the time the West could react, the various communist regimes were already well seated, and held power for decades to come.

    Now back to real estate…during normal times, the barrier to “unseat” an Atherton/PA/MP home owner is extremely high. A deep recession would present a rare window of opportunity.

  43. RealEstater Says:

    anon says,
    >>with your previous statement that PA is a “recession-proof area.” Saying it is a “recession proof area” means: if recession then no affect.

    May I remind you that statement was made in a printed article not written by me?

  44. anon Says:

    “May I remind you that statement was made in a printed article not written by me?”

    As far as I can recall, you made those statements. Until you prove otherwise, I will assume that I am correct.

    I find it comical that you liken ‘cracking into destination land’ to invading a weak country. And in the same breath, you state that there is no weakness. Odd.

  45. RealEstater Says:

    >>As far as I can recall, you made those statements. Until you prove otherwise, I will assume that I am correct.

    What?? Presume guilty until proven innocent?
    You were there when such discussions took place not long ago. If you can’t follow the conversations, there’s only a certain amount of baby sitting I can do.

  46. bob Says:

    Sorry RE, but if you’re using the wisdom from any of Robert Kiyosaki’s books, which supports a vast majority of what you preach here, then you’re setting yourself for disappointment. You’re yet another person who doesn’t connect the dots already set in motion that poor economies and recessions create lower home prices in all levels. As I’ve correctly pointed out, the economy of the BA is extremely volitile and not setup at all well to handle recessions. Tech relies on healthy economies and highly confident investors.

  47. Pralay Says:

    May I remind you that statement was made in a printed article not written by me?
    ————-

    Wow! Chuckie never said “recession-proof”. He only said “nearly recession-proof”. So, anon, you are technically incorrect. You know it’s like Bush talking – always right by means of vagueness. When Bush said “mushroom cloud” he did not mean mushroom cloud from nuclear bomb. You know it’s just cloud that looks like mushroom. Same way, when Chuckie talks about nearly recession-proof, he did not mean recession-proof.

  48. Pralay Says:

    If there is a serious recession with job losses in the BA tech sector, I believe Palo Alto and Menlo Park will be affected moderately. The areas that will be affected the most are the middle class professional strongholds such as the various parts of the CUSD.
    ——-

    That’s because Chuckie says so. Does Chuckie has any past stat to prove that higher end gets affected less than lower end? 2001 stat? 1990 stat? No. But still Chuckie’s prediction will be true. Because Chuckie says so.

  49. Pralay Says:

    RealEstater – Excellent point. From now on, any question I’ll ask you will be appended with “or do you even have a clue?” without of course forgetting the redeeming question mark.
    ————-

    DreamT,
    That’s not a question mark, but cavuto mark. As Jon Stewart put it – “putting a question mark at the end of something, you can say f**king anything“.
    Chuckie is the poster-child of using cavuto mark here. You know, there is a question mark in his statement. Just a question. :)

  50. Pralay Says:

    OK, just to make sure there is no confusion: the above predictions are based on the assumption that there is a deep recession in Silicon Valley itself with associated layoffs. As of now these conditions have not materialized.
    ————-

    Come on Chuckie! You are making me nervous. I thought RBA would be OK unless there is a full blown depression. I thought until Seattle becomes totally jobless and Lionel moves to bay area, we would be perfectly fine. Now you are talking about recession. And “associated layoffs” in bay area itself. :(

  51. madhaus Says:

    Rats, Pralay beat me to the cavuto mark. Here’s a sample of good usage.

    RealEstater: Complete moron or just an amusing troll? Does he have any idea how real estate cycles work? Is his IQ over room temperature? If you lead a donkey to a soccer field, will it burn its nose on the barbecue grill?

    I see a new poster Um and hope to see more. What happened to that new poster from last week who was also pretty quick? anon mentioned enjoying those posts.

    WillowGlenner mentions tightening inventory in higher-end locales during a real-estate downturn. I’ve also mentioned this and called it “sticky” pricing. Sellers demand their bubble-prices, buyers know better than to pay them, so nothing is sold. Once sellers realize that prices really have gone down, they pull their properties off the market and hope to ride out the downturn.

    That only works if they aren’t going anywhere for the next five years. Eventually someone will have a job transfer and sell at the real price.

  52. Pralay Says:

    Realtors don’t care if home prices are up or down. As long as there are transactions, they will make money.
    ———–

    That’s right. ;) And they don’t need to preach “home price doubles in 10 years” either. Because whether they preach and show rosy picture of housing market or not, people are going to buy anyway – in same volume.

    ———
    Therefore, realtors and others claiming the market will go down are trying to get sellers to drop the price so that it will be easier for them to complete the transaction.
    ———

    But I simply don’t understand why they need to do that. These realtors must have got brainwashed by mainstream media. They don’t get the fact that RBA is RBA – foreigners coming with cash, people are waiting in sidelines with cash to buy homes. It’s a destination investment. Sellers don’t need to “drop the price”. Transaction will be easy without dropping price. You know, we are talking about people with cash in sidelines. What could be easier transaction than that! It’s all media’s fault. They brainwashed these realtors.

  53. LosAltos Renter Says:

    Real Estater – I have not watched Menlo Park or Palo Alto closely but have been looking in the Los Altos market for several months. I think it’s safe to say that even the “best areas” are now being impacted by the general economic downturn. Virtually every property we’ve looked at in the last six weeks has gone through 1 or more price cuts before selling and/or has not sold and is just sitting. These are properties in the $1.6 to $2M range with great locations (walking distance to the village, for example). Look, for example, at 423 Arboleda – walking distance from the Village on a quiet street. DOM -92 and price started at $2.195, dropped to $1.98; dropped to $1.83 and now at $1.799. Or 283 Quinhill (20K foot lot). DOM – 23, started at $1.99 and is now at $1.79 and so on. Limited inventory is the only thing holding back steeper price drops in my opinion. I do agree, by the way, with your basic assumption (I don’t know how anyone could disagree) that the most desirable areas will hold value the best and longest, but I think the notion that the best areas have not yet been affected is not accurate. I also agree that there is an absurd amount of money in some of these communities but there are also a fair number of seniors (especially in Los Altos) who have got to be thinking (or at least their kids are!) about pulling out some of that equity before too long and any material increase in inventory is going to force prices down for every marginal property (marginal defined within each subset -i.e., even in the best neighborhood, someone is going to sell the corner lot or the house with the stinky old pool or the lot that is closest to foothill and gets noise, etc.) which will pull down comps. My $0.02.

  54. Prof. Bleen Says:

    LosAltosRenter and everyone: Your attempts to correct RealEstater, though valiant, earnest and fact-laden, are doomed to failure, because you haven’t taken into account RE’s Advanced Set Theory. After months of careful study, housed in a special materialism-proof laboratory I constructed especially for this purpose, I believe I have an inkling of how it works.

    According to the theory, the RBA inhabits a misty borderland between “Useless Anecdotes” and “Meaningless Aggregate Data.” When someone cites individual properties whose prices have fallen as of late, as LAR did in #35, they are labeled “useless anecdotes,” as they are too specific to describe the RBA, where prices only go up. Similarly, city- or statewide statistics—assuming they describe an overall drop in prices—are classified as “meaningless aggregate data,” as the RBA subset (uniformly appreciating, of course) has been contaminated with non-RBA depreciation.

    Here’s the clever part: the RBA—i.e., the gap between Useless Anecdotes and Meaningless Aggregate Data—can expand or contract as the situation requires. In the heady early-bubble days, the RBA may have extended as far north as Seattle. In contrast, when housing prices fall across the board—and signs suggest such a trend is imminent—the domains of Useless Anecdotes and Meaningless Aggregate Data may expand until they abut one another seamlessly, and the RBA is reduced to one, $20M palatial mansion. And if that property, too, should suffer a decline in perceived worth, the RBA would recede from our universe altogether, biding its time in the aether until the economic situation perks up enough to warrant its return.

    My apologies to RE, of course, if I’ve misused any real-estate terms above. After all, I’m merely an amateur in this biz, and should tread lightly into the realm of a bona fide realtor real estate broker “average tech guy.”

  55. anon Says:

    “In the heady early-bubble days, the RBA may have extended as far north as Seattle.”

    LOL. Cheers, Professor.

  56. RealEstater Says:

    LosAltos Renter,

    I think it’s too early to call Los Altos a buyer’s market, since the average list to sold price is over 100% as of last month.

    The house on Arboleda is close to the village, but from the wrong direction. To be worth $2M+, it needs to be along San Antonio. The pool is a minus as well.

    The house on Quinnhill is in the Highlands neighborhood near 280, which does not normally command the highest prices in LA.

    In my opinion, the two homes you gave as examples are now listed at the correct price.

  57. RealEstater Says:

    Guys,

    Please keep to a minimum the useless posts such as #54 and anything written by Pralay. If you’re going to spend time posting, and you expect us to spend time reading them, please make it worthwhile for everyone here.

  58. DreamT Says:

    Who upgraded RealEstater to moderator?
    If nobody did, then reading #57 was a waste of time.

    (rephrasing: If nobody did, then reading #57 was a waste of time?)

  59. madhaus Says:

    I thought Bleen‘s post (#54) was excellent. More like this, please!

    Has anyone else noticed that when bob isn’t posting, Chuckie gets more obnoxious? It’s like there’s only enough nastiness to fuel one of them at a time.

    I wish austindweller would pop in more often.

  60. Prof. Bleen Says:

    Gosh, thanks, madhaus and anon! And RE, for admitting I got under your skin; that’s quite a compliment. I submit to you that #54 is perfectly in keeping with the overall whimsical tone of this blog. burbed, please correct me if I’m wrong.

  61. madhaus Says:

    Los Altos Renter is correct in noting the price drops. Altos research continues to rate all RBA cities as in buy range. Altos’ index considers 30 a balanced market, and a buyers market with any score below that.

    Los Altos: 18.13 index, 85 DOM (Days on Market). Inventory is the highest it’s been all 2008 (84 properties for sale).

    Los Altos Hills: 13.79, 134 DOM. Inventory is 41, but there were more at the beginning of the year. The peak was the credit crunch in mid-April.

    Any of you can go to Altos Research and check any city you want. You’re not going to find a single one of them with a seller’s market. Even Palo Alto has an anemic 20.27/57 DOM. And peak inventory of 82.

    Wait, wasn’t the self-purported Palo Alto expert saying there wasn’t anything for sale? I’m so confused. Pass me the Sprinkles cupcakes.

  62. anon Says:

    “Please keep to a minimum the useless posts such as #54 and anything written by Pralay. If you’re going to spend time posting, and you expect us to spend time reading them, please make it worthwhile for everyone here.”

    Yes. Absolutely. In order to further the ‘greater good,’ I am proposing the following rules:

    Everyone shall refrain from posting anything sarcastic, witty, clever, or comical.

    Aggregate data, anecdotal/empirical instances are not allowed. Data or numbers of any kind has no place here.

    Bragging about material wealth is permitted, but only minimally so (appropriateness shall be determined by the Chuckster himself).

    No conclusions shall have premises.

    Most importantly, All posts shall contain bullish statements regarding real estate in the void RBA and nothing more.

  63. anon Says:

    “Please keep to a minimum the useless posts such as #54 and anything written by Pralay.”

    Oh man this had me dying. “and anything written by Pralay.”!!!! Frankly, I’m disappointed you didn’t add me there as well.

    “Gosh, thanks, madhaus and anon! And RE, for admitting I got under your skin”

    Shh! Don’t explain to him what his posts really mean!

    I would imagine that posting on burbed has taught the ol’ chuckster more about social interactions than he has learned in the past 40 years.

    Too bad he still can’t keep up.

  64. anon Says:

    MH, I am correcting your statement:

    “Has anyone else noticed that when bob isn’t posting, Chuckie gets more obnoxious?hilarious.

  65. nomadic Says:

    Prof. Bleen, I’ll add my kudos for #54. Well done! :-)

  66. Prof. Bleen Says:

    Thanks, nomadic!

  67. RealEstater Says:

    Madhaus says,
    >>Wait, wasn’t the self-purported Palo Alto expert saying there wasn’t anything for sale? I’m so confused. Pass me the Sprinkles cupcakes.

    Wait, if conditions are so favorable, why is so difficult for you to upgrade? Could it be because:
    - Your foreign assets took a hit from the financial crisis?
    - Everything decent in PA is priced over $3M?
    - Anything in your price range is either next to the train tracks or closer to 101 than Gables End?

  68. nomadic Says:

    How about what she has stated rather plainly numerous times: she isn’t interested in moving now. She believes prices will be coming down and would rather move when/if that happens.

    And why do you care if madhaus moves or not? Would it make you happy if she moved? Or are you just hoping she will, AND will post the address so you can tell us all why the property is undesirable.

    It appears that you operate under the mistaken belief that what others have or don’t have affects you in some way. Once you let that go, your life will be far more happy.

  69. RealEstater Says:

    nomadic says,

    >>How about what she has stated rather plainly numerous times: she isn’t interested in moving now. She believes prices will be coming down and would rather move when/if that happens.

    She isn’t interested or she isn’t able to? If prices come down it will affect the value of her home too, so your theory doesn’t work anyways.

    >>And why do you care if madhaus moves or not? Would it make you happy if she moved? Or are you just hoping she will, AND will post the address so you can tell us all why the property is undesirable.
    >>It appears that you operate under the mistaken belief that what others have or don’t have affects you in some way.

    With so many assumptions, I don’t even know how to respond!

  70. WillowGlenner Says:

    OK but just to add .02, most posters here are renters that want to buy, or renters who don’t want to buy because they are perpetually pissed about prices (you know who) but this emotion is the same as #1, or people who want to move up, in other words buy. Therefore there is a huge propensity on this site to talk your positions meaning basically “RE is going to crash in Palo Alto any minute now”. As of this moment you have to accept RE’s premise that there is NO evidence of that. Prices have come down everywhere from the peak, although the lack of inventory is keeping things afloat in desirable areas- but things are still down- yet the people here can’t see it, and these declines are not enough (according to you). I have said REOs are declining and posted supporting documents and according to posters here that news is bogus for one reason or another. I’m jus sayin’ that the people that post here are not the most objective when it comes to real estate pricing analysis.

    Remember to try this on too- if you choose to buy now you may not get that elusive bottom that you think is around the corner, but depending on the house you may be able to drive a hard bargain- and you avoid the white hot rental market where avg houses are renting for $4500 with no writeoffs. That is almost 60K per year in rent down the drain every year, and thats if you can even GET a desirable house for $4500.
    As for the low end, the volume is drying up. The next move will be up, pricewise. We could stay flat here for a while but the next move will be up

  71. RealEstater Says:

    A bunch of people here like to talk about psychology. This line sums it the sentiment so well Burbed should put it in the heading at the top:

    “RE is going to crash in Palo Alto any minute now”

  72. RealEstater Says:

    >>This line sums it the sentiment

    should be

    This line sums up the sentiment

  73. anon Says:

    “It appears that you operate under the mistaken belief that what others have or don’t have affects you in some way. Once you let that go, your life will be far more happy.”

    This is a safe assumption.

  74. WillowGlenner Says:

    Altos research does show what I believe is happening though- inventory is declining at the low end- the peak being this last summer.
    http://www.altosresearch.com/research/CA/SAN+JOSE

  75. anon Says:

    ““RE is going to crash in Palo Alto any minute now” ”

    Who the hell says this? I haven’t seen this statement made by anyone but RE when he is rebutting a phantom opponent.

    (Hilarious. RE is correcting people’s grammar!)

  76. nomadic Says:

    With so many assumptions, I don’t even know how to respond!
    I know. Poor dear. Don’t worry your little head about it.

    WG, rents are $4500/month now?! Outside of say, Saratoga and downtown LG? That’s sure a different picture than I’ve been seeing in this neck of the woods. I’m seeing nice, remodeled 3/2s for around $3000. Still a good deal compared to buying the place for around $900k (in those areas).

  77. anon Says:

    His own, no less! don’t worry buddy. We don’t think any less of you for your grammar…

  78. anon Says:

    WG,

    I’m curious. What do you make of the 4th graph down that indicates average price per square foot dropping from $450 in January to $356 now?

  79. RealEstater Says:

    Guys, let’s make this line the motto here:

    “RE is going to crash in Palo Alto any minute now”!

  80. anon Says:

    ““RE is going to crash in Palo Alto any minute now”!”

    That would be a good motto except nobody has said that.

  81. RealEstater Says:

    >>That would be a good motto except nobody has said that.

    Don’t try to mis-represent Madhaus now…

  82. WillowGlenner Says:

    nomadic, I was thinking $4500 for Los Altos like Los Altos renter stated above. He listed a few price drops and my only point is that if you want to live in Los Altos, you are paying $55-$60K to rent there while time passes.
    Heres a good LA rental, its a little less but this isn’t a good LA area.
    http://sfbay.craigslist.org/pen/apa/886408721.html

    In my area rentals are less, $3K gets you a good high end house but it takes a while to find it.

  83. Pralay Says:

    Don’t try to mis-represent Madhaus now…
    ———–

    Of course our Chuckie cannot show where someone said so. But you know that’s Chuckie. If he said it, it must be true.

  84. Pralay Says:

    Guys, let’s make this line the motto here:

    “RE is going to crash in Palo Alto any minute now”!
    ————–

    As Chuckie could not show the original comment, let’s put this one in shortlist, until Chuckie finds it.
    Until then I should have a temporary motto which fits perfectly with the theme of this blog. Here I have some recommendations:

    Choice #1: Green Zone

    Think of RBA as the “Green Zone” in Iraq; it’s as safe as you’re going to get.

    Choice #2: Right Place, Right Time, Right Interest Rate, Right EVERYTHING

    If you are invested the RBA, you are in the right place at the right time at the right interest rate right now!

    Choice #3: On-going party

    There’s been an on-going party here [RBA]. Why are you not joining?

  85. WillowGlenner Says:

    anon, for San Jose which is the altos research link I posted, I’m not surprised median prices are crashing, because thats all the REO activity. I see almost every REO that comes through under a certain pricepoint (which is most of them), they are ESJ and banks are doing all they can to move them. The median price won’t move up for SJ until these are depleted next year.

    But these have almost nothing to do with the desirable areas of the bay area. Even San Jose which is where I live. Less than 2 miles away from Willow Glen is the central san jose area where some of the REOs are (most SJ REOs are on the east side which is a ways away). The median prices in Downtown San Jose are probably 50% of what they were at peak due to the REOs. But what does that mean to me, in WG on the other side of the freeway? Nothing! My property taxes have been raised twice since I bought in 2006. I can’t get an adjustment even now because there are no sales in my area, the last sale nearby was in 2007 at 100K more than I paid for a smaller, less desirable house.

  86. WillowGlenner Says:

    Forgot to add that I have a different opinion than RE about BA pricing. I think all areas of the bay area have seen a 20% haircut, even palo alto and menlo park and my area, and the less desirable areas much higher declines. But to prove it you need someone to sell and in this climate this would be more of a distress sale. But there are no distress sales, anywhere. And I don’t believe madhaus is correct in saying it has to happen- I don’t think it does. Case in point where I live, most of the residents are older with property taxes at 1/3 of what the new people pay. The newer residents had to put much more down, and are affluent. Affluent people care about their credit scores and never had toxic loans in the first place. My neighbors across the street are not selling even though they must be underwater since they paid 100K more than I did for a smaller house. They have likely done the math, realize that they would have to pay $3500 and up just to rent a place like that, and that availability is the biggest problem for buying in these areas anyway, and they are building equity every month anyway. They choose not to sell, and if not them- who? Nobody. I predict that for the next 2 years the desirable areas will be in an almost lockdown when it comes to sales. Meanwhile rents continue to go up.

  87. nomadic Says:

    WG, I don’t agree that “all areas have seen a 20% haircut.” There are comps in most areas to show that. In my neighborhood specifically, there usually are only 4-5 houses that sell each year. That hasn’t changed. They are still selling for about the same price they would have gotten in 2005-2006 but it’s taking longer. Prices are flat but there are no signs that they’ve come down yet.

    I’d like to move again in a year or two, so I hope you’re right that they won’t go down but I’m not betting on it. The other part about being underwater is always in the back of my mind: you’re under there with the equity you sunk into the house. In other words, my down payment is washed away before the bank ever has to worry.

  88. SiO2 Says:

    WG, regarding the rental in Los Altos – why would you say that’s not a good LA area? It’s got LA schools. I’ve looked at houses there and it seems fairly nice. I guess the proximity to Mountain View could be a downer, but OTOH it’s convenient to El Camino. But not too convenient – it’s not in the back yard.
    Thanks for any comments. as a someday hopeful LA owner it’s good to hear.
    I just saw a $150k price cut on a house near there, encouraging.

  89. zanon Says:

    All these conjectures — so little facts!

    RE is right — we have not seen major price declines in the RBA. As much as folks think they are coming, they just aren’t here yet.

    The question is, how much as these prices propped up by cheap financing? East Bay is the land of subprime, but RBA is the land of Alt-A. If people were as cash rich as folks on this board claim, they would not need Alt-A loans.

    Alt-A is gone. Alt-A resets some in 09, but really kicks in in 10, 11. We’ll see how much real estate people can afford with 20%+ down 30 year jumbos.

    -zanon

  90. anon Says:

    Indeed we will.

    At the very least, it will be entertaining to watch.

  91. anon Says:

    I’d like to ask a question of my fellow Burbedizens.

    How many of you know of – personally or informally – someone who has put their home up on the market and subsequently took it down becuase they couldn’t get what they ‘felt’ their home was worth? Let’s limit the scope to a year or so.

    I know of 6 instances of the above and I know of one couple who sold their home for 2.65M – this was after 3 price cuts and 4.5 months on the market.

  92. Pralay Says:

    I know one RGA (real gray area) guy who very recently moved to North Carolina, because his VC funded company is shut down. He wants to sell but he put his home for rental because he is hoping that market will get better within 1-2 years (and he will be able to make some money by selling his home).

  93. DreamT Says:

    You’re looking for sensationalism? Not a single house in my neighborhood was pulled out of the market, but almost all of them have sold under asking price this past year (typically $25k under). Currently only one is for sale, with a $50k price reduction.
    The thing is, I don’t live in speculator-land and folks around here are probably educated enough to understand that whatever they “feel” their house is worth is irrelevant when it’s time to price to market.

  94. cardinal2007 Says:

    A townhouse down the street from here was for sale first for 829k in Oct/Nov ’07 and taken off the market. The place was put back on the market in June for 699k, then 649k, then taken off the market again. I figure at that point it was taken off the market because the owners can’t afford to sell it, or don’t want to lose more of their downpayment, having paid 625k for it 4 years ago.

    I felt so certain it would sell at 699k too, but it didn’t, I guess I don’t quite understand the market as much as I thought. I’m not sure if it is being rented out, or if the owners are delaying whatever plans they had.

  95. WillowGlenner Says:

    zanon,
    If people were as cash rich as folks on this board claim, they would not need Alt-A loans.

    NO. Alt-A is for businesspeople, consultants, anybody who does not work for a W-2. Every Alt-A loan I am aware of in BA is fixed. I have 2 Alt-A loans. I know you all are dreaming about this upcoming catastrophe and you are going to be sadly mistaken

  96. madhaus Says:

    truth is loan brokers were pushing Alt-A loans at people who didn’t need them. But they were easier to fill out and qualify on, so people took ‘em.

    Lots of people got variable loans when the prices went up, because they had to.

    Case in point where I live, most of the residents are older with property taxes at 1/3 of what the new people pay. The newer residents had to put much more down, and are affluent. Affluent people care about their credit scores and never had toxic loans in the first place. My neighbors across the street are not selling even though they must be underwater since they paid 100K more than I did for a smaller house. They have likely done the math, realize that they would have to pay $3500 and up just to rent a place like that, and that availability is the biggest problem for buying in these areas anyway, and they are building equity every month anyway.

    Actually I need to correct the last sentence to:

    They have likely done the math, realize that they would have to pay $3500 and up just to rent a place like that, and that availability is the biggest problem for buying in these areas anyway, despite their losing equity every month anyway.

  97. zanon Says:

    WillowGlenner: Alt-A is for people with great FICO, but not enough money. Stated Income may be for non-W2 employees, but they have also been for non-Income people.

    And the problem is not just rates resetting, it’s these vanishing entirely from the market. If financing availability is critical to prices — and that has been true for the rest of Planet Earth — then it will be critical to RBA also.

    At any rate, I think I actually have a way of finally getting some real data on how much leverage is sitting under RBA, and therefore how exposed prices here are to a credit collapse.

    So, a question for the board: which zip best encapsulates the RBA?

    -zanon

  98. Mr. Ethics Says:

    truth is loan brokers were pushing Alt-A loans at people who didn’t need them. But they were easier to fill out and qualify on, so people took ‘em.

    You are exactly right. And not all Alt-A loans are fixed. I have seen numerous transactions in which the borrower was well qualified but used a loan with a low introductory rate to buy a house about 100-200k out of their price range. Lots of these in the 700-1.1 range in the RBA to people with good jobs. Unless all these people are making at least 25% more than they were when they got the loan (some will), they will not be able to make the their new payment. At the end of the day, the numbers just don’t work. There are more people sitting on 600k-1 million dollar mortgages than can afford them. Even in the RBA, the median household income simple doesn’t support the average price of a house. Eventually all debt becomes due. You can only keep paying less than the fully amortized amount for so long.

  99. Mr. Ethics Says:

    Exactly right Zanon. Problem one is resets, which will affect a sizable number of well-off persons who bought just a little too much house. Problem two is the lack of new buyers that will be able to afford those houses on a 30 year fixed. There simply aren’t enough households pulling down 200k + a year to sustain housing at its current price levels.

  100. WillowGlenner Says:

    You guys really don’t know what you are talking about. I have to ring the BS alarm like real estater has to do occasionally. I just got an alt-a loan about 3 mos ago, no problem, I could get one tomorrow. And the entire REASON they are used in the bay area to the degree they are is because we have a lot of independent consultants and small business people, it is NOT because people don’t have enough money – which has nothing to do with Alt-A anyway, Alt-A is not subprime.

  101. WillowGlenner Says:

    madhaus, we just had a conversation where I said that in truth most houses in the bay area, even in Palo Alto and Menlo Park, if put on the mkt tomorrow would show a decline of 20%+ from peak. I actually believe that. Then somebody corrected me and said his neighborhood has had steady sales for the past few years and prices are intact but houses are taking longer to sell. So there are some here that are seeing no declines in their own neighborhoods. In my case I don’t know, because there are no sales, and as I say my property taxes have gone up the maximum amount, twice, which is certainly something I would like to curtail if I could. The people who are making a decision to stay in their homes, despite the fact that you, Madhaus, want to buy and want them to dump in a firesale, don’t really KNOW that their equity is declining. It could be that the only people that think equity is declining are people that want to buy and post on sites like burbed.

    Sometimes you have to accept reality- if wishes were horses, you know?

  102. madhaus Says:

    WG, don’t be a bob. Just because YOU obtained Alt-A loans that made financial sense does not mean everyone did the exact same thing as you. I assure you they did NOT. So you are sharing “useless anecdotes.”

    Look, I bought, refi’d five times into smaller loans on better terms each time, ended up with a fixed ten (which I’m paying as a fixed eight and a half) where we borrowed about 60% of what we did on our first loan. I do not assume everyone else did what I did. In fact I know of too many people who did the exact opposite and pulled cash out. Idiots.

  103. madhaus Says:

    I never said prime RBA lots had declined 20%. I said they would decline 30% — when the Alt-A chickens come home to their RBA roosts. But it is already starting.

    I live in borderline RBA and prices have been softening all through spring bounce on into summer and now fall. I would say 94087 is now down 5-8%.

  104. nomadic Says:

    anon (#91) I know of three. Two were only on the market a month or two. Both – how to say this nicely? – needed a fair amount of work. I think both were owned by senior citizens. The third (all remodeled) went under contract for 97% of reduced list price after 4-5 months but the transaction fell through when the prospective buyers couldn’t unload their current house in their allotted time period.

    DreamT (#93), even smart people get too emotional and often slide into what they “deserve” or “need” to get for their house. :-)

  105. madhaus Says:

    anon, I don’t know too many people selling now. Of the people I did, one made several price cuts and pretty much reduced the house about 30% to catch the falling market. This was in south Alameda county.

    Another sold when they didn’t have to and are now renting, not really their plan (they were going to move to another state but the reason fell through). Not only that, credit had dried up for a few weeks so nothing was selling (this was a little more than a year ago), then when the pipe re-opened they sold as fast as they could. They did note they could no longer get the prices they were seeing that summer (2007). They lived in SJ 95129 (CUSD).

    Don’t know anyone who decided NOT to sell because they couldn’t get their wishing price.

  106. Mr. Ethics Says:

    I guess it depends on how you define Alt-A. To me, Alt-A is anything to a borrower with good credit and solid income that isn’t fully amortized and thus will reset at some point resulting in higher payments. And of this, there is a lot because I have seen it. Guess it really comes down to what you consider Alt-A. Bottom line, many buyers in the RBA will face a sizable uptick in their monthly mortgage payments in the coming years. It will effect the market, as will the lack of this “creative” financing, which will keep prospective buyers out of markets they would be in with in.

  107. DreamT Says:

    madhaus – Possible, but all sellers in my neighborhood have been either long-time residents or actual retirees. So the “smart but emotional” might not apply much in what I persist to call non-speculation land. I’d definitely see a different trend in… trendy new townhomes built in Sunnyvale these past few years, for example.

  108. cardinal2007 Says:

    The bigger issue I see is the Option ARMs, since their underwriting standards are based on having the buyer being able to pay the minimum and not on the fully amortized rate (based on 30yrs). These loans made up 28.5% of of loans in 2005, a year with record volume.

    Since on average the fully amortized payments are about 63% higher than the minimum there will be major issues when these loans recast. With banks like Washington Mutual and Wachovia offering Option ARMs up until this year, and with Fitch Ratings saying that they expect up to 45% to default (Only about 8% has done so up to last quarter). About 83 percent of the option ARMs issued from 2004 to 2007 were underwritten without full documentation of borrowers’ incomes, according to Fitch, making them Alt-A loans.

    I certainly expect that these will lead to a large number of short-sales and foreclosures next year, though not as large as the subprime foreclosures, but certainly in a different demographic.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aNSwdt57nTBI&refer=home#

  109. anon Says:

    “The people who are making a decision to stay in their homes, despite the fact that you, Madhaus, want to buy and want them to dump in a firesale, don’t really KNOW that their equity is declining. It could be that the only people that think equity is declining are people that want to buy and post on sites like burbed.

    Sometimes you have to accept reality- if wishes were horses, you know?”

    Is this a joke? I hope so, bob 2.0.

    I too don’t know many people who are in dire straits and must sell. One example in particular is a 4k sqft home that was on the market for 3.1M. Zillow itself valued it at 2.5 LOL. I don’t know what they were thinking and none of their friends had the heart to tell them they were crazy. So, the home sat on the market for 11 months and they gave up. They bought it 25 years ago before this creative financing bullshit so they don’t need to move.

    Zanon, I think there are a lot of people who are going to be able to make their ‘adjusted’ payments – at least for sometime. This is why I believe we’re not going to see the bottom in the upper end markets until later than 2012. Yes, WG – I understand you saw the bottom on the crappy properties you like to buy and rent out. Those are not at all what I am talking about.

    One more thing – it’s fun to watch Madhaus destroy the men with her logical reasoning ability. Again. And again.

  110. nomadic Says:

    Oh, forgot to answer zanon in #97! Use our “most hallowed, most revered” RBA zip: 94301. Please share your data. We’d love to hear more about the Alt-A leverage around here!

  111. nomadic Says:

    …it’s fun to watch Madhaus destroy the men…

    Is she not supposed to be able to? You know, being a female and all! ;-)

    (I think it still irks RE.)

  112. madhaus Says:

    Yeah, I can’t use logic correctly, my tits keep getting in the way.

  113. anon Says:

    Supposed to be able to? Don’t know how to respond to that, but I will admit that there is at least a touch of sexism in my comment.

    “(I think it still irks RE.)”

    Aww… poor widdel weal estataire.

  114. anon Says:

    “Yeah, I can’t use logic correctly, my tits keep getting in the way.”

    Do tell.

  115. anon Says:

    Better those than your ego, eh RE?

  116. madhaus Says:

    I guess it depends on how you define Alt-A. To me, Alt-A is anything to a borrower with good credit and solid income that isn’t fully amortized and thus will reset at some point resulting in higher payments. And of this, there is a lot because I have seen it. Guess it really comes down to what you consider Alt-A. Bottom line, many buyers in the RBA will face a sizable uptick in their monthly mortgage payments in the coming years. It will effect the market, as will the lack of this “creative” financing, which will keep prospective buyers out of markets they would be in with in.

    Alt-A does not mean variable-rate! There are fixed Alt-A loans, WG is right about that. But there are plenty of toxic Alt-A loans, too. Alt-A is how the loan was qualified, not what the terms of the loan are. cardinal2007 is correct to worry about Option-ARMs. Those are serious bad news to anyone who has one.

    If you don’t know squat about finance and your loan statement arrives, and you have the choice of paying a)$3452, b)$3178, c)$2527 or d)$1681, what do you think most people on this loan will pick?

    If you said d), congratulations! You are now paying even less than interest-only on your loan, you’ve now gone into negative amortization mode, and once your loan reaches the recast point (usually 115% or 125% of the original loan), your loan turns into a fixed-30. At the new principal, bearing in mind you chose not to pay principal plus interest on the old principal. Good luck!

  117. madhaus Says:

    Chuckie’s busy on another Super MEGA PROJECT. Lining up all the worker bees in other time zones, ya know.

    It’s funny that’s the Chuckster is such an out and out sexist pig, given that there’s no way he could afford digs in 94301 without his wife’s high-paying gig. I bet it really peeves him that mr. madhaus can afford to keep his family in Sprinkles cupcakes and high-end guitars on one income.

  118. anon Says:

    Well, wait.

    If I pick D, I can use the extra $1771 as payment for the Ferrari I’ve always wanted (and deserve). Then I’d have a nice home and a Ferrari. Whose the sucker now?!

    Later on, I’ll just refi or sell at 15% yearly gain! Boy this finance stuff is easy. Can you believe people go to college for this crap?

  119. madhaus Says:

    Another vote for loan stats in 94301 per nomadic. And LOL at #118, anon. So what did you major in, beer pong?

  120. anon Says:

    Double major in women’s studies and glass blowing. Took me 7 years.

    Still, it doesn’t take a fancy schmancy degree to choose the lower number! Who wants to pay more? I just want to get more.

  121. RealEstater Says:

    Madhaus repeats the Motto theme:

    >>But it is already starting.

  122. anon Says:

    And it is starting. It started a couple months back.

    But, sadly, there will be no crash. Like the titanic slowly sank into the ocean, so shall the paper value.

  123. RealEstater Says:

    >>Alt-A is for people with great FICO, but not enough money.

    >>Oh, forgot to answer zanon in #97! Use our “most hallowed, most revered” RBA zip: 94301. Please share your data. We’d love to hear more about the Alt-A leverage around here!

    I repeat, nobody even heard of Alt-A in 94301. When the median is over $2M, there is no way to fudge your way in.

  124. Pralay Says:

    I repeat, nobody even heard of Alt-A in 94301. When the median is over $2M, there is no way to fudge your way in.
    ———–

    And how exactly our Chuckster knows it? Oh, I forgot, he talked to couple of guys in mortgage industry. :)

  125. anon Says:

    No no no Pralay.

    He asked his neighbor.

  126. Pralay Says:

    In addition, don’t forget that he is not an “amateur”. Most likely he himself is a mortgage broker by profession and he issues ALL the mortgages in RBA for last five years. Who could know better than him?

  127. anon Says:

    Nobody.

    Except me. I can see Palo Alto from here.

  128. anon Says:

    “I repeat, nobody even heard of Alt-A in 94301. When the median is over $2M, there is no way to fudge your way in.”

    bullshit

    Roll your equity into the home and over extend yourself on the amount you borrow.

  129. Pralay Says:

    It’s funny that’s the Chuckster is such an out and out sexist pig, given that there’s no way he could afford digs in 94301 without his wife’s high-paying gig.
    ———

    Come on! What makes you think so? The only reason he works is to earn frequent flyer miles. That means only reason he is running a multi-timezone, multi-country, multi-million-dollar, multi-****** mega project and staying awake 2AM morning is to earn frequent flyer miles so that he can afford to go to international vacations and show his prestigious zip code to custom officers.

  130. anon Says:

    Right. He works even though he doesn’t have to.

    In this way he avoids the Immasculation of knowing that his wife could float them both.

  131. RealEstater Says:

    Madhaus says,
    >>It’s funny that’s the Chuckster is such an out and out sexist pig, given that there’s no way he could afford digs in 94301 without his wife’s high-paying gig. I bet it really peeves him that mr. madhaus can afford to keep his family in Sprinkles cupcakes and high-end guitars on one income.

    Not to feed the troll, but to give you some perspective, our monthly childcare related expenses is higher than our mortgage payment. These include sending to kids to learn art, swimming, karate, ice skating, after school care, and various academic pursuits. Our monthly Visa bill is also higher. In other words, the house payment is not where the battle is at (To rent an equivalent house today would cost more than our mortgage payment). Your focus is simply wrong — living in one zip vs. another has minimal impact in our big picture.

  132. RealEstater Says:

    The ultimate “prestige” item in my mind would be kids. To anyone who owns 2 Ferraris I would say, “Big freaking Deal, I have 2 kids. I will easily out-spend you for the next 20 years!”

  133. Pralay Says:

    The irony is that after all the successes, achievements and perfections in real life in real bay area, the only thing Chuckie achieved here is a name – “New Chuck Norris”.

  134. RealEstater Says:

    Pralay,

    Are you waiting for your multi-time zone call? If not, don’t be a loser to stay up just for internet chat.

  135. madhaus Says:

    Chuck springs into action.

  136. anon Says:

    Like a crouched bengal tiger stalking its prey. One roundhouse kick is all it takes to transform BA into RBA and back again.

    Such is the way of Chuck.

  137. madhaus Says:

    Who knew that Burlingame was the equivalent of the hidden gusset?

  138. anon Says:

    “The irony is that after all the successes, achievements and perfections in real life in real bay area, the only thing Chuckie achieved here is a name – “New Chuck Norris”.”

    Here’s the deal. WG was close, but upon reconsideration I realized:

    The internet is the great equalizer.
    The bay area is the great incentivizer.

  139. DreamT Says:

    Wait RealEstater’s, in your world prestige = spending?!?
    You don’t realize prestige is an arrived state (success, reputation, wealth), not a behavior such as spending?
    Also, the quotes really belong around “item” not “prestige”. Don’t let your kids read your post, you don’t want them to know they’re merely a prestige “item” – they might use some artsy karate on you while wearing that ice skating shoe.

  140. RealEstater Says:

    DreamT,

    Everything I told you will start to make sense once your kid grows older. You probably don’t get it now just as the single apartment guys don’t get why they will need a home eventually.

  141. anon Says:

    Ah, the old ‘when you’re my age you’ll understand’ argument. It’s interesting; the more I read that post the more funny it becomes.

    You really do put a lot of expense into making sure your kids are well rounded, RE!

    I wonder: what are they learning from dear ol’ dad?

    One more thing: what exactly are “and various academic pursuits”? Real estate seminars? Logical reasoning courses?

  142. anon Says:

    Maybe Spanish lessons so they can translate “get out of my park” for you?

  143. RealEstater Says:

    anon,

    What I described is pretty much standard practice among kids in our community. “Academics” include tutoring sessions in advanced math and reading. In addition, there’s piano lessons.

  144. madhaus Says:

    Children as potlatch-generators. That’s creepy.

    Isn’t it cute how Chuckie pulls the “I know more than you young whippersnapper” sctick at the same time as calling other posters old and irrelevent. I’m going to have to beat that hooligan with my walking stick.

    Yes, I’d like to send this letter to the Prussian consulate in Siam by aeromail. Am I too late for the 4:30 autogyro?

  145. RealEstater Says:

    Damn, I forgot about chess class and basketball. That does add up to quite a bit…the thing is we never tracking our spending.

  146. madhaus Says:

    I feel sorry for Chuckie’s kids, they’re only studying one instrument apiece. How will they deal with that huge deficit?

  147. RealEstater Says:

    While Madhaus mostly focus on API scores, we train our kids to be well rounded, have leadership skills, and are widely traveled.

  148. RealEstater Says:

    Madhaus,

    Piano is the foundation. My kid is fascinated by the guitar, so I’m sure he will pick it up later. A guitar player does not even need to know how to read music, so that’s not the place to start.

  149. DreamT Says:

    RealEstater – Right, when I’m 40 I will suddenly care about prestige, objectify my kids and buy their free time away while I post on burbed :) And it will all make sense, to boot!
    That said, I empathize with the emotional and (reportedly) financial burden of having to compete with the “community” for being the family with the most academic pursuits – and still find time to educate and guide us lowly folks. It’s admirable.

  150. zanon Says:

    94301 it is.

    Give me a couple of weeks — hopefully I’ll be able to get both Alt-A (including flavor) and HELOC activity.

    -zanon

  151. SiO2 Says:

    WGer is at least partially right about Alt-A. There’s at least two legitimate reasons to get Alt-A that don’t result in being unable to pay.

    1. Part of income is based on stock options, grants, variable bonus, etc. Standard underwriting excludes stock option and grant gains. So it undercalls income. Therefore you could do a stated income to state your true income, since it’s more than your salary + average of last 2 year bonus

    2. Want to buy first then sell. This was very common up to mid 08; sellers would not accept an offer with a contingency on selling. Or (like in my case) I didn’t want to sell while living in the house (pain in the butt) and also didn’t want to sell, have to move to a rental, then move again. Or get priced out! So you state income a bit higher to support both mortgages, but ultimately having sold the first house it’s no problem. Semi-legitimate I guess but not going to cause a financial crash.

    The real problem as has been stated is the option ARMs held by people who don’t really understand them, and stated incomes who are now in unsustainable mortgages. Or who got laid off. That will be the real linchpin of the market – if the job market sags significantly in the tech industry, that will cause prices to fall. Like in 2001.

    WG – any comment on the northeast part of Los Altos? I’m eagerly awaiting your insights! thanks!

  152. SiO2 Says:

    To answer the question about putting on the market and taking off – I have a friend who put his Cambrian house on for $850k a couple of months ago. The house was pretty good, but not that good! Reduced to $799 then just took it off and is renting it out.

    Also I have seen some $100-$150k price drops in Saratoga and Los Altos. Including one where it went pending at $1.7m, but the buyer backed out because his down payment was in stocks and he lost too much in the recent DJIA crash. doh! Now it’s at $1.6m. Starting to get tempting.

  153. Herve Says:

    RealEstater, don’t forget modeling.

  154. Pralay Says:

    I feel sorry for Chuckie’s kids, they’re only studying one instrument apiece.
    ——–

    I feel sorry for his kids too. “Tutoring sessions in advanced math” and “and various academic pursuits”? I know what that means – pressure cooker system.

  155. Pralay Says:

    While Madhaus mostly focus on API scores, we train our kids to be well rounded, have leadership skills, and are widely traveled.
    ——-

    Isn’t that cute! Chuckie tries to find something in others lives what he ASSUMES as weakpoints and then tries to highlight them.

    “VP-type” DreamT does laundry and Chuckie doesn’t. DreamT is loser.
    Anon does not have two kids like Chuckie does. Loser.
    Madhaus does not do “multi-country interntional vacation”. She and her kids are losers.

    But his assumption itself turns out to be wrong most of the times. I wonder what his neighbors thinks of him. :)

  156. Pralay Says:

    Lastly, I hope (and strongly hope) Chuckie’s kids are not like Chuckie (someone who thinks people living outside RBA are losers) after learning leadership skills and traveling widely.

  157. WillowGlenner Says:

    SiO2, Sorry but I really don’t know anything about Los Altos. I really only know the south bay, and even then I only deal with lower priced properties. Just can’t comment on it, but in general I don’t think prices will fall much in the desirable areas although they will fall some and have fallen. Inflation is the friend of the real estate investor.

  158. WillowGlenner Says:

    Mr. Ethics,
    To me, Alt-A is anything to a borrower with good credit and solid income that isn’t fully amortized and thus will reset at some point resulting in higher payments.

    What are you talking about? Alt-A has nothing to do with adjustable loans or option ARMs. Many (most?) Alt-A loans in the bay area are fixed. The fact that you all here think Alt-A means Option Arm is the whole reason I know whatever you are expecting won’t materialize. For that matter I have never heard of an Option ARM in the bay area either. Ever. Not one.

  159. WillowGlenner Says:

    Anon,

    Is this a joke? I hope so, bob 2.0.

    I too don’t know many people who are in dire straits and must sell. One example in particular is a 4k sqft home that was on the market for 3.1M. Zillow itself valued it at 2.5 LOL. I don’t know what they were thinking and none of their friends had the heart to tell them they were crazy. So, the home sat on the market for 11 months and they gave up. They bought it 25 years ago before this creative financing bullshit so they don’t need to move.

    Thats exactly the point, anon, and its not me that is the joke it is YOU. In order for prices to fall you need people to sell. They need to feel some urgency to sell. If nobody does this, prices WILL NOT, repeat WILL NOT fall. It is not my equation that does not work with the scenario you described above. It is yours.

  160. Stepford Says:

    #91 ” How many of you know of – personally or informally – someone who has put their home up on the market and subsequently took it down becuase they couldn’t get what they ‘felt’ their home was worth? Let’s limit the scope to a year or so.”

    I know of one house in Hillsborough which didn’t need to be sold, but the family wanted to buy a house in a different part of Hillsborough. It was listed at 2.8 (I don’t know if that was a fair price). It sat over the summer and then they pulled it off the market in Sept as they didn’t have to sell and didn’t get the price they were asking.

    I am not selling my house, but am planning to tear down/remodel in April. I am not sure I will go forward with this plan now. I have lost a lot of money in the stock market (unlike RE who timed the market correctly) and my stock options also are half the value they were in Nov 07. I noticed in my neighborhood there is not as much construction going on. There have also been warnings from my hood realtor blogs that people are getting their lines of credit cut off right in the middle of construction. My father in law in WMP told me that a house near him under construction had to stop. I also casually follow the mls in WMP and I don’t see much pending sale. I’m surprised people here think MP is holding up. I think you can get more house there now for the price compared to the past.

  161. anon Says:

    “Thats exactly the point, anon, and its not me that is the joke it is YOU. In order for prices to fall you need people to sell. They need to feel some urgency to sell. If nobody does this, prices WILL NOT, repeat WILL NOT fall. It is not my equation that does not work with the scenario you described above. It is yours.”

    I don’t get it. Didn’t I describe a situation wherein the owners do not need to sell?

    You will notice that, unlike you, I have never said that I believe prices have fallen 20% in the upper end…I have said time and time again it will be years before the upper end is affected.

    You appear to be reading your own desires/misconceptions into my posts, sir.

  162. WillowGlenner Says:

    Anon, you asked me if it was a joke and called me bob2.0, and that was the point I was making. The neighborhood I live in doesn’t have people that get up every morning looking at their home equity to make their buy sell decisions. The place where valuations come home to roost is property tax assessments which are still going up. I doubt my neighbors are aware of the certaintly professed by people on this thread that their equity is declining. I don’t think they know, or even care.

  163. anon Says:

    Perhaps – perhaps not. Most people I know are aware that the market has shifted and that their home would probably not fetch the same price at market as it would have during the bubble.

    Remember, the high end homes did not see anywhere near the percentage gain that the lower end homes saw. You would know better than I – Am I correct in asserting that many lower end homes doubled in “value” between the years 2000 and 2006?

    You will be hard pressed to find a home in the 1.5-3.0Mil range that did the same. In fact, I highly doubt you will see a single one. This is part of what is contributing to their price stickiness. As the lower end homes were doubling in value, the upper end were seeing gains of 20%.

  164. anon Says:

    “I doubt my neighbors are aware of the certaintly professed by people on this thread that their equity is declining. I don’t think they know, or even care.”

    One more thing – who said this?

  165. cardinal2007 Says:

    Regardless of whether one personally has heard of Option ARMs or anyone who has them they did constitute 28.3% of mortgages in the Bay Area in 2005.

    findarticles.com/p/articles/mi_qn4176/is_/ai_n16894544
    findarticles.com/p/articles/mi_qn4176/is_/ai_n16813389

    One thing I have learned over the years is that personal experience counts for nothing when comparing to large populations.

    95% of the people I know in their 20s diligently save for retirement, I don’t go ahead and extrapolate that to mean that even most people in their 20s save for retirement. The people I decide to spend time with are a selected group, many I have met at TJ or at CMU or Stanford, I don’t make any presumptions in my mind that they are a sample set of the population or anywhere near.

    It is the almost the same for anyone, they don’t have a representative population as their set of friends, most people hang around people like themselves.

    I think the only true way to gather data for large population is to collect all the data as it occurs, or to take polls. This removes any selectivity bias.

  166. R Says:

    Never heard of Option ARMs in the Bay Area? You need to talk to more mortgage brokers, as they gobbled up like candy during the bubble years because they allowed buyers to bite off more than they could otherwise chew.

  167. RealEstater Says:

    >>95% of the people I know in their 20s diligently save for retirement, I don’t go ahead and extrapolate that to mean that even most people in their 20s save for retirement. The people I decide to spend time with are a selected group

    I think this is the sample set you should bother tracking anyways, because these are the people who competed with you to get into Stanford, and these are the same group of people who will compete with you to buy into Real Bay Area. The “plumber Joe” types will be renters, east bay guys or future Austin dwellers.

  168. Pralay Says:


    Are you waiting for your multi-time zone call? If not, don’t be a loser to stay up just for internet chat.

    ——-

    Chuckie,
    I am curious what you were doing by staying awake till 2AM? Don’t tell me the same made-up story that you were waiting for conference call in India for your multi-timezone, multi-country, multi-million-dollar project. :) As I said before, “management class” guy does not need to stay awake till 2AM to make conference call in regular basis. The only situation warrants that kind measure when there is a catastrophic issue in the project.

  169. RealEstater Says:

    Pralay,

    Whatdo you know about working with offshore? If you’re on my team and you don’t take a call at 2AM, you’re going to lose your job and H1B status.

  170. WillowGlenner Says:

    On the east side San Jose homes more than doubled in the bubble. I would say many tripled in price from 2000-today. On the east side you can see the subprime crisis in action.
    http://www.redfin.com/CA/San-Jose/14461-CHRISLAND-Ave-95127/home/1066717

  171. WillowGlenner Says:

    Its getting hard to follow all the conversations but what I was talking about with regard to Option Arm is in the context of the Alt-A implosion that so many think is forthcoming. I am certain Option A existed in East side San jose which resulted in a tripling in price and the current implosion. But on the West side, more desirable properties etc, who has an option A? Do you seriously think somebody who buys a house 750K and up is going the Option A route? Option A is something that should be rightfully associated with Subprime and that bubble has burst.

  172. RealEstater Says:

    WG says,
    >>Do you seriously think somebody who buys a house 750K and up is going the Option A route? Option A is something that should be rightfully associated with Subprime and that bubble has burst.

    It’s very easy to prove there’s no Alt-A and such things in the desirable areas. Just look at the foreclosures — practically non-existent in these places.

  173. madhaus Says:

    Is Chuckie suggesting that he’s going to lose his H1B status because he isn’t taking that 2 AM call? So his boss, someone maybe like DreamT, ordered him to make those conference calls and like it?

    I’m even more amused to hear Chuckie spout off about what kids need to learn to play guitar. It’s obvious he knows squat. Guitar was the first instrument my son studied and he’s been reading notes from day one, had no trouble adding on extra instruments already knowing his treble clef. I assume the Chucklehead learned how to play three chords on an open-tuned guitar and thinks that’s all there is to it, like the G-tuned stuff Keith Richards pounded out omitting his sixth string (although even that required knowing both pentatonics and triads, clearly way beyond the Chuckster).

    Piano is a great first instrument, but don’t wait to add the second one. All the other kids in Palo Alto are already playing flugelhorn and alto flute in addition to the standard piano, guitar, violin, and drum kit. Hurry up, your children are being left behind!

  174. Herve Says:

    > Hurry up, your children are being left behind!

    As long as he out-spends the other parents, big freaking deal.

  175. RealEstater Says:

    Madhaus,

    A rock musician does not need to be trained in music. Do you think Eddie Van Halen can possibly write down his tunes in notes? It will never sound the same. Don’t get me wrong, I love rock music, but I look at it as more of an art form than anything else.

  176. madhaus Says:

    Who said anything about writing notes down? I am talking about reading them.

    Most rock guitarists write their songs out for others using tablature, anyway, but I wouldn’t expect a dilettante like you to know anything about this subject.

    Speaking of Eddie Van Halen, you really picked a terrible example, as you usually do. You might want to look into how he got to be so awesome.

  177. madhaus Says:

    PS – wonder how we got from learning guitar to being a rock guitarist? There are a plenty of other styles to play on guitar, many of which require reading notes, or at least tab. If you want to play jazz, you need to be able to read a jazz chart – which is the melody line (in musical notation) plus chords.

    If you want to study classical guitar, you had better bloody well know how to read notes.

    PS: I play all the above.

  178. RealEstater Says:

    >>I know what that means – pressure cooker system.
    >>Hurry up, your children are being left behind!

    The above comment just goes to show that MH and Pralay don’t get it. It’s totally not about competition or pressure cooker. It’s about expanding a kid’s interests. My kids love the programs we send them to. They make a lot of friends, and they enjoy learning. This is why the API-centric families can never compete with the all around self-motivated kids that grew up in an invigorating environment. It’s all about the intangible qualities of a community.

  179. RealEstater Says:

    Madhaus,

    Not sure if you know anything about Speed Metal, but I suggest you check out this band called Arch Enemy. It’s got a female vocalist from hell, and totally awesome guitar work.

  180. madhaus Says:

    Chuckster’s pwn3d on bringing up guitar instruction, so he changes the subject to API scores. Coming up next: Chuckster schools Pralay on Indian cookery, WillowGlenner on investment property, sonarrat on piano lessons, nomadic on where to buy in Los Gatos, and burbed on moderating a blog.

    Tune in tonight, for another exciting episode of As The Chuckster’s Legs Bind!

  181. madhaus Says:

    The only metal band I like is Spinal Tap. Well, Led Zeppelin, but they’re ur-metal.

  182. madhaus Says:

    ack, hit the wrong key… there’s a kid in my rock elective who brings in a different death metal CD every week. Yeah I know about speed metal – see Metallica, they are mostly from Berkeley.

  183. RealEstater Says:

    MH,

    Looks like you’re only into the old uncool stuff from your generation.

  184. RealEstater Says:

    Speed metal is all about guitar. Not sure why a person who supposedly is passionate about guitar has so little exposure to it. BTW, Metallica WAS speed metal. They haven’t done that genre for many albums now.

  185. DreamT Says:

    I hadn’t realize speed metal was still alive. I’ll try your band and see how they compare to the first offerings of Slayer, Kreator, Loudblast and Coroner…

  186. RealEstater Says:

    Get the DVD concert.

  187. madhaus Says:

    Chuckie, I’m older than you, why are you surprised that I like music from an earlier time than you?

    I am not into Metallica, I just mentioned them. I don’t follow them. One of the kids in my elective brought in their new album and played 2 cuts which I did enjoy.

    I am into progressive rock – I know, stuck in the 80s. I’m fine with that. If you want to talk about awesome guitarists, I am down with Steve Morse and Eric Johnson. I can name a bunch of musicians I think are great. But just like with zip codes and cars, other people like other rock bands than you do, something that you seem to have a tremendous amount of difficulty with. That is your problem, not mine. Your insecurity does not have anything to do with me.

  188. RealEstater Says:

    There goes again…can’t really argue with a woman. Always end up with some sort of insecurity problem.

    Anyways, I hope you enjoy your Duran Duran, Spandel Ballet, and Fleetwood Mac.

  189. Herve Says:

    > Always end up with some sort of insecurity problem.

    Get used to it, this is not the last time you hear that.

  190. madhaus Says:

    Poor Chuckster. The group is “Spandau Ballet.” That’s probably the only remotely prog group of the 3 he named. But since he’s usually wrong on real estate, why should he have any idea what “progressive rock” is? Calling Fleetwood Mac prog is like calling the Ramones Disco.

  191. Pralay Says:

    This is why the API-centric families can never compete with the all around self-motivated kids that grew up in an invigorating environment.
    ——-

    Oh boy, I am trying to visualize the “invigorating environment” of well-rounded kids with well-rounded parents. :)

  192. madhaus Says:

    I don’t see any well-rounded parents from 94301 around here. Just a craven materialist who confuses possession with profession, locale for expertise, and expense with quality. In fact, I’d suggest the Chuckster is probably the least rounded of any of tonight’s participants, and that includes the real estate stooge.

  193. RealEstater Says:

    Madhaus still doesn’t get it. For the formula to work it requires an environment where virtually all the kids in the community are well rounded, motivated kids from proper families. Most parents in the district have a good camaraderie and healthy respect for each other, as they know the area is full of very talented people who didn’t get there by being stupid.

  194. Pralay Says:

    Most parents in the district have a good camaraderie and healthy respect for each other, as they know the area is full of very talented people who didn’t get there by being stupid.
    ———–

    Provided JustMe of Duveneck/St. Francis neighborhood (ref #191) and Chuckie are NOT the samples of those “very talended people”. :)

  195. Pralay Says:

    BTW, Chuckie is trying hard to prove his well-roundedness by association: Palo Alto is a place of “very talented people”, therefore I am talented (and well-round) too.

    You know, if you hang out with Bill Gates, you are billionaire too.

  196. nomadic Says:

    Pralay, Larry Page lives in Palo Alto. Are his neighbors billionaires? ;-)

    …good camaraderie and healthy respect for each other.

    Too bad for you that doesn’t extend to anyone who doesn’t live in 94301. (“Proper” families? Are you sure you aren’t a closet Republican?)

  197. nomadic Says:

    The second part was not directed to you, Pralay.

  198. Pralay Says:

    Pralay, Larry Page lives in Palo Alto. Are his neighbors billionaires? ;-)
    —————

    Of course they are billionaires. You know, “the area is full of very talented people who didn’t get there by being stupid“. If Larry Page is not stupid and became billionaire as a result, his neighbors must have done the same thing. They did not get there by being stupid.

  199. Pralay Says:

    …good camaraderie and healthy respect for each other.

    Too bad for you that doesn’t extend to anyone who doesn’t live in 94301. (”Proper” families? Are you sure you aren’t a closet Republican?)
    ————-

    No, “healthy respect” does not extend beyond 94301. No healthy respect for EPA people, non-RBA people, angry renters, flyover-country people and “nomadick”.

  200. RealEstater Says:

    Steve Jobs is a resident too. The school district has many Apple Computers donated by him, so you don’t exactly need to be associated with him to benefit in some way. However, don’t under-estimate the power of association. In the business world it’s all about your networks. The biggest benefit as I see it is the overall environment for the children. They’re going to schools where their peers come from families who are leaders in industry and society. They see the accomplishments all around them in their formative years, and that’s the standard they accept as normal.

  201. RealEstater Says:

    Pralay,

    Why are you spreading a typo around? What’s the agenda here?

  202. Pralay Says:

    They’re going to schools where their peers come from families who are leaders in industry and society. They see the accomplishments all around them in their formative years, and that’s the standard they accept as normal.
    ————

    You mean just like Paris Hilton, right? :)

  203. Pralay Says:

    Why are you spreading a typo around? What’s the agenda here?
    ——-

    LOL! If typo has an agenda, that’s not a typo.

  204. madhaus Says:

    Now I get it. Chuckster has nothing to offer his children on his own. He can’t role model leadership, because he’s despised. He can’t demonstrate talent, because he doesn’t have any. He certain can’t teach them “camaraderie and healthy respect” because he doesn’t know how to get along with anyone.

    So he has to move to Palo Also in hope that the other residents’ children’s awesomeness will rub off on his own kiddies. If he’d stayed somewhere where he figured no one would respect him, like Real Gray Area, then there’s no way his children would develop as self-actualized future leaders. But this way, living near all that wealth, talent, and creativity, they’d realize through accident of birth they got a failure as a dad but other people’s parents are pretty darn fun to hang out with.

    Yup, that’s Chuckie all over. Don’t cultivate what you want to be; buy access to it.

  205. RealEstater Says:

    Madhaus,

    By your reasoning, there’s absolutely no need to be in a good school district.

    Children absorb the environment around them like a sponge. For the majority of the day when they are not in front of you, they are in the school! What makes a school good is not just the teachers or the facilities, but also the makeup of the student population. This is true all the way up to college. Why does Stanford turn out such high quality students? Because they were already high quality going in.

  206. Pralay Says:

    Steve Jobs is a resident too. The school district has many Apple Computers donated by him, so you don’t exactly need to be associated with him to benefit in some way.
    —————

    OMG, I never knew that Steve Jobs would be so selfish that he would donate computers only for PA school district, depriving other school districts in bay area including home city of Apple Computers.

    Ooops, I forgot, he lives in PA. That’s why he did. Perfectly makes sense.

    So Madhaus The Loser Mom,
    Your kids are deprived from Apple Computers. You kids could get Apple only if you could move to PA.
    And damn, you and your school district so poor that you and your school district cannot afford Apples – even after all educational discounts Apple is giving for last 30 years.

  207. Pralay Says:

    Children absorb the environment around them like a sponge. For the majority of the day when they are not in front of you, they are in the school! What makes a school good is not just the teachers or the facilities, but also the makeup of the student population. This is true all the way up to college. Why does Stanford turn out such high quality students? Because they were already high quality going in.
    ———

    LOL! Chuckie carefully avoided the most important part – parenting.

  208. Pralay Says:

    Now I get it. Chuckster has nothing to offer his children on his own. He can’t role model leadership, because he’s despised. He can’t demonstrate talent, because he doesn’t have any. He certain can’t teach them “camaraderie and healthy respect” because he doesn’t know how to get along with anyone.
    ——-

    Another unfair statement from Madhaus. Chuckster is managing multi-timezone, muilti-country, multi-million-dollar mega project with multi-sub-teams. He is too busy and staying up till 2AM everyday due the conference call to India. He has a Porsche, 2 SUV, Rolex and sub-zero refrigerator and a prestigious zipcode. How could he not be a role model!

  209. madhaus Says:

    I actually agree with everything the Chuckster said in #205. What’s said is exactly what Pralay noticed in #207 — even Chuckie admits that he has nothing to teach his own kids other than how to thrown money around to impress people.

    I can just imagine them at school.

    Chuckie Jr: My lunchbox is better than yours!
    Gifted and Talented Palo Alto Kid: If you say so.
    Chuckie Jr: I do say so! My dad bought it for me at the most expensive store in town! Look at this quality! You’re a loser with your lunch in a paper bag!
    GATPAK: You seem resentful of my lunch.
    Chuckie Jr:I am NOT resentful! I have a better lunchbox than you do! I won’t sit next to you anymore!
    GATPAK:Why don’t you sit with Autrey the Austitic Kid? He loves counting the stitches on lunchboxes. I bet he’ll really admire yours.
    CJ: I already told him he’s a loser for wearing pants from Target.

  210. anon Says:

    Gah… I can’t resist.

    “Now I get it. Chuckster has nothing to offer his children on his own. He can’t role model leadership, because he’s despised. He can’t demonstrate talent, because he doesn’t have any. He certain can’t teach them “camaraderie and healthy respect” because he doesn’t know how to get along with anyone.”

    “But this way, living near all that wealth, talent, and creativity, they’d realize through accident of birth they got a failure as a dad but other people’s parents are pretty darn fun to hang out with.”

    Holy f’in crap. Someone turned on the firehose ;). Keep it up. Even though Chuck won’t get the message, this is great reading.

    I also would like to point out that I alluded to this a couple days ago when I mentioned that Chuckie’s kids wouldn’t learn anything from him. It’s quite clear he has nothing to offer.

    Anyway, I’m going to do my best to make good on my previous statement.

  211. RealEstater Says:

    Guys,

    I cannot say how much my kids have learned from me, but it’s pretty obvious Pralay has learned a hell of a lot! He can recall every passage I’ve ever written by rote, and knows everything I’ve ever taught him by heart!

  212. RealEstater Says:

    anon,

    Do you realize you have a lot in common with Bob? Bob said many times he would no longer write to certain people, only to do it over and over again.

  213. RealEstater Says:

    Wo wo wo…Pralay talking about parenting? I see a pattern here. He talks about real estate until 2AM in the morning, despite having no experience ever owning any property. Now he is questioning someone else’s parenting even though he has no kid and zero parenting experience. Just one basic question: Would you ask a vegetarian about the best steak house in town?

  214. DreamT Says:

    This brings to mind a comment you made about French food, right before elaborating on the depth of your experience (rocky baguette!)

  215. RealEstater Says:

    DreamT,

    You are learning a lot too — from Pralay unfortunately.

  216. anon Says:

    “Do you realize you have a lot in common with Bob? Bob said many times he would no longer write to certain people, only to do it over and over again.”

    1) I realize that it is bob-esque to say I’m going on a hiatus and then post the next day.

    2) Since I also have a lot in common with you, I can bullshit my way out. I merely said I would go on a hiatus. As a hiatus is an interruption in the amount or intensity of something for an indiscriminate amount of time, I can take the stance that I stopped posting for an (albeit short) amount of time. Also, the intensity (read frequency) has dwindled.

    3) To say that I have “a lot” in common with bob and then back it up using a single instance is to make the same bob does. I suppose that means you have a lot in common with bob.

    Since we all have “a lot” in common with each other, it looks like we’re all ‘birds of a feather.’ I would imagine that has “a lot” to do with why we post on this blog.

    Would you like me to spoon feed anything else to you, friend?

  217. DreamT Says:

    RealEstater – Mine wasn’t a taunting post, but the proof of yet another flagrant delit of hypocrisy.
    I question how much you actually learn on this board. While you’re focusing on dispensing unsolicited pearls of wisdom, a lot seems to pass you right by.

  218. RealEstater Says:

    anon,

    I can see that you’re the type with no impulse control. It took no effort to get you to do something you said you would not do.

  219. anon Says:

    Guess what buddy:

    You’re right it took no effort.

    Madhaus verbally eviscerating you is what prompted me to post.

    Look up hiatus.

  220. RealEstater Says:

    LOL. Just did it again! Want to bet I can get you to buy a house?

  221. Pralay Says:

    Now he is questioning someone else’s parenting even though he has no kid and zero parenting experience.
    ———–

    Chuckie,
    I did not question your parenting, but pointed out that you avoided that part in your post.

    Regardless, I don’t think a materialist, racist, a person who makes up story about multi-**** mega-project to explain why is up till 2AM makes a good parent.

  222. madhaus Says:

    Here’s Chuckie’s other kid learning from the environs.

    Chuckette: You jumprope like the kids from Sunnyvale.
    Gifted and Talented Palo Alto Kid #2: Hey, thanks!
    Chuckette: That wasn’t praise. I don’t give praise to losers. So don’t say thank you when I’m dissing you.
    GATPAK 2: Why are you being rude to me? You can’t even jumprope that well. If you were nice I’d help you get better.
    Chuckette: I don’t want to be your friend. I bet all your friends live in 408-land.
    GATPAK 2: No, most of them live here. Some of my friends in gymnastics are from there.
    Chuckette: I bet you’re terrible in gymnastics.
    GATPAK 2: executes flawless aerial. I think I’m getting pretty good. Let’s see yours.
    Chuckette: attempts forward roll (somersault), falls to side before completing it. You’re pathetic.
    GATPAK 2: Okay. I’m going to hang out with the other pathetic kids. See you.
    Chuckette: to entire playground, loudly Every one of you is a big, fat loser!

  223. Pralay Says:

    He talks about real estate until 2AM in the morning, despite having no experience ever owning any property.
    ———-

    Chuckie,
    Last time I checked it not a homeowner’s blog. Check the title of this blog again – “…….. Insanity Blog”.

    As you are well-rounded parent of well-rounded kids, I assume you understand topic of homeownership is different from the topic of real estate market. Let’s put it this way – I don’t think you understand market better just because you purchased a home five years back.

  224. madhaus Says:

    anon, I can understand wanting to leave, but I’m glad I got you to come back. :)

  225. Pralay Says:

    He can recall every passage I’ve ever written by rote, and knows everything I’ve ever taught him by heart!
    ——

    Chuckie,
    Believe me, googling is lot earlier than remembering the local time of India. Due to this reason I don’t need to stay up till 2AM every night. For example, googling “burbed.com + Dynasty” took me right there what you said about “high-end” restaurant and what DreamT said about your definition of high-end restaurant.

    Looks like well-roundedness of 94301 is taking toll in your “average hitech guy” capacity. :)

  226. cardinal2007 Says:

    I think it will be RE who has the last laugh a few years from now as he is supervising the movers that are moving his child’s computer clothes and linens into his/her dorm room a week before classes start at Stanford. And before you think of Azia Kim, RE’s child will have been accepted to Stanford.

    As for why he/she applied to and decided to attend Stanford, I think we all know the reason.

  227. DreamT Says:

    The one who’ll have the last laugh is burbed. He’s the only one making money on our time spent here. :)

  228. anon Says:

    “LOL. Just did it again! Want to bet I can get you to buy a house?”

    Sure, buddy. And, while I’m at it, since you’re going to assume it anyway, I may as well concede it:

    I, anonymous j throckmorton III, being of sound mind and reason hereby declare the following:

    Be it know that, henceforth, every time I visit the webpage burbed.com, read the comments on burbed.com, or post on burbed.com it is solely because, for, or as a direct result of the actions or thoughts of the man behind the LCD screen known as Real Estater.

    Now we can be clear.

    And thanks MH…I’m not leaving per se, but I am cutting back.

  229. madhaus Says:

    once you smoke the burbed crack, you don’t never go back.

  230. Pralay Says:

    Want to bet I can get you to buy a house?
    ———-
    :) Chuckie answers the “motiation” question someone asked yesterday.

    Freudian slip? (question with a cavuto mark).

  231. anon Says:

    don’t never indeed.

    There’s something so irresistible about a place with a multitude of clever people and a whipping boy whose nearly always wrong.

  232. nomadic Says:

    anon, we can hang out if you come back from hiatus.
    .
    .
    .
    Wherever that is! ;-)

  233. anon Says:

    Nomadic, you’re killing me. Who can refuse an offer like that?

    Good thing I never said it was a real hiatus, eh?

    WG, looks like all hope is not lost – you may get your wish: http://www.latimes.com/business/la-fi-foreclose24-2008oct24,0,1349817.story

    “That new law virtually slammed the brakes on mortgage default filings,” said Andrew LePage, a DataQuick analyst. “We don’t know yet how many of those loans will get worked out versus just shifted to late this year or early next year.”

    I wonder what ‘worked out’ means. Anyone know? I highly doubt its a reduction in principal. My best guess would be a lower interest rate or an increase in the loan duration…If this is the case, it will only prolong the equity burn process.

    So, what are the banks really doing? I would speculate that they are offering either of the two options mentioned in the previous paragraph so that they can keep the loan on their balance sheet. From their perspective, it is better (on paper) to give the FB a break and still keep the loan on their balance sheet than it is to foreclose and take the loss. Again, payment of the piper is prolonged.

    “Members of Congress complained that the administration has been far more responsive to Wall Street’s needs than to ordinary homeowners.”

    Thank god. While I can’t stand those thieves on wall street, prevention (mitigation?) of a global financial meltdown is a tad more important than an over leveraged buyer keeping his home. Guess what? If you can’t make the payments when your loan adjusts, you were over leveraged.

    Home prices double every 10 years my ass. It was nice of that RE stooge (why is this word so funny in this context?) to explain how ‘the business’ narrows the scope of homes that are taken into consideration to create that ‘fact.’

  234. nomadic Says:

    Interesting: according to the OFHEO, the house I sold (in the midwest) a bit over SEVEN years ago is worth $100 less today than the price I sold it for. Just goes to show the uselessness of aggregate data I suppose. (Looking at comps for sale, I’d estimate it’s worth even less.)


Leave a Reply

Please be nice. No name calling, no personal attacks, no racist stuff, no baiting, etc. Let's be nice to each other in the true Bay Area spirit! (Comments may be edited/removed without notice.)