Guess what this house sold for: Menlo Park
Remember this house?
“Original owner of this home has watched all of the trees in this neighborhood grow tall” [Burbed.com]
335 HEDGE RD
Menlo Park, CA, 94025 offered at $749,000
Bedrooms: 2 Bathrooms: 1 Full
Apprx. Sq. Feet: 1020 Year Built: 1950
Original owner of this home has watched all of the trees in this neighborhood grow tall!! Very special home with separate dining room, beautiful hardwood floors, new paint inside & out. Formal entry. Woodburning fireplace in living room with looks out toward lovely backyard with prolific lemon tree. Two car attached garage. Excellent neighborhood with a great sense of community. Superb Menlo Park Schools and very convenient location.
Well, here’s an update from Burbed reader Mia:
Burbed,
remember this house I told you about last month? (see below).
Well, I just got a neighborhood “let me brag to you about how quickly I sold this house!” letter in the mail from the realtor. It stated that the house was listed for $749,000, received 5 offers, and closed for $826,000.I guess multiple offers are alive and well in the RBA, even in this down economy.
10% over asking. BOOYAH baby!
Phew. After all those “the bottom has been reached posts”, I’m glad to see this. Thank goodness that the Real Bay Area is still going strong and that those excellent Menlo Park Schools are just totally rocking!
Signs are looking good for the Real Bay Area!
October 23rd, 2008 at 9:23 am
a similar story.
I got an email this morning from a Coldwell Banker agent who listed a bank-owned, four-bedroom house on Chiles Drive off of Branham Lane in San Jose, for $297,500, way below the area comps, he said. The property got 118 offers, he said — 59 of them below $400k, and 59 of them above $400k.
http://blogs.mercurynews.com/realestate/2008/10/22/uncertaintys-effect-on-the-housing-market-and-a-contrary-example/
Here’s the house.
http://www.redfin.com/CA/San-Jose/4915-CHILES-Dr-95136/home/585374
Still a lot of stupid buyers I see- never offer 400K+ in this climate for an east side house. Pay a little more and go to Cambrian, a good area.
October 23rd, 2008 at 9:47 am
Who’s Buying Now? 4 Different People are buying now.
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1. The Rich: The Rich have cash to buy foreclosures and know in the long run these properties will gain in value. These are the people that send guys dressed in t-shirts, jeans, and strapped with bluetooth pdas to the court house with wads of $100k cashiers checks to buy foreclosed properties at well-below market value. Even if these properties would go down an additional 15% to hit bottom, the Rich will rent them out and keep them in their portfolio until they mature in value and make them money.
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2. The Indifferent: The Indifferent have 5 – 20% down-payment either saved up or they have inherited the money someway and want a house. They want to move on with their lives and establish a home for their family. They are not interested in waiting an addition 2 – 5 years for a housing bottom and are willing to buy now, seeing prices have declined over the last 2 years.
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3. The Delusional: The Delusional is an investor and cannot believe prices have come down this far! They believe the mantra that real estate always goes up and think this housing decline will be short lived. Once the subprime houses all foreclose and are eaten up by the market, prices will shoot back up. So they are willing use profits from flipping houses back in the boom days to finance properties now.
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4. The Uninformed: The Uniformed is uneducated about the housing market and credit crisis. They have probably scrapped together the minimum 3% down for an FHA loan and are willing to get into any home they can afford/qualify for because they hate wasting money on rent. They are also part Indifferent and part Delusional because they have been brainwashed by the real estate industry and our own government.
October 23rd, 2008 at 10:06 am
Good analysis Joe,
I especially like the investor analogy. There’s a lot of people still drunk on the last bubble who honestly believe that this annoying slump is only a temporary blip on what will otherwise be a continuation of insane appreciation. The “golden days” of real estate are over. Modest appreciation will be the name of the game for here on out.
October 23rd, 2008 at 10:09 am
Is 4915 CHILES Dr really east side? I thought east side was considered Story & King. This is at where 87 meets 85…
October 23rd, 2008 at 10:15 am
>>The property got 118 offers, he said — 59 of them below $400k, and 59 of them above $400k.
This example just goes to show there are tons of cash on the sidelines ready to move in on any opportunity. It’s a total misrepresentation to think that everyone is strapped for cash and in dire straits. RE investors are out there in spades; it’s just that they have moved to low end as their new battle ground.
October 23rd, 2008 at 10:36 am
That Chiles Dr property is on the south side, Blossom Valley.
October 23rd, 2008 at 10:59 am
“This example just goes to show there are tons of cash on the sidelines ready to move in on any opportunity.”
But the question would more importantly be are there people just about to piss their pants waiting to buy YOUR home?
Secondly, whoever bought this is an idiot. There’s obviously a lot of idiots still out there who will likely be a tad sorry they so quickly jumped into a devaluing asset.
October 23rd, 2008 at 11:28 am
>>But the question would more importantly be are there people just about to piss their pants waiting to buy YOUR home?
Sure, I see several Sold signs prop up after Lehman Brothers fell.
>>Secondly, whoever bought this is an idiot. There’s obviously a lot of idiots still out there who will likely be a tad sorry they so quickly jumped into a devaluing asset.
You can keep yelling, but as I’ve always told you market demand is strong on the peninsula. You’re disconnected from the reality; that’s why I suggested you drive down one of these weekends to tour some open houses. The house above is under-priced to begin with, and whenever that happens here there’s a feeding frenzy.
October 23rd, 2008 at 11:47 am
LOL! Someone trying to demonstrate the health of the market and demand based on an example of bank-owned property.
40+% sales in bay area is REO. Definitely a sign of healthy market with lots of demand.
October 23rd, 2008 at 11:58 am
Pralay,
You’re talking aggregate data again. Places such as Menlo Park and Palo Alto are never high volume places, and don’t have much correlation to your statistics.
October 23rd, 2008 at 12:09 pm
Useless aggregate data, you cannot measure the RBA with countywide figures! You cannot even measure the RBA with citywide figures!
You also cannot tell the health of the economy using meaningless anecdotal data, such as how many sold signs “prop up” when Lehman brothers collapsed.
Remember the RBA is at the hazy boundary of two sets of useless data, and cannot be quantified by either.
October 23rd, 2008 at 12:23 pm
“Secondly, whoever bought this is an idiot.”
The twit is back!
October 23rd, 2008 at 12:40 pm
Shaaaaaad-dap!
October 23rd, 2008 at 12:48 pm
Argh, I was just talked down to! bob is McCain’s evil twin.
October 23rd, 2008 at 12:51 pm
bobby, WillowGlen has a question that I think you can answer better than I
October 23rd, 2008 at 1:06 pm
Bob wrote, “The “golden days” of real estate are over. Modest appreciation will be the name of the game for here on out.”
Funny, I remember reading almost those exact words in Money mazagine in 1991. I say almost because they used “3% annual” rather than “modest.” Tea leaf readings containing specific numbers always carry more credibility.
As for the Chiles property, the reason big price cuts draw a lot of attention is not for the price itself, but for the clear signal that the owner (especially banks) are now ready and motivated to move the property.
October 23rd, 2008 at 1:13 pm
Hey bob,
Secondly, whoever bought this is an idiot. There’s obviously a lot of idiots still out there who will likely be a tad sorry they so quickly jumped into a devaluing asset.
I didn’t buy the Chiles house, but I bought a house a few mos ago that was around the same price range and I can assure you- people buying here are NOT idiots. I think this particular Chiles house is not the best value out there at this moment, but buying at this price in all but the very worst neighborhoods are decent investments- and it SURE BEATS the STOCK MARKET. By a MILE.
October 23rd, 2008 at 1:19 pm
Just as the RBA exists in the hazy borderland between uselessa aggregate data and useless anecdotal data, intelligent discussion about RBA real estate will take place between the insanity of Chuckie calling people losers for not buying into Palo Also, and Sarah calling people idiots for spending more than $400K on anything whatsoever.
October 23rd, 2008 at 1:20 pm
Amazing that I have to explain once more something that should be elementary and easy for even the most economically challenges person to comprehend. But whether people want to believe it or not, the FACT is that real estate relies on the stock market, and more so than the stock market relies on real estate.
I’ll break it down to stupidly simple terms:
A: The stock market is a gauge for the overall economy
B: When stocks go down, companies fail to report positive earnings.
C: When they fail to report good earnings, they cut costs- ala- jobs.
D: When jobs get cut, people can’t buy things ( like cars, houses,and flatscreen TVs)
E: A general economic decline creates recessionary environments, which in turn creates waves of layoffs in all sectors ( such as Yahoo laying off lots of people)
F: Eventually, the overall slowdown affects even the upper market and upper wage earners. For example, hedge funds are projected to fail in massive numbers in the coming months… which happen to be a favorite wealth converter/generator for the uber-wealthy.
All of these points to my summary: As long as stocks fail, housing will fail, and yes, this goes for even those of you who “think” you got a deal buying foreclosure property, which even though foreclosed is still way above what it will ultimately be worth once the recessionary cycle plays itself out.
This is basic economics folks, no rocket science here.
October 23rd, 2008 at 1:26 pm
and Madhaus,
I like that rather cute nickname.Sarah.. huh-huh… Should I think of something creative for you too? Nah… that’s not creative enough. Perhaps you’d like a song instead, So alas, I leave with you this rather famous country song. I hope you enjoy it.
And when you read the lyrics… remember that ole’ Sarah is thinking of yew… Darlin’…
“Dreams of an Everyday Housewife”
She looks in the mirror and stares at the wrinkles that weren’t there yesterday
And thinks of the young man that she almost married
What would he think if he saw her this way?
She picks up her apron in little girl-fashion as something comes into her mind
Slowly starts dancing rememb’ring her girlhood
And all of the boys she had waiting in line
Oh, such are the dreams of the everyday housewife
You see ev’rywhere any time of the day
An everyday housewife who gave up the good life for me
The photograph album she takes from the closet and slowly turns the page
And carefully picks up the crumbling flower
The first one he gave her now withered today
She closes her eyes and touches the house dress that suddenly disappears
And just for the moment she’s wearing the gown
That broke all their minds back so many years
Oh, such are the dreams of the everyday housewife
You see ev’rywhere any time of the day
An everyday housewife who gave up the good life for me
Oh, such are the dreams of the everyday housewife
You see ev’rywhere any time of the day
An everyday housewife who gave up the good life for me
Oh, such are the dreams of the everyday housewife
FADE
You see ev’rywhere any time of the day
An everyday housewife
October 23rd, 2008 at 1:34 pm
You’re talking aggregate data again. Places such as Menlo Park and Palo Alto are never high volume places, and don’t have much correlation to your statistics.
——–
Gosh, REO home that got 118 offers is definitely not in Palo Alto or Menlo Park. Basically, you are trying to demonstrate the health and demand of the market by showing 118 offers in San Jose.
And then when pointed out, you retreated back to RBA.
October 23rd, 2008 at 1:35 pm
Economics according to bob,
As long as stocks fail, housing will fail,
October 23rd, 2008 at 1:38 pm
You also cannot tell the health of the economy using meaningless anecdotal data, such as how many sold signs “prop up” when Lehman brothers collapsed.
———–
That’s so unfair from your side, Madhaus. He showed some additional datapoints to demonstrate the health:
1. Stanford Mall parking lot is always full.
2. It takes hours to get a table in restaurant.
October 23rd, 2008 at 1:39 pm
WG,
Do me a favor. Name me ONE time that there was a recession where home prices went UP. It really is that simple…
October 23rd, 2008 at 1:42 pm
How cute. Sarah’s talking to me again. Awwww! Sarah can’t write her own lyrics so she steals stuff from other people. Why didn’t he give the songwriter a credit there?
So what’s that song about? People get older? At least he called that one right, I certainly am not getting younger. Of course, neither is he. Too bad his analysis of the relationship between equities and real estate is such a flippin’ mess that it would take three times as much as he’s posted to explain all his bad assumptions. And it’s not worth the effort because he won’t learn anything anyway.
But here’s just one little piece of it: The stock market tends to react to short-term news rather than long-term health of companies. So when companies announce layoffs, the stock usually goes up. Here’s another: The price of a stock often goes up or down regardless of their earnings. It certainly does not cause earnings to go down. Markets are reactive, not catalytic.
October 23rd, 2008 at 1:43 pm
>>Name me ONE time that there was a recession where home prices went UP.
Did someone forget that the current boom started during the recession following the dot-com bust?
October 23rd, 2008 at 1:45 pm
That’s so unfair from your side, Madhaus. He showed some additional datapoints to demonstrate the health:
1. Stanford Mall parking lot is always full.
2. It takes hours to get a table in restaurant.
Stanford Mall lot is not always full. Chuckie’s just too lazy to park further away. If you only drive in from Sand Hill, yes, that side is usually fuller. I found parking within 30 seconds the last 2 times I went to Snodfart mall, both within the last 2 weeks.
Since he didn’t quantify which restaurants were full, that is meaningless anecdotal data. It could be the one restaurant that was full was pulling the equivalent of today’s Hedge Road property — underpricing their food and making it up on volume.
October 23rd, 2008 at 1:47 pm
RE – good answer.
bob wrote: The “golden days” of real estate are over. Modest appreciation will be the name of the game for here on out.
Only for 5, maybe 10 years. We (as a country) regularly dig ourselves into the same messes over and over. It’s kind of like what Greenspan said this morning:
But he said that less-risky decisions by investors will help pull the markets out of their slump. “Investors, chastened, will be exceptionally cautious,” he said.
and
Because of their hard-won experience, markets “will be far more restrained than would any currently contemplated new regulatory regime,” he said.
Truth is, unless actual regulatory changes are made, some dope will decide in the next decade that he’s smarter in some way and “it’s a new paradigm” and we’ll have our next bubble.
October 23rd, 2008 at 1:49 pm
Guys,
If you follow Bob and Pralay’s way of thinking, you will surely be on the road to poverty if not bankruptcy.
During the good times you should save for a rainy day. During the bad times, you this is when you want to accumulate your assets for the next upturn. It’s important to put things in perspective. What we have now is miles away from the depression of the 30′s. This too shall pass! You will likely see many recessions in your life time. If you always panic during the bad times one thing is for certain: you will throw all your money away with no opportunity to recover.
October 23rd, 2008 at 2:02 pm
Using the recession of 2001 is a bad example because the Fed essentially created an artificial market for housing by dumping interest rates. Poor example. But if you want to believe that the same thing will happen this time, be my guest but I’m almost positive that you’re in for some disappointment.
“Only for 5, maybe 10 years. We (as a country) regularly dig ourselves into the same messes over and over. It’s kind of like what Greenspan said this morning:”
…Except that this happens to be the worst financial collapse since the 1930′s. 150 year old banks failed. I can guarantee that the books will be re-written as far as who and how you get a home loan. It’ll be damned-sure that if you buy, then you will have to show the ability to pay it off. Lack of regulation is what caused prices to skyrocket. That isn’t to say NORMAL appreciation won’t return. It likely will. But those rubbing their hands together waiting for Apple to cure Cancer and 20% annual appreciation are going to be disappointed.
Lastly, RE… I’m doing quite well thank you. But I can’t say the same for someone like yourself, counting on your house for the majority of your retirement. You will find yourself without enough retirement if you continue down your line of financial reasoning.
We can keep on arguing this point over and over again, but the fact is that if you think that RE is a great place to park money from that I assume you’re pulling out of stocks… then you’re an idiot and deserve the financial spanking you’ll get as a result. The Kool-aid seems very much still alive in the area.
Madhaus- I wouldn’t be talking. You will never be a professional musician. I don’t allude to be anything except what I actually do for a living. See the irony? Anyhow, you remind me once more why having intelligent discussions with you is pointless.
October 23rd, 2008 at 2:02 pm
During the bad times, you this is when you want to accumulate your assets for the next upturn.
——–
Above statement is incomplete without following one:
It’s great time to buy home NOW!
October 23rd, 2008 at 2:16 pm
so bob, I take it you’re revising your statement from “modest” to “normal” appreciation?
I would agree that for the near term, the former is accurate but things will most likely revert to the historical norm.
My point is that there will be a new bubble and eventually it will be real estate’s turn again. With luck, things like down payment requirements and proof of income will keep us from heading back into the unprecendted territory we’re in now.
October 23rd, 2008 at 2:21 pm
Since he didn’t quantify which restaurants were full, that is meaningless anecdotal data.
———
I think Chuckie meant “high-end” restaurant.
And we kind of know definition of Chuckie’s high-end restaurant (thanks to DreamT for putting it to word correctly).
October 23rd, 2008 at 3:10 pm
Bob says,
>>Using the recession of 2001 is a bad example because the Fed essentially created an artificial market for housing by dumping interest rates.
Is the Fed taking a back seat to let things fall apart now? Didn’t they just cough up $700B? There’s already talks about another stimulus package coming. I would say the Fed is doing more now than it did in 2001.
October 23rd, 2008 at 3:15 pm
Madhaus- I wouldn’t be talking. You will never be a professional musician. I don’t allude to be anything except what I actually do for a living. See the irony? Anyhow, you remind me once more why having intelligent discussions with you is pointless.
And exactly what qualifications does Sarah have to judge musical ability using posts to a real estate board? This is even better than Bill Frist, who at least was a doctor, diagnosing Terry Schiavo after watching a videotape. Chuckie knows better than a guitar player what is needed to learn guitar. Sarah predicts my performance career based on getting pwn3d on a blog. I can’t decide which of them is a deeper shade of teh 5+00p1d but it’s a close race.
October 23rd, 2008 at 4:05 pm
RE – is your basic thesis that prices will never fall in premium locations or that irrespective of whether they fall homes in such locations will be good long term investments because, in the long run, RBA real estate will bounce back? Most of what you’re saying is pretty reasonable — best locations hold value the longest, there is a fair amount of accumulated wealth on the peninsula, the area should remain desirable for the foreseeable future, etc., but the idea that any neighborhood is immune to normal market forces is kind of goofy. Even my real estate agent of all people is saying that there is nothing to lose from waiting and that the price trendline continues to be down while inventory slowly accumulates. I agree, by the way, that you can’t compare Los Altos or Palo Alto to Tracy or Stockton and that people shouldn’t be waiting for 40% price drops, but I do think that over the next year there will be opportunities to find a great property on the Peninsula for less than you would have paid for it in 2005 and that marginal properties – even in good neighborhood – will get wacked pretty hard.
October 23rd, 2008 at 4:48 pm
LosAltosRenter,
First let me say thanks for acknowledging that I have not said anything that is out of bounds with the reality on the ground.
To address your question, I maintain that you cannot, nor should you try to time the market. It may be difficult for people to accept this concept during these times of economic uncertainty, just as it is difficult for people to accept the idea that they should be buying assets during these times, but the fact is that you cannot predict where is the bottom. You can only realize it after the fact.
Once you bought in Los Altos or Palo Alto, what happens to the market afterwards should not be of concern. Here’s why. If the market drops, it will drop harder everywhere else. Thus, if you choose to upgrade later, you will not be in a disadvantaged position. If you plan to live there for the long haul(as I do), then the market is irrelevant. You would be just holding the asset as Warren Buffet holds on to his stocks.
October 23rd, 2008 at 4:49 pm
bob,
Do me a favor. Name me ONE time that there was a recession where home prices went UP. It really is that simple…
Someone already mentioned 2001, but anyway it really isn’t that simple, bob. The house we are discussing – where you said the current buyers are idiots- sold for around HALF of what it sold for in 2005. In other words this particular house sold for LESS than the total percentage drop from the worst real estate decline CA has had up until now – the early 90s crash.
We are not talking about somebody buying a full price house at the top of a bubble staring into a recession. This house sold for a firesale price.
Let me turn this around. When was the last time that somebody bought a house for half of its prior price in the middle of a recession actually LOST MONEY?
October 23rd, 2008 at 5:54 pm
The house on CHILES DR is too darn close to freeway 85. As a former renter of a house that’s right next a freeway, I would say that you stay away from them. The grinding noise day in and day out is just intolerable, even with the sound barrier.
October 23rd, 2008 at 6:06 pm
“and it SURE BEATS the STOCK MARKET. By a MILE.”
Depends on what you’ve invested in. A poster here about a month back noted that SRS was down about 82. It topped out at over 160 yesterday. I was too chicken to hold on that long, dumping at 125 and then again at 140. But there have been ways to make money during the down market.