December 29, 2008

$150,000 price cut at The Palms SF – not a surprise

555 FOURTH STREET #521, San Francisco, CA 94107 – presented by Daniel Hershkowitz
HUGE PRICE REDUCTION –$150,000– THE PALMS SF
$699,000
1078325451_palms

555 FOURTH STREET #521, San Francisco, CA 94107

Features:

* 2 bedrooms, 2 baths
* Contemporary Classic in the Heart of San Francisco
* Designer Italian Kitchen w/ Finest Cabinets, Counters & Appliances
* Light-Filled Living Room w/ City Views & Balcony
* Spacious Master Bedroom w/ His & Her California Closets & Sleek Master Bath
* First Class Amenities — 24hr Concierge, Full Gym, Yoga Studio, Business Center, Billiards, Theatre
* MLS# 341320

Thanks to Burbed reader Andy for this find.

I hate to say this, but wasn’t it obvious that the price would be cut at places like this in SoMA San Francisco? I mean, come on – there is seriously nothing there. Sure there’s a Whole Foods, but it is truly dinky. And culture? Give me a break.

It’s no secret that everyone is flocking to places like Cupertino. Heck, just look at the size of the Whole Foods there! And the choices of eateries definitely beats SoMA. Afterall, there’s Cupertino Square. Take that Metreon!

Sorry SoMA San Francisco. You were cool earlier this decade – but now it is Cupertino’s time to shine.

Comments (92) -- Posted by: burbed @ 5:37 am

92 Responses to “$150,000 price cut at The Palms SF – not a surprise”

  1. Prof. Bleen Says:

    Is “MRDANTASTIC” named after the realtor? His ego encompasses the entire Bay Area. And who’s that in the picture with him—his trophy wife? On the other hand, with the exception of a dropped hyphen or two, his spelling and grammar seem impeccable, so perhaps he has earned the right to brag.

  2. bob Says:

    test

  3. bob Says:

    I used to walk by this building every day going to work several jobs back. All in all, the area was already kind of dead even then. There’s scads of these rather sterile, luxo-lofts in this area, and most tried to create an artificial town by putting retail space in the first floors. Half of the retail space was completely vacant when I worked there and never came close to filling. Its a kind of depressing area if you ask me. No way I’d pay you even $200k for one of these either.

  4. DreamT Says:

    If only Cupertino could brag half as much startup activity as SOMA, then or now.

  5. nomadic Says:

    Here’s the ultimate angry, entitled renter:

    http://www.cnn.com/2008/US/12/29/carnegie.tenant/?eref=rss_topstories

    There is only one scenario that might work, the grandmother of 25 said.

    “They can pay me $10 million. I’m part of history,” she said. “You want to tell me they don’t have enough rooms? They have a building of rooms. This place is history, and I think Carnegie, the people running it, I don’t think they think about that.”

    HO HO HO!

  6. bob Says:

    I don’t feel too sorry for that woman. I have friends who live in NYC, and since they’re “newcomers” ( been living there for around 9 years) they don’t enjoy the same rent control that older folks like this woman does. One friend of mine lives in a nasty part of the Bronx and pays over $1,000 for a one room studio with no kitchen.

    Yet this woman only pays $650 for an apartment that I’m guessing would cost $10,000 per month for everyone else, and in fact less than most families in NYC for their rat holes. Good riddance. Time to see what its like for everyone else. Personally, I’m not sure why people like NYC so much. Been there three times and its basically a big stinking concrete hole with nice museums and uber-rich tycoons.

  7. nomadic Says:

    But bob! She’s 96. The world “owes” her. She’s been paying rent there for 50 years… (It sounds like she doesn’t actually live there, but I could be wrong. I thought maybe that’s where her business is.)

    :-P

    Yes, I’m kidding. They are being more than generous, offering to find her a new place, pay her moving expenses AND paying any difference in rent for the rest of her life. Very generous I’d say.

  8. bob Says:

    The article also mentioned that she was some sort of famous portrait artist. Thus I assume she’s probably loaded anyway. Besides, she’s almost 100. She should be happy that she got to get a nice long ride for that long. Entitlement indeed…

  9. anon Says:

    She’s just bitter she didn’t buy the flag and can’t sell it for 12x what its worth.

  10. burbed Says:

    At least when she dies, the rent will reset. So there’s some finite period – unless she lives to infinity.

    Unlike Prop 13 which does live for infinity.

  11. get real Says:

    There you go again blaming Prop 13. Talk about bitter!

    Get over it. My family has been in California since the early part of the last century. Everything ran just fine here until recently. We already pay some of the highest taxes in the nation and the current fiscal mess is not the fault of Prop 13.

    What about the gold plated wages, retirement and healthcare costs of state workers? What about all of the high cost mandates passed by the legislature?

    Prop 13 is just like Prop 8–the voters passed it and that’s life.

  12. nomadic Says:

    spoken like a true freeloader.

    Not that I’d argue with cutting 50% of state programs and aligning government benefits and “pensions” with the private sector.

  13. sg Says:

    > My family has been in California since the early part of the last century.

    The prop 13 has *not* been there until the late part of the last century. At most, the property tax should be at par with the inflation.

    California is a tax happy state on everything except the property tax.

  14. nomadic Says:

    sg, I think that would be a fair compromise to help old folks keep their homes. Other states take that approach.

    It should not apply to commercial properties in many cases, however, and should not be transferable to future generations without a reasonable adjustment in the assessed value.

  15. get real Says:

    According to the National Association of Home Builders, in 2005 California ranked 10th in median real estate taxes paid at $2,278.

    First was New Jersey at $5,352.

    While the real estate tax RATE of California ranked 45th, the actual amount paid was 10th. So while the rate of North Dakota was 8th at 19.27% the median RET paid was only $1326 (ranked 29th).

    When you consider the high state income taxes of California it is obvious that it is very expensive to live in California.

    It really makes me laugh to hear all of the whining post baby boomers on this blog. You guys are the most spoiled and pampered generation in the history of the world–you haven’t had to work for anything nor have you EVER suffered one ounce of true hardship.

    Yet all I hear is “My grandparents had it EASY! They only had to live through the Depression and World War II–they could buy a house for $10,000! I have to buy non-organic produce and drink tap water! And the state is persecuting me and I’m suffering discrimination just like black slaves because I can’t marry my homosexual partner of 3 years, 4 months and 238 days!”

    The horrors that the modern generation has to face!

  16. madhaus Says:

    Oh gawd, the Carnegie grandma. I think I read about her a couple of months ago in The New Yorker. Guess that didn’t generate enough sympathy so she took her tale of woe to CNN.

    Talk about your entitlement whiners!

  17. anon Says:

    Oh, come on now – give her some credit. I mean she’s taken pictures of some famous people. She’s been part of NY’s history for half a century.

    She deserves to live in NY for 650 a month.

  18. get real Says:

    sg: The property tax rate is mandated by the state constitution. You do believe in the constitution, don’t you?

    Oh that’s right, this is the Bay Area and people here don’t believe in following the constitution except when they want imaginary rights that aren’t in the constitution like gay marriage.

    Here’s a suggestion for all of you Prop 13 haters: Amend the Constitution. Get the voters of the state to approve of scrapping Prop 13.

    Good luck.

  19. R Says:

    You mean equal rights aren’t guaranteed by the CA Constitution? I guess we’ll see. Actually we won’t because Prop 8 will be overturned on grounds that writing discrimination into the Constitution takes more than a 50 percent vote.

  20. nomadic Says:

    You guys are the most spoiled and pampered generation in the history of the world–you haven’t had to work for anything nor have you EVER suffered one ounce of true hardship.

    LOL! Every generation says that about the one coming after them. I’m not going to say anything else because Prop 13 has been beaten to death on here, and well, generation “wars” bore me to death.

  21. bob Says:

    Prop 13 is screwy because it has had the effect of creating a huge hole in the state budget from unrecognized taxes. Most states have some sort of progressive RE tax. I’m starting to study property tax per state, particularly Texas where we’re thinking of moving to. For example, Texas has some odd taxes, but they make sense in some ways. For example, if you live near one of the newer residential areas of Austin where there are lots of new developments, schools, and so on, the taxes can be as high as 3%. But if you’re happy to live say- 15-20 minutes out in the “sticks”, then that rate can go as low as 1.5-2% simply because there are less schools and infrastructure to pay for. Makes sense if you think about it: Taxes that pay for the stuff in any given area. That also gives buyers some flexibility. From what I’m also reading, it is also why Austin is still fairly affordable since higher prices also means you as the owner have to pay more taxes, hence a sort of stop-gate inflation measure.

    Very different from CA where there’s a generic prop 13 that over time ensures that the population just gets older and older and subsequently produces less and less taxes. Its a system that totally disregards inflation, thus why this state is in serious debt.

  22. bob Says:

    Imaginary rights… Interesting. Perhaps we need to look at the constitution and see just how many amendments are unnecessary then? Bring back prohibition baby! Oh ya… I love to drink fine wine and craft beer.

  23. sg Says:

    get real,

    > Here’s a suggestion for all of you Prop 13 haters: Amend the Constitution. Get the voters of the state to approve of scrapping Prop 13.

    I agree with you on this. Sooner or later, I think it will happen eventually. The current prop 13-based system is unsustainable.

  24. sg Says:

    nomadic,

    > sg, I think that would be a fair compromise to help old folks keep their homes. Other states take that approach.

    The above sounds good. But it distorts the free market system, and creates a moral hazard.

    First, you have to define what “old” means. Do you mean Larry Ellison or Steve Jobs? They are quite old.

    At least we agree that generational transfer of Prop 13 entitlements is a bad idea.

  25. get real Says:

    bob: There are all kinds of “taxes” that Californians pay that are not property taxes and are used to pay for services and infrastructure. They’re called “assessments” and they show up on people’s property bills.

    These “assessments” can be substantial and the notion that older Californians are free-riders and aren’t paying their way is just nonsense.

    It is a myth that the state’s financial problems are caused by Prop 13.

    In terms of gay marriage, 20 states have amended their state constitutions to prohibit gay marriage and 41 states have “defense of marriage” statutes.

    The Federal Government does not recognize gay marriage and NO one is suggesting that the Federal Defense of Marriage Act be repealed.

    Where in the California State Constitution does it say that gays have a right to marry?

    And if the State Supreme Court overturns Prop 8, I predict two outcomes:

    1. The people of California will pass Prop 8 by a super majority and end the issue forever.
    2. The people will throw out the Supreme Court justices who vote to toss out Prop 8. Remember what happened to Rose Bird?

    Gays don’t have a right to marry in America. A super majority of states believe this.

    You can’t change social constructs with four votes.

  26. get real Says:

    sg: In case you haven’t noticed the economy is sliding into the toilet.

    I doubt that the people of California will vote to increase their taxes by amending the constitution and repealing Prop 13 at this time.

    You people in the RBA really do live in Fantasyland.

  27. garbage Says:

    @These “assessments” can be substantial and the notion that older Californians are free-riders and aren’t paying their way is just nonsense.

    Oh, you mean like the people who live in Palo Alto and pay $800 a year in property tax while their neighbors pay $10,000?

  28. garbage Says:

    Like these two houses?

    830 Arroyo Road, Los Altos, CA
    2008 Property Tax: $1,586

    840 Arroyo Road, Los Altos, CA
    2008 Property Tax: $20,166

    And for all you know, 830 Arroyo may be owned by a 21 year old because his parents gave the house to him. Older Californians my ass.

  29. get real Says:

    garbage: If you are so stupid that you buy a house in PA and pay $10,000 in property taxes when your neighbor in exactly the same house pays $800, then you deserve to pay $10,000!

    LOL!

    God, you people WHINE! Of course the senior couple that bought their $800 property tax in 1960 aren’t like the $10,000 PT speculators–they aren’t going anywhere until they die.

    The POOR people who bought the house next door are going to flip it and make a killing. Of course we should throw grandma and granddad out of their homes so that the young ones can wreck the economy AND make a bunch of honest people, homeless.

    WHINE WHINE WHINE!!!!!!!!

    This site is really entertaining!

  30. madhaus Says:

    Wow, it looks like CA resident has returned in a new form.

    Prop 13 was written into the constitution with a really nasty little codicil that says it can’t be repealed without a 2/3 vote. So was the follow on that required a 2/3 vote to raise local taxes via bonds. I don’t know about 13 but that second one did NOT pass by 2/3.

    I would love to float an amendment that says any repeal requirements that are stricter than what the amendment passes by are null and void.

    And what nomadic said earlier: big problem with Prop 13 is that it isn’t just for residential property. And corporations are finding ways to exist forever even when sold.

  31. nomadic Says:

    RE #24: The above sounds good. But it distorts the free market system, and creates a moral hazard.

    First, you have to define what “old” means. Do you mean Larry Ellison or Steve Jobs? They are quite old.

    You took me too literally. The old people benefit by default if they stay in one place. You could substitute “long term owners” in place of “old people” in my original post. I don’t think someone deserves special treatment strictly by virtue of age.

    This was interesting: God, you people WHINE! Of course the senior couple that bought their $800 property tax in 1960 aren’t like the $10,000 PT speculators–they aren’t going anywhere until they die.

    So anyone who moves to CA and wants to own a house is a speculator? And is “stupid” for wanting to own? Just who do you think is going to take the houses off of the hands of the estates of these old people when they die? Are they stupid for allowing your heirs to cash out?

    Not to mention that anyone who bought in the last two years is NOT going to make a killing by selling in the next few years.

    Hey, do you regulars suppose “get real” is RE’s stand in while he’s off for the holiday? ;-)

  32. nomadic Says:

    A going away comic for madhaus (open for anyone to enjoy):

    http://xkcd.com/132/

  33. madhaus Says:

    Thanks nomadic, that was good. Okay, time for me to go to bed. Y’all have fun with RE 2.0 now.

  34. WillowGlenner Says:

    LOL, get real. Another entitled self important “the world owes me a free ride” oldster? Just can’t handle the fact that people under 40 are sick of freeloaders like you I see.

    My experience is that most older people think the younger generations revere them with the same regard that THEY had for their parents. But this generation (the 60 or so year olds, now) are the biggest group of deadwood ever to infiltrate the planet. They had their peak earnings years in the 70s, reap HUGE windfalls from social security and medicare that they pay almost nothing for, and benefitted from tremendous FREE public schools for their kids, paid for by their parents- that they subsequently squandered so that my generation didn’t have the same options.

    Granny and Grandpa- you’re on your own, suckers.

  35. WillowGlenner Says:

    BTW 10K in property tax is only an 800K house.

  36. bob Says:

    test2

  37. bob Says:

    Case-Shiller report out today. Looks like the miracle turnaround will have to wait a bit longer…

    Home prices in 20 U.S. cities declined at the fastest rate on record, depressed by mounting foreclosures and slumping sales.

    The S&P/Case-Shiller index declined 18 percent in the 12 months to October, more than forecast, after dropping 17.4 percent in September. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.

    The financial market meltdown that’s reverberated around the globe has prompted banks to curb lending, signaling the housing slump will persist for a fourth year in 2009. Falling property values have eroded household wealth, causing consumers to pare spending and deepening what is projected to be the longest recession in the postwar period.

    “As 2008 comes to an end, the housing market is left in a weaker state than at the beginning of the year,” Michelle Meyer, an economist at Barclays Capital Inc. in New York, said before the report. “Uncertainty remains high given the unprecedented nature of the recession.”

    Furthermore, US banks and financial institutions report the first quarterly loss since 1990:

    NEW YORK–U.S. banks and savings institutions are heading for their first overall quarterly loss since 1990, according to a report in Tuesday’s Wall Street Journal.

    The Journal said that since posting a combined profit of $1.7 billion in the third quarter, the situation has gotten worse for the 8,300 institutions with deposits backed by the Federal Deposit Insurance Corp. The $1.7 billion profit was a 94% drop from the year-ago period.

    The Journal reported that nearly one quarter of U.S. financial institutions reported a net loss for the quarter ending Sept. 30, and that percentage is likely to climb in the fourth quarter, with some analysts predicting that even entities such as J.P. Morgan Chase & Co. will report losses.

    Lastly, I was listening to the radio today. There’s growing evidence that the slump in home sales and values is transitioning from a market driven down by supply and foreclosures and to being driven more by a bad overall economy. The summary of this is that even if all the foreclosures and short sales got sold along with the remaining larger supply of existing and new homes, the market will still suffer from the effects of layoffs, lower incomes, and so forth.

  38. Prof. Bleen Says:

    Gays don’t have a right to marry in America. A super majority of states believe this.

    You can’t change social constructs with four votes.

    A bigoted, entitled, self-important oldster, no less. You know, the same thing was said about Jim Crow laws and anti-miscegenation laws.

  39. nomadic Says:

    bob, our “bad news” man, you missed the fact that consumer confidence hit an all-time low in December as well:

    http://news.yahoo.com/s/ap/20081230/ap_on_bi_ge/economy

    a tidbit for those who don’t want to click:
    In 3M Co.’s quarterly update this month, Chairman and CEO George Buckley talked about how the company had closed 16 plants over the last year and a half, has been drawing down inventory and cutting capital spending.

    “Is this healthy?” he said on the call. “All of us acknowledge we’re collectively making the situation worse, but I think the first responsibility we have as leaders of companies is to make sure that we ensure the health and survival of our own companies first, not necessarily other people’s companies, or, for that matter, the whole U.S. economy.”

  40. bob Says:

    “bad news” man,

    Hardly bad news to me. The more news like this, the better I say. The more headline damage there is, the less I pay for things in the future, like houses, gas, and so on, which is fine by me. Call it twisted, but times like these are what savers and fence sitters like me have been waiting for.

    Thanks for the additional “bad news”. More fuel for the fire.

  41. nomadic Says:

    Wow, bob, are you channeling our resident troll? The news is all good as long as you can personally profit? Just like poverty in India is great because (as an American who could move there) you can hire servants cheaply and live like a king.

    ;-)

  42. bob Says:

    Nomadic,
    Its called Capitalism and the free market. I’d also say there’s nothing wrong with being fiscally and personally responsible. This… “bad news” is being generated by people and companies that didn’t act responsibly and acted with greed. That’s not my fault, thus it seems fitting that I would benefit from their downfall.It would be simple to leave it at that, but the other more significant part is that I have simply saved and lived frugally, which has ultimately placed me in a good position given the circumstances. Nothing more. Yet you’re accusing me as being morally corrupt as a result? Interesting.Perhaps I should’ve done my part for the American people and put myself in serious debt so I could share the pain like a good citizen.

  43. nomadic Says:

    You’re speaking in polar opposites now.

    I’m not judging you. I agree that people should live within their means and not carry debt for consumable items or those that depreciate.

    Some people who live frugally will still be suffering now, especially if they lose their jobs.

  44. DreamT Says:

    Morally corrupt to rejoice if there’s hardship around you, “deserved” or not? It’s not that much of a stretch in my eyes, bob. Schadenfreude is the little voice of your inner sociopath. Are you sure you want to entertain it?
    GetReal – to your almost hilarious concept that majority always knows best, how does it compute with the fact that majority opinion typically aligns with enlightened new laws (reversal of death penalty in Europe, abolition of slavery..) _after_ they were passed?

  45. bob Says:

    I’m not personally rejoicing at other’s expense. Just about every person I know has been affected by this economy, me and my Wife included. Both parents have lost retirement investments, a best friend of mine declared bankruptcy after his two investment homes failed to sell, two other friends were laid off. Due to the now more questionable environment, me and my Wife are also likely going to stay here longer and wait it out a bit, which is something we hadn’t planned on doing.

    But I would be lieing if I said I didn’t get some amount of personal satisfaction seeing things unfurl as they are, after years of watching prices and everything else go out the wazoo, all the while hearing from people how much money they “made” on their houses or how their little RE investments meant they were going to retire early, and so forth.

    To me, what’s going on now is a good thing. Americans are so used to not looking at the actual price of something and assuming a loan will buy it for them. The last decade has been all about buying what your actual income can’t afford because everyone else was doing it. I knew people working at Home Depot who drove $50,000 cars and other silliness. Now that people suddenly realize that loans are only worth their usefulness if they can be paid back the old-fashioned way, they’re saving more money, and ultimately that’s better for us all. If we get back to a society that buys what they can with what they save, an awful lot of problems will get solved, things won’t get too overpriced, and social order will be maintained.

    So I look at it from a more general perspective. If that makes sense.

  46. madhaus Says:

    Somehow, bob, I see a lot more problems being created by a serious recession than being solved. Like you, I’m in a position to benefit by it, but I’d hardly start cheerleading for layoffs, failures, closings, foreclosures and bankruptcies as the cure for excess materialism. Yeesh.

  47. bob Says:

    Madhaus,
    You could very well be right and we’re going to have a rough ride. It definitely pays to have a backup plan just in case. I am personally grateful me and my Wife both have jobs at this point and the landlord keeps our rent low. But if both of us lost our jobs, we’d probably take that as the signal to go ahead and move elsewhere.

    But the way I also look at it is if you’re not saddled with debt and obligations and have been a saver, if you survive a recession like this intact and save as much as possible, you’ll be sitting pretty when things turn around. That probably won’t be anytime soon, and if the Alt-A bomb thing does like many think it will, we’re only halfway through.

    We will see…

  48. madhaus Says:

    Bob, I can’t object to what you say above; believe me when I say I see a world of hurt coming for a lot of innocent bystanders as well as the Debt Is Wealth crowd. I do not welcome it but I’d be a fool to not be prepared.

  49. nomadic Says:

    Please forgive the obnoxiousness of this, bob. All of the “me and my wife” references made me cringe.

  50. sg Says:

    > Bob, when I say I see a world of hurt coming for a lot of innocent bystanders as well as the Debt Is Wealth crowd.

    That’s probably true. But the world will not end. People will find more sustainable jobs. Seriously speaking, consumers have bought too much stuff, including housing over the last 4-5 years. They have no means to buy any more of the same stuff again and again.

    When people like Bob saves money, we have more money for future investments.

  51. bob Says:

    Nomadic, then I suppose it should be “My Wife and I”. But I certainly much rather hear ” Me and my Wife” rather than “Hubby”. That makes me want to throw things.

    Very well… Me and my Wife will be more grammatically correct in the future.

  52. bob Says:

    SG,
    exactly. Basically, in enabling lax lending, the market has been grossly oversold. In essence, the future was sold versus a more natural system of saving, qualifying, and buying.

  53. nomadic Says:

    bob, does “dh” make you want to barf? :-) That one is annoying too. I think women avoid “husband” because it’s too long.

  54. madhaus Says:

    Hey, I say dh all the time. Don’t forget the d stands for either dear or damned; so delightfully ambiguous. I also find bob’s tendency to capitalize the word wife a mite amusing.

    As to sg’s comments on overspending, I recommend The Story of Stuff with Annie Leonard. Sorry no link because I’m not on a real computer. Just google it. It’s probably the best 20 minutes you’ll spend this week if you haven’t already seen it.

  55. bob Says:

    I don’t pretend to have perfect grammar nor writing.But theoretically I should since my Mom was an English teacher who used to take out a red pen and mark up my type-written( on a mechanical typewriter) reports for school projects. Having to re-type an entire report over and over makes you learn to write better much faster. By the time I was in college, I could write a research paper in an afternoon.

    Oh well.

  56. bg Says:

    I think that this crash is the best thing that could have happened to the world and, especially, the RBA. Everyone has been living high on the hog for years now–do I have to remind everyone of all of the boasting, gloating and general “I’m rich and you’re not” that went on in places like the RBA?

    What was that all about? It was about greed and selfishness and “irrational exuberance”. People rode the wave up and drank like there was no tomorrow.

    And the dawn comes…

    What?! The RBA and the rest of Silicon Valley all of a sudden have this massive hangover. What did all of you expect?

    It turns out that the entire world economy is now suffering from this recent binge of irresponsible consumption.

    I don’t feel sorry for anyone since many, many people will do just fine in this economy. Those of you who were not wise might have to settle for less–but there are no soup lines and I doubt anyone on this board will end up on the street.

    This is what makes this and all of the other RE boards so fun–it’s the sight of a really big train crash.

    Happy New Year!

  57. WillowGlenner Says:

    LOL, bg and bob.

    I’m not personally rejoicing at other’s expense.
    do I have to remind everyone of all of the boasting, gloating and general “I’m rich and you’re not”

    You are jealous and envious and are personally rejoicing. Just admit it, come on!

  58. madhaus Says:

    >>I’m not personally rejoicing at other’s expense.
    do I have to remind everyone of all of the boasting, gloating and general “I’m rich and you’re not”<<

    You are jealous and envious and are personally rejoicing. Just admit it, come on!

    Oh man, where is RealEstater when we need him? I thought he was here to help!

  59. anon Says:

    No need for him. We have WG helping bob come to terms with his real feelings.

  60. anon Says:

    W. Glenner,

    Are you still there? I am still awaiting a respone to my inquiry in this post: http://www.burbed.com/2008/12/25/merry-christmas-heres-a-gift-from-burbed/#comment-35120

    I haven’t given up on you.

  61. madhaus Says:

    I think this phenomenon can be described as the Conservation of Trollishness.

    1. A troll in action remains in action.
    2. A troll out of action allows another to assume the position. With RE off on holiday scouting out investment property, WG has taken on the goatskin mantle.
    3. Bad trolls crowd out the good ones.
    4. For every troll position there is an equal and opposite position. For example a permabull troll will geenerate the rise of a permabear troll.
    5. Force of trollishness is equal to the rate of increase in speed of posts times the troll’s mass.
    6. Trolling is commutative. It does not matter which troll posts first, as the argument will continue as long as fuel (response from the non-trolls) is present.
    7. Triangulation of Trolling: The most direct line by a troll is the square root of its high pitted news.

  62. WillowGlenner Says:

    LOL, bob and RealEstater are 2 sides of the same coin.

    anon- I didn’t see your post from the other day but my sense is that 1. most properties that were going to default have already defaulted and 2. most RBA people will be able to refi on valuation, the only issue is full doc income requirements but the stated loans are in east san jose, where people have already defaulted.

    inventory chart:
    http://1.bp.blogspot.com/_8GEmmG-C-5g/SVlTP37CYGI/AAAAAAAAA_Q/mEdsD-r8tUI/s1600-h/Weekly+Stats+12-29.bmp

  63. WillowGlenner Says:

    The problem is I am not here quite enough to be a troll. Its hockey season.

  64. bob Says:

    WG,
    Envious? Hardly. I’m personally glad I don’t share your financial decisions. I hope to god I don’t turn 50 and start buying up houses. My Wife would think I was loonie.

    In regards to Refi’s, none of this will help the people who need it, which is to say the people that bought homes like your little investment foreclosures will still lose their homes because their houses are worth a lot less than what they paid, which means no refi for them. As we can see from month to month, the market is being heavily eroded by foreclosures which drives down the overall median, which in turn continues to diminish buyer confidence and ultimately affects values even in areas that aren’t remotely close to heavy foreclosure areas.

    The bottom line is that the housing crash hasn’t (yet) been about massive devaluations in the RBA but rather other areas which have undeniably had an affect on the overall market- the RBA included. Thus if this shortsighted Refi plan won’t help those in stricken areas, then its unlikely to help the RBA either and we can expect to see much of the same.

  65. R Says:

    If you find deals on rental property that make them good investments, why would you stop investing at age 50? Doesn’t make sense to me, especially given that WG has stated that most of his new purchases are or are close to being cash flow positive. Cash flow rental property is really a no brainer if you ask me. Somebody is basically giving you money every month in the form of payments towards principle on the loan.

    Why do you “hope to god” you don’t have to resort to the kind of investment at age 50? I don’t get it.

  66. anon Says:

    “anon- I didn’t see your post from the other day but my sense is that 1. most properties that were going to default have already defaulted and 2. most RBA people will be able to refi on valuation, the only issue is full doc income requirements but the stated loans are in east san jose, where people have already defaulted.”

    Again, I am unclear as to how this is relevant. How is the ARM adjustment ‘myth’ debunked because people like you can refi?

    BTW, just so you know, Willow Glen is San Jose. It is not RBA.

  67. WillowGlenner Says:

    I am over 45 (but under 50) and already bought one investment property this year and am trying to buy another.

    Hey guys; 50 isn’t that old! I didn’t start investing in property until age 38, and even then it was small potatoes. Only when I got a job in the chip industry as a salesman in the 90s making mid 6 figures did I really get into it, so I was already about 40 when I started.

    Hey the Miracle on Ice hockey guys are 50 now, too! Hard to believe isn’t it. The movie was on the other night.

  68. WillowGlenner Says:

    anon, nothing I own is RBA according to this blog except maybe some rentals I have in Los Gatos and that is borderline. But we were talking about who can refi and whether my situation applies to other people. My position is that people who own homes that have collapsed in price have already WALKED if they were going to do so. Other people who are in the RBA have valuations that support a refi easily, so no problem for them. Every good area in the bay area including Willow Glen where I live is able to refi, because valuations haven’t really collapsed much. The statistics show collapsing values in some zipcodes, but when you delve into the details you see that the issue is all the REOs on major streets and highly undesirable properties, which is the dirty little secret these renter real estate blogs don’t get. Plus appraisals still TEND to lean high if somebody is borderline on a refi. If you want to refi and cash out you won’t get it, but if you already have a mortgage for 880K on a property you bought in 2007 for 1.1 million, they will let you refi, I have found. “Valuing” property is not the same as selling it. If you are on the border you will be fine. The people who put 5% down can’t refi, but they have already walked. Nobody bought property over a million with 5% down.

  69. bob Says:

    I just got back from a bike ride. For the hell of it, I looked at the homes for sale in the window of the local real estate agent. There were not one, not two, but three houses- 2 bedrooms, for 300k or LESS. I kid you not. These same homes were 550-600k during the height of the boom, 450k last year, now 300k. Amazing. This is all in Alameda where there’s no crime to speak of. Its almost tempting. Absolutely amazing.

  70. bob Says:

    WG,
    I think you’re making an awful brash assumption that the carnage is now all over and that all the folks who were in danger have now walked. I think we’re really only about 50% of the way through.

  71. R Says:

    WG, I think you are vastly overestimating the number of people who have at least 20% equity in their property in the “RBA” so as to possibly allow them to refi. I am guessing that in borderline areas like Sunnyvale and Mt. View at least half of the people that purchased from 2003 on (a lot of people) didn’t put much down and thus don’t have much, if any equity in their home. I know several personally that are in this situation. They used Option ARMs with little or no down and have been making the minimum payment. They won’t be able to afford the re-set and don’t have equity to refinance, even though the value of the home has gone up a little.
    I also think that the price declines that we have seen in most areas will finally hit the “RBA” in 2009. Will be see 50% declines like subprime areas? No, but based on historical prices, real income levels, and rental rates (ie. fundamentals), I think prices will probably drop in the neighborhood of 20%, which will wipe out a lot of people. Basically those who bought 2003 and on.

  72. madhaus Says:

    R, if you want to compare with the 1988 bubble, south Sunnyvale lost 25% by 1991. That’s the whole 94087 zip, which includes 3 different school districts. I would expect to see similar fallback by 2010. Can anyone figure out what the valuation drops were to some of the primo RBA zips back then? I’m quoting the 94087 drop from an article I remember in the Murk as I had a friend who bought there at the peak of that bubble.

  73. nomadic Says:

    Here’s a little info on the micro level. A neighborhood realtor posted her stats for my subdivision. Asking prices are the final asking prices; any reductions along the way are unknown. I do know that one of the 2008 sales that sold for asking price was only after the price was reduced.

    2007 – 10 sales selling an average 0.2% below asking price; 6 at or above asking
    2008 – 9 sales selling 1.2% below asking; 4 at or above
    $/sf change YOY – down 6%
    average selling price YOY – up 7%
    average CDOM – up 56% (to 47 days)

  74. WillowGlenner Says:

    The thing is madhaus, I think many places have dropped 25% from peak. Real estate stats are hard to read like that, and of course people here will never admit this decline happened. For example the place I own in Willow Glen, a small place for us empty nesters probably priced at oh, $1,039K at peak. That is taking the square footage of two houses sold at high prices, one in 2005 for $617 square foot and another in 07 (the absolute peak) for $545 per square foot, averaging those to $581/sq ft and applying that to my square footage. A perfectly reasonable estimate and one I probably would have gotten, once. 25% off of that peak prices is $779K, lower than this place certainly, but we have fallen significantly from peak. Every dump in palo alto was selling for over $1.5 million once, including the recent post from burbed. We have had a sharp correction. The rental places I buy are 50% off from peak (meaning, these places were $650-$699 at peak and I am buying them for $450). A lot of the discussion we have on burbed should have been happening 2 years ago. Now today the damage is there and in the market.

  75. bob Says:

    WG,
    Yes, we’re 20% off peak, but the median up until very recently has been skewed heavily by foreclosures weighing down the numbers. I would expect real declines to happen if they haven’t already in the overall RBA from here until 2011-2012. Saying that we’re now done with the declines is very premature. Far from it.

  76. R Says:

    Thanks for the info madhouse.

    WG, I agree that many areas have fallen 25%. However, I haven’t seen anything suggesting that “RBA” areas have fallen anywhere close to that. I think prices have possibly been flat this year in areas like Sunnyvale and Mt. View but they certainly haven’t fallen anywhere close to 20% – yet. Some areas might have hit bottom or are at least close to it, but not the “RBA” or most areas on the peninsula. I think those areas will start to see declines in 2009.

  77. madhaus Says:

    R, I agree. I saw sales in my subdivision peaking at $1.15M that would go for closer to a mil today. We are down but we are not down 25% yet. I would say down 5-10% in CUSD and more outside it. Yes I expect more declines in 2009, ending with a 25% decline. This is consistent with what I’ve been saying on this site since I started posting here this spring. My neighborhood is almost RBA. For Palo Alto I expect a 20% decline by end of 2010 from peak.

  78. R Says:

    Agree madhouse. I also don’t see prices bouncing up after reaching their bottom either. I think things will be flat for at least a couple years.

  79. WillowGlenner Says:

    LOL, bob. So you expect declines in bay area real estate until 2012 now? Dream on!

  80. R Says:

    I don’t think prices will continue to decrease area wide for the next three years, but I do think that there is a good chance things won’t begin to appreciate until then. By all accounts, this recession is going to be ugly. Combine that with the historic real estate bubble we are coming off I think it take real estate a long time to recover.

  81. madhaus Says:

    Again, compare this end of bubble with 1989. Prices were flat until 1995 at least; the decline began in 89 and 90. I don’t foresee declines beyond 2010 but I don’t see growth until at least 2012 and more likely 2014. WG, you really need RE to come back so you can sound sane by comparison.

  82. RealEstater Says:

    As the first post of the new year, I would like to wish everyone a happy and prosperous 2009!

    I believe 2009 will bring new hopes. With a new Administration and government bail-out programs coming into effect, I would look forward to more stabilization rather than doom and gloom. Right now the stock market “wants to go up”, and as we know, the market is forward looking. With any luck, Silicon Valley will scrape by this recession just fine.

  83. RealEstater Says:

    (This post belongs in the December 31 topic, but could not be posted there due to the spam filtering tool)

    WG says,
    >>College terrace is not a good area. I would rather be in Barron Park than ct.

    To people in the know, College Terrace is a highly desirable neighborhood. The schools are better than those in Barron Park, and the location is better due to it being adjacent to Stanford University, north of the Oregon Expressway, and near California Avenue shopping district.

    >>the fact is the US as a nation does not owe China an economy. This dumping of all these cheap asian goods has to stop.

    Like it or not, the two economies have become inter-dependent. If China did not produce cheap goods, a pair of sneakers will cost 300 dollars, and there’d be hyper inflation here.

  84. madhaus Says:

    As the first post of the new year, I would like to wish everyone a happy and prosperous 2009!

    Oh goody, Roger returns, with his arm longer than ever from clapping himself on his own back.

    I believe 2009 will bring new hopes. With a new Administration and government bail-out programs coming into effect, I would look forward to more stabilization rather than doom and gloom. Right now the stock market “wants to go up”, and as we know, the market is forward looking. With any luck, Silicon Valley will scrape by this recession just fine.

    The stock market does not “want to go up.” The stock market is the sum of all market transactions, intentions, and speculation, and there are pressures from different directions that lead to an equilibrium. You may want it to go up, but there’s a counterpart to you out there betting against it. The market itself has no preference which one of you “wins.”

    “With any luck” — the evolution of Roger the permabull continues. Just as the never-goes-down homes devolved from California to Bay Area to Real Bay Area (which used to include all Sunnyvale and now barely is holding onto CUSD portion), so have Roger’s economic forecasts changed from irrational exuberance to blind hope.

    Happy New Year, indeed.

  85. Real Estater Says:

    As usual, madhaus starts off the new year fighting. As expected, she starts off behind RealEstater.

    The phrase “stock market wants to go up” is a characterization heard on CNBC regarding the up days in the last few weeks of ’08. Obviously it’s not to be taken literally.

    Hope and luck are appropriate for a new year message; Not sure what madhaus has against’em. Maybe she’s not getting any.

  86. Real Estater Says:

    Wow, a strong rally to start off the year!

  87. cardinal2007 Says:

    RE, it is not as entertaining when you don’t say “Dow SOARS!”, please remember to do that in the future. It went up almost 3% today, and you didn’t say it, I was disappointed.

  88. DreamT Says:

    I went to burbed today ONLY to see RealEstater’s post about the DOW. I’m disappointed as well.

  89. madhaus Says:

    I was hoping to hear that the Dow not only soared, but that it was confused with both a bird and a plane. Look! Up in the Sky!

  90. Herve Says:

    Not only it soared, but it is now over 9,000 points.

    9,034 = 8,888 + 88 + 28 + 28 + 2. This augurs a great year. The fields will be fertile and there will be abundance of grain and new wine.

  91. DreamT Says:

    (since nobody’s posting this, I guess I will)

    Herve – You must have meant that this board will be fertile with an abundance of grins and whine.

  92. New Term for 2009: RSF (Real San Francisco) | SF Bay Area Home Price and Mortgage Insanity Blog - Burbed.com Says:

    [...] Ouch. Sorry SoMA. You’re now no longer in RSF, and thus no longer in RBA. (Was it a really surprise to any readers here though? After all… how can you compare the boring culture of SoMA to that of Palo Alto and Cupertino?) [...]


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.)