Cupertino homes are now affordable – just $699,888
10558 GASCOIGNE Dr, Cupertino, CA 95014 | MLS# 80842233
10558 GASCOIGNE Dr Cupertino, CA 95014
Price: $699,888
Beds: 4
Baths: 2
Sq. Ft.: 1,844
$/Sq. Ft.: $380
Lot Size: 5,300 Sq. Ft.
Property Type: Detached Single Family
Year Built: 1954
Stories: 1
View: Neighborhood
Neighborhood: Cupertino
County: Santa Clara
MLS#: 80842233
Source: MLSListings
Status: Active
On Redfin: 55 days
Located in the Prestigious and Quiet nieghborhood. Upgraded Kitchen w/ Tile counters top. New Carpets. All Room Doors are New. Bright & Light Open Floor Plan Design. Nice Pool & Spa in the backyard. Walk or bike to Cupertino Schools. Close to Shopping Maill & Ranch 99 Market. It’s Move in Condition.
To all you whiny Renters who keep complaining that housing in good school districts isn’t affordable, here’s your once in a lifetime opportunity.
Did you know that you can own a house with new room doors? Yes that’s right! And here’s proof!
Now, granted, if I lived here, I’d be in constant fear that someone would back into my house, given the peculiar driveway layout – but heck, it’s in Cupertino and that’s what matters.
Don’t be fooled my the lack of interior pictures. It’s move in condition.
$380 per square foot. I’m embarassed for this house. I bet its part of a strategy to underprice.
January 2nd, 2009 at 8:31 am
I’ll have to post later about the neighborhood, but this is one ugly presentation. It looks like a couple doublewides crashed together on a runway. Finally, the color is all wrong for the season, so deduct another $88,888.
January 2nd, 2009 at 9:53 am
Seems like the house is priced some 11k too high maybe?
The neighborhood seems interesting, at least from street view, a mix of badly kept, somewhat ugly contemporary houses, some nice contemporary houses, and some new or almost new larger houses. Hard to gauge the value of tear-down rebuild vs keeping it. The price per sqft is not bad though.
January 2nd, 2009 at 10:45 am
Is this a sign that Cupertino is no longer part of the RBA? Its price per sq ft is $620 too low. LOL
January 2nd, 2009 at 10:48 am
Doesn’t look too terribly bad to me, is this in that Rancho Rinconada area Madhaus?
New interior doors is an expensive upgrade, and really adds to the quality feel and livability of a house, assuming the new doors are solid wood. The doors in most of the old houses out here were the hollow plywood and those don’t provide too much sound protection. But I’d have to see the rest of the inside because these faux eichlers are usually tacky inside so new doors doesn’t help. The other problem is pretty large sq footage on too small lot.
January 2nd, 2009 at 10:50 am
the reason its price per sq ft is so low is that its a fairly large house on a small lot. It probably has a huge bonus room in there somewhere. Those are always cheap per sq ft. Wish there were inside pictures.
January 2nd, 2009 at 10:59 am
It is in Rancho Rinconada, one block from the San Jose border at Lawrence Expressway. If you must have Cupertino schools, it could be worse. It could be on Sterling Blvd. or Loree and have a lot of background traffic noise. But it’s the least desirable part of Cupertino.
January 2nd, 2009 at 11:06 am
Oh, well if its Rancho Rinconada thats not so great. There have been houses for sale there for 750K for a while and they looked better than this. The only thing about this is its low price per square foot but if its a bonus room situation, forget it. Its probably a flip gone bad. This will probably sell quickly though with a confumbo loan, the price is right.
January 2nd, 2009 at 1:51 pm
Still overpriced.
Found a comp about a mile away:
http://sfbay.craigslist.org/sby/apa/977433717.html
renting for $2700 4 bd/2 ba (it’s about 400 sq. ft. less than the featured house, which would equate to that bonus room).
Assuming a buyer with 10% down ($70k) with a 30-yr fixed at 4.5% (if they could get that), you’re still looking at a monthly payment of about $3,200, not including insurance, taxes, maintenance, etc.
January 2nd, 2009 at 4:24 pm
Joe, that person is much better off buying than renting in that case. This is a house where the value prop is better buying. Of course that assumes somebody wants to live there for the long term.
Any rental approximating $3K is better to buy with most of these until you get over a mil.
January 2nd, 2009 at 5:54 pm
How do you guys suppose a large bonus room is crammed in 1800sf with four bedrooms and two baths? If that’s the case, those bedrooms probably can’t fit any furniture besides a bed.
(Rancho Rinky-dink, as madhaus calls it, is uber-crappy unless you’re doin’ it for the sake of kids in school. I looked there before buying my last place in 94087 before I knew better. I’m SO GLAD we stayed away.)
January 2nd, 2009 at 6:22 pm
WG,
The only case I would see a buyer taking this place for this price is if they planned to stay a long time and this was their dream house/lot. If they have any plans to try and sell in the short to mid term, this is a terrible buy for several reasons:
1. Even with the artificially low interest rates right now, it’s still better to rent.
2. We are about a year and a half out of the housing bubble peak in Santa Clara county and the rate of home price declines are increasing.
3. The federal reserves policies will lead to high inflation eventually, which will lead to higher interest rates. This will hamper the purchasing power of home buyers and drive prices further down. I’m sure you don’t need an example, but I’ll offer it to the board. The buyer that can afford a payment of $3,200/month can get a mortgage around $630k @ 4.5%, if interest rates go to 8%, the same buyer can only afford $435k.
January 2nd, 2009 at 7:16 pm
Holy Handbaskets, everyone! Did you take a look at the price and sales history of this place? Have a gander!
Property History for 10558 GASCOIGNE Dr
Date Event Price Appreciation Source
Nov 17, 2008 Price Changed $699,888 – MLSListings #80842233
Nov 12, 2008 Price Changed $819,888 – MLSListings #80842233
Oct 27, 2008 Listed $849,888 – MLSListings #80842233
Sep 21, 2004 Sold $683,000 8.6%/yr Public Records
May 29, 1998 Sold $405,000 – Public Records
So, this crapshack is now listed for essentially the same price it sold for in 2004. Yeah, it might be the crap part of Cupertino, but it’s still Cupertino shaving off the bubble. If anyone wants to argue about Cupertino being in the RBA I think this clearly shows that Rancho Rinkydinky (or Rancho Stinkanada, either is fine, nomadic) is NOT.
You also get some of the worst schools in the vaunted CUSD, namely the worst middle school (Hyde) the second worst High School (Cupertino) and I am not sure how bad the elementary (Sedgewick) is but it’s not great over here.
sonarrat, who is that in your new gravatar? Dr. Strangelove?
Joe, nice to see you posting a lot. Keep it up and you’ll be invited to the next burbed party. So far I’ve covered Thanksgiving and Christmas. I think some New Year’s Resolutions may be in the making for next week. Heh heh.
January 2nd, 2009 at 7:44 pm
That is none other than famed Soviet composer Dmitri Shostakovich.
January 2nd, 2009 at 7:51 pm
So what does Burbed make of this little gem?
January 2nd, 2009 at 9:54 pm
lol, sonorrat. Thats quality cupertino living there. Well maintained yard too, if you check out the pictures.
On this house on Gascoigne, pricing at 2004 levels is still high for undesirable properties even in good parts of the bay area. I think this whole RBA thing is hard to read, for me anyway, maybe because I don’t live in whatever RBA is supposed to be. But for example San Carlos, belmont and there, the undesirable parts that border RWC or are a little too close to major roads are going for 2003 prices even now. And of course what I buy in San Jose is pre-2003 prices. So a 2004 is still high, higher than many areas anyway.
January 2nd, 2009 at 9:58 pm
Joe you are making a lot of unfounded assumptions. Claiming inflation is the enemy of the real estate investor, for example is REALLY a stretch. For one thing, high inflationary periods mean rents go up as we have seen.
January 2nd, 2009 at 10:18 pm
Yes. That’s almost as stupid as thinking everyone who is going to default has done so already.
January 2nd, 2009 at 10:30 pm
Joe says,
>>…and the rate of home price declines are increasing.
We are just barely out of the holiday season. Majority of the people do not buy and sell homes during November and December. How you can delcare a market trend at this moment in time is beyond me.
January 2nd, 2009 at 10:57 pm
Article in NY Times says:
- With government stimulus, recovery by July.
- Without government stimulus, recovery by end of 2009.
- Housing to bottom out by Spring
Obviously, guys like Joe and Bob are living on their own planet.
January 2nd, 2009 at 11:26 pm
RE, If you want to look at housing data and see the prices are falling off a cliff, go here: http://www.housingbubblebust.com/OFHEO/Major/NorCal.html
For every economist or NAR representative that is predicting any recovery in mid-2009, you can find 10 economists that say it won’t happen.
If you feel strongly about a recovery in 2009 for housing, give your reasons. All the signs I’m experiencing and analysis I’ve been reading point to the contrary. I’d be interested to hear your arguments.
January 2nd, 2009 at 11:30 pm
Useless aggregate data.
January 3rd, 2009 at 12:20 am
“For every economist or NAR representative that is predicting any recovery in mid-2009, you can find 10 economists that say it won’t happen.”
That’s got to be the most compelling argument I have seen so far this year! The majority is always right!
Although if the 10 economists actually put their own money where their mouth is, it will be EVEN more compelling.
January 3rd, 2009 at 12:29 am
RealEstater, I have a hard time deciding if your article is merely an exercise in new-year cheer-leading, or advanced speculative fiction. Two pages selectively reporting biased opinions, only to conclude that the driving variable will be crowd psychology esp. the abating of the fear currently experienced by still-employed folks? The article is junk.
January 3rd, 2009 at 1:04 am
Sheesh… more houses like 10070 Peninsula, and there won’t be any point in having a site like this.
January 3rd, 2009 at 9:08 am
Joe, these statistics pretty much tell the tale as far as an improving picture for real estate.
http://1.bp.blogspot.com/_8GEmmG-C-5g/SVlTP37CYGI/AAAAAAAAA_Q/mEdsD-r8tUI/s1600-h/Weekly+Stats+12-29.bmp
http://4.bp.blogspot.com/_8GEmmG-C-5g/SVlTudFzM-I/AAAAAAAAA_Y/1XIAdmpz1-o/s1600-h/Weekly+Stats+12-29.gif
Inventory peaked last july. Since then, we’ve been boring through the inventory. thats it, thats all there is.
January 3rd, 2009 at 9:10 am
I read that article in NY times also. The point is that the whole next great depression angle is being tossed. Now we just have a plain old vanilla recession on our hands. Thats a huge change right there. The only issue is how long will it last. Looks like it will be over next year sometime.
January 3rd, 2009 at 9:35 am
Joe says,
>>If you feel strongly about a recovery in 2009 for housing, give your reasons. All the signs I’m experiencing and analysis I’ve been reading point to the contrary. I’d be interested to hear your arguments.
Joe, Joe, Joe, pay attention. We’ve discussed this point a few times already. Just remember 2 key words: GOVERNMENT INTERVENTION. The mistake the doom-and-gloom crowd is making is that we’re living in a laissez-faire economy. This is simply not the case, especially with the Democrates taking over, and Obama having to prove himself as a Freshman.
With the government buying $500 billion worth of mortgage backed securities in Jan, and mortgage rates drifting below 5%, do you expect to not see an effect? This is like a patient getting a dosage of Cocaine. Chances are, we’re going to get high.
January 3rd, 2009 at 9:44 am
The NYTimes article features economists who badly misread the bubble on the way up. Maybe they will do better on the way down, but their track record has been lousy:
WG: At this price the price/rent almost makes sense. I’m with Joe though, I still think it’s a little too high, but if someone loved it and bought it, that would be understandable.
January 3rd, 2009 at 9:58 am
The economic outlook from a Bay Area person’s perspective should be one of opportunity. In order to save Joe the Plumber’s ass in Ohio, the U.S. government is handing out gifts that can make you rich. At this point the uncertainty factor is contained because the main causes of the economic problems are now known, and the policy is such that the risks to the downside are limited. If you’re thinking about owning a house sometime in your life, 2009 is about as a good of a chance as you’ll get.
January 3rd, 2009 at 10:31 am
Happy new year folks, especially to WG, madhaus, really had fun and learn from the folks here.
January 3rd, 2009 at 11:03 am
DreamT, you echoed my point. Anyone can find a biased opinion in an article and post it on here. I was not implying that just because the prevailing opinion is the majority that it is the right one.
WG, what your graphs are telling me is that inventory is rising in both SFHs and Condos/Townhomes. With prices falling off a cliff, I would expect more sales as we can see here with the median price of a SFH off nearly 40% YoY: http://scc.rereport.com/market_reports?formSubmit=1&searchtype=search&emailtype=search&period=1&report_description=Santa+Clara+County%2C+All+Cities%2C+All+Neighborhoods&area=15&proptype=1&cities=&yearmonth=&locations=&get_report.x=52&get_report.y=12
RE, govt. intervention may prevent us from having a long protracted recession, but it will not bring back the bubble prices of housing. There’s no reason not to believe that historical relationships between incomes and home prices will be restored now that mortgage lending standards are back in place. If that’s the case, we still have a long way to correct.
January 3rd, 2009 at 12:09 pm
Joe says,
>>With prices falling off a cliff, I would expect more sales as we can see here with the median price of a SFH off nearly 40% YoY
The characterization of “price falling off a cliff” is misleading. It has a lot to do with the mix of homes that are selling, as indicated in this (biased?) Mercury News article:
“It doesn’t mean the typical house in Santa Clara County has lost 39.5 percent of its value,” said Andrew LePage of DataQuick. “The median price is telling us a lot about what buyers want right now. They want bargains in relatively affordable areas.”
January 3rd, 2009 at 12:09 pm
Joe, inventory peaked last July. It has been declining every since sans the typical seasonal patterns. Thats reality, clearly identified in the chart.
Theres a lot of selective data analysis on this thread, but an equal amount of it comes from the bears here which completely overwhelm the bulls, and btw I am not a RE bull really- I think prices will be flat for the next few years.
I know you all want to buy, and are talking that up. But deluding yourselves won’t help. You will likely look back as the Jul 08-May 09 period as the ideal time to buy.
January 3rd, 2009 at 1:40 pm
““The median price is telling us a lot about what buyers want right now. They want bargains in relatively affordable areas.””
This is very true. The variation in median sales price does not correlate a bit with actual change in house values. You might see a 30% drop in median sales price, yet your house only lost 5% of its value (the converse can be true as well if your location sucks).
For that same reason I would caution against using the median price as a sign of a bottom. Just because the median price is going back up does not mean your house isn’t losing value anymore.
January 3rd, 2009 at 1:43 pm
RE, if you don’t want to look at current YoY sales because of the mix, then you can look at any of the home price indices that are based on repeat sales of SFHs. Both tell the same story.
Initially in a downturn in home pricing, it is not surprising that the majority of sales would be in lower priced SFH & townhomes/condos, these are the properties buyers can qualify for. The higher priced homes will sit on the market until the buyers lower their prices to what the market can afford. Just take a look at Redfin and look at all the price reductions. This is pretty simple to follow.
What doesn’t make sense to the so-called “bears” on this board, is why some believe home prices will stay inflated at their current values or even go up. History tells us what the relationship between incomes and home prices is; the current data tells us that relationship is still out of wack. Perhaps the difference is that the “bears” do not believe there is a new paradigm in housing and the others do.
WG, there could be several reasons for a peak in inventory. One, the data appears to be cyclical, so we can expect lower inventory in winter, higher in the summer. Sellers know winter is a slow season and may deactivate their listings. Foreclosures have been temporarily stalled because of the legislation passed by the governor. Many owners I’ve talked to who bought in the bubble are hoping for a principal reduction, so they’re trying to hold onto their homes. In any case, the long term trend in the data you referred to is more inventory.
January 3rd, 2009 at 1:44 pm
“You will likely look back as the Jul 08-May 09 period as the ideal time to buy.”
Do you think this is as true of East Palo Alto or Stockton as it is of Palo Alto or Los Altos Hills? That’s a very generic statement you’re making here.
January 3rd, 2009 at 1:48 pm
bubed said: Sheesh… more houses like 10070 Peninsula, and there won’t be any point in having a site like this.
Listen to yourself, man! They still want over a HALF MILLION DOLLARS for a tiny crap shack on a postage-stamp sized lot – next to railroad tracks. I think there’s plenty of reason to keep going.
This icing on the cake for the house on Peninsula? The owners paid just $195,000 for it four years ago.
Huh, maybe it isn’t that simple. It’s bank owned now, according to the listing. Here’s the history:
Jan 02, 2009 Listed $564,375
Nov 16, 2004 Sold $195,000 (Loan amt = $487.5k)
Aug 31, 2000 Sold $62,000 (Loan amt = $306k)
Dec 31, 1991 Sold $181,500 (Loan amt = $163k)
January 3rd, 2009 at 2:00 pm
nomadic, a transfer at that low price in 2004 would make me think it was some sort of in-family transfer. That price is all out of whack for 2004 no matter how crappy the house is. Land near Peninsula is still worth more than Rancho Rinkydinky because so many people were scraping and upgrading… because it’s MONTA VISTA HIGH, Kennedy Middle, etc etc etc.
January 3rd, 2009 at 2:36 pm
WG: Price to rent tells you all you need to know about whether housing is fairly priced or not.
http://sfbay.craigslist.org/pen/apa/972273916.html
3BR, Palo Alto, $3K/mo, 94303
Zillow price is $1M. Payment with 20% down 30 year fixed, $5.5K/mo.
Annual savings for renting over buying: $30K
I think this is a flip gone bad. Last sold:
11/07/2008: $1,110,909
The owner is eating $30K/year on this and has $200K of capital tied up in this.
Price to rent needs to be within 10% to make it worth buying.
RE: Sadly the Government’s actions to date make me extremely pessimistic about the economic situation in 2009.
January 3rd, 2009 at 5:47 pm
Joe says,
>>History tells us what the relationship between incomes and home prices is; the current data tells us that relationship is still out of wack.
This statement is ridiculous. The median price in Santa Clara County is under $500K right now, and many homes in San Jose are priced under that. This means you can buy a house with a $100K down payment or less. The Bay Area is affordable if you don’t insist on the premium neighborhoods. The premium neighborhoods are also affordable to those who are in that market segment. For example, demographics data for Palo Alto 94301 shows that there are 900 families making between $250K and $500K, and another 800 families making over $500K in this zip alone.
January 3rd, 2009 at 7:25 pm
RE, how many single family homes in 94301?
January 3rd, 2009 at 7:31 pm
zanon, they bought that house less than two months ago. Either they are the king & queen of poor planning or they bought the place to rent it out.
Opinions anyone?
January 3rd, 2009 at 7:59 pm
Opinions anyone?
Yeah. The East Coast sucks.
January 3rd, 2009 at 8:24 pm
>>The East Coast sucks.
That’s why the BA is SPECIAL!
January 3rd, 2009 at 8:54 pm
DreamT, re: #36, No I am sure it is not as ideal of a time to buy in LA or PA as the lower priced areas that I buy, but I also have never seen a situation where high priced properties literally crashed while the low end was bottoming out or rising. It is obvious we have left the whole great depression rhetoric behind, so we’ve gotten through that, and stock markets are already much better than they were. So we’ve been through the trough and where was Palo Alto? Slightly flat, thats about it. A typical RE correction at the high end, houses just stay flat.
January 3rd, 2009 at 8:59 pm
zanon, its almost impossible to find a 3K rental in Palo Alto and yet you found one. Reminds me of bob telling us there were multitudes of $2500 rentals in Palo Alto and mtn view, and I found 3, all of which were dicey. There is always that rare case where you can disprove any general statement but the fact is there are plenty of houses renting for 4K and up in PA and at that level you are almost at break even.
Rents are just too high right now. Its a rare situation that makes buying favorable.
This one is probably highly cash flow positive. These rents just blow my mind.
http://sfbay.craigslist.org/pen/apa/975758813.html
January 3rd, 2009 at 9:04 pm
WG: if there is one thing we can say for sure Its that this real estate correction will not me like previous ones. The low end is cash flow positive so it is done correcting. The high end is just getting started.
As for this house – help me understand why a cash flow negative property is a good idea in nov 2008.
January 3rd, 2009 at 9:45 pm
WillowGlenner – Fair enough. For one, I’m curious of places like EPA, ESJ or Stockton are already on the rebound. I figured that the “best” time to buy there is already a year behind or so, but only as a hunch.
As for the high-end and even not so-high end as in my area, it only started declining a few months ago, so I suspect prices will continue declining through most of 2009 and therefore the “best” time to buy a standard property (not badly located) would be after the period you mentioned – esp. due to upcoming defaults in the mid-range market ($500k to $900k?) after the past quarter’s layoffs.
January 3rd, 2009 at 10:27 pm
WG: LOL! I just went to craigslist and pulled the first one that didn’t look like a EPA POS. I then typed the address into Zillow to get a price estimate. I also wanted something that was at least 3BR and a SFH. No condos!
It took zero effort and time! Yet you make it sound like it was this incredible feat.
I use housingmaps.com. makes it easy
January 3rd, 2009 at 10:34 pm
Here’s another, more high end one
http://sfbay.craigslist.org/pen/apa/971024119.html
3br/3ba, 94301, $5K/mo rent.
Zillow price: $2M. 20% down, fixed 30 year etc. gets monthly payments at $10.5K.
Annual savings by renting over buying: $66K (no typo)
Last sold in 10/13/1993 for $137,500, but Zillow thinks this is a family transaction.
January 3rd, 2009 at 11:00 pm
That one makes me think rents have come down – it’s a nice house and really close to University Ave. shopping.
Usually I’d laugh at the Zillow “price” but I think that one is pretty close to reality. Even if it’s high by $250k, the rent vs. buy equation still favors rent.
January 4th, 2009 at 9:11 am
zanon says,
>>The low end is cash flow positive so it is done correcting. The high end is just getting started.
That’s what we keep hearing(“Palo Alto will drop any minute now”), but such statement is more reflective of the mentality of hopeful buyers than any logical reasoning. Rather than indulging in wishful thinking, these people would be better served by buying something they can afford now.
When the low end recovers, there will be a massive number of people who gained 300% or more in equity from owning those San Jose properties for $50K down. Many of these people will be looking to upgrade, driving up mid-range and high-range prices. In summary:
1. Use the current opprotunities in the low end to build a base for yourself if you’re hoping to own real estate sometime in your life.
2. The high end does not necessarily participate in economic downturns, but it usually participates in recoveries.
January 4th, 2009 at 9:41 am
Well it might have taken zero effort and time zanon, but to put up a $3K house in Palo Alto as common or average is simply not correct. I know, because I rent houses for $3K (most of mine are lower), I know what the rental market is like, and there are literally hundreds of applicants for any $3K house in Palo Alto.
Craigs list is hard to use to get typical numbers because it doesn’t separate houses and apts, so I use a 4BR search to exclude all apts. Here’s what we have in PA with 4 bedrooms:
<$3500: 2 properties
$3500-$4K: 3 properties
$4K-$4500: 1 $4300
$4500-$5K: 2 properties
$5K-$6K: 7 properties
$6K-$7K: 2 properties
$12K – one house here it is
http://sfbay.craigslist.org/pen/apa/977924607.html
In other words there are double the houses over $4500 than under that in PA. I can guarantee you anybody renting in PA for $3K is going to be deluged with huge competition for any house. Not to mention the fact that the house you listed there was small with ONE BATHROOM. I don’t know what a 1K sq ft house with one bathroom would sell for in many high end locations but it is not what most people quote here as average price to buy. Nobody here is looking for a 1K sq ft house with 1BA as far as I know as a purchase.
January 4th, 2009 at 11:07 am
A new definition for RBA – a place where:
The high end does not necessarily participate in economic downturns, but it usually participates in recoveries.
LOL
January 4th, 2009 at 1:29 pm
that onboard navigator link doesn’t work.
January 4th, 2009 at 4:01 pm
RE: The low end has not “recovered” in that it is not selling where it used to sell 12 months ago. It’s “recovered” in that it is now selling at its cash flow positive price. There will be no appreciation, it’s done. There will be no equity to move into the high end. With zero appreciation at the low end, the conveyor belt has stopped.
WG: I never once claimed this was an average house. In fact, I put up another house that was much more expensive right after. It was just something I pulled from craigslist that was not a EPA POS posing as PA.
I also have no clue what you are trying to say with your counts. Your house, for example, has no address so I have no idea what it’s zestimate is and whether it’s cash flow positive at its $12K/mo rent or not (it should be though. That’s where rents need to be to justify current PA prices). I’m not talking about how many prices rent for what in palo alto. I’m comparing rents to monthly expenses for owning via Zillow. Are any of your listings cash flow positive?
Also, I think I’m going to disregard all those willow glenn houses you keep talking about. $700K houses are cash flow positive at $4K/mo, but they are also totally not in the RBA. I can show you cash flow positive houses all over the country, big whoop. RE is right, RBA means very cash flow negative, but worth buying anyway because the appreciation will make up for it. WG is not in the RBA any more.
My comps are simple: rent on craigslist vs monthly price on zillow.
Can we please all focus on RBA now?
January 4th, 2009 at 4:20 pm
“Can we please all focus on RBA now?”
What’s that humongous thing you got on your shoulder? Oh I see, it’s a ship! Or is it a sheep?
January 4th, 2009 at 4:23 pm
Neither a ship nor a sheep DreamT. If I want to talk about !RBA, there are lots of blogs I can go do, including housing blogs about baltimore, nashville, etc. etc. I’m not interested in Bob talking about TN, and I’m no longer interested in WG talking about WG for exactly the same reason.
Burbed is for RBA, and we should stay focused.
January 4th, 2009 at 4:37 pm
zanon, were you serious when you wrote this?
RE is right, RBA means very cash flow negative, but worth buying anyway because the appreciation will make up for it.
Are you really expecting the RBA to continue appreciating (assuming it hasn’t already stagnated) over the next year or two?
January 4th, 2009 at 4:59 pm
If you’re thinking about owning a house sometime in your life, 2009 is about as a good of a chance as you’ll get.
Translation: “I’m a RE permabull, am deluded that “the new RE bubble” is around the corner, and by spewing misinformation, perhaps a few dumb folks will somehow panic when they read “good” news and buy, thus making me rich.
I’ve got news for you housing cheerleaders. 2009 is going to be ugly. Perhaps not as nasty as this year, but you’re only fooling yourselves if you think a return to even a modest market is about to happen. Expect a modest and quick rebound on Wall Street. But the damage to the economy is done and will have little effect on the overall economy.
As Zanon correctly pointed out, the freaky Real estate machine some of you investors are fully counting on to resume is long-gone. Sorry, but crazy appreciation is a thing of the past for the long term. Will it happen again someday? Maybe, but not in the short 2-5 years I know many of you are thinking it will. Instead, you’ll have to be happy with a more modest 2-4% annual appreciation, and that’s after the bottom is reached, which even though you’re also assuming is near since foreclosures are selling like hotcakes. But sales don’t equal appreciation if those sales are dramatically eroding the median. I personally know someone who put a bid on a house in the East Bay for $175k. That’s right folks, a full 3 times cheaper than the area median just 2 years ago.
As Zanon also correctly pointed out, there are hundreds of other areas across the USA where at this very minute, you can buy for cash and rent at a profit and cash flow from day one. Perhaps it won’t sell for 600k, but that’s beside the point: It cash flows. Hell- the best story I’ve read recently was about a couple from CA who moved to Ohio, are buying government owned houses for 5-10k, making minimal repairs, selling for 10-20k a pop.Yet you all here are just guessing that better times are about to return and crazy appreciation will make you rich. uh-huh… well I guess I’ll just wait for the dot-com to return then because That’s just as good a chance of occurring.
That’s my prediction for 2009: Much of the same. If I were to be optimistic, then I’d say that perhaps the very bottom of the barrel foreclosures will bottom out this year, followed by outright stagnation and unmoving prices from the bottom.
January 4th, 2009 at 5:07 pm
Maybe my head is still fuzzy from the nap I took while the EAgles spanked the Vikes, but when has anything in the RBA ever been cash flow positive?
Yet, there are few investments that had performed better 1998-2008 than 94301, 94306, … Obviously, if you don’t anticipate prices doulbing every 7 to 10 years going forward, the math works out differently.
January 4th, 2009 at 5:42 pm
Nomadic:
I think a good definition of RBA is “cash flow negative, but buy it anyway because it’s going to appreciate — by a lot”. This is RE’s position.
The joke on this site has always been what’s in and what’s not in the RBA. Stuff keeps getting thrown out.
So, I think the definition above is exactly right for RBA, but I think what gets included will tend towards the null set.
January 4th, 2009 at 5:46 pm
Ain’t that the truth. Without the delusion that values double every 10 years, nobody wants to buy. Gosh I wonder why rents are going up!
Btw for you math whizzes, cash flow positive depends on how much is put down. To arbitrarily say something is or is not is stupid.
January 4th, 2009 at 5:48 pm
ah, that makes sense.
I’d say the RBA has already blinked out of existence and won’t re-emerge for 3-5 years. It’ll start slow too.
January 4th, 2009 at 6:02 pm
zanon, take a chill pill and relax. If you can’t engage in rational discourse, please don’t ruin it for the rest of us.
January 4th, 2009 at 6:16 pm
steve it is very rare that anything in the bay area is cash flow positive, in Palo Alto or EPA or anywhere. The only other time I can remember cash flow positives in the bay area was in 1999 and thats because RENTS went through the roof, which is not what people were predicting.
The early 90s which were a boffo time for real estate investing was strongly cash flow negative from my own personal experience. I was renting in San Carlos for $1600 and that house to own would have been about $3K per month at the going interest rates then (we looked into it), but we chose not to buy, that same house is maybe $1.2 million now, or maybe even more, and to rent $4K. Plus you could have refied and gotten that payment down to under $2K.
But anyway all that said, now is a time when some houses, not all are cash flow positive in the bay area. The houses in San Jose that I buy are cash flow positive- these are not low end, they are midrange, usually selling for 650K-699K at peak and now 450K or so. Those are cash flow positive. You might be able to pick up a house in one of the higher end areas and be cash flow positive but I am not certain. A 900K loan is about $4600/mo mortgage, so a $1050K house might be right about cash flow positive or cash flow neutral if you can rent it for $5K.
These are the houses renting for $5K so its not like this is some kind of high bar for rent. This is new, I know.
http://sfbay.craigslist.org/pen/apa/979514005.html
January 4th, 2009 at 6:19 pm
bob,
As Zanon correctly pointed out, the freaky Real estate machine some of you investors are fully counting on to resume is long-gone. Sorry, but crazy appreciation is a thing of the past for the long term.
Real estate investing is not about appreciation. It is about getting somebody’s RENT to apply to your mortgage. Appreciation is just a cherry, but personally I think it will come back from these levels soon enough. But appreciation is not the point in RE investing.
January 4th, 2009 at 6:21 pm
Whoever predicted that WG would tend to fear in 2009 sure called it. The RBA is a mythical land which is smaller than the BA and somewhat larger than a puddle on Hamilton in Palo Alto.
January 4th, 2009 at 7:47 pm
zanon – If burbed spent some weeks posting about pink houses in Daly City or EPA, it’s probably because his “focus” isn’t as narrow as yours. But whatever. If you want to arrogate the right to constraint the flow of discussion, maybe you should start by posting both more frequently and less adversarily (a word I made up just for you!) Incidentally, most of the posters here do not live in the “RBA”. You can always start your own blog if you’re so unhappy.
January 4th, 2009 at 8:22 pm
LOL, DreamT. Now that this blog is for ONLY RBA, I guess it will need to morph into….
All RealEstater, ALL THE TIME!!!
I know all of you would love that!
January 4th, 2009 at 8:27 pm
But whatever. If you want to arrogate the right to constraint the flow of discussion…
We already have a self-appointed moderator, and that’s RealEstater. There can be only one.
January 4th, 2009 at 8:35 pm
Here’s a fun story. Too bad we’ll never have accountability for the havoc created:
http://online.wsj.com/article/SB123093614987850083.html
This one is actually more stupid than the strawberry pickers buying the $700k house in Salinas.
January 4th, 2009 at 9:08 pm
LOL – have you seen this pic of WaMu graffiti?
http://failblog.org/2008/10/26/bank-fail-2/
January 4th, 2009 at 9:15 pm
thanks for posting that, nomadic. Whats truly amazing about that article is the sheer amount of money that woman has burned through, while living rent free. WTF?
Ms. Halterman hasn’t had a job for about 13 years, she says. She receives about $3,000 a month from welfare programs, food stamps and disability payments related to a back injury.
When an Integrity telemarketer called Ms. Halterman in 2006, she was cash-strapped, owing $36,605 on a home-equity loan. The firm helped her get a $75,500 credit line from another lender.
Ms. Halterman used it to pay off her pickup, among other things. But soon she was struggling again.
In early 2007, she asked Integrity for help, Mr. Rybicki’s records show. This time, Integrity itself provided a $103,000, 30-year mortgage. It had an adjustable rate that started at 9.25% and was capped at 15.25%, according to loan documents.</I?
January 4th, 2009 at 9:15 pm
Ouch! I think my old post got eaten. That will teach me to be adversarily!
Short version:
WG: I think the craigslist house you brought up is
1107 Boranda Ave, mountain view, ca
Zestimate is $1.5K, so you save $26K/year renting instead of buying.
Last bought in 06 for $1.2K, 0 down (www.icocinvestigation.com/property/RGERes.pdf)
Maybe someone can do the math and tell me if $5K/mo rent covers their mortgage payments or not. This may be a flip gone bad.
January 4th, 2009 at 9:20 pm
nomadic, Failblog rulez! Bleen, can’t we have two self-appointed moderators trying to ban each other? That would really be amusing.
January 4th, 2009 at 9:26 pm
Yes, WG, I was really puzzled why someone receiving $3k/month in BF-nowhere-AZ would struggle to pay bills. Where the heck did that money go if she stopped drinking ten years ago? Her son’s meth habit? WTF?
January 4th, 2009 at 9:38 pm
meth is a drug that can be manufactured very cheaply in somebody’s house utilizing standard over the counter antihistamines apparently, so its not meth. You may be wondering how I know this about meth, well its because I dropped into WALGREENS in Oakland when I was out there at that giant Hockey store and found the antihistamines behind the pharm desk and the guy refused to sell me 5 bottles at a time- I guess I just have the look of your standard meth dealer what can I say.
I know dozens of people living on $3K/mo living expenses when you exclude rent/mortgage. It is just incredible that this woman on welfare nets $3K/mo and manages to blow through that while taking out $150K in home equity which also disappears in a cloud of smoke. Stories like this are the reason welfare is constantly under attack for reform, although the payouts seem notoriously stingy to me for people that actually need help and are trying to get on their feet.
January 4th, 2009 at 9:44 pm
@WG: I guess you never get sick or something?
They have the same policy at most stores, Target – etc. Since 1999 I think.
January 4th, 2009 at 9:49 pm
burbed- Really? Well my family buys most of the drugs around here. I don’t have allergy problems but everyone else does so I said I’d pick some up, turns out they wanted Benadryl and I bought sudafed. But I could swear I have bought Benadryl off the shelf at Target just this last year! Pink bottle. I will check next time I am in the target.
This Oakland walgreen was another world entirely though. Bars and stuff locked down everywhere you looked. They practically had the candy locked up so fat people couldn’t get it. Great hockey shop out there though, Hockey X. Surprisingly, no great hockey stores like that out here, even though we have the sharks practice and logitech ice about 1/2 mile from here.
January 4th, 2009 at 9:59 pm
Another great Michael Lewis article submitted for your enjoyment.
January 4th, 2009 at 10:06 pm
The restrictions were passed in 2005:
http://usgovinfo.about.com/od/medicalnews/a/coldmeds.htm
January 4th, 2009 at 10:10 pm
madhaus, I’ll take your “end of the financial world” and raise you the “end of the USA (by 2010):”
http://online.wsj.com/article/SB123051100709638419.html
There’s a kernel of truth in this line: In it, he reiterated his theory, called U.S. foreign debt “a pyramid scheme,” and predicted China and Russia would usurp Washington’s role as a global financial regulator.
January 4th, 2009 at 10:11 pm
nomadic, clearly too much energy spent regulating over the counter medicine versus the entire economy (contrasting links in #81 and #82).
January 4th, 2009 at 10:16 pm
This is from nomadic’s article in #83. So, since Putin really will rear in Sarah Palin’s airspace after all, why can’t the RBA be one of the six pieces?
No way! Cupertino is NOT taking Oakland or Newark!
January 5th, 2009 at 9:15 am
Hey madhaus, that’s one sickening article you posted last night. I went back for a more thorough review this morning.
Is it just me or does this:
Preserving confidence, even when that confidence is false, has been near the top of the S.E.C.’s agenda.
sound just as stupid as spending our way out of a credit bubble? I think Obama’s stimulus plans will have marginal short term value and terrible long term ramifications.
Even this incredibly irresponsible journalist appears to “get it” as he writes his Pollyanna article about 2009. To wit, he last sentence of his points #4 & #5:
(on the stimulus) Will some of that money be wasted? Of course. But the sums involved are so huge that there’s a good chance someone, somewhere, will benefit.
(on not increasing taxes) The United States may have led the world into this crisis, but the world now seems more than willing to lend us unlimited amounts of money to lead the way out.
This, too, is unsustainable. A reckoning will come. But that’s a problem for 2010 and beyond.
RE, I think we’ve found your soul mate!