March 30, 2009

FAIL! “Bay Area housing is now affordable”

Bargain home prices attract investors, novices

Many homes here have returned to the realm of reasonable prices, with the median sale price hovering below $300,000. That means that even people with incomes around the Bay Area’s median of $80,000 or so can find properties within their price range.


— Pricing. The Bay Area reached a peak median sales price of $720,000 in spring 2007. In February, the median was $295,000. That doesn’t mean that all homes lost half their value – although many did see appreciation erode significantly – but it does show a major shift in the composition of homes being sold.

The first-time buyers

Cori Belew, 27, teacher; Dillon Westbrook, 27, masonry contractor

House: 3 bedrooms and bonus room, 1,228 square feet, Oakland

Price: $279,000

Previous price: $514,909 in November 2006

Mortgage: FHA loan at 5%; Monthly payments, about $1,900

Is it any wonder why newspapers are going out of business? Those are not in the Real Bay Area.

What we need is a focus on the Real Bay Area.

Luckily, sites like Movoto have the real scoop:

Mountain View City Description

The median house price in Mountain View is $800,000, with an average of 490 properties sold a year. Mountain View has a population of 70,000 residents, with a mean household income is $69,000. The headquarters of Google, MSN/XBOX, and the NASA Ames Research Center are just a few of the companies that fuel the technological production of Mountain View, working side by side with major telecommunications offices such as Nokia and WebTV. A benefit of being located so centrally within Silicon Valley, Mountain View will be the first city in the country to be provided with complete wireless internet access, creating a gateway between this progressive town and the online world. Keeping up with technological advancement is Mountain View’s impressive educational record: Mountain View High School scored the highest possible Academic Performance Index.

Phew. I feel better already.

Let’s get some real journalism out there!

Comments (60) -- Posted by: burbed @ 4:28 am

60 Responses to “FAIL! “Bay Area housing is now affordable””

  1. Herve Says:

    From Movoto’s Mountain View city description:

    Just south of Palo Alto lies Mountain View, known for it’s prominent technology companies.

    Definitely written by a realtor…

  2. BobbyS Says:

    Well if you are willing to commute 2 hours one-way to work and while in the middle of nowhere, or willing to live in a close-in slum then this article is dead on.

  3. BobbyS Says:

    I think they included the value of tents and cardboard boxes in SF.

  4. Real Estater Says:

    These articles are right on. It is absolutely untrue that you can only find an affordable home in slums. There are plenty of homes in decent neighborhoods priced in the $400K-$600K range, which should be affordable to a typical worker with Silicon Valley profile. These homes are located in a number of cities, including: Sunnyvale, Santa Clara, Cambrian, San Jose, Fremont, Milpitas, to name a few. The angry renters are running out of excuses. All they can say now is that “they predict” RE will fall. The real reason is that these people lack the resolve and fear the responsibility to take on any kind of commitment.

  5. madhaus Says:

    But RE, you cannot expect the angry renters on this board to buy in those locations! They are “Real Grey Area”! Why, they would risk lack of respect from their co-workers if they bought there!

  6. anon Says:

    Gosh, a whole year isn’t enough commitment?

    Certainly if I had more resolve, I’d commit to being someone’s bagholder…

    Do you understand the difference between balls and stupidity, RE?

  7. R Says:

    Ah yes, when all else fails, attack all with the Math and Econ 101 skills necessary to realize that prices are still vastly too high to make buying anything other than foolish as cowards. I think this is right out of the used-car salesman manual.

  8. nomadic Says:

    where’s the city of Cambrian?

    .
    hey, the ad next to the comments area lists last week’s book for just $14.93 – it was originally $120! hehe, that must have been the “pre-release” bootleg price. It had its very own bubble!

  9. anon Says:

    Yes – the cowards are the ones buying. Only fear would drive someone to behave so stupidly.

  10. madhaus Says:

    Yes – the cowards are the ones buying. Only fear would drive someone to behave so stupidly.

    Or greed.

  11. Real Estater Says:

    madhaus says,
    >>But RE, you cannot expect the angry renters on this board to buy in those locations! They are “Real Grey Area”! Why, they would risk lack of respect from their co-workers if they bought there!

    I generally have more respect for you than Pralay, so please don’t act like him.

    We’re talking about first time buyers here. They need to start somewhere. Respect has to be earned. You don’t get hired into a management position coming straight out of school, just as they can’t expect to be your neighbor in buying their first home.

  12. sv_newbie Says:

    RE, I have been looking into SC-CUSD myself. Note – looking, not buying yet :-)
    One house I saw was near Prunridge/Lawrence, nice 7000 lot, listed for 700k, will take 50k in renovation.
    So, basically one can get a nice updated SFR in CUSD (Eisenhower) for $700k (assuming 7% below listing price).
    SV-CUSD is at least $100k expensive. or you can get a similar house on busy street for $700k.
    Neighborhood wise I really dont think 94087 commands $100k over 95051. Schools are actually better in 95051, higher api.

    So, I really don’t understand why 95051 is gray area. To me – it looks no-brainer.

  13. DreamT Says:

    sv_newbie – I can venture several guesses why SC CUSD is gray area. First, I’ll admit we looked at MView before Sunnyvale, and Sunnyvale before Santa Clara. There’s just that unspoken hierarchy between cities that commands a 50k to 100k premium each time and takes a while to change, if at all. Second, 95051 is mostly Santa Clara district, a case of “wrong zip code” for the folks who live in the CUSD area – so again, perception. Third, the area just isn’t as nice looking as cities up north, even though I find the city services to be stellar (except for the post office). Fourth, this is fringe area – houses are larger west in Sunnyvale, Cupertino commands higher prices south-west, large mansions in San Jose south, and the larger, more recent buildings in Santa Clara are east (St. Tomas Woods), while everything north is at least $100k cheaper. Fifth – there’s no real downtown in Santa Clara and when there’s one, it will be on the opposite end of Homestead – that stuff matters to folks like RE. And sixth – lots of not so well maintained flattop houses south of Geneva.
    Someone purchased a fixer-upper here for $650k two years ago, but on the other hand there are a few million+ dollar houses for sale at the moment. The prices about doubled in value from 1995 to 2005 and flat since then (except for a couple of overpriced sales in 07 & 08). It’s a safe bet neighborhood, not one that will make you rich, one where you rub shoulders with managers and directors rather than CEOs and Google millionaires. Most important in my opinion to gauge a neighborhood, it’s a place where people who have money to move up decide as often as not to stay put and build another story instead.

  14. anon Says:

    “Respect has to be earned.”

    What do you think you know about respect, excreter? You receive none here.

  15. sv_newbie Says:

    DreamT, thanks for the detailed reply.
    Yes, I agree it’s matter of both perception and reality. I want to filter out perception part :-)

    I love MV area, its just that they dont have good schools (well for most part) and highest prices among the 3 cities. SV is best location wise. But, I am not ready to shell out $100k more for SV… yet!

    Another interesting thing I noticed – zillow shows max of $804 valuation for the SC house, down to $740k. For a comparable (in my mind :) SV house (1002 Hollenbeck) it shows max of $1.1M. The house sold for $685k recently.

  16. sv_newbie Says:

    DreamT, thanks for the detailed reply.
    Yes, I agree it’s matter of both perception and reality. I want to filter out perception part :-)

    I love MV area, its just that they dont have good schools (well for most part) and highest prices among the 3 cities. SV is best location wise. But, I am not ready to shell out $100k more for SV… yet!

    Another interesting thing I noticed – zillow shows max of $804 valuation for the SC house, down to $740k. For a comparable (in my mind :) SV house (1002 Hollenbeck) it shows max of $1.1M. The house sold for $685k recently.

  17. DreamT Says:

    sv_newbie – Sunnyvale prices climbed more during the past few years, so it has more to fall – in my opinion it’s as simple as that. Will it climb more again in the next 10 years, as RE suggests? It’s anybody’s guess. I’ll just point out that the highest vacancy rate in business buildings in January was reported to be in Sunnyvale, and their downtown was already moribund during the bubble – but back in 2005 I do know that Sunnyvale looked attractive to many buyers because they thought that a new downtown would raise the price values. So past performance isn’t a good indicator of future etc etc.

  18. mtv-renter Says:

    The angry renters are running out of excuses. All they can say now is that “they predict” RE will fall. The real reason is that these people lack the resolve and fear the responsibility to take on any kind of commitment.

    What about people who have the means to buy a house anywhere in the RBA, but choose to rent and are happy about it? Not all renters rent because they’re angry with the housing bubble. There are distinct advantages to renting; my rent is far cheaper than buying (on par with property tax if I bought the place), I have the freedom of having no debt, so I’m not indentured to a bank, I can easily move to shorten my commute, which I have done several times. The only downside to renting is I can’t raise the roof on the garage and install a lift so that I can work on my car, but I can also rent garage space, though that’s less convenient.

  19. SoonToBeDad Says:

    “I love MV area, its just that they dont have good schools (well for most part) and highest prices among the 3 cities”

    I don’t understand how that works.

    Arent the High Schools in Mountain View some of the best in the area? So why is it that the elem and mid schools are not good?

  20. sv_newbie Says:

    #19: not sure, may be kids these days are not studying enough :)
    see http://api.cde.ca.gov/AcntRpt2008/2008GrthAPICo.aspx?cYear=2007-08&cSelect=43,SANTA,CLARA

  21. bob Says:

    The angry renters are running out of excuses. All they can say now is that “they predict” RE will fall. The real reason is that these people lack the resolve and fear the responsibility to take on any kind of commitment.

    Personally, I think people who buy in the BA, and frankly either coast on the US are idiots, so it makes no difference to me, and the more of them move here- the better. Keeps the morons concentrated in one area.

    By the way RE, I bet you heard that the 2 fastest growing cities in the us are…. drum roll…. Raleigh Durham NC and Austin TX. Hmmmm… Looks like if I were a smart RE investor, I’d probably consider somewhere that is gaining versus losing population…

    and oh ya- you seem curiously silent on today’s misfortune day on the stock market. Now you’re down to gaining maybe 1.5-2%. Woo-hoo!

  22. Fru Says:

    #19: The reason the high school ratings are different to the middle/elementary schools is that they have different boundary catchment areas.

    Mountain View-Whisman Elementary/Middle school district is everything north of approx. Bryant. Mountain View-Los Altos High School district includes all of Los Altos (i.e. all of the $2-3MM+ houses south of Bryant).

    See http://www.sccoe.k12.ca.us/schooldirectory/schoolsinfo/boundarymap/

  23. Real Estater Says:

    Bob says,
    >>By the way RE, I bet you heard that the 2 fastest growing cities in the us are…. drum roll…. Raleigh Durham NC and Austin TX. Hmmmm

    Interestingly, I watched an episode of House Hunters on HGTV this past weekend. It was about a couple who moved out of Austin to buy a new home in Wisconsin, and they were saying how much better quality of life is in Wisconsin.

    >>and oh ya- you seem curiously silent on today’s misfortune day on the stock market. Now you’re down to gaining maybe 1.5-2%. Woo-hoo!

    I hope the market drops another 20% so I can add to my holdings.

  24. nomadic Says:

    Personally, I think people who buy in the BA, and frankly either coast on the US are idiots, so it makes no difference to me, and the more of them move here- the better. Keeps the morons concentrated in one area.

    Leave it to bob to be naive yet thoroughly insulting. Must suck to live every day so miserably just so you can “save up money” to move to the sticks and coast the rest of your life. I’d say that makes you more greedy than a bubble investor.

  25. steve Says:

    nomadic, lol. RE and Bob are quite a pair.

  26. anon Says:

    Two very different guys, both equally sophisticated.

  27. Real Estater Says:

    Surely Bob and I are very different, and the results reflect the differences.

    Equally telling is how anon and Pralay are similar.

  28. anon Says:

    I’d like to think I were that smart. Alas, I’m just your average ex-tech guy.

  29. madhaus Says:

    Surely Bob and I are very different, and the results reflect the differences.

    There’s one way RE and bob are similar: R-E-S-P-E-C-T. And that’s something you can’t buy.

    Equally telling is how anon and Pralay are similar.

    anon’s Indian? I had NO idea!

  30. SiO2 Says:

    #8 – Cambrian is sw San Jose, near Los Gatos. Think 85/17 then go south and east to Almaden Expwy. Not a separate city. In fact some of Cambrian is unincorporated, like the area around Camden Ave and New Jersey Ave.

    #12 – I think 95051 is Fremont High, and at least some of 94087 is Homestead High. There’s a 100 point API difference between the two. API isn’t everything, but it’s something.

  31. sv_newbie Says:

    95051 CUSD is actually cupertino high.

  32. Pralay Says:

    Respect has to be earned.
    ———

    Moral of the story: zipcode cannot buy respect.

  33. Pralay Says:

    Surely Bob and I are very different, and the results reflect the differences.
    —–

    Result? What result? You mean fictitious result claimed by a lair.

  34. Pralay Says:

    Interestingly, I watched an episode of House Hunters on HGTV this past weekend. It was about a couple who moved out of Austin to buy a new home in Wisconsin, and they were saying how much better quality of life is in Wisconsin.
    ——

    And I know one guy here who keeps telling how quality of life and “life style” is sooooo good in Palo Alto.
    So I guess they all, Wisconsin guy, Austin guy and Palo Alto guy, are made of same material. :)

  35. nomadic Says:

    #30 Not a separate city.

    My point exactly. I was being facetious.

    But thank you for trying to help. :-)

  36. SiO2 Says:

    Oh, I failed on both answers! hope I’m not banned from Burbed!

  37. madhaus Says:

    sv_newbie, I tried to reply to this yesterday but the site kept crashing on me.

    I don’t understand why you say 95051 has higher API scores than 94087. Nimitz Elementary has the second lowest scores in CUSD, but that’s one out of three schools in the zip. Eisenhower, the 95051/CUSD elementary, is outscored by the other 2 94087 schools.

    And the middle school serving 95051/CUSD, Hyde, is also the lowest scoring, 60 points below Cupertino Middle (94087/CUSD).

    DreamT’s right about the tiers moving from Mountain View to Sunnyvale to Santa Clara. A lot of that is distance to the jobs, some of it is closeness to the Peninsula itself, and school district always counts for something. Anyway between DT covering 95051 and me covering 94087, we can sprout off all kinds of opinions. :)

  38. bob Says:

    Leave it to bob to be naive yet thoroughly insulting. Must suck to live every day so miserably just so you can “save up money” to move to the sticks and coast the rest of your life. I’d say that makes you more greedy than a bubble investor.

    You only wish I was naive and miserable. I’m young enough to be able to move out of here, start a new life, and live not necessarily as a rich person, but live in a stable situation and do it sooner than later. Secondly, I’m actually visiting these cities I talk about. I’m not blowing smoke out my ass when I say that the quality of life is considerably better than here in two of the cities I’ve visited so far, and that isn’t just because of the cost of living. The people are nicer. The cities are cleaner. The economy is more stable. and yes- the cost of living is less and more “normal”, meaning that might explain why people in these places I’ve visited are generally more laid back more so than they are here. Lastly, when I move there I will gladly contribute to their economies. I’m a hard working person, which is how I managed to get to where I am today. No “coasting” as you suggest.

    If you want to feel sorry for someone, find someone else to feel sorry for. I’m perfectly happy and only too glad to have made the decision I’ve made.

    I don’t apologize for my observations after living on both coasts either. That’s called opinion.

    Over and out. Continue bickering.

  39. nomadic Says:

    No, I don’t “wish” you were miserable. That is what you project here on a regular basis.

  40. bob Says:

    Ok, tell you what. I’ll take back that people who buy on the coasts are “idiots”. Perhaps that was stepping a bit too far. But as someone who has lived all over the country, why do people in places like the BA, NYC, NJ, and other uber-expensive urban areas find it so much more worthwhile to pay what is sometimes 2 to 5 times as much to live in those places? Perhaps if your family lives here I could get it. Otherwise, I don’t really see the advantage. I know that sounds stupid. I get a feeling most of it is due to status and being able to say: ” I live in “X”” or whatever.

    Perhaps I’m a simple man with less demanding tastes, but perhaps that explains why I’m continually amazed by what appears to me nonsense in regards to what efforts people make( in my opinion outright unnecessary) in order to live in these mythical places.

    But in any regards, I imagine that long after I’m gone, the same people will be on this forum blogging about the same stuff: housing and its ever-fascinating high price in the BA and the turmoil it ultimately creates. Ever wonder why Austin Dweller is rarely here? Could be because they don’t care anymore, just as I won’t and do so less and less the sooner I get ready to leave myself.

  41. anon Says:

    bay area sucks

  42. Mole Man Says:

    well, it sucked you in, didn’t it, anon

  43. DreamT Says:

    “in order to live in these mythical places.”

    Bay Area: Myths and Legends (“it was better 100 years ago!”)

    “Perhaps I’m a simple man with less demanding tastes”

    bob, please don’t wish that upon yourself.

    sim·plic·i·ty (sĭm-plĭs’ĭ-tē)
    Lack of sophistication or subtlety; naiveté.
    Lack of good sense or intelligence; foolishness.
    Lack of acuteness and sagacity.
    Weakness of intellect; silliness; folly.

    Marquis Dorset, a man, for his harmless simplicity neither misliked nor much regarded. –Hayward.

    In wit a man; simplicity a child. –Pope.

    How long, ye simple ones, will ye love simplicity? and the scorners delight in their scorning? –Prov. i. 22.

    [dictionary.com]

  44. DreamT Says:

    “in order to live in these mythical places.”

    Bay Area: Myths and Legends (“it was better 100 years ago!”)

    “Perhaps I’m a simple man with less demanding tastes”

    bob, please don’t wish that upon yourself.

    sim·plic·i·ty (@ dictionary.com)

    Lack of sophistication or subtlety; naiveté.
    Lack of good sense or intelligence; foolishness.
    Lack of acuteness and sagacity.
    Weakness of intellect; silliness; folly.

    Marquis Dorset, a man, for his harmless simplicity neither misliked nor much regarded. –Hayward.

    In wit a man; simplicity a child. –Pope.

    How long, ye simple ones, will ye love simplicity? and the scorners delight in their scorning? –Prov. i. 22.

  45. bob Says:

    DreamT,
    Thanks for further exemplifying exactly the kind of person I tend to encounter in places like the BA.

    Nice try on a comeback though despite it making me chuckle. As if you can convince me or yourself that I’m indeed ” weak in intelligence”. Face it- you’re jealous because I have flexibility and choices while I can just about guess you’re not in that same ease of making decisions. But that would be making a judgment wouldn’t it and that would be presumptuous wouldn’t it? So I take it back. I didn’t really mean it. Honest!

  46. nomadic Says:

    lol, bob, DreamT wasn’t insulting you. At least, I don’t think so.

    re#40, I’ve lived in various places and even outside the USA too. I’ve stayed here because it’s a pleasant place to be, and as you’ve noticed, one can make a decent living. I don’t obsess over the cost of living. There are trade-offs wherever you choose to settle. It’s you who appears to labor over these issues.

    It seems like there’s a lower level of activity on this site because even the locals are losing some interest in the gyrations of the real estate market. Or maybe not less interested, but a little tired of the speculation of what might happen next.

  47. DreamT Says:

    “Face it- you’re jealous”

    Lighten up a bit, bob, it’s a joke (and on the internet, to boot). No wonder people think you feel miserable..
    If you want the no-joke version: I think it highly hypocritical to shoot down a place and insult its residents, while you remain here nonetheless to profit financially as much as you can. No doubt you’re two-faced with your employer. :)
    This is why I thought nomadic’s observation that you’re “greedy” remarkably apt.

  48. bob Says:

    Ok, I apologize. I’m tired and not totally 100% clear-headed.Sorry Dream T and Nomadic. Anyhow, I’m off to hit the hay. Have a good evening. Later.

  49. Herve Says:

    Apologies accepted. Moving on now…

  50. anon Says:

    “well, it sucked you in, didn’t it, anon”

    it did indeed

  51. Herve Says:

    Japan gives cash to jobless foreigners to go home.

    To think that they will send spend the money to buy real estate in the Bay Area… Leaves me shivering.

  52. nomadic Says:

    Sounds like the South Park episode where the boys get a bus to take the homeless people to California for the good weather and better benefits.

    ;-)

  53. Real Estater Says:

    Bob,

    Face it, your defensive posture has not served you well. First you missed the biggest run-up in Bay Area housing prices in history, then you missed the best performing month of the Dow in the past 6 years. Sure, you’ve saved some money that may give you some subsistance level comfort in fly-over land, but each penny of that had to be earned. You haven’t captured any of the opportunities that make it worthwhile to be in the Bay Area in the first place.

  54. bob Says:

    RE,
    Seriously, shut the hell up. Like I said- I’ve actually visited these places I am considering, and yes, I stand by my previous statement that they are indeed nice places. I’d say most of the people in the BA and probably on this blog are from crappy places like the Northeast or midwest thus they don’t know any better anyway, or at least not enough to know that other cities are just as nice, or nicer than the BA.

    Again- I will be glad to be out of here leaving ignorant people like you who sadly will never know what the good life is all about.

  55. steve Says:

    breaking news: despite a seemingly insurmountable lead, reigning “most obnoxious poster” RE has been overtaken by “Bob” in the current standings.

    when reached for comment on this stunning development, Mr B “I’m not an angry renter” Ob had this to say:

    #$?% you, and your (*&$?^ blog and your #$?%ed up RBA and this whole &!) *$^& ^$(*##$ !@# state. You are all a bunch of #$?% *&*@#%*&*#s and I can’t wait to get the &^%# out of here.

  56. steve Says:

    Again- I will be glad to be out of here leaving ignorant people like you who sadly will never know what the good life is all about.

    Mongol General: Hao! Dai ye! We won again! This is good, but what is best in life?
    Mongol Bob: The open steppe of Tennessee, fleet horse, falcons at your wrist, and the wind in your hair.
    Mongol General: Wrong! Conan! What is best in life?
    Conan: To crush your enemies, see them driven before you, and to hear the lamentation of their women.
    Mongol General: That is good! That is good.

  57. DreamT Says:

    steve #55 – Some day, we’ll find out that all along it was a case of mutual envy :) RE dreaming of frolicking in the Tennessee fields, and bob dreaming of his sub-zero fridge while at work. Their innermost aspirations, exposed!

  58. anon Says:

    56 was fricken hilarious

  59. nomadic Says:

    #56 – post of the month! I’m laughing so hard I have tears in my eyes!

    Yes, post of the month and it’s only the FIRST day of April.

    :-)

  60. steve Says:

    thanks, guys!


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