Comments on: Breaking News: Bay Area house prices are soaring!

By: toto

toto — Wed, 26 Aug 2009 23:44:38 +0000

#9-pralay

Houses are still selling at close to asking price.

Does not mean much. Sellers also reduce asking price accordingly depending on market condition.

True, I have not done the research to find out how the asking price compared to the peak of the market.

I found it difficult to compare a house to an equivalent size/location and then adjust for layout/age/renovations …

Even more difficult when the area (old MV) has low transaction volume and its surrounding area price vary significantly.

I have tried a few times and based on my far-from-perfect method the asking price was shockingly close to peak.

The only hope is in the trend which very slowly went from 0% off asking price, to 5% and I have seen a 10% off for the first time a couple of weeks ago.

By: sonarrat

sonarrat — Wed, 26 Aug 2009 20:56:46 +0000

The house across from my parents’ place in Morgan Hill just sold to a bank for about $650K. Jeez! It’s 5000 square feet! They had paid $1.3M for it.

By: BuyersAreIdiots

BuyersAreIdiots — Wed, 26 Aug 2009 16:52:49 +0000

95032 is the worst hit so far

That zip encompasses a good portion of Los Gatos, including the outskirts. The Monte Sereno zip would be 95030 which would include most of the downtown area. But it also includes the corridor between Los Gatos and Saratoga which has numerous multi-million dollar joints. I’ve seen some huge price drops on some of those.

The majority of the LG Mountains would be the 95033 zip. Those should have also taken a pretty good hit. Based on the price drops I have seen.

By: SiO2

SiO2 — Wed, 26 Aug 2009 14:51:13 +0000

DreamT,
my 15% is just an estimate, based on looking at what you can get (or could get) in the $1.3 to $1.6 range. I’m sure you are right, and some properties would be down 20% nowadays. There’s probably less demand for the all original 1950 houses with 1600 ft in los altos nowadays.

I suppose that the fate of RBA depends on a few things;
1. can the owners hold on until employment picks up. Some will, some who spent a lot on consumer goods cannot.
2. will the state budget problems hit the revenue limit schools more than the basic aid schools, and how long will that last? (for me, a key factor for RBA is schools, and the better ones are usually basic aid)

If you have one kid, private school can be a better deal than an RBA house. If you have two, RBA house is cheaper. But if the gap grows, then private school is better for two, or three kids – and that’s probably where people would start to choose that option. Hmm, maybe now’s a good time to invest in a private school. Is Challenger listed on NASDAQ?

By: DreamT

DreamT — Wed, 26 Aug 2009 08:22:35 +0000

#7 – SiO2 – I posted this a little while back, my belief is that (as RE routinely points out) well-maintained properties with no location issues have not budged much, while poorly located properties have comparatively crashed much more. So in the same street, some property values may have decreased by 20% and others by 5%, simply because the former were artificially lifted by the latter during the boom as people couldn’t afford to be as choosy as today. The small percentage of properties that everybody still would prefer to buy in a given neighborhood have proven particularly resilient.
That said, your 15% figure looks a bit optimistic to me (I’d have said 20%) because the ’07 peak was stratospheric if short-lived.
The worst-hit areas have lost ~ 70% while some areas haven’t decreased at all, all this within a few miles. It’s instructive to live through all this.
Also there’s an interesting fable going on in Portola Valley these days. Every single house for sale there is because the owner is moving to downtown Menlo Park. Because, you know, the kids. I wonder what the tale is in downtown Menlo Park. Maybe the owners there are moving to Portola Valley.

By: DreamT

DreamT — Wed, 26 Aug 2009 08:08:41 +0000

Grandiose contribution by our newish troll!
BTW Los Gatos Mountains rule! See, I contributed.

By: Top Dog

Top Dog — Wed, 26 Aug 2009 04:31:52 +0000

n my area (Los Gatos) I have seen a much larger drop than some other areas when you take the entire Los Gatos area into account. The LG Mountains have taken a big hit (probably 30% drops) with areas closer to the center dropping less.

What about your area (just Los Gatos itself)? I think Los Gatos Mountains is not a good area.

By: Herve Estater

Herve Estater — Wed, 26 Aug 2009 04:31:29 +0000

> now that I read it, this post is pretty useless. I can’t even say that it’s useless aggregate data, there’s no data. Hopefully at least it makes someone laugh.

I see you’re adopting my style

By: nomadic

nomadic — Wed, 26 Aug 2009 04:29:48 +0000

Surprising data (from Zillow) on the LG zips:
http://www.zillow.com/local-info/CA-95030-home-value/r_97936/

95032 is the worst hit so far.

By: nomadic

nomadic — Wed, 26 Aug 2009 04:23:57 +0000

Without doing any analysis, I’d say Zillow’s data probably isn’t good. A lot of what they do is a bit suspect. Here’s Redfin’s data for 94301:

http://www.redfin.com/zipcode/94301

Median up over 3% YOY, $/sf down almost 10% YOY.

Altos Research clutters things up by aggregating (word of the day!) all of PA into one lump:
http://www.altosresearch.com/research/CA/palo-alto-real-estate-market