July 31, 2010

Cashing In on Refis

More Homeowners Putting in Cash to Refinance

By M.P. McQueen. The Wall Street Journal

Second quarter data from Freddie Mac, the mortgage investor, released Wednesday confirms a trend of “cash-in” refinancings. As we reported in Saturday’s Journal, more homeowners are paying down their principal balance in order to take out a new loan at a lower interest rate.

About 22% of homeowners who refinanced their first-lien mortgage during the last quarter put in cash to lower principal, tying a record for the third highest “cash-in” share since Freddie Mac started keeping records in 1985. The share increased from the first quarter, when the revised cash-in share was 19%, according to revised figures.

On the other hand, borrowers who took cash out at closing, and increased their loan balance by at least 5%, fell to 27%, near-all time lows in the last few quarters, the company said. Cash-out financing was popular for years prior to the housing bust.

Overall, total home equity converted to cash fell to the lowest level in a decade, at $8.3 billion.

image According to an April article from bankrate.com, the primary cause of stepped up cash-in refinancing was tighter lending standards, or home appraisals coming in lower than expected.

Low appraisals!  Good thing we live in the Real Bay Area (RBA), where home values never go down!  If there are cash-in refis going on here, it’s to avoid higher interest rates, right? Conforming loans must be for $417,000 or less.  A mortgage over $729,750 will have even higher interest rates than a non-conforming loan.  Homeowners hoping to refinance at today’s lower rates could pay in additional money to lock in significantly lower rates.

Are banks even allowing cash-out refinancing anymore?  Isn’t that how the non-RBA got into this mess?  But good news awaits!  With low interest rates and cash-in mortgages in vogue, now is the time to double down on your house!  Yes, sell your underwater house, bring cash to the closing and retire your mortgage, then buy a bigger house at a lower rate for similar monthly payments!  What could possibly go wrong?  Well, other than the economy double-dipping, interest rates going up pulling down home values, or McMansions going out of vogue with green-conscious Generation Y buyers?  Oh, don’t worry about that last possibility, none of them can afford a house because they all owe too much on their college loans!

Comments (11) -- Posted by: madhaus @ 5:02 am

July 30, 2010

Welcome to back to Real Bay Area, San Carlos


1135 ALAMEDA San Carlos, CA 94070


Beds: 3
Baths: 2
Sq. Ft.: 970
$/Sq. Ft.: $814
Lot Size: 5,920 Sq. Ft.
Property Type: Detached Single Family
Stories: 1
View: Bay
Year Built: 1950
Community: El Sereno Corte
County: San Mateo
MLS#: 81034182
Source: MLSListings
Status: Active This listing is for sale and the sellers are accepting offers.
On Redfin: 1 day
New Listing (24 hours)


Now, granted, San Carlos had to eliminate its police force and outsource it to the county, but still, have you seen house prices in San Carlos lately? Woo! It’s back to $8xx per square foot levels! Welcome back to the Real Bay Area San Carlos!

And just look at this amazing blurry house. Now you’ve even got the Real Bay Area swagger! Nothing says RBA like a listing that says “buyer, you’re my BITCH”. I love the lack-of-interior photos attitude.

Yo go San Carlos. You truly are the city of good living now.

Comments (8) -- Posted by: burbed @ 5:40 am

July 29, 2010

Location*3, Part III

In our previous installments, we saw a very small house priced under a million, and a very large house priced (and in contract within a month) under eight of those millions.  Since the first home was a 2/1, and the second was an 8/4.5, we can surmise that getting four times the rooms should probably cost four times the cash.  But it didn’t.  It cost eight times as much.  Why?

One of these homes was not like the other, one of these homes doesn’t belong, can you guess which house was not like the other, because its location was wrong!  Yes, the house that’s one eighth instead of one fourth the asking price is on the wrong side of the great divide better known as Middlefield Road.

Or is it?  Let’s take a look at today’s house, on the same side (but not the same neighborhood) as the garden shed.  It’s not too big or too small, but is it just right?

1270 LINCOLN Ave Palo Alto, CA 94301


Beds: 4
Baths: 4
Sq. Ft.: 3,040
$/Sq. Ft.: $845
Lot Size: 9,711 Sq. Ft.
Property Type: Detached Single Family
Style: Spanish
Stories: 2
View: Neighborhood
Year Built: 1985
Community: Crescent Park
County: Santa Clara
MLS#: 81015526
Source: MLSListings
Status: Pending Without Release This listing is in escrow, past inspections and waiting for loan funding. "Without Release" indicates that the current buyer doesn’t need to sell a home to buy the new home.
On Redfin: 111 days


I wish the realtard would stop SHOUTING at me!  Even the agent for the broom closet had the courtesy to use lower case.  And for two and a half mil, don’t you think they could spring for spelling out all the words?  No, I do not want to say “hi” to the ceilings or find out what’s in that flour plan.  Wondering how spacious the rams are.  Or are they rums?  Maybe it belonged to a chip designer and they’re ROMs. At least the $8M house had “roooms” so I could guess what they rly wr.  But good move spelling out “LIMESTONE, MARBLE, GRANITE.”  PRIORITIES.  How does Limestone and Marble and Rock, Oh My! sound for this listing?

One more thing.  Do you think the GARAGE is ATTACHED?  I want to b sr.

Now, this property is taking a price hit for several reasons.  First, it’s extremely close to a rather busy street:


Next, we already have the ideal formula for bedroooms to bathroooms from our previous two homes: 2 br for each ba.  This house violates the golden realty ratio by having excess ba, so twice as many toilets to scrub.

These two flaws could easily knock twenty or thirty percent off the price of a home.  Another oddity could pull it down some more: the home is advertised as a two story, but the second one is very well hidden.  So well hidden it may be apocryphal, legendary, or really creative marketing (a fancy term for “lying”).  As in: the second story is telling you the house has two floors.


No second floor here…

Where could it be?


Perhaps it is at the end of these railroad tracks:




No sign of a staircase inside, either.  Is this place really two stories?  Better take another ten percent off our appraisal just to be sure.

So why is this house about a third the asking price of the Vampire Frat House when it’s 60% the size?  The corrections above don’t add up to 67% off.  I’ll tell you.  Location, location, location.  This house is in Crescent Park, which is simply on the Wrong Side.

One last apples-to-apples comparison.  In the other neighborhoods, find the worst vehicles nearby.  Here’s what passes for hillbilly in Crescent Park:

It’s a toss up between this, which is mitigated by being parked in front of the house being sold. So maybe the sellers will take it away.  What the heck is it, a Lada?  A Trabant?


Two-stroke engine mystery
vehicle versus… the horror of public transportation on this very street!


So much for a beautiful day in the neighborhood!  Stay tuned for the next installment of Wrong Side Right City.

Comments (37) -- Posted by: madhaus @ 5:04 am

July 28, 2010

A house in Fremont with a lucky price, and lucky marble columns


46890 RANCHO HIGUERA Rd Fremont, CA 94539


Beds: 6
Baths: 5
Sq. Ft.: 6,100
$/Sq. Ft.: $473
Lot Size: 0.88 Acres
Property Type: Detached Single Family
Style: Tudor, Contemporary
Stories: 1
View: Green Belt
Year Built: 2001
Community: Alameda County
County: Alameda
MLS#: 81033347
Source: MLSListings
Status: Active This listing is for sale and the sellers are accepting offers.
On Redfin: 5 days
Stunning custom one story home. One of a kind. Well-known Italian architect. East ing/ west wing floor plan. Hollywood-style Driveway. Grand entrance. Ideal for social events. Gourmet kitchen with butler station and octagonal skylight. High ceiling with special lighting throught out. Radiant floor heating. In-law set up. 2 sets of gargages. Media room and Library too. Private back yard and garden.
Thanks to Burbed reader G for this find!
Who will be the owner of this lucky house with the lucky price and the beautiful mawble… um… I mean, marble columns? Will it be this one, or that one? This one or that one?
This house is clearly meant for the jet set living in the east bay. Lindsey? Mel? Maybe it’s time for a change of scenery! Try chillaxing here in the Bay Area – it might do you some good!
Comments (8) -- Posted by: burbed @ 5:24 am

July 27, 2010

Location, Loocation, Looocation – Part II

In a previous post, I asked whether location was all there was to pricing real estate.  Looking at several homes on the same street, their position, and their list prices would help answer this question.  The first home was a small 2/1 in a “fantastic location” for just under a million.  Let’s see what’s on the same street but on the Other Side of that cruel boundary between sort of good and Real Good: Middlefield Road.

365 Lincoln Ave Palo Alto, CA 94301


Beds: 8
Baths: 4.5
Sq. Ft.: 5,505
$/Sq. Ft.:$1,452
Lot Size: 0.72 Acres
Property Type: Detached Single Family
Stories: 3
View: Neighborhood
Year Built: 1907
Community: Professorville
County: Santa Clara
MLS#: 81024865
Source: MLSListings
Status: Pending Without Release This listing is in escrow, past inspections and waiting for loan funding. "Without Release" indicates that the current buyer doesn’t need to sell a home to buy the new home.
On Redfin: 62 days

Special Opportunity to own one of Professorville’s largest lots & historic homes. Built in 1903 by Stanford Professor Leander Hoskins, this graceful craftsman style home is 5,511 sq ft & has 8 bedroooms & 4 bathroooms on a 31,500 sq ft lot. Fine example original craftsman woodwork. A broad inviting veranda welcomes visitors. Walk to Downtown & Stanford University. Please do not disturb occupants

That photo looks a bit… threatening.  Lights are on but it’s still daytime… but not for long!  The house seems like it’s crouching down low, preparing to spring onto your chest, knock you down, rip out your throat and force you to sign an eight million dollar real estate offer without contingencies.  And no eights in the price, yet!  But it’s a “Special Opportunity.”  It’s so special, the “bedroooms” and “bathroooms” are pre-stocked with extra haunting ooos.

It’s sooo special, that you’d better be able to handle the cognitive dissonance of a “broad inviting veranda” that “welcomes visitors,” except you’re not supposed to “disturb the occupants.”  Guess that broad inviting veranda is off-limits, eh?  But ask yourself, what kind of occupants would there be in an 8/4.5 near a major university?

Two words.  Frat house.  With extra ooos.  Take a look at the photo above, again.  Are you thinking what I’m thinking?

Vampire frat house.

While you put on your carbon-fiber neck protector, savor this lot.  Look how it takes up the space of more than four tall or two grande properties, and just lolls onto both Lincoln and Waverly like a well-played Tetris piece… without actually being on the corner!


Heh.  I said loll.  And lolling is what you get to do when you live on the Better Side of Middlefield.  Too bad you can’t buy the Vampire Frat House, though.  It’s pending, and loooks like it was delisted a month ago, probably when someone walked in and said “Ooo!  8 bedroooms and 4 bathroooms!  Sooold!”  Loooks like you’re priced out forever, but the ooout-of-tooown sellers are making the city very happy.  The old tax valuation was (ooo!) $175,246.

To be fair, I went up and down the street loooking for unsightly vehicles, but this was the worst to be found.  The next worst was the Post Office truck.  But I do like how this photo shows the hired help gazing longingly at a house he wishes he could live in.


You see, this is the Better Side (even if you have to leave garlic on each windowsill)!  The neighbors keep their cars tucked behind hedges and trees, so only the transient workers’ jalopies remain.  Next time, we’ll Return to the Dark Side. Be there or be a Tetris piece!

Comments (33) -- Posted by: madhaus @ 5:08 am

July 26, 2010

High tech townhouse in Palo Alto–just $3.9M


455 FOREST Ave Unit B Palo Alto, CA 94301


Beds: 4
Baths: 3.5
Sq. Ft.: 2,676
$/Sq. Ft.: $1,476
Lot Size:
Property Type: Townhouse
Style: Modern/High Tech, Contemporary
Stories: 1-3 (Low Rise)
View: Neighborhood, City Lights
Year Built: 2009
Community: Downtown
County: Santa Clara
MLS#: 81031358
Source: MLSListings
Status: Active This listing is for sale and the sellers are accepting offers.
On Redfin: 17 days
City Lofts – modern 3-level townhome in the heart of downtown Palo Alto, accessed by your own private elevator. Soaring top-floor ‘great’ room with walls of windows opening to a large roof deck. Ground floor suite with kitchenette, full bath and separate entry. Powered by solar panels. Designed by David Solnick Price includes most furnishings.

These days, people want everything to be high tech. Thanks to Burbed reader Herve for this high tech find. Wow… $3.95M! Here’s a question: how much of that is due to the private elevator and solar panels? And why does this house have a private elevator anyway if you’re trying to be green?

So many questions, so much price. This house is definitely fit for a newly minted Tesla millionaire!

Comments (13) -- Posted by: burbed @ 5:20 am

July 25, 2010

California Mortgage Defaults down, Foreclosures Up

Mortgage defaults in California at 3-year low

The number of default notices in the second quarter falls 43.8% compared with the same period in 2009. Meanwhile, banks step up repossession of foreclosed homes.

By Alejandro Lazo, Los Angeles Times

The number of Californians entering foreclosure slid dramatically in the second quarter to a three-year low as the fallout from the worst of the housing crisis continued to abate.

Default notices, the first stage of the foreclosure process initiated by banks on troubled homeowners, plummeted 43.8% in the second quarter over the same period last year to 70,051, and 13.6% from the first three months of the year, research firm MDA DataQuick of San Diego said Wednesday.

DataQuick Notice of Defaults Q2 2010

Well, we’ve got some good news, and we’ve got some bad news.  The good news is fewer Golden State homedebtors are defaulting on their mortgages.  The bad news is that there’s plenty of already defaulted property for the banks to foreclose on, and foreclose they did.  The average loan has taken 9.1 months from Notice of Default to foreclosure, and the number of California NODs peaked in the first quarter of 2009.

"We are now three-plus years into the housing crisis, and at this point of time we are seeing stabilization across the board," said Stuart Gabriel, director of UCLA‘s Ziman Center for Real Estate. "The stabilization is in fits and spurts … but it is evidenced in a variety of indicators."


One of the things that the subprime mortgage meltdown has led to are a rash of professors at actual accredited institutions of higher learning using the word “evidence” as a verb.  You’ll have to read the article yourself to find out what the Real Estate Erudite from Cal and USC have to say.  Well, I’ll give you a hint.  The guy from USC thinks fewer people are going to walk away from underwater mortgages than predicted, but didn’t bother to share any actual reasoning for this supposition other than home prices trending back up.  It’s fairly easy to find experts suggesting that housing prices will stay down and could go even lower, so I definitely want a glass of that SoCal Kool-Aid.

But don’t forget the “Bad News” portion: 4.4% more trustee’s deeds were filed on California properties from the same quarter a year earlier, and 11.2% from the previous quarter, for a total of 47,669.  The last stage of foreclosure is recording the TD.  Foreclosure filings were up 38% nationally, and California was well represented in those numbers.

Mortgage rates went down this week, from 4.57 to 4.56 percent for a 30 year fixed conventional loan.  (These are national averages, and California rates are usually higher.)  That last .01 percent is going to be the trigger for everyone who refinanced at 4.59% to jump in for a new set of appraisal documents.  And all those newly foreclosed homeless are going to jump at this opportunity, right?  Best of all, you’re all going to get a chance to refinance at 4.55%, because Bernanke (Chairman of the Federal Reserve, but you knew that) says as the economic outlook is “unusually uncertain” he may have to lower interest rates even more!

Comments (11) -- Posted by: madhaus @ 5:02 am

July 24, 2010

It’s Search Engine Saturday!

Recently someone found this site by searching for “best car to afford with 100k salary.”  Too bad the reader doesn’t live anywhere Special, because in the Real Bay Area (RBA) everyone has a 100k salary.  Heck, my hairdresser’s housekeeper’s dog walker makes 100k.

So, think back to when you only made a hundred thou a year and tell us what the best car for you would have been.  I’m assuming if you’re a fairly recent homebuyer, the car would be a 1988 Honda Civic. For a renter, maybe an Audi R8 is almost good enough to make up for your meaningless transient life as you pile up wads of cash rather than fork it over to a friendly mortgage company.

Today we’re having a two-for-one special.  Another reader found burbed by searching for “$150k income $600k mortgage.”  Are banks letting people borrow only four times their income?  That could lead to the collapse of our whole RBA way of life!

Comments (14) -- Posted by: madhaus @ 5:13 am

July 23, 2010

Are you buying this Mountain View house for the realtor?


462 PETTIS Ave Mountain View, CA 94041


Beds: 3
Baths: 1
Sq. Ft.: 828
$/Sq. Ft.: $810
Lot Size: 6,600 Sq. Ft.
Property Type: Detached Single Family
Style: Cottage/Bungalow
Stories: 1
View: Neighborhood
Year Built: 1919
Community: Downtown
County: Santa Clara
MLS#: 81026682
Source: MLSListings
Status: Active This listing is for sale and the sellers are accepting offers.
On Redfin: 43 days
Location location & value. A great location-YES, a large buildable lot YES, an unbelievable low $ for this area YES do the home & lot need vision YES YES YES. The previous owner lived here for 61 years & all the neighbors nw him well, a great guy. You have an oppurtunity today to buy a place in Mountain view where you can walk to all the shops & restaurants on Castro & also walk to Cal Train HURRY!

Thanks to Burbed reader Herve for this find.

Now, to be fair, the entry has since been updated to correct for this, but still its ok to have fun with this listing!

Just think, you can buy a house where all the neighbors were friends, so they’ll hate you when you move in. Because, you know, you’re not the guy.

But, you do have this dashing realtor to help you and build credibility, so I guess that’s a plus. So… just buy this house, tear it down, spend another $375k and boom you’ve got a great house in Mountain View. I wonder if you can do some sort of scheme where you leave one wall standing to preserve your purchase tax rate.

Anyone familiar with Prop 13 avoidance scams… er… techniques like that?

Comments (9) -- Posted by: burbed @ 5:34 am

July 22, 2010

Location, Location, Location

Ask a professional real estate agent why one house costs more than another, and she’ll say “location, location, location.”  Ask why one house cost more than another despite being smaller and having fewer amenities, and she’ll say, “location, location, location.”

Then again, ask her what she had for dinner last night, and she’ll say, “location, location, location.”

Is location really all there is to pricing Real Estate?  Is it the perceived market pulse, or expectations, or whether a neighbor down the street has an RV in the front yard?  Does the condition of the house matter?  Or is it just what the realtard had for dinner last night?

Several homes for sale on the same street is one way to stress test this real estate cliché.  So let’s begin with this “cozy charmer,” as a professional might call it.  The rest of us would call it a charming ninety year old garden shed.  But when the shed is in a prime zip code, it’s priced right under a million.

725 LINCOLN Ave Palo Alto, CA 94301



Beds: 2
Baths: 1
Sq. Ft.: 1,032
$/Sq. Ft.: $968
Lot Size: 4,250 Sq. Ft.
Property Type: Detached Single Family
Stories: 1
Year Built: 1920
Community: Community Center
County: Santa Clara
MLS#: 81035012
Source: MLSListings
Status: Active This listing is for sale and the sellers are accepting offers.
On Redfin: 5 days

English cottage style with wonderful decor and charm. Two bedrooms with walk-in closets; large kitchen, separate dining room, inside laundry. Lovely patios under new trellis. Separate out building attractive exterior could become darling room of some practical or fun purpose. Fantastic location!

See!  She said location!  I guess we should be grateful she only said it once.  She also said “charm,” “lovely,” and “darling.”  And the “separate out building attractive exterior” isn’t shown in the photos, even though it “could become darling room of some practical or fun purpose.”  Practical or fun?  Why not both?  Then the on-site meth lab/hookah bar is a go!

Now, speaking of the “fantastic location,” notice anything about the map?

image .

Well yes, it appears the property has been subdivided into The House and The Street Access.  That’s curious, but remember today’s title?  Hint: The yellow “do not cross – crime scene” tape runs across Middlefield Road.  So, is this house on the “right” or the “wrong” side of the boundary?  And would the price be higher or lower if the chicken crossed the Road? 

By the way, the neighbor really does have an RV parked on the lawn.


Now that is one classy neighborhood.  Can’t wait to see how prices (as well as neighbors’ vehicles) fare on The Other Side.  Stay tuned!

Comments (26) -- Posted by: madhaus @ 5:02 am