September 26, 2010

Let the housing market crash!

Housing Woes Bring a New Cry: Let the Market Fall

As the economy again sputters and potential buyers flee — July housing sales sank 26 percent from July 2009 — there is a growing sense of exhaustion with government intervention. Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash.

When prices are lower, these experts argue, buyers will pour in, creating the elusive stability the government has spent billions upon billions trying to achieve.

“Housing needs to go back to reasonable levels,” said Anthony B. Sanders, a professor of real estate finance at George Mason University. “If we keep trying to stimulate the market, that’s the definition of insanity.”

The further the market descends, however, the more miserable one group — important both politically and economically — will be: the tens of millions of homeowners who have already seen their home values drop an average of 30 percent.

The poorer these owners feel, the less likely they will indulge in the sort of consumer spending the economy needs to recover. If they see an identical house down the street going for half what they owe, the temptation to default might be irresistible. That could make the market’s current malaise seem minor.

I agree. There’s no reason why we Real Bay Area folks should support the housing markets across the nation. It’s time we stopped giving them hand outs, and invest in ourselves. How else will we ever surpass our enemy to the east: Manhattan.

If anything, tax dollars should be flowing to the Bay Area to help boost house prices here to set an example for the rest of nation on what’s desirable: unaffordable housing.

California leads, the nation follows. It’s time we led again.

Comments (172) -- Posted by: burbed @ 5:59 am

172 Responses to “Let the housing market crash!”

  1. SEA Says:

    Oh, yes, we need more RBA followers who believe housing automatically doubles every 10 years. Knowing and following the 10 commandments of the RBA is very important. We all know that unaffordable housing is desirable as long as it continues to increase in unaffordability, as it always does in the RBA.

  2. maryjane Says:

    >>If they see an identical house down the street going for half what they owe, the temptation to default might be irresistible.

    Luckily this doesn’t apply to the RBA because all our houses are unique. Sorry – VERY unique.

  3. maryjane Says:

    >>When prices are lower, these experts argue, buyers will pour in . . .

    And who would want that! Keeping people out keeps prices high. It’s a total win for the RBA – fewer people and higher prices. Isn’t that what the RBA is all about?

  4. SEA Says:

    maryjane- Prices are not, and never, lower in the RBA. Buyers pour into the RBA because prices are higher, and going higher.

    Who wants to pour in when prices are going lower?

  5. maryjane Says:

    Having the right zip code is like having little LV’s all over your purse. You pay more for people to know you paid more. Some might point out that Louis Vuitton purses are made out of canvas – not even leather – but those people are just ignorant. You’re buying status and that’s what costs you. Having people know you overpaid – priceless!

  6. Real Estater Says:

    It’s all about choice and selection. When you shop for a handbag, there’s LV; there’s Coach, and then there’s Ross for Less. There’s plenty of Ross Stores around, but everyone likes to go to Santana Row and Stanford Mall to look at the LVs and talk about how expensive they are. In Burbed terms, it’s the “Pralay mentality”: A guy who should be looking at San Jose likes to talk about Palo Alto all day, trying to convince himself prices have crashed and it’s a good thing he’s a loser after all.

  7. SEA Says:

    maryjane- Is there an RBA purse? You know, one that goes up in value every year. The one that everyone wants, even if they cannot afford it, so many buy purses that are going down in value.

  8. SV Shopper Says:

    How is everyone doing? Haven’t checked here for a while. I noticed some of the same war of words (and some will probably come my way soon — to no fault of my own, of course). Anyways, just a quick update. We haven’t looked at houses for a while, because we spent most of our summer months in Europe. After traveling through many countries, I will say Bay Area absolutely rocks. If you think unemployment is high here, you should go see what it’s like in Europe. Many people we met were quite envious we are going back to the Bay Area!

  9. madhaus Says:

    Nobody bit on #6, so the sockpuppet comes out. What a sad life #6 must lead. Got the home of his dreams and still miserable. A bunch of people on some internet blog are unimpressed! Oh noes! What a bunch of losers! Wait, they don’t care if he calls them losers! Why not? Don’t they care he has a house in 94301? I SAID 94301!!!!! Anybody?

    Today’s article must have him terrified by the potential equity evaporation.

  10. maryjane Says:

    >> We haven’t looked at houses for a while, because we spent most of our summer months in Europe . . .

    There you go – no house but able to take European vacations. What misplaced priorities. If you had over-extended yourself you’d be living on PB&J and thankful you could afford that.

    Welcome back.

  11. madhaus Says:

    maryjane, I think #7 is more the ramen type.

  12. maryjane Says:

    I see.

    madhaus – did you see Chanel raised the price of their handbags by 20% – because they wanted to ‘keep the brand exclusive’? Now I know some people might rush right out to pay the higher price for the exclusivity factor but do you think it’s wrong of other people to laugh at them?

  13. nomadic Says:

    If #6 and #7 aren’t they same person, they were twins separated at birth.

    #11, I think it’s important to find humor and laughter anywhere you can in life so of course it’s not wrong to laugh.

  14. madhaus Says:

    #12, couldn’t have said it better.

    #11, there will always be those who see price as a feature. Some of us were put on this earth to mock them senseless.

    Wait, did you say Chanel?

  15. Pralay Says:

    trying to convince himself prices have crashed and it’s a good thing he’s a loser after all.
    —–

    LOL! Calling people loser sound more like a bitter homedebtor than happy homeowner. Post #6 has bitterness written all over it.

    Where are those days when Uncle Estater used to sound upbeat? Two and half years must be a long time for Uncle Estater.

  16. Pralay Says:

    We haven’t looked at houses for a while, because we spent most of our summer months in Europe.
    —-
    :) SV Shopper should have stayed in Europe, because he can’t be a homeowner anyway. In fact both Uncle Estater and SV Shopper should move to Europe. Just look at the comment aspects of both of these guys.
    1. Both can’t buy properties for various reasons – including vacations. This is truly European way – vacation first, investment later.

    2. Both Uncle Estater and SV Shopper spell “humour”. So European!

  17. Real Estater Says:

    Pralay,

    No need to re-cook the same food. We’ve already gone through, and clarified the fact that the only thing SV Shopper and I have in common (along with thousands of others) is that we are facing the same market. I’d be willing to assert that if you start shopping for a house, you’d become another SV Shopper. Frankly, I’m not convinced “you’re not even looking”. Most likely you have been looking, and know all too well you’re priced out forever.

  18. Pralay Says:

    Got the home of his dreams and still miserable. A bunch of people on some internet blog are unimpressed!
    —–

    Don’t worry. People in internet blog might be unimpressed on him, but I have no doubt that he is impressive in in REAL life. ;) After all he is REAL Estater.
    I was thinking he might be Steve Jobs or Steve Young in real life.

  19. Pralay Says:

    Many people we met were quite envious we are going back to the Bay Area!
    —-

    Let me try to imagine what they said:

    Someone in Florence, Italy: This town is a dump. There is absolutely nothing here except couple of old sculptures. It’s great you are going back to RBA. At least home price doubles in 10 years there.

    Someone in Crete, Greece: Mediterranean weather sucks here. Water is too hot here. It’s great that you live in RBA where beaches are freezing cold. You lucky guys.

    Someone in Paris: You guys visit here, but we never get bothered to visit those outskirts outside San Francisco city. What do you call it – “suburb”? Lucky you guys – nobody visit you guys and you can live quiet and peacefully.

  20. Pralay Says:

    No need to re-cook the same food.
    —–

    Translation: I hate my own older posts.

  21. inception Says:

    RealEstater is pretending to be SV Shopper again. I actually laughed when I read post #7. That’s hilarious.

    And why do people think RE lives in Palo Alto?
    He lies about everything else.

    I’m telling you that guy lives in his parent’s basement, or in San Jose. Or his parent’s basement in San Jose. There’s no one else on this blog more ghetto except maybe Alex – but he admits to it, so that’s cool.

    The only people that talk incessantly about junk they own are teenagers, or poor people. And teenagers are poor people.

    We know RealEstater is old.
    So you can do the math to figure out which category a) teenager b) poor people, he belongs to.

  22. maryjane Says:

    I’ve always thought RE was a kid living with his parents. His world view just seems so simplistic and the things that make him happy are so superficial. Anyone with life experience would have more nuanced opinions and be able to give more than a pat answer to every question. Maybe he does live in PA – in his parents’ house.

  23. sonarrat Says:

    #1 – the affordability in truly desirable areas doesn’t change much, at least on paper. What does happen is that the median income of the residents increases. San Francisco, for example, is at about the same level of affordability now as it had in the ’80s (yes, really!), but the median income is far higher. Of course, this happened during a period during which the median wages of the average American were flat, but this is actually irrelevant. The more money a household makes, the more it will fly away to quality – real or perceived. So with a limited pool of housing stock, you have an increasing number of wealthy people trying to buy the same number of housing units as last year.

    The same principle obviously does not apply to working-class neighborhoods, which are severely prone to boom and bust periods due to the disproportionate effect of unemployment on such areas. But bubbles still occur frequently there, often because of investors who see better cash-flow numbers and pour their money into questionable areas, then realize they can’t get reliable tenants because their property is in a ghetto..

  24. sonarrat Says:

    By the way, I believe San Francisco is FAR more likely to continue to hold its value than Cupertino or Palo Alto.

  25. Real Estater Says:

    maryjane,

    It’s just a hunch, but I always thought you’re a divorced lady whose ex-husband had more life experience than you wish he had.

  26. Real Estater Says:

    deception,

    Why try a new alias? After all, we all know who you are.

  27. Real Estater Says:

    Alex,

    I think we found your redhead.

  28. Alex Says:

    Faux Estater,

    No, this is my idea of a redhead.

    Inception, fvck you. I may be ghetto, but I’m ghetto with style, beeeotch.

  29. madhaus Says:

    #23, how could San Francisco hold its value better than Cupertino? Now you’re going to tell me some silly nonsense like San Francisco has more Asians.

  30. inception Says:

    >Why try a new alias? After all, we all know who you are.

    no. no you don’t. liar.

  31. DreamT Says:

    VM Ware?

  32. Pralay Says:

    Funny! If #21 is not true, why is Real Estater so upset in #24?

  33. Pralay Says:

    Why try a new alias? After all, we all know who you are.
    —-

    Next, Real Estater will ask Burbed to find out IP address. :)

  34. maryjane Says:

    #24 -

    RE – I seem to have offended you and I apologize. But your suspicion about me only make me even more convinced that it’s you who wishes he had more life experience. The sharp-tongued middle-aged woman must have driven off her long suffering husband who sought solace in the arms of a much younger woman. Such a stereotype! You see every situation in black and white and that’s exactly why I suspect you’re very young and inexperienced – I won’t say you’re dumb because I feel every child can learn given the right encouragement and attention. Your education is just taking more time than anyone ever expected but we’re not giving up on you.

    No, I’m not divorced – still on husband #1. My children are lovely and doing well. I do have a few cats but I haven’t tipped over the line yet. But I have lived long enough to realize that I can think for myself, not mindlessly follow the herd and I don’t have to take nonsense from little boys like you.

  35. SEA Says:

    sonnarat- By desirable area you mean that there is plenty of demand, and the demand includes those with the greatest financial resources. Of course there are plenty of buyers in other areas when prices are sufficiently low.

  36. Real Estater Says:

    maryjane,

    It’s funny how you create stereotypes about yourself, and make up imaginary characters out of others. A middle age woman should be past pretend play by now.

    Between you and me, who is the one following the herd on Burbed?

  37. SEA Says:

    “I’ve always thought RE was a kid living with his parents. His world view just seems so simplistic and the things that make him happy are so superficial. Anyone with life experience would have more nuanced opinions and be able to give more than a pat answer to every question. Maybe he does live in PA – in his parents’ house.”

    Really makes me wonder about PA schools. Maybe he’s a home schooler?

  38. Real Estater Says:

    RE being accused of being too simplistic

    RE mocked for giving non-simplistic answer

    Will you guys work it out among yourselves?

  39. SEA Says:

    Once again Real Estater, I thank you for starting my week out with the entertainment. Mondays are too often drab, but not this week.

  40. A. Lewis Says:

    #7 – thanks for asking!

    I’m doing well, continuing to rent (just like Zuckerberg!), and saving a ton of money compared to buying every month. I live in a nice neighborhood, enjoy the good public schools there (while they last – the state budget cuts are terrible, again), and my rent hasn’t gone up since Dec. 2008. I do wish I owned the house at reasonable multiple of what it costs to rent (it’s fallen in value by about 25% – needs to fall another 25%), so I could make a few changes, but that’s far outweighed by A) the money – I save so much, B) the worry – if we have termites, or an earthquake, or a mold problem, or the furnace dies – that’s not my financial responsibility. I sleep easy.

    So many neighbors are stretched badly, or underwater, and are one paycheck away from bankruptcy; while I have lots of savings and no debt, and if I did lose my job, I could move on 1 month’s notice to anything needed to support my family.

    TeaL DeeR version: Still renting, still better off because of it.

  41. A. Lewis Says:

    #20 – hey, I was one of the first to suggest that Real Estater was not who he says he is. Don’t steal my ideas! I believe one of my leading theories was renter in Minnesota – often inebriated.

    Pralay, can you dig up one of my posts on this? I think I had a few funny ones…

  42. SEA Says:

    A. Lewis- As a renter you note that so many homeowners in your neighborhood, “…are stretched badly, or underwater, and are one paycheck away from bankruptcy;”

    I know a couple people who purchased near the peak, and they love the home, even if they can only afford PB&J. Cash keeps going out and the market value keeps going down.

    Anyway, it’s a little sad to see how they worry about driving on bald tires, delaying normal maintenance, so they can keep making the house payments.

    Oh well. I guess they should have purchased in the RBA, where the streets are paved in gold. I will never know why they didn’t follow the yellow brick road.

  43. nomadic Says:

    #37 – in my post you linked to, I was not mocking a non-simplistic answer. (There goes your reading comprehension again!) Your scenarios all boiled down to one point: you were saying the engineers were out of work because of their own personal failing to not position themselves with just the right skills.

    Oh well, at least you understood that I was mocking you.

  44. maryjane Says:

    #35

    Create stereotypes? What on earth can you mean?

    As for following the herd – I’m not underwater – not even close.

  45. madhaus Says:

    #41, they deserve what they got. Everyone knows to make money in California real estate you have to buy a house in 1975.

  46. madhaus Says:

    #42, Dunning-Kruger effect strikes again!

  47. Real Estater Says:

    A,

    Unless you’re making a ton of money, how can you save a ton of money? If you’re making a ton of money, why are you living in the East Bay? Something doesn’t make sense here. Most likely, you’re not doing the math right. For example, you think you’ve saved a lot of money because you didn’t take tax into consideration. If you did, you’d realize paying for a mortgage is better than paying Uncle Sam.

  48. SEA Says:

    Savings = Income less expenses (including taxes, etc.)

    High income with higher expenses => No savings.

    Lower income with much lower expenses => savings => much greater savings than high income with higher expenses.

  49. nomadic Says:

    mortgage interest + property tax + maintenance – tax benefit > rent

    Savings after paying rent > savings after house payments

    I didn’t even include probable depreciation.

  50. SEA Says:

    nomadic- Aw, come on. In the RBA:

    rent > housing price appreciation > mortgage interest + property tax + maintenance + insurance + improvements + …

    But what I’m not sure about is the mortgage interest deduction. You know, in the RBA you should have purchased before 1975, and the home should be free of any debt, yet RE suggests that one should pay mortgage interest to reduce taxes (pay $1 to get back less than $1 and be happy), but he’s discussed AMT problems, yet at the same time he suggests hiding illegal rental income from the IRS.

  51. nomadic Says:

    True, I left out the immutable law of RBA prices always going up.

    As for RE’s troubles with debt and taxes… well, let’s just say his wife probably has to make sure he has pants on before he leaves the house each morning.

  52. madhaus Says:

    #50, those pants keep coming off so he can count to eleven.

  53. SEA Says:

    Since owners in the RBA don’t have any mortgages, and maintenance is only a matter of light bulbs and Drano, my guess is that RBA owners have the greatest savings and RBA renters have the least savings, in addition to all that housing price appreciation. How else could it be?

  54. Real Estater Says:

    Guys,

    I’m all in favor of rational debates based on facts and figures. Please refrain from making personal attacks, and demonstrate a little Bay Area spirit!

  55. Alex Says:

    rational and Faux Estater are mutually exclusive.

  56. Real Estater Says:

    Maryjane says
    >>Create stereotypes? What on earth can you mean?

    I quote: ” The sharp-tongued middle-aged woman must have driven off her long suffering husband who sought solace in the arms of a much younger woman.”

    >>As for following the herd – I’m not underwater – not even close.

    Neither is Madhaus, nor me, nor DreamT. Anybody underwater here?

  57. madhaus Says:

    #53, meet #6. I’m sure the two of you have a lot to discuss.

  58. nomadic Says:

    But put some pants on first.

  59. maryjane Says:

    #55>>It’s just a hunch, but I always thought you’re a divorced lady whose ex-husband had more life experience than you wish he had.

    I was just stating a bit more vividly your impression of me.>>” The sharp-tongued middle-aged woman must have driven off her long suffering husband who sought solace in the arms of a much younger woman.”

    It’s not my stereotype – you’re the one who wrote it, genius. Maybe you should take some index cards and make flash cards with all of your ad hominem attacks. It can be hard to keep them all straight.

  60. SEA Says:

    Real Estater- “I’m all in favor of rational debates based on facts and figures.”

    I thought you suggested you went to public schools?

  61. A. Lewis Says:

    (new feature – I’ll put my TL;DR summary at the FRONT of my long posts!)

    TeaL DeaR version: RE, you are under-informed, you make lots of false assumptions, and you’re wrong.

    Long version:
    “Unless you’re making a ton of money, how can you save a ton of money?”

    Maybe I am making a ton of money – like Zuckerberg! You wouldn’t know…

    “If you’re making a ton of money, why are you living in the East Bay?”

    Why indeed…hmmm. I don’t want to just GIVE you the answer. I want you to think about it a little. You can’t think of any reasons, Real Estater?

    “Something doesn’t make sense here.”

    I’m sorry you’re confused. It makes perfect sense to me. You might want to try that listening thing I mentioned. Many of us give fine explanations.

    “Most likely, you’re not doing the math right.”

    I’d love to match wits with you in a math competition any day. In lieu of sending you my resume, Let’s say that I have a strong math background, both in school and in applied settings in the real world.

    “For example, you think you’ve saved a lot of money because you didn’t take tax into consideration.”

    Nice try. If you recall I created a mortgage calculator which included detailed calculations of the tax savings over a 30-year horizon, which I offered to share with folks – but DreamT and others gave me such a hard time I kept it for my non-blog friends and myself. So I can account for the tax benefits when evaluating rent vs. buy.

  62. nomadic Says:

    A., who needs precision calculations?

  63. DreamT Says:

    A. (if I may still call you A.) go ahead and post it, and I promise I won’t give you a hard time.

  64. SEA Says:

    A. Lewis- To simplify the computations, always deal with Net Cost of Capital. Thus 5% is 5% after any tax benefit.

    One problem with any tax savings computations is dealing with the standard deduction for those who hold relatively small mortgages. When your mortgage interest deduction is only slightly above the standard deduction, what’s the tax benefit?

    While I am not going to suggest that tax avoidance not be fully utilized within the risk adjusted opportunity cost, paying $1 to save $0.50 on taxes is not a good strategy. Real Estater suggests, “Look at me, I just saved 50 cents on taxes,” without the other part of saying, “but I paid $1 to save that 50 cents.”

    I know a dumb little girl that plays a similar game. She elects to have way too much withheld during the year, and then, boom, big tax refund. It’s like a mystery–how did that happen?

  65. Real Creator Of Craiglist Says:

    If you’re making a ton of money, why are you living in the East Bay? Something doesn’t make sense here.
    —–

    I never knew “making tons of money” is prohibited in East Bay.

    Very funny, Uncle Estater. :) Your question demonstrates what a simpleton you are.

  66. Real Creator Of Craiglist Says:

    I’m all in favor of rational debates based on facts and figures. Please refrain from making personal attacks, and demonstrate a little Bay Area spirit!
    —-

    LOL! Who is attacking? We are having rational debates about “Pralay mentality” and losers.

  67. bob Says:

    When prices are lower, these experts argue, buyers will pour in, creating the elusive stability the government has spent billions upon billions trying to achieve.

    I want to be one of these “experts”. They obviously get paid a lot of money for coming up with content that un-experts like me and probably about 99% of the rest of us knew years ago. That it took years after the initial crash for such an “expert” statement to materialize is amazing. Duh!

  68. bob Says:

    Unless you’re making a ton of money, how can you save a ton of money? If you’re making a ton of money, why are you living in the East Bay? Something doesn’t make sense here.

    Simple. The cost of rent in the East Bay is a lot less than other places like SF and the “RBA”. The cost of homes is also a lot cheaper. So to answer your question in easy terms, if you make a lot of money- or maybe make less money and live in the East Bay, you can save more money by not paying as much for housing. ta-da!

  69. Real Estater Says:

    Bob,

    We’re talking “a ton of money” here. Unless you’re making a ton of money, can you save a ton of money? Here’s the reality:

    - People who save for a living typically don’t make a ton of money.
    - People who live in the East Bay typically are there for a reason.
    - If you’re down to comparing the cost of renting, you’re really playing in the wrong league.

  70. Real Creator of Craiglist Says:

    People who live in the East Bay typically are there for a reason.
    —-

    Baby step at a time – slowly Real Estater making reasonable argument. :)

    Yes, Warren Buffett lives in Palo Alto Omaha for a reason. Yes, Bill Gates lives in Palo Alto Medina for a reason. Yes, Real Estater lives in Palo Alto for a reason.

  71. Alex Says:

    #68,

    Faux Estater, it’s hard to impress you when you consider $500K not a whole lot of money.

  72. AlexGroomer Says:

    > I want to be one of these “experts”.

    If you want it as bad as you want to move to Texas, this may very well never materialize :-p

  73. Real Estater Says:

    Alex,

    Here’s someone who doesn’t like at least half of your sandwich.

  74. Alex Says:

    #72,

    I don’t have that problem.

  75. Real Estater Says:

    Good for you. I guess one person’s trash is another person’s treasure.

  76. nomadic Says:

    Yeah, like a $1.5M house with a one car garage on a 6000sf lot is trash to me.

  77. madhaus Says:

    #75, it’s not even worth $1.5 million anymore, remember? It’s suffered a 33% equity burn. Plus it’s on the Wrong Side of Middlefield. Definitely trash.

    But the link in #72 shows another Dunning-Kruger victim. Here’s this idiot arguing for racial purity when every biologist knows hybrid vigor is a good thing.

  78. Real Estater Says:

    Right. By using (useless) aggregate data and Pralay’s extrapolation method, it’s quite easy to see that prices will soon drop to below 94087 levels.

  79. madhaus Says:

    I had no idea Pralay worked for Zillow! So it’s all due to him that Wrong Side of Middlefield is down so much. Thanks for taking care of us on the right side, Pralay!

  80. Real Estater Says:

    Reading comprehension problem? Pralay didn’t supply (nor understand) the data, but he will extrapolate anything. If he worked for Zillow, you would be trading down to 94301!

  81. madhaus Says:

    Guess I’ll have to explain it slowly for you, #79. Zillow has devalued your neighborhood pretty badly, so you’re blaming Pralay for it in #77 above. Meanwhile, 94087/CUSD is down by much less, leading to price flattening between the two neighborhoods. This really shouldn’t surprise anyone, as 94301 had nowhere to head but down after hitting unsustainable prices over a thousand a foot.

    While Zillow strikes out occasionally, the sale prices in 94301/WSoM reflect their price adjustment fairly accurately.

    Remember, I called a 20-30% drop in spring 2008. You didn’t take it seriously. Looks like you were wrong. But you were right the junks would fare the worst. You know, like small and old homes with one car garages on busy streets. So why are you so surprised your equity took such a dive?

  82. Pralay Says:

    So it’s all due to him that Wrong Side of Middlefield is down so much.
    —-

    Now you know why Real Estater is a bitter homeowner and angry on Pralay.

    We are talking about Wrong Side Middlefield. What he means by useless aggregate data? Does he mean both and Wrong Right Sides of Middlefield are aggregated together? To understand it, let’s see what he said in past:
    January 2009:

    DQ is thoroughly useless aggregate data, probably rolled up Palo Alto and East Palo Alto into one number.

    March 2009:

    You’re looking at useless aggregate data that includes all the crap places in San Jose all the way down to Gilroy.

    This was a constant complain from Real Estater – people are making useless aggregate data by mixing up EPA, San Jose, Gilroy data with prestigious Palooooooo Altooo.

    Is anybody here talking about EPA? Anybody talking San Jose here? Gilroy? We are talking about Wrong Side of Middlefield IN PALOOOO ALTOO.

    So this how Real Estater’s “useless aggregate data” evolved. Wrong Side of Middlefield now one of the “crap places” like San Jose, Gilroy.

  83. SEA Says:

    Does #74 realize that Alex is not looking for white males?

  84. Pralay Says:

    Remember, I called a 20-30% drop in spring 2008. You didn’t take it seriously
    ——-

    Don’t kid yourself. There’s no evidence to substantitate that lower prics are coming to the Wrong Side of Middlefield.

    Now, the hilarious one. Ready?
    I only invest in places [e.g. Wrong Side of Middlefield] where property values always go up.

  85. Real Estater Says:

    Pralay,

    Did you remember to mention the Wrong Side of Middlefield?

  86. Real Estater Says:

    Q: Alex is to Viagra as Pralay is to _____?

    A: Wrong side of Middlefield!

  87. Real Estater Says:

    Alex,

    Do you consider Indians as Asians? If so, why don’t you ask Pralay to help you set up a sandwich on the wrong side of Middlefield?

  88. nomadic Says:

    Anyone have a hose we can turn on RE & Pralay this morning? And a ball gag for RE?

  89. A. Lewis Says:

    #68 – Epic fail.

    The East Bay housing market is better than the peninsula, and a smarter place to live, work, and play.

    It’s better for renting and owning. The smart money is up here.

    People who live on the peninsula are typically there for a reason.

  90. Real Estater Says:

    Nomadic,

    Didn’t you start this sub-thread?

  91. Real Estater Says:

    >>People who live on the peninsula are typically there for a reason.

    I couldn’t agree more!

  92. nomadic Says:

    I was describing half of the houses in the suburb-which-shall-not-be-mentioned (aka SWSNBM). I can’t help it took a wrong turn, but you can keep your racial baiting out of it.

    Why don’t y’all move to a fresh thread and I’ll go back to work?

  93. Pralay Says:

    What’s going on Uncle Estater? At 10:38 PM reading lonely canadiangirl’s post and next day morning still talking about sandwich. :)

  94. Mr. Zillow Says:

    >>People who live on the peninsula are typically there for a reason.

    I couldn’t agree more!
    —-

    Baby step two. Good Job Uncle Estater.

  95. Real Estater Says:

    Pralay,

    You lost focus again. It’s not about the sandwich, but about the Wrong Side of Middlefield! Do you feel it now?

  96. Mr. Zillow Says:

    It’s not about the sandwich, but about the Wrong Side of Middlefield! Do you feel it now?
    —-

    What happened at Wrong Side of Middlefield? Are you renting your home for sandwich shop, as part of your investment strategy?

  97. ROI Says:

    Anyone remember when this site used to be hysterically funny. Now it just seems hysterical.

  98. SEA Says:

    ROI- Remember the days when people used to joke about prices going down and laughing. Now we just laugh.

  99. ROI Says:

    I’m planning on buying in 3-5 years. In the meantime I rent and save an obscene amount of money every month.By the time things have bottomed out I should easily have 20%+ to put down on something I could never afford in this market. Yeah, I laugh a lot.

  100. Real Estater Says:

    LOL. I didn’t realize the way to make an obscene of money is to rent. I should have quit my job and become a professional renter.

  101. anon Says:

    It’s not the way to make an obscene amount of money. It’s a way to save an obscene amount of money.

    As morons like you overpay, it just keeps the benefits flowing to those who know better.

  102. Real Estater Says:

    anon,

    The end result is the same. You get a ton of obscene money. How many of you are getting that from your regular jobs?

  103. ROI Says:

    *LOL. I didn’t realize the way to make an obscene of money is to rent. I should have quit my job and become a professional renter.

    I rent because I have a job dude. I’m hunkering down in a small place and working my butt off while they pay me a small fortune. I’m only there to sleep so why should I pay a lot to own a crapbox that’s only losing value every month. I’m leaving that mess to my landlord.When I think it’s time to settle down I’ll buy but time is on my side. We can talk in a few years.

  104. SEA Says:

    Real Estater- “You get a ton of obscene money.”

    My money keeps its pants on.

  105. bob Says:

    Bob,

    We’re talking “a ton of money” here. Unless you’re making a ton of money, can you save a ton of money? Here’s the reality:

    - People who save for a living typically don’t make a ton of money.
    - People who live in the East Bay typically are there for a reason.
    - If you’re down to comparing the cost of renting, you’re really playing in the wrong league.

    I am always amused with your responses because they seem so outlandish and “cartoony” at times. But to play along I’ll answer a few of your ‘observations’.

    First of all, it is entirely possible for anyone to save “a ton of money” even if they make a minimal income. At one time I was making $12 an hour. Yet I saved up $11,000 in 2 years. Sure- its not a TON of money, but I know plenty of people making 4 and 5 times that amount and they are constantly broke. Its all about decisions and choices you make in life and how you choose to spend your money. I make a fairly generous income now and have done so for around 6 years and I feel fortunate to do so because after making peanuts for years I appreciate what I make.

    People that live in the East Bay are typically here because they like it. I like it myself and more so than the Peninsula or city for that matter. I really don’t get the allure of the Silicon Valley area other than it might mean a shorter commute time. Other then that there’s not much I find scenically attractive about the area. Then again- some people like the way it looks and therefor they live there. If you’re suggesting that people that live in the east bay do so because they are poor then perhaps you should come out and I’ll drive you around and show you some of the enormous mansions in the Berkeley and Oakland Hills. People there definitely have lots of money because the houses there cost millions of dollars each.

    Comparing the cost of rent is easy. There’s nothing about “playing in the wrong league”. Simply put, I rent what amounts to a pretty nice house. Its actually nicer than most of the homes ‘owned’ by people I know. I’ve lived in it longer than most people who ‘own’ on my street. Perhaps some people made a little equity on their ‘owned’ homes for a few years but since 2006- or almost 5 years so far- nobody has made any money because the market is stagnant for the entire Bay Area. But on the other hand my rent has stayed the same and I am still saving around 50% of my income which I can almost guarantee has surpassed whatever equity most recent homeowners might have made. Of course the biggest difference is that I have actual cash I can hold in my hand and use to buy something- like a house somewhere else for instance- versus the paper wealth that only comes from a home being sold.

    In the end money is money. Finding ways to save it means you simply have more of it. Buy a house in the bay Area these days and you’re likely not going to see much of any gains for a very long time. Then again- that’s everyone’s call.

  106. Real Estater Says:

    Bob says,
    >>I am always amused with your responses because they seem so outlandish and “cartoony” at times.
    What is truly amusing is the fact that you write up these posts in such serious tone, without realizing what a hick you are

    >>Yet I saved up $11,000 in 2 years.
    LOFL! Most folks here get more in Bonus money.

    >> I make a fairly generous income now and have done so for around 6 years
    I think most readers are laughing pretty hard by now. Your “generous income” and “a ton of money” is considered disposable income in Peninsula neighborhoods.

    >> I’ll drive you around and show you some of the enormous mansions in the Berkeley and Oakland Hills.
    You mean those mansions that are worth less than 6000 sq. ft. lot homes on the other side of the Bay?

    >>I rent what amounts to a pretty nice house. Its actually nicer than most of the homes ‘owned’ by people I know.
    Again, you’re talking about people you know.

    >>Buy a house in the bay Area these days and you’re likely not going to see much of any gains for a very long time.
    If you had bought at the time I recommended Pralay to jump in the market, you would be sitting on a 25% gain already.

  107. Real Estater Says:

    HP provides rosy outlook:


    Next year’s revenue is expected to total $131.5 billion to $133.5 billion, an increase of 5 percent to 7 percent. Analysts were looking for $131.4 billion in revenue.

    The projections reflect HP’s confidence that it can boost profit margins as it expands into consulting services, computer security and storage while maintaining its lead in PCs and printers.
    ..
    The company, based in Palo Alto, anticipates a “robust” recovery in its stock price next year

  108. Pralay Says:

    you would be sitting on a 25% gain already.
    ——-

    What place? Not in Wrong Side of Middlefield.

  109. Real Estater Says:

    For Accountants and Engineers, School Name Plays Bigger Role

    Engineering, international business and accounting majors said they saw the strongest connection between school reputation and their careers. Graduates of these specialized, math-oriented majors are more likely to be recruited straight out of college into jobs that directly relate to their majors

    Reader comment:
    To say that ivy league schools don’t influence decisions is crazy. They are harder to get into and cost more. They have more qualified teachers. I am not an ivy league student but name recognition is everything. No way some crappy tech school can compare to a reputable university.

  110. Real Estater Says:

    Pralay says,
    >>What place? Not in Wrong Side of Middlefield.

    Back for more stimulation?

  111. bob Says:

    Bob says,
    >>I am always amused with your responses because they seem so outlandish and “cartoony” at times.
    What is truly amusing is the fact that you write up these posts in such serious tone, without realizing what a hick you are

    Am I? hmmm… I don’t exactly know how a “hick” is supposed to act. I’d hate to think what you would classify yourself as.

    >>Yet I saved up $11,000 in 2 years.
    LOFL! Most folks here get more in Bonus money.

    That one clearly went over your head and you took my point out of context. My example was not meant to compare how much people might make in Silicon Valley jobs versus a lower income job. The point was that yes- its possible to save a comparatively large amount of money. Put one and one together. if the same savings behavior was use for a six figure income then the amount would be on par with $60,000-$80,000 in 2 years.

    >> I make a fairly generous income now and have done so for around 6 years
    I think most readers are laughing pretty hard by now. Your “generous income” and “a ton of money” is considered disposable income in Peninsula neighborhoods.

    … which is hilarious since I never mentioned how much I make. That would be rude. Its a generous income and we’ll just leave it at that.

    >> I’ll drive you around and show you some of the enormous mansions in the Berkeley and Oakland Hills.
    You mean those mansions that are worth less than 6000 sq. ft. lot homes on the other side of the Bay?

    WTF is your point? you don’t even know what I’m talking about because you’ve likely never been to either of the locations I mentioned. These are pretty damned nice houses and the people who have the millions to buy them certainly aren’t dopes.

    >>I rent what amounts to a pretty nice house. Its actually nicer than most of the homes ‘owned’ by people I know.
    Again, you’re talking about people you know.

    Do you know any of my acquaintances?

    >>Buy a house in the bay Area these days and you’re likely not going to see much of any gains for a very long time.
    If you had bought at the time I recommended Pralay to jump in the market, you would be sitting on a 25% gain already.

    You’ve been telling us to buy 100% of the time that I’ve been on this blog. Had we all done what you’ve been preaching we would be just like you- holding onto an asset that is bleeding equity.

  112. Real Estater Says:

    For the same reason a school name matters for jobs out of college, I’ve seen that address matters for experienced management jobs. Say your address is “Apt 3b, Santa Clara”, can you really be expected to be taken seriously by a CXO?

  113. Pralay Says:

    Graduates of these specialized, math-oriented majors are more likely to be recruited straight out of college into jobs that directly relate to their majors
    —–

    Who needs math skill? That skill is only for worker bees. Those graduates needs to understand only “pulse of the market”.

  114. Pralay Says:

    I’ve seen that address matters for experienced management jobs. Say your address is “Apt 3b, Santa Clara”, can you really be expected to be taken seriously by a CXO?
    —-

    Too bad, buyer of this property wasted his money. He should have consulted with Uncle Estater. :)

  115. Alex Says:

    Faux Estater: For the same reason a school name matters for jobs out of college, I’ve seen that address matters for experienced management jobs. Say your address is “Apt 3b, Santa Clara”, can you really be expected to be taken seriously by a CXO?

    AHAHHAHAHAHHAAAAAAAA!!! My nephew’s birthday is coming up and we’re thinking of getting a clown for the kids’ entertainment. You interested?

  116. SEA Says:

    Real Estater, quoting someone else, “No way some crappy tech school can compare to a reputable university.”

    It makes me wonder, after all your comments about your schooling, why you think you can compare to many of the others here.

    Let’s see, if I remember right, it’s a combination of:

    1. Education
    2. Mate
    3. Address

    Hopefully your address compensates for the other two.

  117. Real Estater Says:

    SEA,

    How would Alex compensate?

  118. Real Estater Says:

    At least we know how Pralay compensates:

    Wrong side of Middlefield!

    Works better than Viagra for him. He may have found himself a cure.

  119. SEA Says:

    By driving a Pinto.

  120. A. Lewis Says:

    Hey Real Estater – where did you matriculate?

  121. Real Estater Says:

    A,

    Old topic. Ask Pralay.

  122. maryjane Says:

    Real Estater -

    Why won’t you answer? I’d love to know.

  123. Real Estater Says:

    Hint: I went to a place where math is hard and most people can’t get in.

  124. Alex Says:

    119,

    Estater is too ashamed. He’s just an average tech guy.

  125. SEA Says:

    Real Estater- “Hint: I went to a place where math is hard and most people can’t get in.”

    Considering you went to public schools, my guess is Prison.

  126. A. Lewis Says:

    Most people can’t get into most universities. Was it an Ivy League school?

  127. Alex Says:

    #122,

    That’s harsh, dude. But it makes sense. The math can be pretty rough in prison when you’re constantly pondering the odds of getting gang-raped.

  128. maryjane Says:

    Come on RE – I’ve narrowed it down to MIT, Cal Tech or University of Phoenix Long Distance Learning. Do you want everyone to vote on which one seems to suit you best?

  129. nomadic Says:

    Hint: I went to a place where math is hard and most people can’t get in.

    So you got in because one of your parents went to the school? Or did they make a large donation instead?

  130. nomadic Says:

    maryjane – MIT, CalTech? Funniest post of yours yet.

  131. Petsmart Groomer Says:

    Real™ Estater is such a Real™ Attention Whore (s)he’s going to make that one last all night…

  132. Anti-Real Estater Says:

    When trying to decide how to respond (or if I should respond) to some of the stuff RE puts out on this blog, I often stare for a while at the “Please be nice…” request above this comment box. When dealing with someone like Real Estater – what is the true Bay Area spirit? WWtBAs do?

    He keeps lying. He won’t engage in genuine debate. He pushes selective links and news articles that only reinforce a very narrow, self-serving viewpoint, and when his logic is found faulty, and evidence given to counter it – he ignores, denies, or makes ad hominem attacks to distract.

    Normally, I think, people would simply stop talking to him in ‘real life’, and he wouldn’t be invited to discuss things. No one who took his advice and got burned would ever take it again – he’d become ostracized, as he should.

    But here, he gets equal voice anytime he wants and is perpetually invited to the party…and I hate the idea of his foul, errant viewpoint getting to stand unquestioned. I hate the idea of anyone reading his stuff without context to know how they are being deceived by him…and so I am inclined, again and again to post and provide a counterweight.

    It’s so silly, though…Pralay, when was the last time I swore I’d stop replying to him?

  133. Mr. Zillow Says:

    Old topic. Ask Pralay.
    —-

    Uncle Estater went to the most prestigious college.

  134. Mr. Zillow Says:

    Hint: I went to a place where math is hard and most people can’t get in.

    Or can’t spell summer and Manhattan.

    Given his lack of logical reasoning, actually I doubt he is a graduate with four year degree.

  135. Mr. Zillow Says:

    My nephew’s birthday is coming up and we’re thinking of getting a clown for the kids’ entertainment. You interested?
    —-

    LOL! What if clown starts insulting guests?

  136. Anti-Real Estater Says:

    I would hire people from East Bay zipcodes and non-ivy league schools if I thought they were excellent. Heck, I would even hire Harvard grads from 94301 if I thought they were really excellent – but they’d have to give a damned good interview to get over my prejudice against them.

    And I’m highly suspicious of people with really good-looking mates – I never hire them. They spend too much time having sex and not working!

  137. Mr. Zillow Says:

    maryjane – MIT, CalTech? Funniest post of yours yet.
    —-

    Funny indeed. I am voting for MIT.

    (Hopefully no MIT alumni will read my post and get offended for denigrating his/her school)

  138. Real Estater Says:

    A,

    Aren’t you over-reacting? Where did I lie about anything? My long-held premise here is RE never lies. For example, I won’t tell you I have bought an investment property if I haven’t done so. In this thread, I posted information from the news reports. Nothing was made up. Just because you don’t agree with something doesn’t mean the other party is lying.

  139. Mr. Zillow Says:

    My long-held premise here is RE never lies.
    —-

    I have to admit that this time Uncle Estater is factual. It’s his and ONLY his long-held premise.

  140. Real Estater Says:

    >>Heck, I would even hire Harvard grads from 94301 if I thought they were really excellent – but they’d have to give a damned good interview to get over my prejudice against them.

    And then you’d have to try really hard to convince them working for you beats working on Sand Hill Road.

    >>And I’m highly suspicious of people with really good-looking mates – I never hire them. They spend too much time having sex and not working!

    How about people who are really good looking themselves?

  141. maryjane Says:

    #129 – Amen

  142. Anti-Real Estater Says:

    I happen to know an executive at Adobe who went to the East Bay’s very own Diablo Valley College and not an Ivy-League school. He happens to be excellent at his job and is very well paid. He also chooses to live in Irvington rather than Palo Alto, which is equidistant from Adobe HQ.

  143. Mr. Zillow Says:

    Where did I lie about anything?

    Let’s start with Uncle Estater’s hilarious AMT problem. Although A Lewis explained him why he was wrong, but Uncle Estater still insisted that he was not lying about his AMT problem.

  144. madhaus Says:

    #128: so true.

    At least my last post, #80, was actually on the article topic. Can anyone name a neighborhood where the housing market hasn’t crashed? I know there were some good numbers this year for 94306, but I assume it’s because so many of the crappy old Eichlers got torn down and replaced with zero-lot-line charmers.

    Since construction cost isn’t listed in our usual source of records, we don’t know if those sellers actually came out ahead from the transaction. That would be an interesting study.

  145. Real Estater Says:

    Pralay,

    Where is “Insecure Techie”? Perhaps he knows where I went to school?

  146. DreamT Says:

    ohh Real Estater – ever the life of the party and the center of attention. You’re right, personal address matters when securing some management jobs. Unfortunately, none of the posters here would probably give a rat’s sh#t about the position or its supervisor (unless she’s an Asian redhead, in which case I’d discount Alex).
    On second thought, talk is cheap and principles are only tested when faced with the actual choice. How many out there can truthfully say that they would refuse such a position simply because of the supervisor’s personal values?

  147. madhaus Says:

    Now what. SAT score face-off?

  148. DreamT Says:

    For that matter, race, sex and country of origin equally matter. Prejudices still run very high at the highest levels of management and is often impossible to prove (simply discard the applicants with a funny-sounding name).
    Real Estater probably has some sound advice on that matter for us all…

  149. madhaus Says:

    #143: That depends. If the supervisor expects me to show up for work in a burqa, I think I’ll pass. Especially on a day like today.

    Unless they have really good air-conditioning. Working at home in a shack without any A/C has its own rewards. Like not having to wear pants. :)

  150. Mr. Zillow Says:

    Can anyone name a neighborhood where the housing market hasn’t crashed?
    —-

    Didn’t I tell you already? It’s Wrong Side of Middlefield where Uncle Estater invested. Price never goes down there.

    You just need to buy a time-machine and go back to April 2008. That’s all.

  151. Mr. Zillow Says:

    Pralay,

    Where is “Insecure Techie”? Perhaps he knows where I went to school?
    —-

    How would I know? If you are a MIT graduate (remember I voted for it in #134?), you should be smart enough to find it in your own.

  152. Anti-Real Estater Says:

    My company, and all the East Bay companies I am familiar with, are flooded with job applicants for every opening – these applicants come from all over the Bay Area, including the peninsula, as well as around the country. The East Bay is a very desirable place to live and work – and everyone in the country knows it. So do you RE, you just won’t admit it.

    The number one complaint I hear from new people is the high cost of housing. Traffic/crowding probably #2. Weather, culture, restaurants, activities are all cited as incredibly strong positives. Sound familiar?

    Your bizarre characterization of the East Bay as some shameful ghetto is just plain silly.

    Don’t get me wrong though – I think housing is massively overpriced here, too!

  153. madhaus Says:

    #149, I run two East Bay listings and you let it all go to your head! That’s it, I’m cutting you off.
    :)

  154. Real Estater Says:

    >>For that matter, race, sex and country of origin equally matter.

    Unfortunately, there’s quite a bit of truth to that. Even appearance in general matters. Most execs you see look the part. Even in non-management but customer facing roles, people with good appearance and height have a certain advantage. People judge you by the way you look.

  155. Anti-Real Estater Says:

    #150 – I had to seize my opportunity. I’m just like that, I guess. Maybe I’ll go back to lurking. You guys can keep the site appropriately disapproving of high housing prices without my whining, right? I don’t really need to worry that prospective buyers are coming here looking for genuine real estate pricing analysis and getting fooled by the “now is always the best time to buy” crowd, right?

    It’s gonna be OK, right?

    Tell me ’bout the rabbits?

  156. Alex Says:

    Faux Estater: People judge you by the way you look.

    In that case, were you abused as a kid? Did the other kids taunt you?

  157. nomadic Says:

    #149 – admit it, driving 880 during rush hour sucks really bad. I don’t miss it. But I don’t have to deal with 101 either. ;-)

  158. Real Estater Says:

    A,

    Obviously I’ve hit a nerve. East Bay people and Central Valley folks have something in common – insecurity. They both know that their locale is not the first choice if people had a choice.

    As for traffic/crowding, if people don’t have to travel across the bridge to work at your company, BA freeways would be a better place to be.

  159. Real Estater Says:

    >>admit it, driving 880 during rush hour sucks really bad. I don’t miss it. But I don’t have to deal with 101 either.

    Buy a nice German car, and you’ll wish the commute is longer. Problem solved.

  160. Real Estater Says:

    >>My company, and all the East Bay companies I am familiar with, are flooded with job applicants for every opening

    Take note of those positions. Make sure your resume has nothing to do with these kind of roles. The job you want is where they hunt you down, invite you to apply, and give you incentive to accept the offer.

  161. Alex Says:

    >> Buy a nice German car, and you’ll wish the commute is longer. Problem solved.

    For my commute on 101, my shagmobile, the trusty Pinto, serves me quite well.

  162. Alex Says:

    >> The job you want is where they hunt you down, invite you to apply, and give you incentive to accept the offer.

    Estater, you are wise beyond your years. Can you help me find a job?

  163. DreamT Says:

    A. – East Bay is mostly ghetto with some isolated nice pockets. Peninsula is mostly the reverse. Not sure why you’re arguing the point. If gang activity and generally crime aren’t sufficient, surely the map of most popular netflix rentals by zip code would convince you (can’t find the link, I posted it on burbed a couple of times).

  164. Tuno Says:

    RE is remarkably talented at coming up with the most vulgar view on any topic broached.

  165. Mr. Zillow Says:

    East Bay people and Central Valley folks have something in common – insecurity.
    —-

    When it comes to insecurity I would add another person – Uncle Estater.

  166. DreamT Says:

    Here is the link to the infamous netflix map

  167. Real Estater Says:

    >>A. – East Bay is mostly ghetto with some isolated nice pockets. Peninsula is mostly the reverse. Not sure why you’re arguing the point.

    I think A is asking his wife to tie him down right now…

  168. Real Estater Says:

    Alex says,
    >>Estater, you are wise beyond your years. Can you help me find a job?

    Have you checked out the market for Pinto mechanic?

  169. madhaus Says:

    #161, amen.

    #152, you’re always welcome to comment, but remember that Silicon Valley is the most Special Place in the Entire World, except for all the non-RBA parts. I thought you were channeling #67 for a minute there.

  170. Alex Says:

    #165,

    But Faux Estater,

    I’m tired of being a Pinto mechanic. Too easy to get chicks.

    You’re my hero. I want to be like you. I want to live in a great zip code. Earn lots of money. Have a trophy wife.

    That way, I’ll learn to settle down and maybe even abandon my decadent lifestyle of debauchery and pursuit of sandwiches.

  171. Pralay Says:

    You’re my hero. I want to be like you. I want to live in a great zip code. Earn lots of money. Have a trophy wife.
    —-

    Provided you can handle your trophy wife in “totally professional” way and tolerate her boyfriend while you work till 2AM to pay for your mortgage.

  172. bob Says:

    Buy a nice German car, and you’ll wish the commute is longer. Problem solved.

    Yes… because then you won’t have to worry about commuting because you will get to sit in a really nice car repair waiting room while the window regulator gets fixed for the 5th time. Oh- and by the way, most German cars these days are made in South Africa, Alabama, or some former Soviet Blok country. Either way, your piddly little wannabe’ Porsche will be a rust stain at the junk yard years before I trade in my trusty Toyota.

    As far as this whole East Bay versus RBA thing… its stupid. Just plain stupid. But I gotta’ put a shout out to all my East Bay Peeps!


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