March 9, 2013

Is the Bay Area in another Housing Bubble? Will the Next Pope be Catholic?

We’ve made the call on Bay Area Bubble 4.0, now we’re just lining up the evidence.  Palo Alto began heating up and blowing past peak pricing last year.  The proof of another housing bubble, though, is when the increasing prices and the bidding frenzy and the sales velocity measured in Hours on Market rather than Days and the large number of listings marked Pending/Do Not Show start overwhelming the Not So Special parts of the region.

Here is Evidence For a Bay Area Housing Bubble #1,726: Frenzy for condos.  CONDOS.  In MILPITAS.

Bay Area condos’ tight supply has buyers scrambling

130308-condos-constructionBy Pete Carey, San Jose Mercury News
Posted:   02/18/2013 04:00:00 AM PST | Updated:   02/18/2013 08:19:38 AM PST

The Bay Area’s market for condominiums and townhouses has seldom been hotter. Existing units are selling in record time with multiple offers, and new ones are being snapped up before there’s even a model home to see.

Just ask Niha Singh. Last month, Singh, a 27-year-old Silicon Valley computer engineer, and her husband tried to buy one of 12 units in a new townhouse development under construction in Milpitas. Even though they’d car-camped outside the developer’s office, they ended up on a waiting list.

130308-condos-new"When we got there on Friday, there was already a line," she said. "People were camping out, some of them for six days before the date of release."

Across the Bay Area, buyers are fighting for a limited supply of new and existing condos. Investors have already snapped up many foreclosures and short sales and are renting them out, while owners who might sell in a typical market are either still on the sidelines watching prices rise or are underwater and can’t afford to sell. And demand has been growing.

Wasn’t it just a couple of years ago we were reading about condo complexes that had reverted to all-rental buildings (also known as apartments)?  Why yes, it was.  But obviously Milpitas is Much More Special than Downtown San Jose.  Also Three Sixty is Five days short of even a Regular Year.

People camping out for five days in front of a Milpitas development not enough? Want more evidence of Bubble 4.0?  You think a seller’s market in Milpitas condos is reaching?  At least Milpitas is in the same area code as Google.

Condos in Castro Valley sold in 11 days in December, compared with 82 days in 2011, the Bay East Association of Realtors reported. In Pleasanton, the average number of days on the market dropped from 52 days in December 2011 to 10 days last December.

Castro Valley.  You know, Gateway to Hayward, City of Diversity.  We’re putting in our sell order when Stockton comes back.

Comments (7) -- Posted by: madhaus @ 5:05 am

7 Responses to “Is the Bay Area in another Housing Bubble? Will the Next Pope be Catholic?”

  1. Rickety419 Says:

    I knew the bubble was about to burst when this week I got 4 phone calls from brokers who really really wanted to know if I wanted to sell my house RIGHT NOW. The last time I got calls like that was 2008, roughly the peak of Bubble 3.0.

  2. Real Estater Says:

    Forget Milpitas. Bay Meadows is opening on 3/16.

  3. briareosdx Says:

    For a moment there I was wondering why anyone would want to live at a racetrack. Then I remembered the development. Still, buying into a home at a racetrack is a remarkably apt metaphor for bay area housing these days…

  4. nomadic Says:

    This past week I received 3-4 postcards from moving companies. Do they know something I don’t? It’s not as if my mortgage payments were late!

  5. Tom Paine Says:

    Up here in the whine country it’s a bifurcated market. at $500-$600K or less the home prices don’t make sense at250-300x monthly rent. Get up to $700K or higher and there are some nice custom homes selling for less than the reproduction cost of the main structure. No value given to dry stone walls, top notch landscaping, several view acres in first rate school districts. And no value to sometimes nice outbuildings. Yes I am making allowance for condition and outmoded features. Sonoma County, where cloe tip toes through your two lips…

  6. ms Says:

    Three weeks sold, attempted $170K flip in San Mateo:

    http://www.redfin.com/CA/San-Mateo/1415-Monte-Diablo-Ave-94401/home/703133

    Property within a block is featured here:

    http://www.youtube.com/watch?v=a2hr4p8dAJU

    The bargain $600K price is only good before they flip:

    Come view this home on the market just a short while prior to remodeling. Cute three bedroom and one bath that needs some updating and minor repairs. Home will be available for two weeks only before renovations begin. Sold as is with no reports or repairs. Call Listing agent for your private viewing.

  7. jondojendo Says:

    Milpitas is hot too. It’s not all about Google and Facebook. There are a lot of hardware companies there and people want to live close to work.


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