Here’s some sobering news for those of you expecting the Facebook Effect to rescue the Real Bay Area’s housing values.

Zuckerberg Admits Facebook’s Plummeting Stock Is ‘Painful’ To Watch During A Company-Wide Meeting

Seth Fiegerman, Business Insider  | Aug. 17, 2012, 6:43 AM

Facebook is finally acknowledging that its employees may be just a little bit concerned about the company’s plummeting stock.

According to The Wall Street Journal, Facebook CEO and cofounder Mark Zuckerberg admitted that the stock’s decline is “painful” to watch for some employees during a company-wide meeting earlier this month.

The meeting itself was reportedly part of a larger initiative to boost company morale. Zuckerberg had previously avoided talking about the stock with employees, preferring that everyone stay focused on their work, but in recent weeks, Facebook’s senior management started worrying that the stock’s poor performance might hurt employee performance.

Guess watching Facebook’s plummeting stock is just fine from the comfort of your own office.  But don’t count on cashing in those options to buy yourself an RBA mansion.  The employee lockup period is still in effect, but early investors are dumping shares now.

Now check out this article, from the same publication.

DEAR FACEBOOK EMPLOYEES: Here’s The Truth About Your Stock Price

Henry Blodget, Business Insider  | Aug. 17, 2012, 11:59 AM

Facebook’s stock has dropped by half since the IPO three months ago.

And the stock price is now well below the level at which most employees have been granted stock in the past 18 months.

This means that most current and former Facebook employees are worth far less than they were a few months ago.

Facebook’s stock crash is also hurting morale at the company, and damaging perception of the company’s business and brand. The impact is big enough that Facebook CEO Mark Zuckerberg, who has been crystal clear about his desire to ignore the stock price, admitted at a company meeting that the stock crash has been “painful” for everyone.

Here’s the important consideration from this more in-depth piece:

With the Facebook employee lock-up releases coming in October and November, this isn’t just an issue of morale and “paper net worth.” Current and former Facebook employees have been counting on the stock to buy things (houses, for example). So it’s a matter of near-term financial planning.

So, are home values dropping in Facebook-friendly commute zones?  Let’s have a look.  First, here are Redfin’s stats for Palo Alto home sales.  The advantage of Palo Alto over Menlo Park is that there are very few questionable areas in the former.

You could look at the listing prices one of two ways.  Either the 22% post-IPO listing per-square-foot increase was nothing but irrational exuberance, or Spring Bounce was unusually quick this year.  If we exclude the May and June numbers, we could look at the chart as showing a slow climb for 2012.  That’s if you ignore the 18% drop between mid-January and mid-February, though.

Altos Research’s Market Action Index agrees with this graph, showing a peak right at IPO time and falling back almost (but not quite) to 30, which is a balance between a buyers and a sellers environment.  (31 indicates the ball is still in the sellers’ court.  Mostly.)  The MAI graph above is for Menlo Park, or ground zero for Facebook.

Unfortunately Zillow’s valuation tools are too laggy to show the post-IPO collapse, with the most recent valuation dated to June.  We’re looking at Mountain View this time, which is no doubt polluted by the conflicting Google Effect.

How would you recommend we best demonstrate whether Facebook stock’s disappointing results are affecting the RBA housing market?  What statistics would you recommend, and from where?  One thing we’re seeing is fewer homes going into Double-Secret-Probation Pending-Do-Not-Show status where the listing photos get yanked until the home closes.  And that’s good news for all fans of this site.  Not only does a picture equal a thousand words, it also equates to many more thousands of dollars.

We aren’t going to say in which direction those thousands are moving.

Looks like the SF Chronicle just discovered that the rental market is as hot in the Valley as it is in The City.  Use this open thread to mock their amazing discovery.

Peninsula rents going the way of SF and Manhattan

San Francisco and Manhattan are famously unaffordable cities to rent in– not that such information discourages people from renting in either location. High demand, of course, is part of the sky high prices.

But according to a new study by Apartment List.com, Peninsula rents are quickly  rising to rival those of San Francisco proper.  Over both 12-month and 18-month periods in the area as a whole, rents have risen an average of 10% and 18%, respectively. Here’s a run down of their data, showing rent changes for different sized units. (UPDATE: This chart is a corrected version of the previous one that contained incorrect percentage numbers.)

And since this is an Open Thread, you can also comment about what your own experience has been with rentals, or home prices, or any open houses you look at today, or how much money you made shorting Facebook.

Remember the basic premise of The Producers?  If you oversell interest in a Broadway show, and then deliberately produce the worst musical you can, none of your investors will complain when they lose all their money… and you keep their 40,000% ownership.  So our intrepid producer duo went off in search of the worst script they could find, and… hilarity ensues.

So why hasn’t anyone tried this idea with real estate as well?  Maybe it’s because not enough in the industry figured out the same trick: in a market downturn you can make more money not selling houses than you can selling them.  Read on to know it Tolls for thee.

How did Toll Brothers survive the housing slump? By keeping buyers’ deposits

By Matthias Gafni, Contra Costa Times
Posted:   07/27/2012 09:12:51 AM PDT, Updated: 07/27/2012 05:00:58 PM PDT

As newly minted empty-nesters, Daven Sharma and his wife, Anu, spent 2010 searching for a spot for their dream house with views of San Francisco Bay. They found it in the Hayward hills, within a Toll Brothers development.

Shortly after plunking down about $100,000 in deposits, the couple’s dream fizzled. The Sharmas lost not only the house, but their deposit, attorney and arbitration fees — and a sense of justice.

Critics say and records show that Pennsylvania-based Toll Brothers — the nation’s largest luxury homebuilder, with developments in Contra Costa, Alameda, Santa Clara and San Mateo counties — has made it a regular practice to collect forfeited deposits from prospective homebuyers. In fact, it was the builder’s No. 1 source of profit during the down years of the housing market, according to a Maryland class action lawsuit.

From fiscal years 2006 to 2011, according to its own SEC reports, the publicly traded company retained $123 million in forfeited deposits from 3,300 prospective homebuyers.

Read that again: during the housing slump, the number one source of profit was forfeited deposits.  At least that’s what one lawsuit says.

There are 155,000 results for the search Toll Brothers Lawsuit.  This website has quite a story to tell.  While it’s about severe construction problems, the other part of the story is the lengths their attorneys would go to to avoid fixing the house.  Ellen Nevens has been fighting Toll Brothers for twelve years.  That’s a lot of time and effort to build a house badly and then not fix it.  It would be much easier to not build it in the first place. 

And that’s what happened to Daven and Anu Sharma when they put a $98K deposit on a Hayward hills homesite in a Toll Brothers community.  The Sharmas found out what many others have previously experienced: the sales contract has little flexibility on loan funding.  And if, or maybe we should say when, the loan isn’t funded, the contract says no loan means Toll keeps the deposit.  The Sharmas indeed lost in arbitration, plus they had to pay another $5600 in fees.

Jim Daman had to sue to get some of his $104K deposit back on a home in Danville.  When Toll Brothers didn’t build his house within the promised six months, he watched its market value sink.  He eventually settled for $70K.   Compared to the Sharmas, he did well.  Someone the corporation won the arbitration, claiming that customization had been done and they had outlays.  Yet the photo of the dirt lot above is all that was in place when the Sharmas cancelled their contract because their current house didn’t sell.

Here’s the contract language that one attorney called confusing, Daman called “99.9 percent in their favor” and another tried diagramming on a whiteboard to understand it:

Buyer’s failure to fulfill any of such conditions or the termination or expiration of the mortgage commitment after it is received, for any reason, shall not release Buyer from its obligations under the Agreement.

A latter attorney notes that Toll offered some of his Pennsylvania clients loan commitments with conditions that made no financial sense, such as amounts far larger than the agreed sales price.  When buyers balked, then Toll would keep the deposit, claiming they were in breach.

“They can make more money by not building the house,” he said.

While the Sharma’s Arundel Drive homesite is not listed, this nearby home on Stonebrae Road is.  It looks quite lovely when photographed with a sunset, and it’s “within the gates of TPC Stonebrae Country Club.”  According to the virtual tour, the builder is not Toll Brothers, but a firm called True Life Communities who seem to be avoiding any hint of describing themselves with specifics.

But given the story of the Sharmas and their Arundel Drive site being so nearby, we assumed it was the same community.  (In fact there are several different builders.)  And if you buy this house you’ll have quite the run of neighbors to entertain!

It’s the weekend!  Time to check out the Open Houses, and share your excursions on this Open Thread!  Here’s today’s Red-Hot Home for you.  Thanks very much to Burbed reader Ryan, over at Estately, for passing this marvelous mansion along.  The property’s a bit more effort to get to, but we think it’s well worth the trip.

805 Curiosity Lane
Mars
4^th  Planet from the Sun
$30,000

Asking Price $30,000
1 beds
1 baths
1,680 sqft
6,000 lot sqft
2012 built
1 days on site

Special Features of this Property Include

1. It’s on Mars
2. Rocket man Bobak Ferdowsi will personally watch your yard while you’re away
3. You can do cool astronaut stuff in your yard
4. Hunt rabid alien squirrels from your bathroom window
5. Follow NASA’s Curiosity
6. Libertarian paradise—no government or laws on Mars. Live free and die.

Agent’s Summary

RARE FIND! Once-in-a-lifetime opportunity to own property on the edge of Gale Crater on Mars! Jump into this lucrative market before the Curiosity Rover exposes it.

Whether you’re a stranded astronaut, a Civil War vet named John Carter, or a plutonium-powered rover that just traveled 354-million miles, this happy homestead is the spot to call home. The perfect place to rest after a long day of analyzing soil samples, blasting rocks with lasers, or searching for signs of life, this quaint casa has it all. The modern bath features a tub and shower (should you ever discover water), an oxygen chamber so you can breathe, and a spacious master bedroom should you locate a life form to procreate with (be fruitful and multiply). Seriously, even if single cell organisms are found on Mars it will take billions of years until they evolve into something like humans.

Avoid Earth’s global warming by living on a planet where the average temperature is -81 degrees fahrenheit. Release as much CO2 into the sky as you want—it might even help develop the atmosphere! Are you morbidly obese? Good news—you just dropped 2/3 of your weight because Mars has only 1/3 of Earth’s gravity! Here on the 4th planet from the sun even the heftiest of humans can break the Olympic pole vaulting record! Just don’t try to breathe the air or you’ll die. Seriously. You will die. This home is move-in ready, priced to sell, and offers LOCATION, LOCATION, LOCATION!

Listing Provided by Estately Intergalactic Real Estate

We’ve already let Ryan know that here at Burbed we expect to see photos of the toilets.  Preferably with the seat left up.  Given that this one works using vacuum suction, leaving out that photo is serious mistake on the realtard’s part.

So… what kind of toilets are you looking at this weekend?

We haven’t been shy about sharing our educational “reform” position with you: we distrust the charter school movement.  We believe they are a means for private corporations to strip school boards of their resources and teachers of their benefits by providing cut-rate education under the false flag of “school choice.”  After all, corporations exist to make a profit.  Would you really want your child’s education outsourced to the lowest bidder?  Of course not!  That’s why you’ll pay anything to live in the Real Bay Area!

Charter Schools’ Negative Impact on the Educational System

Charter schools are being implemented all across the country, whether parents want them or not.  This is happening because some very wealthy people, not one of them with any education background, see this as a way to profit at the expense school boards and teachers unions.  Much of the current “school reform” movement has been taken over by tons of money from foundations from the Walton (Walmart), Gates (Microsoft) and Broad (construction and insurance) families and, of course, the Koch brothers.  These groups have completely derailed real school reform in favor of their plan to corporatize our educational system.

All that money crowds out real reform in favor of forcing charter schools, despite their lackluster performance despite their ability to cherry-pick students.  There are stories everywhere of neighborhood schools forced to close, fire all the teachers and administrators, and then reopen as charters, despite complete opposition from the affected teachers, parents and children.  Needless to say, this is most likely to happen where parents are not well-represented in the political system.  That is, this process is most likely to happen in poorer neighborhoods rather than wealthy suburbs.  Remember Waiting for Superman (which is, of course, pure propaganda)?  The Bay Area school in the film was in Redwood City.  And look at all the corporate charter schools that have popped up in Oakland and San Jose.

Click on through to find out what happens next.

(more…)

If it doesn’t, it’s time to chuck your fridge.  Thanks very much to Burbed reader nomadic for passing along this fascinating article.

So Long, Stainless: Whirlpool Introduces a New Finish For Premium Kitchens

 

By Keith Barry, July 18, 2012, Refrigerator Info

The stainless steel appliance hegemony has ended.

On Monday, Whirlpool introduced a new premium exterior finish that they call “White Ice.” With clean lines, silver accents and streamlined controls, the new collection’s refrigerator, range, dishwasher, and microwave are a departure from the flash and glitz of stainless steel and its many lookalikes. In fact, the combination of a white finish, stainless handles and mirrored glass appear to have a lot in common with Apple’s popular design language.

The streamlined new look combines with simplified features that Whirlpool says will make the appliances easier to use. “In addition to the intuitive technology, the line takes a fresh look at appliance design and features flawless exteriors that add beauty to any home,” said Pat Schiavone, Whirlpool’s VP of Global Consumer Design.

Here’s why nomadic sent along a clipping from Refrigerator Info (and I do not want to ask why any Burbed reader would also be checking out that site).

You can be the first real estate blog to report the death of stainless!  No more pergranisteel…

And the inspiration is coming from Silicon Valley!

Yes, this is going to look just great in all those new white kitchens with the emphasis on wood rather than a wall of stainless steel.  Because if your kitchen doesn’t look like a foodie version of an Apple Store, then you’re obviously still living in 2001.

Which is when the first Apple Store opened.

Update: The Sunday piece is a thinky one, so deposit your open thread comments here.

Did you know that there’s a Real Estate department at UC Berkeley?  No, we don’t mean that Cal or the Regents are buying up foreclosed homes nearby.  There is an actual academic department that studies and teaches real estate.

As an academic discipline.

To, among other students, real estate “professionals.”

At UC Berkeley.

The crown jewel of our taxpayer-funded college system.

Yes, there is an actual place called the Fisher Center for Real Estate and Urban Economics and it’s part of Cal’s Haas School of Business.  Here’s their mission statement:

The mission of the Fisher Center for Real Estate & Urban Economics (FCREUE) is to educate students and real estate professionals and to support and conduct research on real estate, urban economics, the California economy, land use, and public policy.

Well, that doesn’t have to be a crisis signifying the lack of integrity of academia, does it?  If they study real estate in a disciplined, methodical and rigorous manner, the subject could certainly be well worth the effort.

Then again, maybe not.

In Tuesday’s SJ Mercury News, Professor Emeritus Kenneth T. Rosen, who is the chairman of the Fisher center, was quoted for a story on the improvement of home values in the second quarter .  Let’s listen in on his brilliant observations on the problem of a stalled regional housing market due to negative equity:

“It’s becoming less negative as house prices are going up around the Bay Area… It only affects those people who bought at the peak two or three years. Part of the reason they have negative equity is that they borrowed a lot of money.”

Ya think?

Movoto’s blog has some pictures today that illustrate the disconnect between listing copy and what the house actually looks like.  They’ve encouraged other blogs to share it so here it is.

Are there any phrasings you’ve noticed particular to Bay Area homes?  The first one we’ve noticed right away, having moved here from somewhere else.  And almost everywhere else this expression does not mean what they think it means.

The others are just part of the pleasure of living in the RBA, like paying more for the same groceries.

Some RBA Realtardese

Lingo	What you think it means	What it actually means
Huge Yard	Acres and acres of space	There IS a yard.  At least a yard wide.
Close to transportation!	Three blocks from the bus	Close to freeway.  Real close.
Location, Location, Location!	Best part of town	Convenient to emergency psych ward

Now it’s your turn!  If you can provide pictures as well, we’ll add them into your comments for you.

Yes, another article about Palo Alto.  It seems nobody can have too much of that place.  Thanks very much to Burbed reader PKamp3 for spotting this article in the Fox News Journal.

Vehicle-Dwellers Call Palo Alto Home

By DEBORAH GAGE, The Wall Street Journal
SAN FRANCISCO BAY AREA Updated July 11, 2012, 6:17 p.m. ET

PALO ALTO—Kurt Varner moved to Palo Alto from Los Angeles in March to start an Internet company. But instead of renting an apartment, the 25-year-old has been residing in a different kind of abode: his car.

Every 72 hours, Mr. Varner moves his car around Palo Alto to avoid violating the city’s parking rules, and he tries to be as inconspicuous as possible to local residents and other car-dwellers. Mr. Varner sometimes does some rudimentary cooking at a co-working space in Mountain View, where he codes during the day. And he showers at a local 24 Hour Fitness gym. His total cost for the gym and co-working space is $139 a month.

Living in his car is the only way he can afford to be in Silicon Valley right now, says Mr. Varner, whose wife, a teacher, lives in Los Angeles. Mr. Varner, who has been effectively homeless for the past few months, says he can’t afford to pay rent on two places but will move into an apartment in the area this month when his wife moves up.

He says he is excited about working on something he is passionate about, but being homeless is “a little scary.”

So it’s not enough to find out that some people love Palo Alto so much they’ll live at the office.  Every single night.  Because they don’t live anywhere else.  Now we’ve got people living in their cars because it’s completely legal to live in your car in Palo Alto.

No wonder there’s only one mobile home park in Palo Alto.  There’s too much lowball competition!  How can Buena Vista possibly compete with BMW?

This is also your Weekend Open Thread, so have at it.  Did you see anyone living in their cars when you toured Open Houses this weekend?  Where are the best places to park?

San Francisco housing market booms bigger than ever

The average monthly price of an apartment lease has risen to $2,734 — up 12.9 percent since 2011 — according to data compiled by the rental data firm Real Facts. The spike in San Francisco rents seems to be spilling over to cheaper markets like Oakland, where the average rent is now $1,835 — up 14.4 percent since last year. Pacifica, where rents now average $1,908, has experienced a 15.6 percent increase.

…

A recent survey by Realtor.com shows that The City’s median listing price is up 15.4 percent since last year, which matches a similar upward tick in Oakland, where the average home is selling for $379,000. The number of homes for sale in San Francisco is down 40 percent since last year, and nearly 60 percent in Oakland.

Congrats to the Real Bay Area for this tremendous achievement!

You heard it here first! This site has been calling this since… oh… 1849. Finally we are back on track to overtake Manhattan, Moscow, Japan, and other world class cities in terms of being unaffordable (e.g. exclusively awesome)!

Let’s check in with an expert, shall we?

“With the rising rents, we’re definitely seeing some people get off the fence,” Kearney said. “But still, a lot more people can afford to pay rent on a monthly basis — even if it’s higher than a mortgage payment — than those who can come up with a down payment. So we’re seeing more and more of those down payments from parents.”

That’s right! Now’s the time to buy! Unlike when the market was tanking (that was also a time to buy BTW). If you don’t buy (with your parents’ money), you’ll be priced out forever!