July 22, 2015

Yes! Yes! Yes! “Silicon Valley’s housing affordability crisis worsens”

Report: Silicon Valley’s housing affordability crisis worsens
Less than 25 percent of workers and just 40 percent of households in metro San Jose are able to rent or buy average-priced housing, according to a new report from the Silicon Valley Competitiveness and Innovation Project.

The new analysis underscores some of the region’s long-term affordability trends and the impact on quality of life and business competitiveness. Compiled by Peninsula-based Collaborative Economics, the data show that the average rent in May for a two-bedroom apartment in metro San Jose was $2,917 — and that residents would need to earn $116,680 annually to afford that. Yet the median income in the area was $57,400 for individual workers and $91,500 for households, according to the most recently available statistics, the study says.

Citing data from the California Association of Realtors for the first quarter of 2015, the report says only 44 percent of Santa Clara County households could afford to purchase an entry-level home — defined as costing $833,850, or 85 percent of the county’s median sale price. That percentage shrank to 29 percent in San Mateo County (where an entry-level home was $1.11 million in the first quarter) and 27 percent in San Francisco ($1.15 million).

 

I don’t know about you, but this is music to my ears. As we all know, the more unaffordable something is, the more exclusive it is – and therefore the better it is. Hermes, Rolex, Ferrari, San Jose.

It’s already so beautiful that that an entry-level home is defined as $833,850 (and it probably requires $100k of work) in Santa Clara- and that includes laggard Gilroy. Come on Garlics, shine! Shine!

Where do you think we will be next year? What will an entry-level home cost? $1M? $2M?

Comments (23) -- Posted by: burbed @ 5:44 am






June 15, 2015

Prop 13 – Real Examples of Property Taxes

LosAltos-Prop13

(Estimates based on current assessed value in Zillow X .0125)

Discuss!

Comments (117) -- Posted by: burbed @ 5:03 am

May 18, 2015

11x!! San Jose’s Median Home Price to Median Income Ratio!

Congrats to San Jose!

The median cost of a house in San Jose is $900,000

A stately row of Victorian-style houses in San Jose, Calif., where the median household income is about $30,000 above the national average.

The median price for a previously owned single-family home in the San Jose, Calif., metropolitan area just hit a whopping $900,000, according report released Monday.

That first-quarter price was up 11.4% from a year earlier, and more than four times the U.S. median of $205,200, the National Association of Realtors reported. It’s important to note that these price figures are for the median, not the mean, meaning that there are as many homes that cost more as those that cost less than these levels, whereas a mean price could be skewed upward by a number of high-value transactions.

The national median income is about $51k, which means the national home price/income ratio is about 4x… but San Jose is special! It’s median income $30k more! Thus, it is around $81k! And the median home price is $900k! That’s a home price/income ratio of… 11x!

<sheds tears>

Oh San Jose. For so long you’ve been lagging behind some of your other Silicon Valley peers. For so long, we’ve all wondered how you could be called “Capital of Silicon Valley” when you were so damn affordable.

Well… now you’ve joined the club. Congrats on the ratio! 11x!

Burbians! Where do you think San Jose will be at the end of this year? 15x? 20x?

Comments (126) -- Posted by: burbed @ 5:28 am

May 5, 2015

The average good house in San Mateo is now $4,028,170

These day it’s all about big home prices and big data. So let’s combine them! Some data that I got in my inbox:

Stats

Wow! Congrats to you San Mateo! $4M for an average good (>$1M) house!

Let’s keep it going! $5M next month? $6M? Where do you think prices are going?

Comments (4) -- Posted by: burbed @ 5:23 am

April 27, 2015

Rent in the San Francisco Bay Area is worse than Manhattan! YES!!!

San Francisco Tops Forbes’ 2015 List Of Worst Cities For Renters

04-Manhattan03-SJ02-OAK01-SF

I don’t know about you, but this is music to my ears.

It absolutely makes sense that the cost of living in San Francisco, Oakland, and San Jose should be more painful (which isn’t always the same as $ amount) than our arch nemesis, Manhattan.

After all, we have easy access avocados. Have you ever eaten guac in Manhattan? No. Because it doesn’t exist.

And, of course, we have tech – which is disrupting paradigms in ways New York could only imagine.

Unfortunately, Manhattan is still way ahead in some areas – for example, the recent $100M condo that sold.

How can San Francisco compete with that? (I think we’re only at $28M or $49M.)

The difficult reality to accept is that it is still too affordable to live here in the SF Bay Area. This is not acceptable. We might have the best guac, but we won’t be world class until we do something about this.

People – what are you doing to help rectify this situation?

Comments (33) -- Posted by: burbed @ 5:12 am

April 20, 2015

Home prices up 31% in Redwood City, 40% in Mountain View – Congrats!!

MedianHomePrice

 

Congrats to the Real Bay Area cities whose median sold home price went up greater than 30%!

Now, let’s dissect the data. Obviously Hillsborough and Atherton went up by 40% because everyday a new millionaire is minted (billionaires are only minted on Thursdays.)

Mountain View is kind of obvious because of Google, Google, Google, and Global Beads at 345 Castro Street.

But Redwood City? Damn!

The last time Redwood City soared like this was back in 2006… when dead people were getting mortgages. But this time it’s different. The paradigm has shifted. There’s Facebook next door and a Philz.

And look at the difference it has made to the schools according to Great Schools:

RWC-Schools

Oh. Uh. Yeah.

Well whatever. Nothing can stop us now. It’s only a matter of time before even Redwood City will beat our mortal enemy Manhattan in price per square foot. (I hear they’re already whimpering in fear.)

Let’s look at how house prices will look in 5 years based on the current growth levels (and as always, past performance is indicative of future results):

MountainViewHomeForecast

Yep, that’s right. You heard it first. I’m calling Redwood City at $4.3M and Mountain View at $4.7M in 2019. Nothing can stop us now!

What are your forecasts for 2019?

Comments (16) -- Posted by: burbed @ 6:40 am

March 30, 2015

Median Home Price to Median Income Ratio in San Francisco Bay Area

Great news everyone!

The Median Home Price to Median Income ratio just exceeded 9x in 2014 Q4! To be precise, it was 9.16x!

And with house prices growing 20% year over year, my guess is that when when the NAHB/Wells Fargo Housing Opportunity Index data for 2015 Q1 comes out, the Real Bay Area will easily exceed the peak of 9.27x set in 2007 Q2!

Where will this ratio go? It’s obvious that by the end of this year, it will be 10x… but when will it happen?

Median

SF

SJ

Great work everyone! The real question is: How can we drive this to 20x?

San Franciscans have already done their part by blocking new homes from being built. Redwood City-ers have succeeded with their protests of building more homes. Mountain View, Palo Alto, Millbrae, Burlingame: You guys need to pass laws to destroy existing apartments (because renters aren’t humans anyway).

What are your suggestions? Let’s hear them in the comments!

Comments (29) -- Posted by: burbed @ 5:31 am

February 9, 2015

Here’s a photo from an open house for a starter home in the Real Bay Area

Here’s a photo from an open house for a starter home in the Real Bay Area.

House

Been to any open houses lately?

Comments (4) -- Posted by: burbed @ 5:42 am

January 29, 2015

The house prices. They won’t stop going up.

They just keep going, and going, and going, and going!

To infinity and beyond!

Comments (28) -- Posted by: burbed @ 12:47 pm

November 3, 2014

House prices are amazing in the Bay Area

Modest Bay Area homes hit mind-boggling prices

Two years of tight supply and intense demand have pushed prices for modest Bay Area homes in trendy neighborhoods to mind-boggling heights.

In Palo Alto, tiny homes sell for multiple millions of dollars. In Oakland’s sought-after Rockridge district, a home just sold for $500,000 over the asking price.

On both sides of the bay, it’s the location that commands the biggest price, even as the amount paid per square foot reached new peaks in more than a third of 155 Bay Area ZIP codes analyzed for this newspaper by CoreLogic DataQuick.

With the price of homes in Palo Alto skyrocketing, Ken Plourde, a 79-year-old retired jazz bass player, decided it was time to sell the home he bought for $35,000 in 1970.

"I was sitting on a gold mine," said Plourde, whose income from music gigs has been declining with his advancing years and changes in the live music business.

The 992-square-foot-home within walking distance of Stanford University was snapped up in one day by a wealthy Stanford graduate in China for $3 million, a price that comes to just over $3,000 a square foot.

Real estate agents say two groups are leading the pack of home shoppers in Silicon Valley: newly wealthy tech workers and overseas buyers, particularly from Asia.

Congrats to the Bay Area. You are making me so proud.

2015 is the year where the median price will be $1250 per square foot across the entire real Silicon Valley. I just know it!

Maybe it’s time to retire this blog.

Comments (34) -- Posted by: burbed @ 5:15 am