Burbed reader sonarrat called me over and slowly opened the trenchcoat.  What illicit product could I buy?  Darn, no chocolate, just real estate.  Here’s what sonarrat has to say about today’s amazing listing:

I don’t have the time to get into why this is so great, but isn’t this a far better use of the money than some crap shack in Cupertino??

Indeed it is!  For one, crapshacks in Cupertino are reachable by anybody.  But this place is boat access only.  For two, move here and don’t worry about truant officers! “Nearby schools are unavailable” per Redfin.

20251 W Bacon Island Dr  Stockton, CA 95201
$799,000

Beds: –
Baths: –
Sq. Ft.: –
Lot Size: 348 Acres
Property Type: Agricultural/Residential Land
View: Bay, Lake
Community: San Joaquin County
County: San Joaquin
MLS#: 81026676
Source: MLSListings
Status: Active
On Redfin: 134 days

SPORTSMAN’S PARADISE. The island is flooded with 350 acres of lake water from 8′ to 12′ and surrounded by nearly 4 miles of levee frontage. High recreational use for boating, fishing & hunting. Incredible bass fishing! Unique opportunity, call for complete brochure. High unused mitigation benefits. One owner, one island, one reclamation district. Big tax benefits. Possible Mitigation.

When a property listing mentions mitigation twice that’s never a good sign.  348 acres, 350 acres of lake water.  That means two acres are flooded twice.  No wonder it has a lake view, plus “water available at site” yet “Sewer not available.”

Let’s have a look at this SPORTSMAN’S PARADISE, with high recreational use for boating, fishing and hunting with incredible bass fishing.  Perhaps the listing agent thinks the island is in Louisiana.

Unfortunately when the map is sufficiently pulled out to show the entire property (above), the lot lines vanish.  It’s shaped like a wide rectangle running from the water curve on the right to the inlet on the left where the little tree marker is.  Here’s a closer-in view created by merging two map images together.

Doesn’t look like much of an island, and doesn’t look flooded either.  But why not pick this one up instead of a Cupertino crapshack in Rancho Rinkydinky?  Then you can truthfully tell your friends and family that all your bass are belong to us.

California has 2.3M ‘underwater’ homes

San Francisco Business Times – by Steven E.F. Brown

California is one of five states with the most “negative equity” in its home market, according to a report by CoreLogic Inc.

The Santa Ana business (NYSE: CLGX) said 33 percent of residential properties with mortgages in the Golden State were “underwater,” meaning the property is worth less than is owed on the loan. The figures are for the end of the second quarter.

That works out to 2.26 million underwater properties in the state. Another 286,000 homes were “near negative equity.”

Total outstanding mortgage debt in California was $2.03 trillion at the end of the second quarter, according to the report.

Though California’s rate of negative equity dropped 1.3 percent from the first quarter to the second, a quick rate of decrease, that was “primarily due to foreclosure, not the stabilization or small increases in prices in some markets,” the report said.

Thanks to Burbed reader Mark for this find!

Now sure this might seem gloomy at first, but think about it – this is about California as a whole. This includes places like… the Indio and the East Bay. Of course it’s going to look bad.

The real question, of course, is: what is it like in the Real Bay Area?

My hunch – 102% of houses (maybe not condos or townhouses) are above water.

Does anyone have data on this?

Mortgage defaults in California at 3-year low

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

By Alejandro Lazo, Los Angeles Times

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

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

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

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

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

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

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

And now, may I present a guest post.  Take it away, madhaus.  Why thanks, madhaus, don’t mind if I do.

Sacramento Bee: Education Coalition Sues California Over School Funding

California’s system for funding public schools is irrational, unstable and in need of overhaul, a lawsuit filed Thursday asserts, and prevents 6 million students from receiving the education they are entitled to under the state Constitution.

The lawsuit, filed by a coalition of students, parents and education groups against the governor and the state, puts California on a growing list of states slapped with what lawyers call "adequacy" suits

Thirty-three states have faced adequacy lawsuits, in which plaintiffs argue that a state does not give schools enough money to achieve that state’s academic standards. In most cases, experts said, the states have lost in court and been forced to come up with more funds and a new way of paying for schools.

Now that’s the American way.  Something’s broken?  Sue ‘em.  The lead plaintiff in this case, Robles-Wong v. California, is a junior at Alameda High School.  Yay, Bay Area, We’re #1!  We’re #1!  And despite a press conference in Sacramento, the suit itself was filed in Alameda County.

A spokesman for the group noted California had some of the highest educational standards in the country, with some of the lowest funding rates.  Yeah, take that, New Jersey!  We do more with less!  We’re the best at writing standards, and the best at failing to meet them!  Boo-yah!

The article also described the method of determining each California school district’s unique funding as “a complicated funding formula.”  This is akin to noting that the General Theory of Relativity is “kind of tough,” as there are only four people in the entire world who understand how the state school funding algorithm actually works.  One of them has an unlisted phone, one refused to respond to repeated requests for comment, and the other two were driven insane by the process of mastering it.

Okay, assuming you were actually reading any of this, by now you’re saying, madhaus, you are just making that part up.  Am not.  See?

San Jose Mercury News: Schools, PTA sue California over education funding

For most of California’s roughly 1,000 school districts, the state budget crisis has caused per-student funding to fall for two years. But the complaint reaches beyond current cutbacks. For decades, California schools have budgeted according to a complicated funding mechanism determined by multiple laws and court rulings and resulting in unpredictable and different per-student amounts for each district. For example, in 2008-09, Evergreen Elementary School District in San Jose received $7,787 per student, but Palo Alto Unified received $14,214.

The suit contends that the state has neglected to do what the constitution requires: prioritize school funding.

See?  See?  “Complicated funding <miscellaneous noun>.”  Told you so.

Can’t get enough of this?  Read the lawsuit (PDF, 59 pages) by clicking here.

Let’s face it, California’s budget is a mess.

It’s revenues are mostly from income, which means that in bad times a vicious cycle develops (layoffs->lower tax revenue->government layoffs->reduced consumption->layoffs->etc).

It’s expenses are locked in by voter initiatives. Now, as we know, California has the smartest people in the world – and that’s why voters pass propositions that result in situations where schools are required to have after school programs like teaching juggling and sushi rolling, while cutting teachers for basic programs. Innovative!

But there’s hope. Because California, especially the Bay Area, has the smartest people in the world, there’s a lot of innovation. Like the highly innovative Prop 13 – which enables companies to pay less property taxes than some homeowners, and enables some homeowners to pay 1/10 the property taxes than their neighbors. Coming up with a tax scheme that only impacts families in the future and immigrants to the state, while creating a landed-class, is definitely the kind of out of the box thinking that the state is famous for.

So now, let me share with you this fantastic proposed solution to California’s budget woes from the Mercury News’ message forums:

Tuesday, 2/02/2010 – 9:32 a.m. PST — Why don’t they just start taxing renters?
dlawrence

Renters are using the same services as homeowners, so why don’t they just pass a renter’s tax?  Maybe that would get a lot of the lazy people off their butts and get them to buy a house and really be a part of their community – rather than just a transient drain on their neighborhood until they move on to some other short-term situation.  There are so many renters out there that there must be a way to monetize them.  Maybe pass a residency tax that affects everyone, but if you’re already paying property tax, you get exempted from the new residency tax.  Then, force landlords to get a SSN from all renters and make sure the IRS has their address – just to make sure that the illegals don’t get away without contributing to their society the way homeowners have been doing for years.

Oh my god! This is an even better idea than the tuition tax, and other taxes on children, floated on this site earlier! Why aren’t we taxing lazy renters?

But wait, there’s more!

Tuesday, 2/02/2010 – 6:55 p.m. PST — Stay in school, then
dlawrence

Take a walk through most communities that are rental-majorities.  Sure the majority of renters would love to participate in ownership but *news flash* they’re uneducated or undereducated for this region.  Maybe if they started applying themselves and showing some initiative, then they’d start making the kind of money it takes to own something.  Also, *news flash* if you can’t afford a house in this market and you want one, you’re definitely in the wrong place.  Move to the hills of Tennessee or something.  Houses here are afforable now, and available to anyone who has a good education and is willing to invest in a long-term future and not live month-to-month.

Is it really a privilege to own property? Didn’t the homeowners pay taxes on the money that they earned to buy that property (think double-taxation)?  Aren’t most of them under water on their mortgages (you don’t need to think about that one)?  Doesn’t it take money to maintain that property to what the community and renters deem appropriate levels (think code enforcement)?  Don’t homeowners need to maintain insurance in case some dumb_ss falls on their doorstep (think lawyers)?  Maybe with your logic, there should be a tax placed on getting sick – because that’s about as much of a privilege as what you’re alluding to.  No, ownership is a right if you have the initiative and guts to do it – and nobody should tax a right.

Renting is a privilege more than ownership. Renters use up a huge chunk of community services and they don’t pay squat for it – and then they get to deduct a portion of their taxes because the landlord already paid property taxes that they’re benefitting from.  That’s just stupid.

Seriously. Mountain View’s a great example – it’s very affordable now, yet 50%+ plus of the population still rents. Those people should be deported!

But wait, there’s more!

Tuesday, 2/02/2010 – 6:40 p.m. PST — HomeyDogg doesn’t even know what clue means
dlawrence

First of all, I’m not a ‘sir’, but I suppose a predjudiced person such as yourself might assume I’m a ‘sir’ because I made what you feel are good arguments.  I shudder to think what you would have called me if I had made no sense.

Just because you are a renter, and probably paying less in rent than the property owner is paying in property taxes for your little unit, doesn’t mean it’s right or fair.  Watch the news – most property owners are completely screwed in this economy and the renters are reaping all the rewards of their hard-earned investment.  The property owner is just trying to make ends meet and usually being taken advantage of by the deadbeat renters out there who could care less what happens to their community because they’ll just be moving out once they miss enough rent payments, do enough damage to burn through their security deposit, or have too many bill collectors or bounty hunters stalking them at their residence.  Grow up.

Indeed. Did you know that in the California Constitution it guarantees that landlords will have profits? Oh wait… it doesn’t? WE NEED A PROPOSITION FOR THAT, STAT!

(BTW, most major landlords have their tax rates set in 1978… so… uh…)

But wait, there’s more!

Tuesday, 2/02/2010 – 10:12 a.m. PST — I don’t think that’s
dlawrence

I don’t think that’s completely true – I know of a lot of landlords that had their property taxes go up year-over-year yet they had to reduce rents because of the poor economy.  If their taxes went up, yet the renters are paying less, then something that was ‘factored in’ all of a sudden got ‘factored out’.  Since most rental real estate is a money losing proposition, and rents are still a heck of a lot lower than the relative cost of ownership, renters are getting a great deal.  They should be taxed to help ‘spread the wealth’ and pay their fair share of the services they’re using.  Everyone knows that renters have more police calls per capita than homeowners, and crime rat
es are higher in predominantly renter-heavy neighborhoods than owner-occupied neighborhoods, so why not tax them to pay for the services they’re using?  Homeowners have been paying huge amount of tax and carrying the burden of public services forever – yet many of those services go to people who don’t own a home and pay property taxes.  Why is that fair?  I say tax them and the problem will be solved.

Also, if they’re getting a ‘renter’s credit’ then how is that fair?  Get rid of the renter’s credit and make them pay their fair share.

Finally – this gets to the heart of how we can solve California’s budget woes: tax the poor.

If we tax the rich, they’ll leave! Local stores like French Laundry will layoff thousands. But if we tax the poor, they’ll leave! And then we won’t have poor people to support, or to look at!

Win-win!

Uh oh… there’s a dissenting view on the site:

Tuesday, 2/02/2010 – 10:25 a.m. PST — Sick of Prop 13!
JBeez

My neighbors bought their house 30 years ago during a time when home values were more in line with salaries. Now, they are only paying $1700 a year in taxes receiving a pention and sucking from Social Security that I may never see! How are they contributing to our schools and other programs? I pay close to $20,000 a year in my property tax and I live right next door with a similar house. How is that fair? They are taking from our community and giving nothing back! When are we going to change Prop 13 so we can STOP taking from our children? What is wrong with CA? STOP prop 13!!! Even if we only increased their taxes by 3% this state would be in a better situation!

Three words: Socialism Loving Nazi.

It gets worse…

Tuesday, 2/02/2010 – 3:17 p.m. PST — And another thing on Prop 13
JBeez

Thank you “your daddy” and shame on you Fat Granny for making such an uneducated comment about “rich yuppies” paying too much for homes!  That is the most rediculous thing I have heard!  We are living here because we are entrepreneuers and if it weren’t for us, you wouldn’t have some of the programs that we do!  Also, as “your daddy” stated, why can’t I live in the area I grew up?  I want my kids to grow up in a nice area so I had to pay this price!  Do you realize Fat Granny and all you other people who are for prop 13 that in 1978, before prop 13 we had a surplus!  Since then, we have had to cut public services, raise other taxes (CA sales tax is amoungst the highest in the nation!), drop school funding (we went from #5 in the nation to #40 in 1985 and is still dropping), road maintenance is down and because you empty nesters wont move we now have ugly tract homes covering our east foothills to make room for new homebuyers!  You see… property taxes are how we pay for things where we live.  Because of Prop 13 limited the sales tax to 1% of the assessed value of each property; and  limited annual increases in assessed values to the lesser of 2% or the increase in the cost of living for the year, with the exception that upon the sale of a property, the assessment would be updated to the transaction price. The effects of this have been a huge impact on the well-being of Californians.  If you can’t understand what I am saying, let me explain… THAT CAUSED HOUSE PRICES TO SOAR! Not rich yuppies paying too much for homes.

Even Warren Buffett commented on the iniquities and inequities of this system and pointed out how he bought a home in CA in the early 70′s with a current market value of $4M and was only paying $2,200 a year in taxes but bought another home in that same neighborhood for half the value in the mid 90′s and was paying $14,000 a year.  His point you ask?  The tax rate on the second house — same neighborhood, same owner, same ability to pay — is roughly 10 times the rate on the first house.  The emphasis is on “the same ability to pay”!!

This might be too hard for you to understand Fat Granny so maybe you should just go eat a dougnut!

This Socialism Loving Nazi is using facts as if they’re the truth. And he has typos.

Everyone knows that facts come from the gut. And only arguments with typos are valid.

Let’s call him on it:

Tuesday, 2/02/2010 – 7:32 p.m. PST — Are you really an entrepreneuer?
dlawrence

“Entrepreneuers” like you should be ashamed of yourself – and I hope your endeavors don’t include anything related to proper spelling, or we’ll all be in a “rediculous” situation, at least those “amoungst” us who have anything to do with what your endeavors produce.  Maybe you own a “dougnut” shop and it just doesn’t matter…

Maybe you are a rich yuppie like you portend in your writing – and studies have clearly shown that most rich yuppies are stupid, so your spelling might therefore be part of your genetic disability.  In that case I’m sorry for pointing it out.  Or, maybe you just got outgrown by this area and you’re so mad that you can’t keep up with it that your brain has stopped working.

BOOYAH. You got owned! Studies show that young people are stupid.

It’s clear what the next steps are:

1. California needs to pass a proposition to tax renters and to guarantee that landlords will have increasing profits every year.

2. California needs to pass a proposition to tax poor people. Let’s drive’em out of the state for good.

3. California needs to pass a proposition to limit voting to people who own houses and are 55 years old+,

Are you with this plan? Or are you with the terrorists?

California Real Estate Sales Exam, 3rd Edition (Paperback)
~ LearningExpress Editors (Author)

List Price:     $34.95
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The one-stop guide to the California Real Estate Salespersons Exam… To become a licensed real estate salesperson in California, you must first pass the California real estate salespersons exam. Each chapter of this revised and updated third edition not only covers what is needed to pass the test, but also includes information for success in a career as a real estate salesperson, as well as four full length practice exams with full answer explanations.

It’s a new year – isn’t it time you got a new job to match?

2010 is the year to become a real estate salesperson. Why? Because the market is set to take off! Just like it has been in 2008 and 2009. Tons of buyers are still sitting on the sidelines, waiting to storm in and grab all the houses they can.

I don’t know this for sure, but supposedly, the exams this year will cover topics like “Crowd management” “First aid” and “What to do if people start throwing money and gold at you for the house.” Better start studying!

After you get your new job and become amazingly rich, you can help make sure this site continues to be great! Click this link to learn more about donating to this site’s hosting costs!

Recordnet.com: S.J. sales prices holding steady
Statewide, just 12.6 percent of all the homes sold could be afforded by a median-income family, up from 11.7 percent in the second quarter, the group said.

Of 65 metropolitan areas ranked for affordability across the nation, San Joaquin County ranked 22nd, with 11.3 percent of median income families – at a median annual income of $60,300 – able to afford a median-priced house of $348,000.

California accounted for nine of the 10 least affordable metro areas in the country: Napa, Los Angeles, Salinas, Anaheim, San Luis Obispo, San Francisco, Santa Cruz, Merced and Santa Barbara.

Only outsider New York City made it into that group at the No. 7 spot.

This is a classic case of good news/bad news.

The good news is that California holds 9 of the 10 least affordable metro areas in the country. That’s 90%. New York City, which has nothing compared to California is at mere #7 HAH. Take that. We rule unaffordableness! Golden State stomps on the Big Apple and turns it into applesauce!

The bad news is that California became more affordable – going from 11.7% to 12.6%. I was really hoping that Santa would deliver a single digit affordability rate this year. Like 9.8%.

Here’s to hoping that 2008 will bring us there. I think there’s a good chance after the Superbowl – everyone knows that prices go up after the Superbowl.

What do you think?

Getting Going – WSJ.com
We’re bad at forecasting. Consider a study by academics Daniel Kahneman and David Schkade.They asked university students in the Midwest and Southern California where they thought someone like themselves would be happier — and both groups picked California, in large part because of the better weather. Yet, when asked how satisfied they were with their own lives, both groups were equally happy.

“When you’re thinking about moving to California, you’re thinking about the beaches and the weather,” says Mr. Schkade, a management professor at the University of California at San Diego. “But you aren’t thinking about the fact that you’ll still be spending a lot of time in the grocery store or doing chores. People emphasize differences that are easy to observe ahead of time and forget about the similarities.”

When we predict what will make us happy, we’re also influenced by how we feel today. If we buy the weekly groceries just after we’ve had lunch, we will shop much more selectively. The downside: A few days later, we will be staring unhappily into an empty refrigerator.

What the hell is this writer talking about?

Everyone knows that you can only be truly happy when you live in California!

That’s why it’s special here. Because everyone here is happy! If it weren’t special and if people weren’t happy, would home be more expensive here than anywhere else in the nation?

And what’s this about groceries or chores? People in the Bay Area spend all of their time in the great hot weather and at our fine beaches like Ocean Beach and Santa Cruz Boardwalk. And it’s just a short few minute drive without any traffic.
To think that people could possibly be happier somewhere else. Sure. I guess it’s possible. If you want to live somewhere CHEAP (which means its undesirable.)

$.5 million condos, baby. That’s the way we roll, Cali style.

Central Valley Business Times
More foreclosures loom as pace of mortgage defaults quickens

A softening home market is not by itself to blame for the jump in California home foreclosures says a San Diego attorney who specializes in helping those faced with losing their homes.

The most common reason is an event such as loss of job or illness to a family’s major income producer. But attorney John Brady says there are other causes that he is seeing more often.

“It could be predatory lending,” he says.

“I’ve had a number of people in this last month – this is completely unbelievable and so foreign – their mortgage payments are more than their income,” Mr. Brady says.

Why don’t people understand that you need to pay to live in a place as special as California?

Besides, everyone knows real estate only goes up in the long run. So if you wait long enough, you’ll be able to sell and be a millionaire.

Santa Barbara OKs Housing Aid for Folks Making Up to $160,000 a Year – Los Angeles Times
Santa Barbara OKs Housing Aid for Folks Making Up to $160,000 a Year
In a city where the median home price is over $1 million, a planned condo project’s units will be priced below market from $495,000 to $595,000. Teachers, nurses, police are among the expected buyers.

Wow. Will Palo Alto follow suit?