May 19, 2006

What does $425,000 buy you in Durham, NC?

It’s Friday! Time for a break from the Bay Area.

Now, I don’t know much about the Raleigh, NC area – except that I’ve heard that there are lots of professionals. Heck, GlaxoSmithKline is there. So, let’s take a look at what you can buy in that area for the price of a condo in Santa Clara!

North Carolina Real Estate Listing
4308 Pine Bark Trail
Durham, NC 27705
4308pinebark.jpg

Essential Information
MLS Num: 856826 Bedrooms: 5
List Price: $425,000 Full Baths: 4
Heated SqFt: 3,100 Half Baths: 0

Hm… all that for just $425,00 – 65k less than the median condo in Santa Clara.

The downside is that you might have too much money left over. What would you do with it? And… more importantly, you’re not in California anymore.

Yeah, this is definitely a rotten deal. Don’t leave the bubble!

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May 6, 2006

Negative Mortgage – Negative for your Health

cbs13.com – Call Kurtis: Negative Mortgage
Leslie and Rob McDonald have the family sanctuary they’ve always wanted in their Modesto home. But this happy life now goes on under a shadow.

“I didn’t understand what we were signing. A lot of embarrassment, a lot of stress. My husband, well he’s actually begun having heart problems now, because of it,” says Leslie McDonald.

It is a tricky kind of home loan called a negative amortization mortgage. It’s a kind of adjustable rate loan that allows you to keep your interest only payment the same for a guaranteed period as interest rates rise. But in the end the small payments don’t cover the rising cost, and the difference is added to your mortgage balance, pushing you further in debt.

“We’re losing about a thousand dollars a month in equity in our home,” says McDonald.

Oops! Considering that the Bay Area leads in this type of mortgage, it really makes you wonder…

Click here to post a comment -- Posted by: burbed @ 5:00 am

May 5, 2006

You don't need a vacation – you live in Silicon Valley!

It’s Friday! You’ve probably had a long and hard week. Thinking of the weekend? Thinking of a vacation? Thinking of going away?

Well, if you are – then maybe Silicon Valley isn’t right for you.

You see, living in Silicon Valley is such a gift, that you never have to leave. In fact, you should probably put in a few extra hours this weekend so that the bank doesn’t foreclose on your house. This is a good thing.

Realty Times – Real Estate News and Advice
In the land of technology and sunshine, it doesn’t appear to matter that, according to the California Association of Realtors, fewer than one in five residents can afford to buy the median priced home or that renting a decent apartment requires a two-income household.

Living in Silicon Valley (largely Santa Clara County) is just too good to give up over something as minor as a three-quarter million dollar home.

A recent study reveals residents who live in the county’s largest and capital city of San Jose are more concerned about crime, traffic congestion and public school education than they are about the cost of homes.

“It’s an absolute fact that people want to live here. That keeps housing prices high. If it wasn’t for the demand, prices would drop,” said Richard Calhoun, real estate broker and owner of Creekside Realty in San Jose.

[snip]

When 1,000 residents where asked what issues most concerned them, 13 percent put crime at the top of their list, 11 percent said traffic congestion, 9 percent said education and public schools, but only 8 percent said housing.

Hm… so basically, there are so many other problems to worry about like the horrible traffic, the lousy public schools that people living here can’t be bothered to worry about the fact that they had to get a 50 year mortgage to buy a 800 sqft termiter.

I guess that makes sense.

After all, who needs disposable income when you have work? Apparently, living in the Silicon Valley means that you never need to go on vacation:

With the increase in jobs, especially in the technology field, landlords are able to lure shelter seekers who are not quite ready to buy, but, like home buyers, are attracted to the area by career opportunities, good weather, geographic and ethnic diversity, and a host of attractions that let them save money on vacation travel.

Hm… Silicon Valley attractions. Let’s see…

  • New York has the Statue of Liberty and the Empire State Museum – we have the Winchester Mystery Mansion.
  • Washington DC has the Smithsonian – we have the San Jose Museum of Art
  • Egypt has the pyramids – we have the Fry’s in Campbell
  • Boston has the birth of America – we have Great America.
  • The Mediterranean has villages – we have Santana Row.
  • London has the Tube – we have Light Rail.
  • Alaska has glaciers – we have Valco.
  • China has the Great Wall – we have the Great Mall of Milpitas.
  • Everywhere else has an airport – we have Terminal C at SJC.
  • Paris has Champs Elysées – we have El Camino Real.
  • Asia has Shanghai, Hong Kong, Taipei – we have Cupertino Village.

Yeah… I guess those are all about equivalent. No need to leave.

In fact, for your own safety, you probably should avoid travelling outside the Bay Area! If you do – you might venture outside the bubble and realize that there are places with only 1 parent needs to work 50 hours a week, instead of both working 80 hours a week! And… then the Matrix would collapse.

But as whacked out as this article is (there seems to be a bias… if only I could pinpoint what it is in this issue of Realty Times), I think we can all agree on this:

“I’ve often said, I would rather live in a one-bedroom condo here than in a five-bedroom spread in Texas and that seems to be the opinion of 99 percent of my buyers. None of them seem concerned about prices. If interest rates rise they will still buy, but they will buy less. Whatever it takes to live here, that is what they will do,” says Boyd.

How insightful! I love using low expectations! Otherwise, if you using a reasonable comparison (you know, Seattle, New York, New Jersey, Washington DC) you might start to question things. And questions are bad.

So let’s all just agree with this new slogan for living in Silicon Valley:

Silicon Valley: 50 year mortgages for a 3 bedroom, but at least it’s not Texas… or Iraq.

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Comments (17) -- Posted by: burbed @ 5:00 am

May 4, 2006

Bay Area Home Appreciation Rate Graph

Marin Real Estate Bubble
DataQuick March, 2006 Graph

Oops, who flipped the graph upside down?

Click here to post a comment -- Posted by: burbed @ 5:00 am

May 3, 2006

Santa Clara Real Estate Trends

The Silicon Valley Real Estate Report

trendsmarch.gif

Interesting facts, wouldn’t you say? Looks like the time on market has doubled since last year!

Click here to post a comment -- Posted by: burbed @ 5:00 am

April 25, 2006

Free BMW with Condo – sort of

Developer Hopes To Get Mileage From BMW Offer
Forget about free plasma TVs, gift cards or upgraded cabinets. What about that free BMW Z4 Roadster that just popped up in ads for a new Fairfax County condo?

“Ask how to receive a FREE BMW Z4 Roadster or 325i,*” says the ad in newspapers and on the Web for Legato Corner, a six-building complex being built near Fair Oaks Mall by Texas developer Fairfield Residential LLC.

Builders are using more incentives in a softening market, but a car is a rarity. It’s “definitely different, and much more eye-catching than just saying ‘no condo fees for a year,’ ” said Tim Liu of condo guide DClofts.com.But hold your horsepower. Developers of the 202-unit complex aren’t actually giving away the $38,000-and-up sports car or its $32,000-and-up four-door cousin. Buyers of two- or three-bedroom units get a free two-year car lease, according to a sales representative who said she was not authorized to comment publicly. Two-bedrooms start at $356,900 and three-bedrooms at $408,900, according to the complex’s Web site.

Sounds like the real estate market isn’t doing so well suddenly elsewhere. Fortunately this is the Bay Area, and there’s no better place to live than here.

Click here to post a comment -- Posted by: burbed @ 9:21 pm

April 24, 2006

"The negative equity epidemic"

Check out this silly news from MSN Money:

MSN Money – The negative equity epidemic
Consider:

* Nearly one in 10 households with a mortgage had zero or negative equity in their homes as of September 2005, according to First American Real Estate Solutions, an arm of title-insurance company First American Corp. The study of 26 million homes in 36 states and the District of Columbia found that one in 20 home borrowers was upside-down by 10% or more.

* The situation is even grimmer for recent borrowers. Of those who bought or refinanced homes in 2005, 29% had zero or negative equity, and 15.2% were underwater by 10% or more.

* Interest rates on about a quarter of all mortgage loans outstanding, or $2 trillion, are scheduled to reset this year and next, according to Economy.com. Homeowners who opted for extremely low teaser rates in recent years could see their payments eventually double, said Christopher Cagan, First American’s director of research and analytics.

* Defaults and foreclosures are already on the rise, thanks in part to higher interest rates, cooling real-estate markets and overextended borrowers. Nationally, 117,259 properties entered some stage of foreclosure in February, according to foreclosure-monitoring firm RealtyTrac, a figure that’s up 68% from February 2005.

Here’s the kicker though:

A 1% teaser rate on a $300,000 mortgage that rose to a market rate of 6%, for example, would increase a family’s monthly payment by 86%, from $965 to $1,799 a month. If the old payment represented 30% of a family’s gross income, the new payment would represent over 55% — a squeeze that few families could endure for long, Cagan said.

Isn’t most of Silicon Valley paying close to 50% of their gross income already? Bah. This is totally doable.

Click here to post a comment -- Posted by: burbed @ 5:00 am

April 20, 2006

Bay Area man wins longest commute award! 370 hours!

Americans commute longer, farther than ever – Yahoo! News
Dave Givens drives 370 miles to work and back every day and considers his seven-hour commute the best answer to balancing his work with his personal life.
The winner of a nationwide contest to find the commuter with the longest trek, Givens is one of millions of people who are commuting longer and farther than ever before.

Studies show Americans spend more time than ever commuting and for a growing number, getting to work takes more than an hour. In the most recent
Census Bureau study, 2.8 million people have so-called extreme commutes, topping 90 minutes.

Givens, a 46-year-old electrical engineer, has an extreme commute between home in Mariposa, California, and his job in San Jose. He leaves home before dawn and returns after dark.

The bold-ing is mine. Only in Silicon Valley would a 7 hour commute be considered balacing your work and personal life.

I wonder how much Dave spends on gas a week – and how much oil he plans on leaving our future generation.

On the other hand, he probably doesn’t live in a 800 sqft house for $800,000… that’s the Bay Area for ya.

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Click here to post a comment -- Posted by: burbed @ 5:00 am

April 14, 2006

TY: $500k for a mobile home in Silicon Valley

TY: $500k for a mobile home in Silicon Valley
$499,000

Holy cow.

Cool! A link from TomorrowYesterday.

Click here to post a comment -- Posted by: burbed @ 9:39 am

April 12, 2006

Real Estate Bubble Blogs – Moneysmartz

Real Estate Bubble Blogs – Moneysmartz Category Updates: Moneysmartz Personal Finance Blog
Real Estate Bubble Blogs – Moneysmartz Category Updates | Moneysmartz Blog Home

Be worried, be very worried.

In addition to global warming, the dollar, and Iraq, add the housing bubble to your list of worries.

This is old news for many, but the chorus of concern seems to be reaching a climax.

Get ready for another decline say a growing list of real estate bubble bloggers.

In surveying real estate bubble bloggers, Moneysmartz found some very, very depressing news and more than a few blogs worth a moment of your time, particularly if you live in a bubble market.

Thanks for linking to me!

Click here to post a comment -- Posted by: burbed @ 10:31 pm