This article caught my eye in the New York Times over the weekend – it’s about Sathish Pottavathini, an engineer at eBay, and his Bay Area Housing Plan:

Hoping for Best in Home Sales, 2 Sides Sit Tight – New York Times
In the San Jose, Calif., area, where the average house price increased 21 percent last year, Sathish Pottavathini, a programmer at eBay, said he was taking his time with the search for a new home and trying to find a good deal.

“I don’t want to rush into things especially in this kind of situation,” Mr. Pottavathini, who is 32, said, “where you hear about a slowing down everywhere.”

He and his wife, Madhuri, spend $1,200 a month renting an 800-square-foot two-bedroom apartment, where they live with their 21/2-year-old daughter, Siri. They would like to find a three-bedroom town house with a two-car garage for less than $500,000.

Although he does not expect prices to fall significantly, he does not think they will rise either and hopes he can find a bargain — a goal that seemed all but impossible in Northern California in the last few years. Now, Mr. Pottavathini said, “If I wait, I might get a better place.”

… [silly impossible comments about how house prices sometimes drop removed] …
Mr. Pottavathini, meanwhile, is giving his San Jose search four months. After that, he plans to take a break and wait until his daughter is a bit older and his wife returns to work. With more money coming in, they might be able to pay more.

If they still have not succeeded, they would then consider leaving Northern California — which he called “the best place in the world” — and returning to their native India.

“If the condos become $600,000, it doesn’t make any sense to live here,” he said. “Imagine owning a house and paying your whole life for that house. I would rather move back to India.”

But wait a minute… if this is the best place in the world, then wouldn’t it be worth it to spend your entire life paying for a condo?

After all, with just a mild rate (for the Bay Area) of 10% appreciation a year… that $500,000 condo would be worth $4,924,866 by just 2030! That’s $5 million at stake!

Come on Sathish, how could you even consider leaving the best place in the world? Think of the children!

Housing Slowdown Ripples Through Economy – Yahoo! News

The slowdown that is showing up in national statistics hasn’t reached all parts of the country.

“I’ve never seen a market as good as this,” Mike Mishler said as he took a break from making finishing touches on a $1.6 million lakeside home near Dallas. “Maybe it will slow down in a couple years, but right now we have lots of California folks coming in, and empty-nest people looking for new homes.”

Mishler, president of the local builders association, says Texas markets are holding up because they are affordable — the median price in Dallas is $145,000 compared to the national average of $213,000.

$145? That’s about 1/6 of the price in the Bay Area. Is this where everyone is going?

The other day Dan at the Bayosphere linked to this site. One of the comments for that entry had this to say:

Home Prices and People’s Long-Range Dreams | Bayosphere
By-the-by, you DO understand that P/E is a real estate valuation model is almost useless, right?

Is it?

Does it make sense that if you buy a home and spend $4000 a month in PITI (Principal, Interest, Taxes, and Insurance) – that you can only rent it out for $2000 a month?

Maybe a P/E ratio of 1 is old and busted, and that a P/E ratio of 2 is the new hotness. Maybe homes in the Bay Area are meant to have Silicon Valley style P/E’s!

Maybe Taser can relocate here and help drive the P/E ratio to be closer to theirs… you know… 496!

I just wanted to take a moment to thank Curbed for the inspiration for this website. If you haven’t seen it, go check it out.

As crazy as real estate is here in the Bay Area, let’s face it: it’ll never be as insane as New York City.

But here’s a myth to dispel: there’s no affordable housing in New York. That’s simply not true.

Unlike the Bay Area where the entire metropolitan region is expensive, it’s mostly Manhattan that’s insanely expensive in NY. Sure, Queens and Brooklyn are pretty pricey too these days. But there’s always Long Island – home of the first suburbs. And still, pretty affordable – with some of the best public schools in the nation.

Home Prices and People’s Long-Range Dreams | Bayosphere
UPDATE: Just spotted the SF Bay Area Home Price and Mortgage Insanity Blog. Can you say “piling on?”

Dan Gillmor’s blog

Cool! Dan linked to this site today!

Valleywag
This and other house porn at the “SF Bay Area home price insanity blog,” Burbed.

Thanks for the link Valleywag!

Wow, a lot of people linked to this blog lately! Neato!

There were some questions in the comments on other blogs – I’m not sure why people don’t just go post comments here.

So… here’s a new category: Questions!

And today’s question I’m going to answer: “Are these prices for real?”

Yes. They are for real. And no, the price people pay will not be significantly lower than the advertised price – typically, you have to outbid others.

Got a question or a suggestion? Email me! burbed@-remove-burbed.com

sarritahunn writes “super-reality check, I live in SF but this is my hometown”

REALTOR.com: Find a Home – Listing Detail

2238 E Southview St
Ozark, MO 65721
MLS ID#: 512316
$499,000
5 Bed, 3.5 Bath
3,829 Sq. Ft.
5.05 Acres

Hm… $500k for a house with metal bars on the window in what was once called the murder capital of America, or $500k for a 5/3.5 house in Ozark, MO.

Sorry sarritahunn, but I’ll have to stick with the insanity!

Fret not, other readers – back to Bay Area housing in the next entry! Submit your worst find and be mentioned on Burbed.com!

I think it’s time to do a property that’s outside of the Bay Area. What can you get for $500k in… Portland?

REALTOR.com: Find a Home – Listing Detail
Portland, OR 97202
MLS ID#: 6002724
$499,500
4 Bed, 2.5 Bath
2,106 Sq. Ft.
Estimated payment:
$2,332 Per Month*

That’s just crazy – way too much house for the money!