June 9, 2013

We’re Number 8! We’re Number 8!

130608-trulia-sanjoseYes, another danged list! This time San Jose is #8 on the Least Affordable Housing Market list created by Trulia. Not only that, Oakland and San Francisco are ranked even better!  Let’s have a look, and also at this article that referenced the Trulia list.

Thanks very much to Burbed reader Petsmart Groomer for sending in the second article.

 

Rank US Metro % of monthly avg wage to pay mortgage YOY % change in prices
1 Honolulu, HI 74% 12.8%
2 San Francisco, CA 55% 19.6%
3 Orange County, CA 44% 21.2%
4 Ventura County, CA 41% 15.4%
5 Los Angeles, CA 41% 17.4%
6 (tie) San Diego, CA 37% 16.8%
6 (tie) Oakland, CA 37% 31.2%
7 (tie) Long Island, NY 35% 1.1%
7 (tie) New York, NY-NJ 35% 4.6%
8 San Jose, CA 33% 23.2%

Affordability is measured as a mortgage payment at 3.8%, 30 year fixed, on an 1800 sf home at median price per sf divided by local average monthly wage for a worker.

130608-trulia-oaklandNot only that, Oakland and San Jose metros are the 1-2 punch of year over year housing price increases, greater than every other Top 100 metro that Trulia examined.  San Francisco is also showing frightening gains at 19.6%, right behind Orange County.

But remember, 8s are very, very lucky.  Tell us how you feel about so many California cities on the Least Affordable List?  Are you going to keep renting or are you determined to get out there and overbid?

130608-trulia-pineappleThe Wall Street Cheat Sheet piece conveniently left our old nemesis Manhattan and environs off its list by completely ignoring it. After all, if you can’t increase housing prices by double digits, what the heck are you doing calling yourself unaffordable?

Now, what are we going to do about Honolulu? We’d better get those median housing prices up past a million in at least 15 more cities by next week!

Comments (6) -- Posted by: madhaus @ 5:04 am






May 19, 2013

Real American Area: No Bubble. Real Bay Area? Otherwise.

Here’s part 1643 of Proof there is indeed a Bay Area Bubble 4.0.

Housing Bubble Unlikely, Home Price Appreciation Should Slow – CoreLogic

BY JANN SWANSON, Mortgage News Daily
May 16 2013, 11:10AM

CoreLogic said today that home prices are projected to increase 3.9 percent on an annualized basis between the fourth quarter of 2012 and the same quarter in 2017.  However, a new housing bubble is not likely as market dynamics shift for both supply and demand.  Prices rose 7.3 percent in 2012.

The CoreLogic Case-Shiller Index report notes that the increase in 2012 was the strongest rate of appreciation in nearly seven years and projected that prices will continue to improve in 2013 and beyond in the more than 380 U.S. markets it tracks.  The company’s current analysis says that, "Cities at epicenter of housing bubble/crash are clocking highest rate of appreciation, largely driven by investor demand."

130518-homeprices-map

This map comes to us thanks to Burbed reader PKamp3 over at DQYDJ.net, who linked us to the story in Business Insider. However they got the story from Jim the Realtor’s BubbleInfo blog, who in turn got it from Mortgage News Daily.  And it’s a good thing we traced the map (and story) all the way back to the original article, because it has some seriously amusing conclusions to anyone who lives Where It’s Special.  And that’s without making fun of the name of the Chief Economist for CoreLogic/Case-Shiller.  Nah, we’ll just make fun of his opinions of whether there’s a housing bubble:

Dr. Stiff tamped down concerns of another housing bubble. "Even if double-digit price appreciation were to continue in the former bubble metro areas, there is no reason to believe that new home price bubbles are forming. That’s because single-family homes in these markets are still very affordable, even after last year’s large price gains. Consider Phoenix, where home prices rose 27 percent since the market hit bottom in 2011, making it the strongest residential real estate market in the U.S. Yet, home prices there are still 45 percent below their 2006 peak," Stiff continued.

Yes, if you would consider living in a hellhole like Phoenix with summer daytime temperatures routinely above 110 degrees Fahrenheit, of course you’d note that these markets are still very affordable. But nobody uses the words “Real Bay Area home prices” and “affordable” unless they are separated by some sort of negating construction.

Lest you think we are making this up, the San Francisco-San Mateo-Redwood City metro is the least affordable in the entire country, with only 28.9 percent of homes affordable by a median income household. That’s right, we’re Number One again, beating out 221 other metros for the crown!  Santa Cruz-Watsonville is #4 (37.1%), while San Jose-Sunnyvale-Santa Clara isn’t far behind at #6 (43.3%) and Salinas (44.4%) at #7.

130518-homeprices-paragonWhere’s Phoenix, the brick oven that’s still 45 percent below their 2006 peak? They’re at number 57 in unaffordability.

Let us remind everyone that San Francisco and San Mateo Counties never dropped 45 percent below peak. The reason the San Francisco Case-Shiller numbers dropped as much as they did is because they’re completely weighed down by Alameda and Contra Costa Counties.

It’s the East Bay that dropped like a rock after 2006, not the Real Bay Area.  And like a pair of cement overshoes, the East Bay took the whole SF Case-Shiller index down with it. Even the upper tier (the top third of home prices) is affected by this home distribution.

130518-homeprices-paloaltoAnd let’s check those East Bay numbers.  Oakland-Fremont-Hayward turns in a respectable #24 in the You Can’t Touch This index, showing it’s no Phoenix, either.

So we have some words for that Stiff Doctor: There is too a Bay Area Bubble 4.0. We see it every single day even outside the Real Bay Area. We see peak pricing. We see bidding wars. We hear from readers reporting lines to enter Open Houses, or appraisals coming in higher in just a few weeks, or as-is cash overbids on homes where the would-be buyers didn’t even bother going inside.

Inotherwords, Dr. Stiff, maybe you need to get over your Phoenix fixation and check out the parts of the country where the housing bubble is very much back.

Comments (4) -- Posted by: madhaus @ 5:04 am

December 9, 2012

10 Least Affordable Metros: We Are Number 2. You Are Number 6.

CNN/Money has another one of their Most/Least/Best/Worst/Good/Evil slideshows that could have been presented as a table, but then they'd get ten fewer click-throughs. This time it's one of our favorite regional competitions, for 10 Least Affordable Cities for buying. Actually it's Least Affordable Metros, but it sounds better if they call them cities, even if a couple of them are known locales for multiple Portals to Hell and very few yachts or polo ponies.

10 least affordable cities to buy a home

BY LES CHRISTIE @CNNMONEY – LAST UPDATED NOVEMBER 29 2012 02:02 PM ET

Looking to buy a home? You may want to skip these places. Prices are either so high or incomes so low that many families can't afford to buy homes here, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

Anyway, we lost to New York City again, which is just so unfair. This isn't even an SF to Manhattan comparison, so we should have kicked serious butt here. However, California totally owns the Least Coast as far as leaderboard spots, and Washington DC didn't even qualify. We present the results in one easy list, so you don't have to click through their annoying one-city-at-a-time-gee-who-could-be-next-and-if-this-was-so-exciting-why-didn't-they-put-it-in-reverse-order-Top-Ten-List-style?

  1. New York, where 28.5% of homes are affordible. They seemed impressed by $1100 a square foot, too. But they didn't define the boundaries of any of these metro areas, so of course we can (and will) complain we were cheated on geographical grounds. We doubt this was an apples-to-Big-Apples comparison.
  2. San Francisco, 31.4%. The piece laments it's unaffordable all over, because nearby communities are also expensive. Nearby high-priced places such as Sausalito, Berkeley, and… wait for it… Daly City. We swear we are not making this up.
  3. Santa Ana, 43.5%. I kid you not. Perhaps the nearby beach towns are pulling up its results. And Disneyland. Because Santa Ana is not what comes to mind when we think “delightful but so unaffordable California real estate.”
  4. Los Angeles, 44.1%. Because “bunus” hydrocarbons and ozone raise home prices. Seriously, when did LA rediscover the bubbly?
  5. Bridgeport, Connecticut, 44.2%. Look, if you have to tell us what state the metro is in, maybe it isn't really worth mentioning. Just sayin'.
  6. San Jose, 46.2%. Above is the lovely photo they used to feature the Capital of Silicon Valley, probably because the Quetzlcoatl statue made the photog drop a perfectly good camera. Not one other metro had a freeway interchange featured. Not even Los Angeles, which loves its freeways so much they get definite articles. We suspect they're also putting their thumb on the scale by adding in San Benito County.
  7. Honolulu, 48.8%. Houses cost more because of good weather, expensive shipping, and hotel jobs pay squat. But they get a photo with palm trees.
  8. San Diego, 54.6%. Here the filler text spends more time lamenting the glory days of 6% affordability during the last bubble. Well screw you, because we're already on our next one.
  9. Newark, 55.3%. No, not that one, in New Jersey. Although Newark itself is cheap. It's la-di-da luxury locales like Hoboken and Jersey City that cost the big bucks. We're sure it's a complete coincidence that NJ made the list even though the feature author's surname is Christie.
  10. El Paso, 61.7%.This is an honest case of low overall incomes ($41.7K) as opposed to expensive housing ($141K).

Let us know if you find any of these results surprising, or what you plan to do to ensure we never lose to New York or LA or The OC ever again.. Or mention anything you want, because this is Your Weekend Open Thread.

 

Comments (7) -- Posted by: madhaus @ 5:04 am

October 16, 2011

We Are the 99th Percentile

imageimageOccupy Wall Street is finishing up its fourth week in Zucotti Park (if they weren’t evicted yesterday), near Wall Street in Manhattan.  The massive protest against Wall Street excess has spun off Occupy movements across the United States, including our very own Occupy San Jose movement on the steps of City Hall. 

And that  in turn spread to, I kid you not, Occupy Palo Alto.  The very definition of the one percent has supporters of the other 99, or at least the 99 found the right location, location, location for the one.

Occupy Wall Street comes to Palo Alto

imageBy Jason Green, Daily News Staff Writer
Posted: 10/13/2011 06:09:44 AM PDT, Updated: 10/13/2011 06:09:51 AM PDT

Photos by Kirstina Sangsahachart/ Daily News

Some 150 people gathered Wednesday evening in front of a Palo Alto bank to lend their support to the growing Occupy Wall Street movement that has zeroed in on corporate greed and rampant unemployment.

Organized by the Peninsula Peace and Justice Center, the rally in front of the Bank of America on El Camino Real was one of several that took place across the Bay Area on Wednesday.

image"This is an upwelling of frustration, a deep-seated desire for substantive change and a keen awareness of just how unfair and unequal our country has become," said the center’s director, Paul George, as protesters sang and waved signs at passing cars. "I expect to see these kinds of demonstrations happening weekly, daily."

As with the demonstrations in San Francisco and San Jose, the Palo Alto rally was held in front of a bank that received a federal bailout but foreclosed on jobless homeowners. "They got $45 billion in bailout money," George said, motioning to the Bank of America behind him, "and they continue to evict people from their homes."

imageOne reason the movement has caught on has been the 99 percent message.  Signs from the Occupy groups tell their stories, and the Tumblr blog We Are the 99 Percent allows anyone to send in a photo with their tale of financial fallout.  (Click the image at left for a larger view.) And there are so many of these stories.  The enormity of misery and how so many people ended up near-destitute in these tales is what sustains both the demonstrations and those who add in their stories to the blog.

Even in the Real Bay Area, where It’s Special Here, people are living paycheck to paycheck.  We’ve discussed some of these ideas on Burbed before, such as the banks’ imagefailure to foreclose on expensive homes, the huge amount of shadow inventory keeping home prices high, and the requirement for two incomes in order to buy even adequate housing.  Now rents are shooting up in both San Francisco and Silicon Valley.

For the most part, people who follow a real estate blog do so because they plan to buy or sell property at some point.  They are most likely in a better financial position than the typical resident.  So given that most of us are doing better than average (We Are the Top 50%), and that with incomes and home prices near the top of the entire country (We are the 1%), how are you feeling about your own financial prospects? 

imageWhat do you think about them now that a number of economists are admitting that yes indeed, we are in a full-blown Depression?  The drop in homeownership rates suggests a Depression as well.  Do you feel you’re the “rich” “they” want to tax, or do you consider yourself “middle class”?  Does “middle class” even make sense in an economy as atypical as ours, where a sixty year old tract house on 6000 square feet can sell for over $800,000?  Or a two-income family taking home more than $200K a year has little disposable income after paying for living expenses?  Or as someone recently asked on patrick.net, if you lost your job today, in how many months would you be homeless?

Comments (80) -- Posted by: madhaus @ 5:18 am

April 1, 2010

Just $469k! 3 bedroom, 1.5 bath SFH in a great school district! Affordable!

$469,000 – 526 KNICKERBOCKER RD, TENAFLY NJ

image

Property Remarks

POTENTIAL SHORT SALE! SUBJECT TO LENDER/BANK APPROVAL. RARE OPPORTUNITY ON A BRIGHT AND CHARMING WELL KEPT CENTER HALL COLONIAL HOME ON DOUBLE SIZE (145X138) LOT.THIS VALUABLE HOME FEATURES 3B/R,11/2BTHS,2DRIVEWAYS ,DEN AND HARDWOOD FLOORS THROUGHOUT. WALKING DISTANCE NYC BUS,PARK, SHOPPING,AND BLUE RIBBON DISTRICT SCHOOL.

Ha ha. Got you didn’t I? An $469k for a 3 bedroom, 1.5 bath single family house in a good school district? You’re out of your mind.

Instead, you’ll have to go to the “unaffordable” (HAH) east coast, especially that New Jersey where everyone is always complaining about how “expensive” it is to live there.

Take that NJ and your affordable homes in the nation’s best (not California’s best) school districts.

Just look at these lame stats:

image

Median Household Income of $118k? With house prices like this? Forget about it! (or…  fuhgeddaboudit). There’s no comparison!

The Bay Area continues to lead the nation in un-affordability, fair and square.

Congrats Bay Area!

Comments (24) -- Posted by: burbed @ 5:02 am

December 17, 2009

how do people afford homes in california

It’s search engine Thursday here!

Recently someone found this site by searching for: how do people afford homes in california

Unfortunately this site is Bay Area focused, so there won’t be as many answers for those who are in SoCal (who are inevitably celebs, agents, subprime mortgage ceo’s, etc).

Here in the Bay Area, the answers are easy:

  1. Hard work. Let’s face it, owning a home should not be a cakewalk. Therefore, working 60-80 hours a week seems reasonable.
  2. Entrepreneurship: The Bay Area is famous for its entrepreneurial spirit. So go, buy a house! Rent out 2 bedrooms! Rent out the garage! Rent out the driveway! Do all of the above!
  3. Cutting things out of your life. Like vacations! After all, you’re living in the Bay Area – why do you need to go on vacation? We’ve got (cold) beaches, great (outlet) shopping. We’ve got a Great WMall! We’ve got Chinese, Korean, and Indian food. Nope no reason to leave.
  4. Leverage. Buying in the Real Bay Area is a sure bet. It’s like investing in tech stocks, mbs, tulips, gold! It’ll never go down. So go ahead, borrow borrow borrow! The more you burrow into debt, the richer you will be!
  5. Pick the right parents. Pick the right year to be born. Duh!

Readers, how do you afford your homes in California?

Comments (39) -- Posted by: burbed @ 5:42 am

May 14, 2009

Santa Cruz is the 4th most unaffordable! 3rd for rent!

Despite falling prices, homeownership out of reach for many – Santa Cruz Sentinel
SANTA CRUZ — Even though the median home price dropped 37 percent last year, Santa Cruz County remains unaffordable for many first-time buyers.

Santa Cruz County is the fourth most expensive place in the nation to buy a home after San Francisco, New York and San Jose, according to Paycheck to Paycheck, a study released Thursday by the Center for Housing Policy, a nonprofit research organization based in Washington, D.C. The county also was found to be the third most expensive place in the U.S. to rent after San Francisco and Honolulu.

Locally, the median price of a single-family home plummeted from $630,000 in 2007 to $400,000 in 2008, but homeownership is still out of reach for households with income under $130,000, according to the center’s calculations. Meanwhile, a two-bedroom rental cost $1,590 a month on average.

[snip]

Pricey LIVING

Rank, 2008 Two-bedroom rental, 2008 Rank, 2007
1 San Francisco, $1,658 1
2 Honolulu, $1,631 11
3 Santa Cruz County, $1,590 6
Median home
Median
Rank, 2008 price, 2008 Rank, 2007 price, 2007
1 San Francisco, $575,000 1 $770,000
2 New York, N.Y., $455,000 7 $525,000
3 San Jose, $410,000 2 $649,000
4 Santa Cruz County, $400,000 3 $630,000
Tie Honolulu, $400,000 18 $409,000
SOURCE: Center for Housing Policy

Congrats to Santa Cruz!

Is it any wonder? With its beautiful, warm, beaches, its thriving high tech high income economy, is it any wonder why Santa Cruz is right up there?

I can list 10 reasons why everyone would want to live in Santa Cruz (assuming they couldn’t live in the Real Bay Area). Can’t you?

Comments (33) -- Posted by: burbed @ 4:16 am

September 24, 2008

We’re not #1: Millions spend half of income on housing

Millions spend half of income on housing – Yahoo! News

In San Francisco, more than one out of five homeowners with a mortgage spends half or more of their income on housing.

That’s also true in 13 more of the largest 100 metro areas analyzed by the Associated Press. Other places include California metro areas of Stockton, Los Angeles, Riverside, Oxnard-Thousand Oaks, San Francisco, and San Diego. Also in the top 10 are the Fort Myers, Sarasota and Orlando metro areas in Florida, and New York-Northern New Jersey-Long Island.

But the most cost-burdened homeowners in the country live the Miami-Fort Lauderdale-Miami Beach metro area: 58 percent of homeowners spending 30 percent of their income on housing costs, and 29 percent spending half of their income or more on housing.

Sigh. It’s nice that we got an honorable mention – but still I’m dismayed that we’re not in the Top 5.

We can do better. I know we can. Perhaps next year.

Comments (8) -- Posted by: burbed @ 4:42 am

June 1, 2008

Still not #1 in Most Unaffordable

NAHB: Indianapolis Maintains Title of Nation’s Most Affordable Housing Market
Other major metros at the bottom of the housing affordability chart included New York-White Plains-Wayne, N.Y.-N.J.; San Francisco-San Mateo-Redwood City, Calif.; Miami-Miami Beach- Kendall, Fla.; and Santa Ana-Anaheim-Irvine, Calif., in that order.

Among metro areas smaller than 500,000 people, the five markets at the bottom of the affordability chart were all located in California, starting with Salinas as the least affordable and followed by San Luis Obispo-Paso Robles, Napa, Santa Barbara-Santa Maria-Goleta and Santa Cruz-Watsonville, respectively.

<sigh>

New York continues to beat us. How depressing. Come on guys, can’t we rally and finally push our way to #1? Surely we can beat New York in terms of being unaffordable!

ACTION ITEM: Please ask all your European and Asian friends/family members to buy real estate here ASAP.

Together, we can win!

(Thanks to Burbed reader Pralay for this find…)

Comments (17) -- Posted by: burbed @ 4:51 am

December 19, 2007

SFGate: Bay Area is too Expensive. Burbed:Bay Area is too Affordable [Burbed.com]

The other day, a commenter named Martin posted this (edited) comment:

SFGate: Bay Area is too Expensive. Burbed:Bay Area is too Affordable [Burbed.com]
Look at this house:
http://www.movoto.com/real-estate/homes-for-sale/CA/Daly-City/1125-Hanover-St-100_728944.htm

I selected a decent house in Daly City. It costs $514,900. Other houses before this one I consider a junk.
Sorted by price from low to high. So, it’s 9th, out from 339.

[snip]

A tiny amount has a household income above 150k.

So, what can justify this kind of house pricing???!
Why it costs so much and who can afford it???!
Daly City is a dirty neighborhood with a worst weather on a peninsula.

I wouldn’t buy this house even for 100k!

Let’s look at the house he found:

 1125han.jpg

Hey that looks familiar!

Why, it’s from the famous “Yellow house that had me at hello” post from back in August…

And the original post back in January:

Wow! What a wild year it’s been!

Come on Martin – this house has already been reduced 39%. Buy it! It was meant for you!

Comments (15) -- Posted by: burbed @ 5:06 am