August 19, 2012

Bye Bye Bubble

Here’s some sobering news for those of you expecting the Facebook Effect to rescue the Real Bay Area’s housing values.

Zuckerberg Admits Facebook’s Plummeting Stock Is ‘Painful’ To Watch During A Company-Wide Meeting

120817-facebook-zuckerbergSeth Fiegerman, Business Insider  | Aug. 17, 2012, 6:43 AM

Facebook is finally acknowledging that its employees may be just a little bit concerned about the company’s plummeting stock.

According to The Wall Street Journal, Facebook CEO and cofounder Mark Zuckerberg admitted that the stock’s decline is “painful” to watch for some employees during a company-wide meeting earlier this month.

The meeting itself was reportedly part of a larger initiative to boost company morale. Zuckerberg had previously avoided talking about the stock with employees, preferring that everyone stay focused on their work, but in recent weeks, Facebook’s senior management started worrying that the stock’s poor performance might hurt employee performance.

Guess watching Facebook’s plummeting stock is just fine from the comfort of your own office.  But don’t count on cashing in those options to buy yourself an RBA mansion.  The employee lockup period is still in effect, but early investors are dumping shares now.

Now check out this article, from the same publication.

DEAR FACEBOOK EMPLOYEES: Here’s The Truth About Your Stock Price

120817-facebook-zuckerberg-2Henry Blodget, Business Insider  | Aug. 17, 2012, 11:59 AM

Facebook’s stock has dropped by half since the IPO three months ago.

And the stock price is now well below the level at which most employees have been granted stock in the past 18 months.

This means that most current and former Facebook employees are worth far less than they were a few months ago.

Facebook’s stock crash is also hurting morale at the company, and damaging perception of the company’s business and brand. The impact is big enough that Facebook CEO Mark Zuckerberg, who has been crystal clear about his desire to ignore the stock price, admitted at a company meeting that the stock crash has been “painful” for everyone.

Here’s the important consideration from this more in-depth piece:

With the Facebook employee lock-up releases coming in October and November, this isn’t just an issue of morale and “paper net worth.” Current and former Facebook employees have been counting on the stock to buy things (houses, for example). So it’s a matter of near-term financial planning.

So, are home values dropping in Facebook-friendly commute zones?  Let’s have a look.  First, here are Redfin’s stats for Palo Alto home sales.  The advantage of Palo Alto over Menlo Park is that there are very few questionable areas in the former.

120817-facebook-pa-redfin

120817-facebook-mp-altosYou could look at the listing prices one of two ways.  Either the 22% post-IPO listing per-square-foot increase was nothing but irrational exuberance, or Spring Bounce was unusually quick this year.  If we exclude the May and June numbers, we could look at the chart as showing a slow climb for 2012.  That’s if you ignore the 18% drop between mid-January and mid-February, though.

120817-facebook-mv-zillowAltos Research’s Market Action Index agrees with this graph, showing a peak right at IPO time and falling back almost (but not quite) to 30, which is a balance between a buyers and a sellers environment.  (31 indicates the ball is still in the sellers’ court.  Mostly.)  The MAI graph above is for Menlo Park, or ground zero for Facebook.

Unfortunately Zillow’s valuation tools are too laggy to show the post-IPO collapse, with the most recent valuation dated to June.  We’re looking at Mountain View this time, which is no doubt polluted by the conflicting Google Effect.

How would you recommend we best demonstrate whether Facebook stock’s disappointing results are affecting the RBA housing market?  What statistics would you recommend, and from where?  One thing we’re seeing is fewer homes going into Double-Secret-Probation Pending-Do-Not-Show status where the listing photos get yanked until the home closes.  And that’s good news for all fans of this site.  Not only does a picture equal a thousand words, it also equates to many more thousands of dollars.

We aren’t going to say in which direction those thousands are moving.

 

Comments (28) -- Posted by: madhaus @ 5:01 am






November 26, 2011

Sawbuck measures Market Health, drunk-dials 911

imageThere are several real estate search sites out there that let you peruse homes on the Multiple Listing Service.  Regular Burbed readers may have have noted we’re partial to RedfinZillow gets noticed for their ZEstimate, an automated model that attempts to value most homes in the United States.  Some of our fans like Trulia, as I get the occasional submission pointing to their site.

imageI just took another look at Sawbuck when I put a recent feature together.  Sawbuck is a Washington DC-based site that partners with local agents in several regions, including the Bay Area.   Until I found their listing information last week, I figured Sawbuck links were just nuisances. Google searches for property addresses pointed to Sawbuck’s very silly videos that were animated frames for MLS photos and information. 

But this time they had a very detailed page on the house I was checking out.  The videos were gone, even when Google pointed to embedded players.  They also had something I haven’t seen on any of the other sites before.

Their pages for each city have a Market Overview, showing how many homes are for sale, the median list and sales price, ho-hum, seen it.  But I hadn’t seen a Market Health Score on a city’s real estate activity before, at least not on a site that links to individual home listings.  Altos Research does something like that called the Market Action Index (MAI), but they’re in the Useless Aggregate Data business.

So how is the market doing in the Real Bay Area?  Let’s have Sawbuck and Altos fight it out, after the break!

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Comments (1) -- Posted by: madhaus @ 5:04 am