Real Estate “Flash Sales” Prove Market Is Hot

If you’re looking for a home in the Bay Area, you will probably need two things on your side: luck, and a lot of cash.

Those who aren’t willing to compete with up to dozens of other offers on a home are now trying to buy it – hours after it’s listed on the market.

The new trend has been dubbed by realty experts as “flash sales” – any sale that happens within 24 hours.

For example, a home in East Palo Alto on Gates Street was put on the market on March 19. It got nine offers the same day and sold for above asking price within 24 hours.

Glenn Kelman, CEO of online real estate brokerage Redfin which is set up in 19 U.S. markets, said that trend is growing in the Bay Area and calls it “Ground Zero” for an incredibly hot housing market, one that experienced an incredible boom at the start of 2013 in January.

I hate to be the kind of person who brags, but… well… told you so.

Oh, I forgot. We’re in the Bay Area. I need to humble brag.

I’m so amazed and honored to be proven right.

The Bay Area is back, baby. It’s Ground Zero!

Just how special?

Ken DeLeon, a realtor, said his latest listing is a 1200 square foot home in Palo Alto that he just put on the market Thursday. “The amazing part is just within 24 hours, we already had a client with a Chinese all-cash buyer offer us more than 300,000 above and we said, ‘No thank you, please wait,’” DeLeon said.

He and other realtors said they’re still catering to those wealthy foreign buyers, mostly from China and Russia; however, with historic-low mortgage interest rates and an inventory that’s also hitting record lows, they said the competitive cash offers are no longer limited to the high-end homes.

Hey Realtors – I gotta tip for you: Price the house in RMB. Why? There’d be even more opportunities to add 8’s to the price!

“There are sometimes traffic jams outside open houses,” said Kelman. “Folks get worried they can’t wait for the offer deadline on Sundays, so they make a preemptive strike to try and buy it on the spot.”

Forget waiting 3 hours to eat brunch at Mamas, or camping out 3 days to enroll your kids into pre-school… now you have to camp out a week to attend a open house.

Hold on for a sec.

I had to get a kleenex.

The tears won’t stop flowing.

This is so beautiful.

The Bay Area is back. Better than ever.

This is the year where the $ per square foot in the Real Bay Area will beat the average $ per square foot for Manhattan. You heard it here first.

Found while perusing The Atlantic Cities and submitted for your consideration need for a weekend giggle:

‘Rich Kid Who Wears Pastel Shirts’ of the Day: Connecticut

HENRY GRABAR | The Atlantic CITIES | MAR 11, 2013

Sometimes, the hive mind just does it better.

This weekend, thousands of Redditors brainstormed an exciting new method of stereotyping American regional identity. If the U.S. were a high school, which states would fulfill which high school stereotypes?

A few of the top answers:

Oregon, by DVDAmoog: "Oregon is that white dude with dreadlocks."

Washington by GoopyCheese: "Washington would be that awesome kid who’s cool enough to roll with the cool kids, but not too cool to hangout with the weird kids."

Alaska, by JoeTromboni: "Alaska is the fat kid with a beard who wears flannel, and gets A’s in shop class."

Okay, you get the idea: let your worst stereotypes run wild. We’ve included the link to Reddit so you can find more, but while this is a fun game, we need remember that on Burbed, all real estate is local. What would each city or neighborhood in the Bay Area be like if they were a typical high school kid?

Let’s see…

Alviso is the runty guy on reduced lunch who lets off Silent But Deadlies on the staircases. Even Milpitas won’t sit next to him anymore.

Emerald Hills (Redwood City) are twin girls. One wears Juicy Couture and tries to hang out with Woodside and his gang but they usually blow her off.  The other Emerald Hills girl buys her clothes at Goodwill, cuts most of her classes, and spends all day in the Art studio.  Nobody can figure out what she’s making.

Mission San Jose (Fremont) used to be a pretty fun dude but once he got those 2380 SATs back he’s just unbearable.

Go.

San Francisco’s Mission District is Hipster Central for the Bay Area.  (Also mentioned: The Uptown, Oakland.  But that’s in the East Bay, so fuhgeddabowdit.) A recent New York Times column (motto: We Still Think New York Is Important!) notes that not all the East Coast Hipsters are found in Brooklyn’s Williamsburg district, either.

Creating Hipsturbia

By ALEX WILLIAMS, The New York Times
Published: February 15, 2013

Illustration: Ryan Inzana

A yoga studio opened on Main Street that offers lunch-hour vinyasa classes. Nearby is a bicycle store that sells Dutch-style bikes, and a farm-to-table restaurant that sources its edible nasturtiums from its backyard garden.

Across the street is the home-décor shop that purveys monofloral honey produced by nomadic beekeepers in Sicily. And down the street is a retro-chic bakery, where the red-velvet cupcakes are gluten-free and the windows are decorated with bird silhouettes — the universal symbol for “hipsters welcome.”

You no longer have to take the L train to experience this slice of cosmopolitan bohemia. Instead, you’ll find it along the Metro-North Railroad, roughly 25 miles north of Williamsburg, Brooklyn, in the suburb of Hastings-on-Hudson, N.Y.

So, barring any proper large city, where would hipsturbia be in the Bay Area?  Is Palo Alto too expensive to qualify?  Is Larkspar too tilted to aging hippies?  Could Hayward, City of Diversity, take the title of the “twee lifestyle”?  How can people who don’t want to be like everyone else find meaning in a subdivision full of identical tract housing?

Well, they can’t, that’s the point.  The challenge is to find low-density but non-conformist older single-family housing.  Or at least older and idiosyncratic housing amid primary low-density population centers and front yards.  We’d say look for neighborhoods near funky downtowns, with low Walk Scores or lots of bicyclists.

We bet you could find something appropriate near the downtowns of Mountain View, San Carlos, or Willow Glen.  Where would you suggest?

Meanwhile, this is also your weekend Open Thread, to discuss any hipster sightings in the Open Houses you’re reporting on.

This is why.

This is Zillow’s map of negative equity by county in Central California.  The more red, the more they bled.  You can look at the map by state, by county, and by zip code.  At the county level, we can see that the only Bay Area regions that aren’t about to terminate from failure to clot are Santa Clara, San Mateo, San Francisco and Marin Counties.  Santa Cruz County is looking a little pink around the neck (it’s 22% underwater) but it’s downright alabaster compared to the abattoir north and east of San Jose.  Here are the county by county numbers for 2012.

And here’s a live version for you to play with, although you can also head over to Zillow and see it in action wherever you want to examine.

Sometimes a picture explains what words cannot.

Rising home values push more Bay Area homes above water, Zillow says

By Pete Carey, San Jose Mercury News

Posted: 02/21/2013 06:26:11 AM PST, Updated: 02/21/2013 06:26:39 AM PST

Rising prices pushed thousands of Bay Area homes back above water last year, according to a report released Wednesday, another sign that the region's housing crisis is easing as the economy recovers.

The report, by the housing website Zillow, shows drops across the region in the number of homes that are underwater — worth less than the value of their mortgages.

More than 56,826 homes bobbed back above water across seven counties of the Bay Area in 2012, Zillow reported. That still leaves 205,986 homes with a total negative equity of $31.5 billion.

Now let's see the graphic. See? Fewer homes are underwater! That means more of them are Special, so more are also in the Real Bay Area! They must be making more Real Bay Area land.

Glad we could clear this up.

Today we’re going to have a look at a realtard’s piece over on Trulia’s blog.  Thanks very much to Burbed reader Real Estater for letting us know about this essay.

Tough Year Ahead: Top 10 Issues Facing Bay Area Buyers

East Bay Real Estate Focus — Providing Definitive Information for the East Bay Area
By Carl Medford | Agent in Fremont, CA
Posted under: Market Conditions in Alameda County, Home Buying in Alameda County, Home Ownership in Alameda County  |  January 26, 2013 8:22 AM  |  257 views  |  1 comment

“TWO recent national surveys of real estate agents suggest that first-time buyers are on the decline, their access to the housing market blocked by tight credit and eager investors,” states Lisa Prevost, of The New York Times (12/20/212).

Old news. In fact, I’ve been saying the same thing since August, 2012.

Truth is, no one knows exactly how many have decided to sit things out a bit until the market calms down. Although we’ve seen a decline in the number of buyers “actively in the hunt,” in reality, there are not “fewer” first-time buyers – if anything, there are more. LOTS more. The problem is that less of them are actually managing to buy a home, and, unfortunately, that’s the primary statistic that is being measured. No one is sitting outside open houses counting the bodies as they hit the front door and then compiling the numbers to a national database. If they did, a much different story would be on the evening news.

Buyers trying to purchase a home in the existing market conditions are facing into the teeth of a perfect storm, real-estate style, and it doesn’t appear that it will be ending anytime soon.

Here are the Top 10 issues facing Bay Area buyers:

Actually, as realtard happyprop goes, this is a little bit better informed than most.  It does say something other than “NOW IS THE TIME TO BUY,” and best of all, the disturbing faceless and sexless icons include the ever-popular, we swear we are not making this up, Dude With A Suitcase Full of Cash.  We know you won’t believe without seeing, so here he is.  (And from the minimal clothing, it’s either a Dude or it’s Annie Hall.)

Here’s that Top Ten list. If you’ve been a regular reader of Burbed, none of these should surprise you.

1. Sorry, you missed the bottom.  Sucks to be you.  Medford says February 2012 was the official bottom.  Maybe it was… in the East Bay.
2. Inventory? What inventory?  Raw meat, here’s the sharks.
3. Prices are going up.  Some areas are up 40% from last year.  Actually, if Mr. Real Estate Person had read the actual data instead of just looking at a piece in the Chron, he’d have seen that some areas are up a lot more than 40%.
4. Lots of cash buyers out there.  Yeah, and not just in the hellhole that’s the East Bay.  RBA too, only these aren’t investors.  On this item the realtard confuses the difference between “Central County” (probably Alameda County given the link) and the entire Bay Area in claiming 30% of all offers are cash.
5. Crowds lead to multiple offers.  Take low inventory and desperate sellers, what do you expect, other than the author citing hard numbers with his opinion columns from a different site.
6. FHA or VA buyer? Don’t even bother in this market; even conventional buyers are losing out to Mr. Suitcase.  And Mr. Suitcase doesn’t care about appraisals.
7. New homes are in demand again – according to CNN, that is. That doesn’t apply to the RBA because they still aren’t making any more land.  Why the realtard didn’t quote this local story in his own backyard is left as an exercise to the reader.
8. Appraisers haven’t a clue prices are up, which is preventing prices from going up even faster.  Includes helpful link to another of his columns mostly about packed open houses with one throw-away graf about appraisers.  What stayed with us was the tsetse flies.  But there was something useful mentioned: appraisers were blamed for the last bubble, and they’re not ready for this one.  Yet.
9. Banks are mucking up your loan even more than usual, although the link provided explaining the loan approval process doesn’t look to us like anything has changed much.  We suppose if you’re a realtard remembering the glory days of If You Can Fog This Mirror You Can Buy This House, you’d have a different opinion.
10. Bank underwriters especially are being poopy-heads, and Medford’s happy to give some examples. Most of them look like underwriters working through a pile of documents, marking off inconsistencies, and resolving them later, where later is some period greater than the five minutes realtards think is appropriate.

While we are perfectly capable of posting house after house in the five mile radius of The Googleplex, we would never confuse the RBA with the entire Bay Area.  Just because an agent can write a column even longer than one of ours doesn’t mean he won’t commit the Fallacy of Composition.  The East Bay isn’t the entire Bay Area any more than the South Peninsula is.  Market conditions vary, so may your mileage, and definitely will housing prices. 

But we can guarantee there will always be some real estate professionals out there who take a few shortcuts.  Let’s give this one a golf clap for giving the appearance of a housing market review, even if he found ten different ways to say You Are Now Priced Out Forever.

Here’s some news from the Merc (motto: Also available on paper!) that won’t come as a surprise to anyone who studied economics.

Bay Area rents are flattening out, new study says

By Pete Carey, San Jose Mercury News
Posted:   01/21/2013 05:47:55 PM PST; Updated:   01/22/2013 05:25:31 AM PST

The torrid pace of rent increases in the Bay Area is slowing, according to a survey of apartment complexes released Monday.

Average rents in the East Bay, Peninsula and San Francisco were nearly unchanged in the fourth quarter of last year and declined slightly in the South Bay, according to RealFacts, a Novato consulting group that tracks rents in apartment complexes with 50 or more units. That compares with the first half of the year, when some areas saw quarterly increases of 4 percent.

Some renters may be deciding that interest rates and low prices have made the time right to buy a condo, and that may account for some of the leveling off of rents, a RealFacts representative said. Occupancy rates for apartments have flattened out while condo sales were in the double digits in December from a year earlier in Alameda, Contra Costa, Santa Clara and San Mateo counties.

This is supply and demand.  If people are buying houses, then they don’t need apartments.  If people are buying houses, they don’t need to rent them, either.  So who loses in a hot housing market?  The landlord.

Are you noticing rents flattening, or even going down? Are more people moving because they bought something, or do new renters spring up instantly to replace them?  Are your rental properties still generating long lines and people offering to fight each other for the right to write you checks?

More complaints that living where it’s Special isn’t all rainbows and unicorns:

Bay Area’s business climate is less friendly to startups than other parts of California, says study

By George Avalos, Contra Costa Times
Posted:   10/18/2012 10:43:17 AM PDT, Updated:   10/19/2012 08:10:22 AM PDT

Relatively expensive housing, coupled with the high cost of living and doing business in the Bay Area, has made the nine-county region less hospitable to new companies than other big urban centers in California, according to a study released Thursday that urges improvements in what it describes as this area’s burdensome regulatory climate.

“You have to ease the regulations that people face when they want to launch a new venture,” said Jon Haveman, chief economist with the Bay Area Council’s Economic Institute, which produced the report. “If somebody is trying to start a small business and spend a small fortune on a new home, they will probably start that business elsewhere.”

The Bay Area lags major rivals such as Los Angeles and San Diego in jobs created by startup companies, the study determined.

The strengths of the region are reflected in household income and other factors, the report stated. The region has increasingly specialized in high-value industries such as professional, scientific and technical services, along with information services and products.

So what the Institute is complaining about is it’s difficult to start cheap-ass startups where it’s expensive?  That isn’t a bug, that’s a feature.  If it’s expensive to live here, it should be expensive to work here. Besides, if you need money for a lower-capital startup, you should sell one of your vacation homes, or write put options for what’s under all the couch cushions at your furniture factory.

The article waits until graf 7 to admit there’s no problem with the Bay Area job market after all. Actual quote from report: “The Bay Area economy is one of the most productive and prosperous in the country.”  Sounds awful. Then again, engineers are being bought and sold like excess office furniture by a Bain Capital-funded startup, which decided staying in business was too much trouble.  The buyer?  Apple.

We swear we are not making any of this up.  Let us know of your ease or difficulty in starting a business in the Real Bay Area (summary: 90% say it’s Special here even though it’s expensive. So?)  Or read the full 68 page report yourself, and comment on it before falling asleep.  Or discuss anything you wish in this Weekend Open Thread.

Movoto’s blog has some pictures today that illustrate the disconnect between listing copy and what the house actually looks like.  They’ve encouraged other blogs to share it so here it is.

Are there any phrasings you’ve noticed particular to Bay Area homes?  The first one we’ve noticed right away, having moved here from somewhere else.  And almost everywhere else this expression does not mean what they think it means.

The others are just part of the pleasure of living in the RBA, like paying more for the same groceries.

Some RBA Realtardese

Lingo	What you think it means	What it actually means
Huge Yard	Acres and acres of space	There IS a yard.  At least a yard wide.
Close to transportation!	Three blocks from the bus	Close to freeway.  Real close.
Location, Location, Location!	Best part of town	Convenient to emergency psych ward

Now it’s your turn!  If you can provide pictures as well, we’ll add them into your comments for you.

This image from SFGate shows eight lightning bolts hitting the Bay Bridge on April 12th.  How did you enjoy nature’s fireworks Thursday night?

You can also discuss this New York Times piece observing that California’s North/South divide is overblown.  The real divide is West versus East, and we coastal huggers are doing fine economically.  Inland is a much different story.  Stockton is looking into bankruptcy.  People moved inland, but the jobs didn’t follow, and then the housing values collapsed.  The coastal regions are more politically liberal and more eager for environmental policies that inland residents object to.  And geographically, a beach is not a desert.

This is an Open Thread.  How’s your weekend going?  Seen any good Open Houses lately?  How about those local sports teams, eh?