October 14, 2013

We’re #1! We’re #1! We’re… PRICED OUT FOREVER!

Yesterday we shared a San Jose Mercury News (motto: Website now as thin as our newspaper!) piece showing many first-time buyers are going to remain full-time renters for the time being.  And that’s true even if we spot them places like Hayward and Mountain House.

That’s distressing news if you hate your blood-sucking landlord (but we repeat ourselves), your noisy neighbors, or your shiftless property “manager.”  Let’s balance that cup of cold crappy colloquy with some news that will turn your frown upside down.

Where Can the Middle Class Buy a Home?

131013-sf-least-affordable-ggbBy CONOR DOUGHERTY, The Wall Street Journal

If you’re in the middle class and want to buy a home here’s a piece of advice: Move to Ohio (if you’re not already there).

Some 86% of homes in the Akron, Ohio area are within reach of middle-class buyers in the area, the highest share in the nation, according to a report from Trulia, the real estate listings site. The next two cities on the list, with 85% of homes affordable to middle class, are Dayton and Toledo, respectively.

For those of you in the coastal elite who are reading this post for the perverse pleasure of finding out just how unaffordable your city is, you might be surprised to hear that New York isn’t No. 1. San Francisco is the least affordable place to be a middle-class buyer, with only 14% of homes within reach of those making the median San Francisco household income of $78,840, according to Trulia.*

However, we were slightly surprised by the next two most unaffordable places, Orange County and Los Angeles, respectively. New York was the fourth least affordable place to be middle class. After that were San Diego and San Jose and Ventura County.

Sooooo, SF is #1 but Silicon Valley is #6? But note, California completely PWN3D New York and the entire East Coast in the unaffordability sweeps. Washington DC? Shut out by the shutdown. Later, you imperialist running dogs no longer feeding at the public trough for the next few days!  When it comes to places nobody can afford to live in, we can revel in our Specialness!

131013-sf-least-listThe Trulia link above (yes, of course it works) says that while San Francisco has a 60% higher median income than most-affordable Akron, Ohio, homes there sell for (deep breath, now) seven times as much.  Only 14% of homes for sale are affordable to a household earning median income for the area.  Even worse, whoops, we mean better, San Francisco has dropped ten more percentage points in affordability since last October when 24% of homes could be purchased by a median income household.

To get slightly wonky, the real formula was what percent of homes’ monthly payments were 31% or less of the median household income, which shows the problem right there.  Everyone knows if you want to buy a house in SF, Cash is King. Monthly payment? Might as well ask if they’ll sell you the house for a hogshead of buggy whips.

San Jose’s affordability index per Trulia was 31%, but then again, none of the contenders were anywhere close to SF.  Second-place Orange County came in with only 23% of homes rated affordable by the “middle class.”

Trulia also provided a “maximum affordable home price” for each area.  Let’s take a look at what you get for that price.  Here’s a 5 BR/3 BA in SF at only $10K less than the maximum affordable amount. Of course this house is in Bayview and it has some permit issues, but you can’t have everything.


Contrast to how far your dollar S-T-R-E-T-C-H-E-S in San Jose!


Wow, a gated estate with lots of CAPITAL LETTERS and it’s yours AS IS, which means the seller won’t switch houses on you!  And just for giggles, let’s see what an “affordable” house in Akron (highest affordable house: $226K) looks like.


OMG look at that house! Those bricks are going down into a big ol’ pile as soon as The Big One hits! Not only that, it would take at least a couple more hours to get to Google from here than the other two houses we showed you.  And when you look out in the boonies like this, notice what you don’t get: a decent fence around the place to keep the nosy neighbors away.

We won’t even get into the difficulty of transferring into Cupertino schools.

Comments (8) -- Posted by: madhaus @ 7:08 am

December 12, 2012

Opportunity in Bayview! Buyer To Investigate To Their Satisfaction

121211-gilman-250KToday’s feature caught our eye on a political site’s discussion area that doesn’t usually get into real estate. The topic was those disadvantaged $250K a year families who are going to get dinged with new taxes, which is so unfair!  These put-upon engines of economic advancement are hardly making it!  Why after spending all their take-home pay on a high-priced mortage or rent payments, private school or college tuition for the kiddies, sky-high taxes, fully funding their retirement plans, restaurants, gifts, vacations, clothing, cable (of course including HBO and Showtime), utilities, cleaning services (housekeeper and pool) 16 cell phone lines, internet, car payments for the new BMW, the current Mercedes and the old (2011) Audi, why before you know it these unfortunate folks in the top 5% are barely clearing anything!

Fortunately, one of the respondents noted that living in San Francisco really did not have to cost so much.  We thank our political participants for pointing us to this house.

121211-gilman-trulia1055 Gilman Avenue
San Francisco CA 94124
Price:  $200,000

Bedrooms: 2 
Bathrooms: 1
63 days on Trulia
Property type: Single-Family Home
Size: 950 sqft
Lot: Ask agent
Price/sqft: $211/sqft
Year built: 1908
MLS/ID: 401812
Neighborhood: Bayview, 94124

Opportunity In Bayview! Close To Gilman Rec, Brete Harte Elementary And Steps To Candlestick Park. Some Interior Walls And Flooring Have Been Removed. Buyer To Investigate To Their Satisfaction. Property Is Not Being Shown At This Time, Please Check Back After October 29Th.

While the property is still Not Being Shown At This Time, seeing is believing!


This home has potential all over, especially In The Electrical Wiring.  You’ll have no trouble confirming this, what with Some Interior Walls and Flooring helpfully Removed.

Comments (29) -- Posted by: madhaus @ 5:04 am

November 27, 2011

BLACK FRIDAY DEALS: Cheapest House in SF!

It’s Thanksgiving Weekend, and we’re scouring the MLS, looking for the best DEALS out there.  You can even find DEALS in hard-to-buy-in San Francisco.  How about a HOUSE for the same price as the cheapest house in San Mateo County?

Can do!  Just remember that we’re in San Francisco, so their definition of “house” is a little different than what we’re used in the ‘burbs.

1881 Oakdale Ave, San Francisco, CA 94124


SQ. FT.: 1,090
$/SQ. FT.: $91
PROPERTY TYPE: Single-Family Home
STYLE: Victorian
COUNTY: San Francisco
MLS#: 387365
SOURCE: San Francisco MLS
STATUS: Contingent
REDFIN: 131 days

Probate Sale with limited authority requiring court confirmation. The subject property is in major disrepair and listing agent has been told that access can’t be provided, and that it may not be safe to enter the property. (no showings) There may be roof damage and fire damage, etc. It is highly possible that the highest and best use is as a tear down for lot value. Ratified @ $95,000 w/ No Contingencies, All Cash, 10 day close, buyer to pay transfer tax, title, escrow, and buyer to take responsibility for all point of sale compliances, As Is. Court Date for Overbid Feb 6th, 9am @ 400 McAllister SF. Must have Cashier’s Check at court. Disclosure package available and overbids will be on same terms, no contigencies!

imageThe listing says “no contigencies,” yet the status is Contingent.  Maybe this house was a Zen Buddhist retreat and you’ll have to listen to the sound of one hand clapping.  Or the sound of one “n” present.

So what does Contingent Status mean in a listing?

This means the sellers have accepted on an offer on the property, but success may still depend on passing a home inspection or the buyer’s financing approval. It may still be possible to tour these properties and submit a backup offer in case the current one falls through.

Given the condition of that staircase, just about anything could fall through.  You just can never tell.image

Lot value only?  Note the lot size above; nothing could be bigger. The public records say the lot size is a whopping 1642 square feet.  Plenty of room to build a rental apartment in the back!

Comments (3) -- Posted by: madhaus @ 4:05 am

May 16, 2011

I Left My Equity in San Francisco

burbedguestbloggerPlease welcome Burbed reader SEA back to the front page with a piece that got held up in comment moderation.  SEA agreed to let us move this to the the featured listing of the day instead, so you could all enjoy every bit of this, um, amazing, um, uh, well read on for today’s Guest Blogger’s view.

Please give SEA a big, warm Real Bay Area welcome and check out this amazing price cut incredible value in Baghdad by the Bay!

Here’s a prime example of a not of money lost, but I’m happy it’s not my money:

627 La Salle Ave #73, San Francisco, CA 94124


SQ. FT.: 1,360
$/SQ. FT.: $55
PROPERTY TYPE: Condominium
STYLE: Traditional
VIEW: Panoramic, Bay
COUNTY: San Francisco
MLS#: 377644
SOURCE: San Francisco MLS
STATUS: Pending
ON REDFIN: 203 days

Sold: July 2005 $400k
Listed: October 2010 $100k (75% lower than last sale–Christmas in October, maybe?)
Listing price reduced: January 2011 to $75k

imageIt did go pending in October 2010, so who knows what’s up with the January price reduction, but who was it that paid $400k for this place, and when will it be worth $400k again, even if the local/national economy suddenly looked very good? I sure don’t see a neighborhood suddenly going from $100k sales to $400k sales (to get back to 2005 pricing), and then, for those who purchased in 2005, it would need to go significantly higher to realize a reasonable return on investment. Here it is some six years later, and let’s use the “double every 10 years” standard, that suggests that this place would need to sell for $800k in just four years. Yes, that’s right, from under $100k to ~$800k in four years. The freakin’ RBA cannot compete with that.

imageAlternatively, Let’s say the price does not go from $100k to $800k in four years, but rather the selling price doubles in four years. This means that similar homes in the area would be worth ~$200k, so those who purchased at $400k would be down 50% after 10 years. And I think I’m being a bit generous to suggest the prices will double in that area in just four years–first prices need to stop going down, and then double.


All this while people kvetch about an extra buck for a gallon of gas. You know the routine: So many complain that gas is ‘unaffordable,’ yet they dream about buying million dollar homes. Million dollar homes cannot be the problem–let’s go to war over a few bucks each week in gas expense.

And before you tell me how special this place is on the lower end, there is at least one other in that area: 132 Dolphin Ct.

Purchased June 2005 for $410k.
Sold February 2011 for $108k.

Is that close enough to say 75% off? When will the selling price get back over $400k?

I know:

empty houseEvery home is sacred.
Every home is great.
If a home is wasted,
God gets quite irate.

Every home is wanted.
Every home is good.
Every home is needed
in your neighborhood.

God loves those who treat
their homes with more care.

Comments (23) -- Posted by: madhaus @ 5:15 am

March 17, 2006

Reader Mail: He’s leaving the area, folks

A reader sent me an email, linking to this exact same house I posted earlier:

San Francisco — Burbed.com: Your Silicon Valley Home and Mortgage Insanity Blog

This is what the reader (thank D.L.) had to say:

so i just figured i can (finally) afford a $800,000 mortgage and booked a condo in south beach for $880K + costs to move in April.  then, i became insomnic for about a month thinking about paying $1098/sq ft for a place to lay my head in between days of working hard to meet a $7000/mo bill (including $900 HOA) and i pulled out of the condo….so, then i recently started (again) a search for housing in SF….onward to the www.sfarmls.comwebsite and searched for ANY single family house ANYWHERE in SF that was

i’m not certain whether to laugh or cry.  most of me is crying…..this charming little shotgun cottage was either left on the slab of cement by a neglectful owner or stolen from the train set at Macy’s over Christmas….i’ve simply copied this from the MLS and am not making this up.  for a HALF-A-MILLION dollars, you can take prideful ownership of this “well-maintained victorian” (in the only area of SF that you are likely to get shot while driving home) and continue to rent it to SECTION 8 tenants with tenants rights!  gee, what a charmer.  what a “super chance for investment and for first time home buyers”, just like me!
i’ve been in SF 5 years now and i still can’t figure out how to buy a place here on an income that would make me a king anywhere else but manhattan.  like a lot of confused, educated, productive people, i too will be leaving soon.  sanity is nowhere to be found here.  a shame.
what’s most bothersome about this is that anyone that also found this place is just more competition!  it wasn’t the only house under a million….there are other pieces of junk out there too…and a line of people looking to pay for them.
[snip] and therefore, i’ll be heading somewhere else where my friends make $500K and have homes.  i always wondered why the people i meet here are either starving artists living in the mission or incredibly wealthy people that made it in the 90s or moved here with their parents money.
even NYC seems more real.
i like your site, and will be back.

Thanks for the mail! Keep’em coming!

Click here to post a comment -- Posted by: burbed @ 7:00 am