February 9, 2013

More Bubblicious Signs of Bubbling Bubblicity

Sometimes, there’s a message out there with your name on it, so you get hit on the head with it again and again and again.  Here are some of the messages we got yesterday, and they all add up to the same thing.

130208-bubble-foreclosureFirst, looks like HELOCs are coming back.  No, they’re not at the insane rate of the glory days of 2006, but there’s more in 2012 than 2011.  So that’s something for us to keep an eye on. 

One of the problems with HELOCs was HELOCity, where every homedebtor used the line of credit not for major home improvements or emergencies, but as a full-time ATM.  People bought a lot of giant-ass SUVs and vacations and bling using the equity in their homes.  Why would they do something that stupid? Do they really think they’d never have to pay it back?  Some of us actually do remember when second mortgages were subprime mortgages throughout the industry.

Speaking of subprime, you know what else is back? Subprime mortgages! That article we featured last weekend on the Dignity Mortgage wasn’t the only sip of subprime sangria.  Gotta love this quote:

The Revival of Subprime: Will This End Badly?

By Matt Clinch | CNBC – February 8, 2013

The sub-prime market – risky mortgage backed securities – is hot again and its revival is exceeding many people’s expectations, the chief market strategist at Rosenblatt Securities says. He believes this will end badly.

The subprime mortgage crisis which led to the financial crash of 2008 involved institutions making loans to those that had difficulty maintaining their repayment schedule.

Wall Street brokerage firm Rosenblatt – which has been monitoring the situation since the last storm – says the credit-led bull market is well under way.

"The subprime market’s revival is proving to be even stronger than we had anticipated," Brian Reynolds said in a research note. "This is just a credit cycle, and it will eventually end badly like the others."

We are sure you are thinking the same thing we are: How can we best profit from so many other people’s stupidity?

130208-bubble-pamaiNext, several different reports of an increasingly skewed seller’s market.  We’ll have one up bright and early to start the week, and it’s a doozy.  Here’s a smaller example, an on-the-ground report from Definitely Not the Real Bay Area.  This poor agent says she listed a Blossom Valley property and now her phone is ringing every ten minutes.  Won’t someone let her get some quiet time and please offer twice the asking price already? 

130208-bubble-downpaymentBuyers now have to write beg letters to get noticed when there’s 40 offers on the table. And who can forget the lottery line for just 4 Gale Ranch models in San Ramon.  Need we remind you, Gale Ranch is not only in the East Bay, it’s in a place where they are still making more land. 

If you haven’t already seen this 2007 (!!!) video, enjoy it.  And if you have, sing along, because HERE COMES ANOTHER BUBBLE.

Comments (32) -- Posted by: madhaus @ 5:05 am






September 2, 2012

CNBC: You’re Doing It Wrong in the RBA

Yesterday, we took a look at a CNBC piece on the difficulty of finding a million dollar home in the Real Bay Area, and how badly they missed the real story.  Two days later they tried again, and ran this piece (below) on Friday.  Not even close but no cigar, CNBC. More like in Lodi with little to smoke. 

Take a gander at this piece, clearly written to complement their first article, and discuss whether your like their housing examples or Burbed’s examples.  (Hint: the correct answer is CNBC.  That is if by “correct” we really mean “completely wrong.”)  They had the right idea, but they just couldn’t find the listings that show how awesome the RBA is.

What $2 Million Buys You in Silicon Valley

By Robert Frank and Paul O’ Donnell | CNBC – Fri, Aug 31, 2012 11:21 AM EDT

120901-cnbc-2-saratogaSilicon Valley’s dynamic, tech-based economy has inflated home prices in the area for more than two decades. But lately, thanks to a rash of IPO’s and the mobility of global wealth, relatively modest properties in the suburban towns south of San Francisco have been going for mansion-like prices.

Sales of homes for $1 million or more doubled in the towns south of San Francisco in the past year, passing Beverly Hills and Miami, where the sumptuous palaces snapped up by the rich look more the part.

The current boom is not the result of an avalanche of tech start-ups. Instead, the Valley has been flooded by employees of established companies like Facebook and Google, who enjoyed a personal “liquidity event” when their companies went public in the past few years.

This article is basically the other article, sentences scrambled around, and a few pictures of presentable homes to go with.  There is one and only reason we alert you to this article, and that’s the wretched hive of scum and villainy called the comments.  It’s the usual “Silicon Valley has fine dining, beach, mountains, biking all close by, and the weather is fantastic” versus “Are you kidding, I can buy a house like that for $105K here in East Fumbuck, Nebraska!”

Yes, but then you have to live in a house in East Fumbuck, Nebraska.

 

Comments (34) -- Posted by: madhaus @ 5:05 am

September 1, 2012

We’re Number One! We’re Number One!

Here’s a cheery news item, submitted by Burbed reader wahnny.

Silicon Valley’s Boom Creates Shortage of $1 Million Homes

120831-cnbc-losaltosPublished: Wednesday, 29 Aug 2012 | 10:22 AM ET
By: Robert Frank, CNBC Reporter & Editor

The home of venture capitalist Kelly Porter in Los Altos, photo, right.

The capital of high tech is now the capital of high-priced real estate.

Silicon Valley currently leads the nation in the number of homes sold for $1 million or more, according to Realtytrac. Sales of $1 million-plus have more than doubled in many communities in the Valley this year, toppling longtime luxury real-estate leaders like Beverly Hills or Miami.

Topping the list is Saratoga, Calif., in Santa Clara County, which had 225 homes sold for $1 million or more. That marked a 162 percent increase over last year.

Ranked second was Burlingame, Calif., which had 211 sales of at least $1 million, more than double last year’s rate. Cupertino and Los Altos ranked third and fourth in the nation, with 175 homes and 170 homes respectively.

Booyah!  We lead the nation in million dollar homes.  Sayonara, Scarsdale!  Meet you later, Miami gator!  Buh-bye, Beverly Hills!  Buh-… there’s just one problem with this article.

CNBC is comparing Silicon Valley to other “longtime luxury real-estate leaders.”  And up there on millionaire’s row is… Cupertino?  That’s not exactly the first town that comes to mind when we think “palatial estate.”

We don’t think this CNBC reporter understands the Real Bay Area.  Any region can feature a town full of luxury homes, towns like Atherton or Hillsborough, only somewhere that isn’t very Special.  You can find some real big, expensive estates in cities such as Bloomfield Hills, Michigan (boyhood home of Mitt Romney), or Winnetka, Illinois, or Greenwich, Connecticut.  Or Beverly Hills.

But only in the Real Bay Area can you find crappy houses for a million dollars.  Observe.

First, we look at Saratoga, since there were so many million dollar homes on the list they couldn’t find one to feature in the article (they just noted you could buy 1.2 acres with no house for more than a mill).  Find out what that same price gets you with a house… after the break.

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Comments (38) -- Posted by: madhaus @ 5:12 am