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






May 19, 2012

CNN blogger creams himself over Facebook Effect

Have we discussed the price adjustments (up! up! up!) in both buying and renting in San Francisco due to the Facebook IPO?  Not enough!  Let’s see what happens when CNN lets one of its bloggers write a tl;dr post that makes our zip code pieces look like tweets by comparison.

The Facebook effect on San Francisco real estate

By Julian Hebron, contributor @CNNMoney May 17, 2012: 1:27 PM ET

120517-sf-facebook-effect(StockTwits) — The Basis Point is a popular mortgage and housing blog that tracks consumer critical issues and data. It is edited by Julian Hebron, a retail mortgage lender who runs the San Francisco branches of RPM Mortgage.

Three weeks ago, some clients wrote a $1.25 million offer on a 1,400 square foot 3-bed, 1-bath house with original kitchen and bath near San Francisco’s Dolores Park. They weren’t even close. There were 51 offers. It sold for $1.4 million and closed 8 days after offers were due.

That’s the most offers I’ve seen in 10 years. And a different property at that week got 23 offers.

Two weeks ago, another client offered $245,000 over list price on a 3-bed, 2-bath Pacific Heights condo. One of the other 9 offers was the winning bid in this $1.6 million to $1.9 million market segment. That was my client’s fourth rejected offer. He’s looking at two properties in this price range this week, and the listing agents are reporting similar demand: about 10 serious buyers circling.

That’s the norm. It’s what some are calling The Facebook Effect on San Francisco real estate.

That’s the norm: 10 serious buyers circling.  StockTwits goes on at very great length to explain why this is happening, and mentions “The Facebook Effect” as if the term were newly minted.  Here’s what Hebron said in much fewer words.  (The charts are all linked from his article.)

1. Everyone not already working for Facebook is trying to buy before millions of Facebook employees get their license to print unlimited money

You will love this quote from the article:

The San Francisco buyer mindset is that they want to get in before they’re priced out, but they either haven’t reaped their firm’s windfall yet or don’t expect much if any windfall from their firm.

That’s right.  They’re all worried about being Priced Out Forever.  And this has never, never, ever happened before!

120517-sf-facebook-house-prices

2. Ed Lee’s reelection as SF Mayor means tech employers can demand payroll tax adjustments

Twitter threatened to leave SF over the 1.5% payroll tax, what with all the high salaries and the stock option financials on top of that, Lee negotiated an adjustment with a maximum annual tax, and now all the other tech companies will expect similar easements.  Which means they’ll stay in SF, which means high-paid twentysomething technogeeks will continue to buy real estate there, which means you can’t afford anything.

And this is all very interesting, except Facebook is not in SF.  So why isn’t this article called “The Twitter Effect”?

3. Constricted housing supply.  Really, really, really constricted.  Plus rising rents.  Did we mention constricted housing supply?

120517-sf-facebook-inventory

The key takeaway is that there were only 500-600 annual SF home sales above $1.5 million.  Now, how many people do you think will be wanting one of those better places once the IPO cash hits?

120517-sf-facebook-sales

And is it maybe possible that more homeowners would cash out when they start seeing more of these prices? 

Comments (31) -- Posted by: madhaus @ 5:08 am

August 6, 2010

Best places for the rich and single in the Bay Area

Thanks to Burbed reader BK for this find!

6. Milpitas, CA

Milpitas, CA

Population: 67,503

Single: 30.4%

Median family income: $113,735

Ever dream of flying? Give it a try in this Silicon Valley town, which serves as the epicenter of Northern California’s hang gliding and paragliding community. Milpitas has one of the largest ratios of residents to parkland in the San Francisco Bay area. All that wide-open green space and a warm, Mediterranean-like climate make it great for outdoor sports all year-round, and young singles enjoy hiking, fishing and cycling in Ed R. Levin Park. Plus, the dog park there can be a great place to find puppy love. –A.C.

Go Milpitas! What? No mention of… The Smell?

7. Sunnyvale, CA

Sunnyvale, CA

Population: 133,876

Single: 30%

Median family income: $110,276

Geek is chic in this hub for tech companies, where you’re likely to meet an engineer from Yahoo!, Honeywell, Palm or Lockheed Martin at the latest Tweetup or “Tech and Beer” happy hour. Flirt over the latest gadgets and a cup of Joe at the Sunnyvale Art Gallery’s café, where Thursday is open mic night. Or take a romantic walk through the historic Murphy Avenue area downtown — a popular place for bar-hopping, open-air summer concerts and farmers markets. –A.C.

Congrats Sunnyvale! Nothing says chic like big box office buildings that you have to cross a giant parking lot to get to. Nope, nothing at all.

8. Mountain View, CA

Mountain View, CA

Population: 73,093

Single: 34.8%

Median family income: $109,215

With NASA and Google in town, Mountain View is the perfect place to find a rocket scientist. Googlers alone range from former neurosurgeons, CEOs and puzzle champions to alligator wrestlers and Marines, so there’s no shortage of interesting dates. But since eligible bachelors outnumber women in this town, the savviest singles may want to head to wine-tasting classes, get involved in a local charity, or try yoga — instead of standing around in a bar. –A.C.

Woot Mountain View! Wait… eligible bachelors outnumber women in this town? Only this town? No way!

BTW, where is this photo taken?

10. Santa Clara, CA

Santa Clara, CA

Population: 110,200

Single: 34%

Median family income: $105,516

European-style streets lined with upscale shops, spas and restaurants give this Silicon Valley `burb a sophisticated appeal. Stroll along Santana Row for luxury boutiques and bars. Like many of Santa Clara’s neighboring towns, you’re likely to meet wealthy techies here, but that’s not all. Since the 49ers are headquartered here, you can also rub elbows with eligible single football players and cheerleaders. –A.C.

So true. You can’t walk a foot without bumping into a 49er.

Ok, confession: I did not know Santana Row was in Santa Clara. It’s so confusing over there.

15. San Jose, CA

San Jose, CA

Population: 948,279

Single: 31.3%

Median family income: $100,219

There’s a reason San Jose’s residents jokingly refer to their city as “Man Jose.” Since men outnumber women in Silicon Valley’s high-tech jobs, the dating scene is disproportionately male. Meet the dot-com millionaire of your dreams in the city’s downtown area, which offers a technology museum, several parks, free concerts, an outdoor ice rink in the winter and — great for those nerdy dates — the world’s largest outdoor Monopoly board. –A.C.

Dot-com millionaires? Whoa… dated. But nonetheless, congrats to Man Jose!

Comments (9) -- Posted by: burbed @ 5:23 am

October 11, 2009

What does a 4 bedroom house cost?

Home price comparison – Sep. 23, 2009

Same 4-bedroom house – wildly different prices
The cost of a middle-management-type home varies significantly depending on where in the country you live. But there are some huge spreads within states, as well.

 

10 least-affordable cities
Where a 4-bedroom, 2.5-bath, 2,200-square-foot house costs the most.
Rank City State Price
1 La Jolla Calif. $2,125,000
2 Beverly Hills Calif. $1,981,750
3 Greenwich Conn. $1,519,250
4 Palo Alto Calif. $1,489,726
5 Santa Monica Calif. $1,460,912
6 San Francisco Calif. $1,363,250
7 Boston Mass. $1,337,578
8 Newport Beach Calif. $1,315,505
9 Palos Verdes Calif. $1,237,041
10 San Mateo Calif. $1,090,000
Source:Coldwell Banker Home

Congratulations to the Bay Area for such an impressive showing!

Just in the Top 10 list alone, there’s 3 Bay Area cities!

In the Top 25 (click the link to see the full article) there are 8 cities! Woot!

Our archnemesis New York? Just one: Queens. (Probably because there are no 4 bedroom houses in Manhattan.) Our archnemesis wannabe Seattle? Just one: Bellevue, and it’s all the way at 22. Hah.

I’m super thrilled with the showing of the Bay Area. We should all be very proud that we are right up there with Beverly Hills and Greenwich. Who needs Paris Hilton or Donald Trump! We’ve got the Flickr guys, the Facebook guys, and other celebs. Woot!

Comments (8) -- Posted by: burbed @ 5:04 am

September 7, 2009

San Francisco, San Jose, cost of living comparisons for Labor Day

It’s Labor Day! That means you should be laboring to ensure your company remains innovative and profitable (as measured by page views, eye balls, friends collected, downloads, etc).

To help celebrate, let’s look at some cost of living comparisons! You know… to see what you’re laboring for.

But first, we need to agree on what salary to choose for comparison. I’m going to pick $100,000 for an easy number to compare (though we know that most make generously more than that!)

Here we go!

Unfortunately, CNN’s calculator doesn’t have Real Bay Area as a destination (yet), so first we’ll have to decide between SF vs SJ:

SFvSJ

Alright… we’re going to with SF as the comparison.

So let’s look locally first – what about other parts of this great state – California. Let’s look to Los Angeles:

SJvLASJvOCSJvSD

Wow… it’s kind of a shocker that groceries are so much cheaper in SoCal! What’s up with that? They’re probably eating all junk food, not “Alice Waters approved only” food that everyone here in the Real Bay Area eats. (BTW, San Diego was even cheaper, so I decided to leave it out.)

Ok, let’s look at our arch nemesis – New York City! But wait, there’s a few possibilities, so we’ll look at all of them, including its Cupertino-wannabe-suburbs:

SJvManhattanSJvQueensSJvBrooklynSJvNassauSJvNJSJvStamford

Alright! A pretty good showing! We haven’t quite licked Manhattan yet, but we’re making progress. And we’re definitely more important now that Wall Street is over and green tech is the new wave of the everyday-millionaire in the future. It’s great to see that we’ve beaten nearly all the places where people who work in Manhattan live (Queens is a draw – and look who lives there… just look at their King!). How can Goldman Sachs employees living in Nassau County possibly compete with the fine fine people that we have in San Jose? If we looked at the San Francisco, this would be a total home run except for Manhattan. Great work everyone!

Ok, now let’s look at some fake Silicon Valley contenders:

SJvSeattleSJvPortlandSJvDenverSJvAustinSJvNCSJvBoston

Now, you might be tempted to move to one of these pretenders, lured by their incredibly cheap cost of living.

Don’t fall for it!

Did you know that in most of these cities, brilliant engineers, the true saviors of the world, are paid only minimum wage? And that no only do they not get Aeron chairs, Dual Quad Proc machines with 30″ LCDs, but instead they have to use folding chairs and Commodore 64’s with tape drive and acoustic coupler modems. Seriously. As for sushi? Let’s just say you’d better get used to eating Chicken of the Sea. Santana Row? Fry’s? Nope. Better get used to doing all your shopping at Walmart Outlet, and Radio Shack Factory Store. Don’t even get me started on the weather – people die there because of the weather. Have you ever heard of people dying here in the Real Bay Area due to natural events (excluding earthquakes which never happen)? Why else do you think it is so cheap in these places? There’s no such thing as a free lunch!

I hope you enjoyed and appreciated this thorough analysis of what it is like to live in other places. Enjoy your labor day!

Comments (74) -- Posted by: burbed @ 5:18 am

March 10, 2007

What's a reasonable price for a Bay Area home?

Burbed reader Brendan posed this  question in a post earlier today.

“In the Bay Area, we’re in a unique bubble … we’re not really seeing prices go down” — Burbed.com: Your Silicon Valley Home and Mortgage Insanity Blog
What do people think? will a nice home ever be able to be had in the Bay Area for 400k?

To answer this, we should look at the numbers.

First, let’s look at median income. In Cupertino, that’s $123,320 for a family.

Unfortunately if you’re looking to buy a house, you’re not competing with all the people who make up that median income statistic. There’s a lot of Pre-Prop 13 people still in Cupertino. You know, people who were born at the right time, and bought a place before 1978 – so they only paid $75,000 and only pay $1000 in property tax a year. They’re done paying off their mortgage and they might be retired, or be paid poorly and refi to help pay bills.

As a result, that median income statistic is skewed lower – which means that the actual median income is higher. Remember, you’re not competing against the low end of the income scale to buy a place.

It turns out that 11% of Cupertino is 65 or older (slightly higher that the California average) and there’s  a 4.8% poverty rate. So, using some fuzzy math, let’s say that the median income is actually 15% higher: $141,818

That seems about right too. A typical software developer gets paid at least $75k right? So two of those would be $150k. And remember, these are the people you’re competing against to buy a place.

Using this calculator, it turns out that a family making this much money can afford at least a $631,574 house using a standard mortgage (with a $100k downpay – not unrealistic either).

And that number assumes that the family is willing to spend 33% on housing payment! As we know, since the Bay Area is so perfect, you don’t need to go on vacation or anything, so you can actually spend more than that. And, I think we all know that people are more than willing to spend more – especially for a place that has a great (for California, not nationally) school district like Cupertino.

So there you go. My claim: a reasonable price for a South Bay Area home in a good school district is $6xx,xxx.

What do people think?

Click here to post a comment -- Posted by: burbed @ 12:25 pm

April 26, 2006

Who is buying homes? Undocumented Immigrants/Illegal Aliens

Check out this wild story:

The Mess That Greenspan Made: This May Take a While
I am a lawyer and I represent illegal aliens in deportation. In all but one of 35 cases I currently have on docket the illegal owns a home. But it is the loan terms that fascinate me. One lady finished school at second grade, speaks no English, and works for a recycling company binding cardboard boxes. She makes about $30K per year and is a single mom with three children. She has a $430K interest only loan that she used last year to buy a $430K condo – 100% financing – she paid $3,000 in closing costs. I tried to explain that her monthly payments will rise substantially in four years. She does not believe me, did not understand what I said and told me the loan and real estate agents specialize in real estate and would have told her if her payments could go up. If 34 of my clients with risky loans and no school past at best eighth grade are surprised by rising loan payments, we should be afraid. This is the last group desperate lenders pander to, meaning we’re near the end.

Sound bogus? Is it crazy that this segment of the population is getting Interest Only mortgages? Is this all made up?

Maybe not!

Banks help illegal immigrants own their own home – Aug. 8, 2005
Banking on illegal immigrants
Banks are seeing an untapped resource in providing home loans to undocumented U.S. residents

Bet you didn’t know!

Click here to post a comment -- Posted by: burbed @ 11:28 am