August 4, 2013

Another Bay Area Bubble Call!

We’ve been boosting the Bay Area Bubble 4.0 news all year. Now, another voice joins in the chorus we started months ago. And this is a one of our long-time fans, PK from DQYDJ! That stands for Don’t Quit Your Day Job.  Recently PK revisited the post that introduced the Bay Area Income and Home calculator, so this is definitely worth your while!

Bay Area Housing Prices: Beware the Inflating Bubble

130803-dqydj-graphPosted By PK    Last updated July 14th, 2013

Two years ago (well, September 28, 2011 anyway), we regaled you on this site with tales about how the Bay Area’s home prices – while admittedly quite high – were complete justifiable.  If you don’t have time to read those prescient words, I can summarize: home prices may have been high in 2011, but Bay Area households pulled in a ton of income (second only to the Government driven economies around Washington, D.C.), making houses somewhat affordable to many households in the area.

Am I proud of that call now that we’ve seen 20% year over year price returns in many areas, and 52% absolute returns on the house I purchased in July 2011?  Well, yeah, of course I am.  However, the mark of a truthful person is to change your opinion when presented with new data.  Here’s to being honest: the Bay Area is getting pretty frothy.

Told ya.

While we do want you to head over to PK’s site and read it, we’ve got the new calculators for you to play around with right here for afters.  First, here’s where you can see how well your income stacks up against the competition. Zuckerberg, you’re not, but go ahead and type in your income and see where you are compared to everyone else.

Remember, Inner Bay Area isn’t quite the same thing as Real Bay Area, because the former is by county. Everyone in San Francisco, San Mateo and Santa Clara is included. Unfortunately they also invited Alameda and Contra Costa Counties, and by adding those East Bay locales the numbers already skew down.  Leaving out Marin County made prices even lower! Wanted: data so we can unskew these calculators by zip code!

Next, here’s the home edition, whoops, the home value edition.  Are you building a Larry Page-type compound in the most prestigious part of Palo Alto? Didn’t think so. But you can find out how affordable your home is, or the home you’re thinking of buying, or the home Larry Page is going to buy.

Let us know what you think of PK’s calculators, or anything else you’d like to talk about.  Yes, it’s Weekend Open Thread time!  How affordable were the Open Houses you saw this weekend?

Comments (4) -- Posted by: madhaus @ 7:02 am

October 2, 2011

A Bay Area Buying Calculator

Burbed readers are a fascinating bunch.  One of them has put together some Bay Area-specific buying calculators, and wants you, the Burbed readership, to have a look.  Since you’re all so hard to please and think everything out there sucks, this is your opportunity to ask the author to make it suck less.

Please welcome Burbed reader PKamp3 and the Don’t Quit Your Day Job blog, introducing lots of boring math, charts, and stats.  Some of you should just go back to sleep, while others should start a second pot of coffee and get ready to dig on in.

Here’s an article I wrote with 2 RBA calculators attached. I wrote it kind of in a Burbed mindframe: “who the hell can afford RBA prices”?

Here’s a preview:

image2362 LAURA Ln, Mountain View, CA 94043

I can tell you before you click the link… using my default assumptions:(20% DP, 4.5% Interest, 30 Year Mortgage, 31% front end DTI.  You can change everything there.)  43% of Bay Area Households have the income to make the payment.  That’s 746,463, in the RBA 4… since I count Alameda County.

Might be interesting… now that I wrote the code I’m having fun looking at listings and running the numbers.  Maybe you can help come up with better house-hunter ranks?  I don’t want to spoil it, but based on home prices the rank changes.


Given how willing PKamp3 seems to be in helping make this tool more useful, please play with it and complain at length in the comments below.  I’ve already groused about the inability to put a cash amount rather than a percentage amount in the down payment, and noted that Alameda County’s presence in the dataset pretty much poisons the well of “Inner Bay Area” buyers.  It might be “Inner” but it’s not particularly Real.

Some of the limitations are due to what’s available.  Some cities have been removed from the dataset.  I felt that the RBA should be limited to San Francisco, San Mateo, and Santa Clara counties, with the possible addition of Marin.  Alameda County?  That’s a fine joke someone is playing on us.  Once those losers are removed, then we can talk about limiting the universe some more.  I would assume San Francisco residents probably don’t want to buy this crapbox in Mountain View, but you never know.

Head on over to the calculator and let us know what you think of this tool and how useless it is it could be improved.  Plug in some other home values and assumptions and see how many buyers you’re up against.  So, what do you think?  Do you see a use for this?  Or are you going back to sleep?

Comments (31) -- Posted by: madhaus @ 5:34 am