June 3, 2013

San Francisco median home hits $1 million

San Francisco median home hits $1 million

The median price for a single family home in San Francisco hit $1 million in April — the highest level since 2007.

The new median price is a 32 percent jump from $760,000 last year.

Told you so. <mic drop>

If anything, I’m surprised it’s only 32%. If my math is correct, this really should’ve been 200%.

Let’s face it – have you seen how much money is out there right now? Just look around – everyone has a brand new Tesla. Everyone just got back from an amazing trip. Geeks no longer wear free t-shirts… it’s all about $400 selvedge jeans. The premium bikes. Paying top dollar for a PBR.

Madhaus calls this Bay Area Bubble 4.0. I disagree. I call this “FINALLY!!!!!”

My only hope is that we can undo some of these onerous government regulations, and bring back innovation into the lending space. It’s been too long since we saw the introduction (and squashing) of disruptive things like NINJA loans and neg-am loans. It’s time to bring these back.

With additional lending innovation, I think we can easily see a 200% increase in the median price in SF by next year. $2M is a much more reasonable price for such an amazing, disruptive area. Just wait until Box and Evernote IPO for $1.4T each. That’s right. You heard it here first.


$6M median home price in SF.

I see it. Can you?

Comments (7) -- Posted by: burbed @ 5:02 am

May 19, 2013

Real American Area: No Bubble. Real Bay Area? Otherwise.

Here’s part 1643 of Proof there is indeed a Bay Area Bubble 4.0.

Housing Bubble Unlikely, Home Price Appreciation Should Slow – CoreLogic

BY JANN SWANSON, Mortgage News Daily
May 16 2013, 11:10AM

CoreLogic said today that home prices are projected to increase 3.9 percent on an annualized basis between the fourth quarter of 2012 and the same quarter in 2017.  However, a new housing bubble is not likely as market dynamics shift for both supply and demand.  Prices rose 7.3 percent in 2012.

The CoreLogic Case-Shiller Index report notes that the increase in 2012 was the strongest rate of appreciation in nearly seven years and projected that prices will continue to improve in 2013 and beyond in the more than 380 U.S. markets it tracks.  The company’s current analysis says that, "Cities at epicenter of housing bubble/crash are clocking highest rate of appreciation, largely driven by investor demand."


This map comes to us thanks to Burbed reader PKamp3 over at DQYDJ.net, who linked us to the story in Business Insider. However they got the story from Jim the Realtor’s BubbleInfo blog, who in turn got it from Mortgage News Daily.  And it’s a good thing we traced the map (and story) all the way back to the original article, because it has some seriously amusing conclusions to anyone who lives Where It’s Special.  And that’s without making fun of the name of the Chief Economist for CoreLogic/Case-Shiller.  Nah, we’ll just make fun of his opinions of whether there’s a housing bubble:

Dr. Stiff tamped down concerns of another housing bubble. "Even if double-digit price appreciation were to continue in the former bubble metro areas, there is no reason to believe that new home price bubbles are forming. That’s because single-family homes in these markets are still very affordable, even after last year’s large price gains. Consider Phoenix, where home prices rose 27 percent since the market hit bottom in 2011, making it the strongest residential real estate market in the U.S. Yet, home prices there are still 45 percent below their 2006 peak," Stiff continued.

Yes, if you would consider living in a hellhole like Phoenix with summer daytime temperatures routinely above 110 degrees Fahrenheit, of course you’d note that these markets are still very affordable. But nobody uses the words “Real Bay Area home prices” and “affordable” unless they are separated by some sort of negating construction.

Lest you think we are making this up, the San Francisco-San Mateo-Redwood City metro is the least affordable in the entire country, with only 28.9 percent of homes affordable by a median income household. That’s right, we’re Number One again, beating out 221 other metros for the crown!  Santa Cruz-Watsonville is #4 (37.1%), while San Jose-Sunnyvale-Santa Clara isn’t far behind at #6 (43.3%) and Salinas (44.4%) at #7.

130518-homeprices-paragonWhere’s Phoenix, the brick oven that’s still 45 percent below their 2006 peak? They’re at number 57 in unaffordability.

Let us remind everyone that San Francisco and San Mateo Counties never dropped 45 percent below peak. The reason the San Francisco Case-Shiller numbers dropped as much as they did is because they’re completely weighed down by Alameda and Contra Costa Counties.

It’s the East Bay that dropped like a rock after 2006, not the Real Bay Area.  And like a pair of cement overshoes, the East Bay took the whole SF Case-Shiller index down with it. Even the upper tier (the top third of home prices) is affected by this home distribution.

130518-homeprices-paloaltoAnd let’s check those East Bay numbers.  Oakland-Fremont-Hayward turns in a respectable #24 in the You Can’t Touch This index, showing it’s no Phoenix, either.

So we have some words for that Stiff Doctor: There is too a Bay Area Bubble 4.0. We see it every single day even outside the Real Bay Area. We see peak pricing. We see bidding wars. We hear from readers reporting lines to enter Open Houses, or appraisals coming in higher in just a few weeks, or as-is cash overbids on homes where the would-be buyers didn’t even bother going inside.

Inotherwords, Dr. Stiff, maybe you need to get over your Phoenix fixation and check out the parts of the country where the housing bubble is very much back.

Comments (4) -- Posted by: madhaus @ 5:04 am

March 27, 2013

The Bay Area is “Ground Zero”

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.

Comments (10) -- Posted by: burbed @ 5:09 am

March 1, 2013

They’re Making More RBA Land

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.


Comments (30) -- Posted by: madhaus @ 5:04 am

January 5, 2013

What could be more awesome than a house in Mountain View?

The median Home Value in Mountain View, according to Zillow, is $877,900.  So what could you get for that amount, if you looked for a house in some other part of the country?  If you were willing to look in Maryland, you could get this nice painting of a house.  Plus HOA fees every month!


Brookville, MD 20833

Ownership Type : Fee Simple
Bedrooms : 4
Type : Detached
Full Bathrooms : 3
Status : Active
Half Bathrooms : 1
List Date : 09/25/2011
Square feet : 4500
Days on Market : 468
Price per sq. ft : $189
Status Date : 09/25/2011
Approx Lot Size (Acres) : 1.0
Price : $852,900
Approx Lot Size (Sq.Ft.) : 43560
Location : BROOKEVILLE MD 20833
Year Built : 2012

HOA Fee : $500.00 Annually
Elementary School : BUSHY PARK
ADC map : 8J12
Middle School : GLENWOOD
130104-what-lotsAdvertised Subdivision : RIVERCREST IN HOWARD COUNTY
High School : GLENELG
Short Sale : No



Holy crap, that’s a lot of CAPITAL LETTERS for the same price you’d pay in Mountain View.  Plus you get a house that hasn’t even been built yet, so you have no idea of the build quality or the feng shui.  And just think of how much work it’s going to be mowing an entire acre or dusting 4500 sf of house.

For this much money in Mountain View, you’d be looking at a vintage one bedroom from 1948,on a 6969 sf foot lot (we’re just reporting the listing, we’re not making innuendos). It boasts a spacious 914 foot floor plan.  Plus the comparable Maryland place, while near such cosmopolitan confluences like Laytonsville,is 2831 miles from Google (we checked).  In current traffic that’s a whizzy 41 hour commute.  One way.

Also, no HOA fees for vintage homes in Mountain View.

Bunus: The home in Maryland was never featured on Burbed, either.  And homes in Maryland, whether or not they’re built, don’t go up $125K in just five months.  Or down $50K at the exact same time

Comments (2) -- Posted by: madhaus @ 5:07 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

August 19, 2012

Bye Bye Bubble

Here’s some sobering news for those of you expecting the Facebook Effect to rescue the Real Bay Area’s housing values.

Zuckerberg Admits Facebook’s Plummeting Stock Is ‘Painful’ To Watch During A Company-Wide Meeting

120817-facebook-zuckerbergSeth Fiegerman, Business Insider  | Aug. 17, 2012, 6:43 AM

Facebook is finally acknowledging that its employees may be just a little bit concerned about the company’s plummeting stock.

According to The Wall Street Journal, Facebook CEO and cofounder Mark Zuckerberg admitted that the stock’s decline is “painful” to watch for some employees during a company-wide meeting earlier this month.

The meeting itself was reportedly part of a larger initiative to boost company morale. Zuckerberg had previously avoided talking about the stock with employees, preferring that everyone stay focused on their work, but in recent weeks, Facebook’s senior management started worrying that the stock’s poor performance might hurt employee performance.

Guess watching Facebook’s plummeting stock is just fine from the comfort of your own office.  But don’t count on cashing in those options to buy yourself an RBA mansion.  The employee lockup period is still in effect, but early investors are dumping shares now.

Now check out this article, from the same publication.

DEAR FACEBOOK EMPLOYEES: Here’s The Truth About Your Stock Price

120817-facebook-zuckerberg-2Henry Blodget, Business Insider  | Aug. 17, 2012, 11:59 AM

Facebook’s stock has dropped by half since the IPO three months ago.

And the stock price is now well below the level at which most employees have been granted stock in the past 18 months.

This means that most current and former Facebook employees are worth far less than they were a few months ago.

Facebook’s stock crash is also hurting morale at the company, and damaging perception of the company’s business and brand. The impact is big enough that Facebook CEO Mark Zuckerberg, who has been crystal clear about his desire to ignore the stock price, admitted at a company meeting that the stock crash has been “painful” for everyone.

Here’s the important consideration from this more in-depth piece:

With the Facebook employee lock-up releases coming in October and November, this isn’t just an issue of morale and “paper net worth.” Current and former Facebook employees have been counting on the stock to buy things (houses, for example). So it’s a matter of near-term financial planning.

So, are home values dropping in Facebook-friendly commute zones?  Let’s have a look.  First, here are Redfin’s stats for Palo Alto home sales.  The advantage of Palo Alto over Menlo Park is that there are very few questionable areas in the former.


120817-facebook-mp-altosYou could look at the listing prices one of two ways.  Either the 22% post-IPO listing per-square-foot increase was nothing but irrational exuberance, or Spring Bounce was unusually quick this year.  If we exclude the May and June numbers, we could look at the chart as showing a slow climb for 2012.  That’s if you ignore the 18% drop between mid-January and mid-February, though.

120817-facebook-mv-zillowAltos Research’s Market Action Index agrees with this graph, showing a peak right at IPO time and falling back almost (but not quite) to 30, which is a balance between a buyers and a sellers environment.  (31 indicates the ball is still in the sellers’ court.  Mostly.)  The MAI graph above is for Menlo Park, or ground zero for Facebook.

Unfortunately Zillow’s valuation tools are too laggy to show the post-IPO collapse, with the most recent valuation dated to June.  We’re looking at Mountain View this time, which is no doubt polluted by the conflicting Google Effect.

How would you recommend we best demonstrate whether Facebook stock’s disappointing results are affecting the RBA housing market?  What statistics would you recommend, and from where?  One thing we’re seeing is fewer homes going into Double-Secret-Probation Pending-Do-Not-Show status where the listing photos get yanked until the home closes.  And that’s good news for all fans of this site.  Not only does a picture equal a thousand words, it also equates to many more thousands of dollars.

We aren’t going to say in which direction those thousands are moving.


Comments (28) -- Posted by: madhaus @ 5:01 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

September 24, 2011

Emerald Hills Haircuts!

Everybody can find some poor fool losing a Lexus or BMW worth of money on their unfortunate adventures in home-ownership. But in the rarefied air surrounding Emerald Lake Hills in Redwood City, you can turn the dream of home ownership into the nightmare of losing 5-10 years of average tech worker salary. Make sure to whisper as we talk about these gems as we wouldn’t want the current buyers to figure out they caught a knife just yet! Let that be an unpleasant surprise for them in a few years.
White hot?  Nope.  Dripping red?  Yes.

This timeless termite-group-hugger finally sold with only a year or so on the market after getting the burbed treatment. Yep, it’s a white hot real estate market for those of you with your own giant puddle to call 1/9th your own. It sold for only $700k (give or take $10k) under the original wishing price! That’s an entire HOUSE in Slummyvale!

But if you’re worried that’s not a REAL haircut, just a dreamer being rudely disabused of his or her little fantasy, let’s take a peak buyer’s banker’s pain and put it on display… a $386k haircut for the bank! There were two loans, so two banks dueled it out to see who would spill the most blood on THAT deal. I’m sure that Pyrrhic victory left the bank feeling like a million bucks!

Too pedestrian? Don’t worry, people with real skin in the game and a much higher price point joined in the blood letting with anot-a-lot-of-money loss of a half million and change. The good news is the sellers stuck to their guns and squeezed and extra $412 bucks for their little slice of hemorrhaging-cash-like-a-diarrhea-afflicted-elephant-heaven. I’m sure that took the sting off of it.Do it for the children!

Yes, there are many ways to lose your mASSarati in Emerald Hills real estate! Come join the party!

Comments (28) -- Posted by: sfbubblebuyer @ 5:08 am

July 10, 2011

Bay Area Price Drops: Dude, Where’s My Equity?

Mapping Home-Value Drops by Zip Code

By Matthew Strozier, Wall Street Journal
Published June 28th, 2011

imageThe housing bust could be described as a tale of two collapses: Pain was widespread but it wasn’t always evenly felt.

Stan Humphries, chief economist for the real-estate website Zillow, mapped the price decline from the peak for zip codes in six major metro markets – Seattle, San Francisco, Los Angeles, Washington, D.C., New York and Chicago (see maps). The data provide a detailed look inside the anatomy of the downturn: Green dots show declines from the peak that are above the metro average; reds are below the metro average.

Zillow’s maps show that poorer center-city neighborhoods and far-flung suburbs tended to fare worse even as trendy urban neighborhoods or established suburbs managed to either weather the storm with limited damage or see losses half that of other zip codes with 50% or 60% declines.

Using useless aggregate data from Zillow, the Wall Street Journal creates some maps by zip code for six different regions, including the Bay Area.  Everywhere, every single zip code, showed a decline from 2006, but some places were hit even more than that 60% figure mentioned above.

imageTake a look at the key for the Bay Area map.  60% is not the worst of it.  Oh no.  One zip code comes within kissing distance of down 80%.  Yes, property value down 4/5ths, across an entire zip code.

What’s also amazing is not a single zip in the entire region managed to hold onto its value since 2006.  While one zip in New York City (10128, Upper East Side) actually gained value, two zips here were notable in keeping their losses under ten percent.  And these two are a couple of old friends to Burbed that we’ve visited many times before.

Holding losses to 9.1% were West San Jose 95129 and South Mountain View 94040.  Right behind them, at exactly a ten percent loss, was Cupertino 95014.  No zip codes managed better than that and all the others were over the ten percent loss mark.  Other “winners” that managed not to lose too much are in SF (94105, SoMA), San Jose (95113, downtown!) South Palo Alto, and South Sunnyvale. Both Los Altos/Los Altos Hills zips are right behind this group.

Now, for the zips that were clobbered beyond belief; these are the ones that lost 75% or more of their value since 2006.

  • In 4th place, losing 75.1% of its Zillow Home Value Index that they swear they weren’t making up, is 95215, in beautiful Stockton.
  • In 3rd place, shedding an embarrassing 75.2% of its made-up number, is 95351, in Modesto.
  • In 2nd place, misplacing an astounding 76.3% of a number Zillow made up to drive eyeballs to its site, is 93620, two cheers for Dos Palos!
  • And the Champion in Value Erosion, tipping the scales at an eye-popping 79.1% of value gone, gone, gone is 95205.  You know where that is.  Give it up for Stockton!

Not only are none of these in the Real Bay Area, none of them are even in the Bay Area.  So let’s find what got eviscerated the most within real commuting distance from the Googleplex, and then let’s see what’s left of the RBA.  That means we can leave out all the places south of Santa Cruz that were pummeled with declines over 60%.

  • Worst Zip in all of San Mateo County, a Burbed favorite: 94063, or the crap part of Redwood City!  Down 42.1%!
  • Worst Zip in all of San Francisco: 94158, down 44.9%.  Google maps calls this area Mission Bay, just a bit north of beautiful Hunters Point.
  • Worst Zip in Santa Clara County, excluding San Jose: 95020, Gilroy, down 48.1%.  What a surprise!
  • Worst Zip in San Jose, handily beating out its Gilroy challenger, 95122, down an amazing 55.5%. Of course this is another favorite Burbed neighborhood in East San Jose.
  • And the Worst Bay Area Zip, Overall Award for Sucking the Most value out of its real estate is 94621, and that’s in Oakland.  This zip is down 74.4%, meaning a Bay Area zip managed to lose three quarters of its value. Not just one property or a block, this is an entire zip code!  Wow! Congratulations to Oakland on showing Stockton a thing or two!

But don’t worry too much about any of these numbers.  Zillow recently changed their Zestimate formula, so feel free to throw out what you don’t agree with.  Just assume in adding up all those Zestimates, the zip-wide index must have have all erred in the same direction!

Comments (6) -- Posted by: madhaus @ 5:36 am