February 1, 2014

I Can Haz Stock Optionz?

Here’s a piece of investment and career advice: If your job doesn’t give you a piece of equity in the company you’re working for, it’s time to move on.

You Need Equity To Live In Silicon Valley

140131-stanford-memeMay 22, 2013 – Andy Rachleff Wealthfront

The other day we were modeling our typical client’s spending when we realized something disturbing – an average Bay Area-based young couple has to own equity in a business if they hope to send their kids to a good university and be able to retire well.

Investing well alone can’t get you there.

Our analysis found you need to work for at least one company where your equity stake can generate at least a few hundred thousand dollars after tax to make your economics work in the Bay Area.

The problem is the hole that opens up in a typical couple’s budget when they are in their late 30s. Three big pressures converge then: the mortgage on your expensive Bay Area home, and the dueling needs to fund your retirement and your kids’ college early so that you take advantage of compounding.

That’s why we say: You need equity to live in Silicon Valley.

And we say, you need even more equity to live in The Real Silicon Valley.  Then again, you could always rent AND send your kids to Community College and Cal State AND move to Arkansas for your Golden Years.

Basically this is another one of those “We make $250,000 a year and we feel sooooooo poooooor” pieces. Please all join in this First World Problems Pity Party because in lieu of another crap house for your disapproval.

Comments (9) -- Posted by: madhaus @ 7:06 am






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.

131013-sf-least-newhall

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

131013-sf-least-waverly

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.

131013-sf-least-akron

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

October 13, 2013

More of you are Priced Out For-EVEH!!!!!!

And now for some Totally Obvious News for Anyone Who’s Been Paying Attention, courtesy of the San Jose Mercury News (nickname: Adventures in Irrelevance).

Many first-time buyers shut out of Bay Area housing market

131012-pricedout-proudBy Pete Carey, San Jose Mercury News
POSTED:   10/06/2013 04:00:00 AM PDT, UPDATED:   10/07/2013 03:59:42 PM PDT

As the peak homebuying season ends, months of rising prices, tight inventory and competition from investors have left many would-be first-time buyers on the sidelines.

Prices are up an astonishing 31.7 percent in August from a year ago for all types of homes in the nine-county Bay Area, and for moderate-income buyers that represents a growing hurdle.

And the slice of home sales for less than $500,000 has dropped from a combined 59.1 percent to 42.2 percent in August in Contra Costa, Alameda, San Mateo and Santa Clara counties, according to real estate information company DataQuick. Homes under $300,000 are down from a combined 29.7 percent in the four counties to 15.2 percent.

See the proud homedebtor in the piccie above? He got himself a house.  In Hayward, City of Diversity. And lately we’ve been seeing ads for new homes in Mountain House.  Not Mountain View, Mountain House.  Mountain House is what people in Livermore point to when asked where the “exurbs” are,  Extra chuckle points to whatever robot put that page together calling San Ramon a “nearby community.”  Sure, just like Prunedale is “nearby” Almaden Valley.

Just as there is nothing wrong with any house that price cannot fix, there is nothing wrong with any price that distance cannot fix either. It’s just that some of you are going to have to buy in Turlock.

This is not only your Weekend Open Thread, it may have to do for the entire week. Tune in tomorrow and find out if there’s going to be a new edition of Burbed or not!

Comments (8) -- Posted by: madhaus @ 7:04 am

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

July 13, 2013

Congratulations! You now have your equity back!

Here’s an interesting piece of Real Estate pr0n received by Burbed reader nomadic.

130712-congrats-equity

In case you cannot view the graphic, here’s the text:

Congratulations!

You now have your equity back!
Prices have shot past the all-time
highs in many areas.
-As-Is Sales-
-Top Sale Prices-
-Minimal Preparation-

What’s Your Home’s Current Value?

Two Beautiful California Peaks

 

(with photos of Half Dome and a large red arrow labeled 2013 Real Estate Values getting bigger and fatter as well as higher on a graph with no labels). The last segment appears to have a rise to run ratio of 8, so perhaps the X axis is fortnights and the Y is mills.

For the record, real estate prices have gone up about 15-20 percent, which would be a rise to run ratio of, well, at most one fifth. You know. 20%.  A one to one ratio is a straight line at a 45 degree angle.

This is your weekend Open Thread, and it may have to last you all weekend, too. Do you have your equity back? You know if you lived in the Real Bay Area you never would have misplaced it in the first place.

Comments (4) -- Posted by: madhaus @ 7:05 am

July 9, 2013

Updated: Bay Area Real Estate Bubble 4.0: Not Over. Nuh Uh Uh.

130708-28th-priceisrightThis weekend we featured a Murky News article claiming that frenzied overbidding on Real Bay Area homes was done. It wasn’t the only such piece claiming that RBA overbids out of suitcases full of cash were coming to a halt.  To which we say: Sure it is. Redfin is tracking the bidding wars, and they say it’s cooling off… outside the RBA.  Specifically, there are fewer multiple bid situations outside California, and in the Golden State, things have eased up a bit in the Southland.  But don’t worry.  It’s Still Special Here.

Let’s find out just how special with this home sent in by Burbed reader mtv-renter.

130708-28th-redfin440 28th St
San Francisco, CA 94131
Sold for $1,756,000

2 Beds
2 Baths
1,057 Sq. Ft.
$1,661 / Sq. Ft.
Built: 1910
Lot Size: —
Sold On: Jul 2, 2013
Status: Sold
Property Type: Attached, Full, Single-Family Home
View: Panoramic, Bay, Hills
County: San Francisco
Style: Victorian
Community: Noe Valley
MLS#: 408763

Much sought after charming single family home with spectacular southern views. Very bright and light. Main level features lovely dining area, spacious living room, office area, stunning remodeled granite kitchen and marble bathroom. Opening to a secluded charming backyard, perfect for entertaining. Second level features two bedrooms with original built-in dresser drawers. Fabulous, new bath with marble walk-in shower. One of the bedrooms overlooks the enchanting garden and the other captures the southern view. There is a lower level just waiting to be finished with great expansion potential!

130708-28th-bedroomTake it away, mtv-renter!

Oh holy hell, the good times are back!

I visited this place myself, but given the line out the door for the open house, didn’t even consider placing a bid. Good thing!

Asking price: $989k, sold for $1,756,000, that rounds up to 78%. This is an astounding $1,661/sqft.

It gets better,

last sold for $749,000 on Sept 24, 2010. That’s $1,007,000 in appreciation over 1012 days, or $995/day.

130708-28th-yellowEveryone should buy in San Francisco. Riches await!

But wait, there’s more!

It gets better, check out the buyer’s agent’s name:

Trim Wellbeloved, 
Pacific Union International
DRE #01209860

You know, we prefer to point ‘n laff at realtard behavior rather than their names, but in this case… well, there it is.  Meanwhile Burbed reader Petsmart Groomer notes that this house has come to the attention of SF Curbed.  Where, asks PG, is the million dollar upgrade?  After all, in 2010 it took 3 price cuts to finally change hands at… $749K despite appearing on television!

130708-28th-redfin2010440 28th St
San Francisco, CA 94131
Sold for $748,000

2 Beds
1 Baths
— Sq. Ft.
Built: 1910
Lot Size: —
Sold On: Sep 27, 2010
Status: Sold
Property Type: Attached, Full, Single-Family Home
View: Panoramic, Hills
County: San Francisco
Style: Victorian
Community: Noe Valley
MLS#: 370108

Big reduction. Please come see this Victorian Noe Valley Home as featured on the TV Show Sell This House. It has amzing Southern Hills Views. Two bedrooms and One Bath. Period detailing throughout the house. Near shops and restaurants.

Why that million dollars is clearly in the kitchen. The stainless steel fridge must be worth $400,000 all by itself.

130708-28th-kitchen-2010130708-28th-kitchen

130708-28th-redfin-restatedBunus: extra bathroom! That’s got to be the other $600,000!

Update 7/10/13: Seems the realtard made a little mistake with that sale price. It’s actually only $1,150,000. However, realtards typing in completely WTF numbers into listings is simply a different kind of Burbed win. So it’s all good, as long as you aren’t the realtard.

See the comments for more details. You should be reading comments on all our articles, anyway. You should be posting in comments, too. Don’t agree? Explain why! In our comments!

Comments (26) -- Posted by: madhaus @ 7:03 am

July 7, 2013

The End is Nigh? Or is that Ni?

Terrible bad news! Someone let the air out of Bay Area Bubble 4.0’s tires!  Tragedy!

Bay Area housing frenzy cooling off

By Pete Carey, San Jose Mercury News
Posted:   07/04/2013 04:00:00 PM PDT, Updated:   07/05/2013 08:44:05 AM PDT

130706-over-signThe Bay Area’s frenzied housing market, marked by soaring prices, short supply and a scramble for homes, is showing signs of cooling.

Some buyers, fearful of a new bubble or worried about higher interest rates, are putting their plans on hold, while new listings of homes for sale have been increasing since March, which should put the brakes on spiraling prices.

"It’s a welcome break in the trend, even if it ultimately means prices start to cool off a bit too," said ZipRealty CEO and President Lanny Baker.

Real estate agents in Silicon Valley, where homes have commanded offers hundreds of thousands of dollars over asking price, say bidding is less frenzied than a few months ago, although it’s still one of the hottest markets in the country with a median of 10 days to sell a home.

Santa Clara Median Sale Price / sq. ft.

This can’t be! The party isn’t over just because mortgage rates are going up, or more homes are being put up for sale. Not in the Real Bay Area, anyway! The above map of Santa Clara County real estate sale prices per square foot says so. The spiking rental market keeps pushing buyers forward as well. Besides, It’s Special Here!  (It’s so special we have to tell you that red is county, green is city.)

And that median of ten days to sell a home proves that things can’t be cooling off. Everyone knows the smart agents wait 10 days and get all the overbids all at once. Houses could sell in 15 minutes if the sellers wanted them to.

The housing frenzy isn’t cooling off. This is wishful thinking. Mortgage rates don’t affect the Real Bay Area, because every single house in it was purchased by suitcases-full-of-cash-wielding foreigners, who, HELLO, don’t care what the mortgage rates are because they have, HELLO, suitcases full of cash on hand.  And more houses being listed? That just allows more people the opportunity to lose out to overbids on an excellent property.

We don’t understand why anyone would be allowed to print something this misleading, although the quote from the president of a county Realtard association (in the East Bay, yet), makes us glad they did:

While the steep climb in median sales prices for single-family homes in the East Bay, Peninsula and South Bay has made some buyers nervous, it doesn’t necessarily mean there’s a bubble, said Robin Dickson, president of the Contra Costa Association of Realtors.

"Clients say they are just not going to buy at the top of market, but really, how do you know this is the top of market?" Dickson said.

Other things we don’t know is whether the sun will rise tomorrow morning, when the San Jose Mercury News will admit it’s just a website, and when real estate writers will stop asking realtards for economic analysis knowing damned well all they’re going to get is cheerleading and happy talk.

Really, how do you know this is the top of the market?  It could actually be the floor of the NEXT market, Mr. Negativity!

Comments (33) -- Posted by: madhaus @ 7:15 am

July 3, 2013

Peak Pricing: Not Just for RBA Homes

We’ve been talking about the Bay Area Real Estate Bubble 4,0 for half a year now. One way to tell things are getting bubblicious and frothy is when areas we don’t think of as expensive start acting like Real Bay Area markets.  Today’s featured home is from the East Bay, and it joins the peak parade,  Thanks much to Burbed reader Brittney for alerting us to this disturbance in the Force.

130702-westbury-redfin5670 OLD WESTBURY Way
Dublin, CA 94568
Sold for $825,000

4 Beds
2.5 Baths
1,972 Sq. Ft.
$418 / Sq. Ft.
Built: 2003
Lot Size: 3,117 Sq. Ft.
Sold On: May 31, 2013

HOA Dues: $126/month
Style: Mediterranean
Community: Tassajara Creek
MLS#: 40615019
Type: Detached
Stories: 2
County: Alameda

Corner location! Features include two tone paint, plantation shutters and crown molding throughout. Kitchen with stainless appliances, honey maple cabinets and granite counters with backsplash. Upgraded fireplace in family room with custom tile work. Backyard w/ grassy area and custom patio!

130702-westbury-livingYes! Corner location! Twice as much traffic who can all appreciate your two-tone paint job! Now let’s hear from Brittney.

Just saw this listing go sold recently. It was listed at $724,900 and sold for $825,000 which is incidentally the exact amount paid for it by the owners back in Oct 2005 – peak of the peak during that bubble. Nothing new was done to the house and it’s not anything special in that area….

130702-westbury-patioThat’s one diference between the RBA and the East No Way, namely when the market peaked. RBA homes peaked in 2008, except You Are Priced Out Forever AGAIN this year. What’s great is you can choose whether you can’t afford Palo Alto or whether you can’t afford Dublin.

Just remember what you can’t afford for $825K in Palo Alto.

Bunus: Holy Planned Unit Development, Batman, this place has a FAR of 0.63.  That’s what your HOA fees bring: the bribes development fees to make that even legal.

Comments (5) -- Posted by: madhaus @ 5:10 am

June 30, 2013

Mortgages Up Half Point in a Week: You are Officially Priced Out Forever

Here’s some cheery news for you from our local Website That Was Once A Newspaper Too!

Biz Break: Mortgage rate skyrockets amid housing market turnaround

By Jeremy C. Owens, San Jose Mercury News
Posted:   06/27/2013 03:47:57 PM PDT; ‘Updated:   06/27/2013 04:40:57 PM PDT

Today: 30-year mortgage rate takes a nearly unprecedented one-week jump to its highest point in two years as the real-estate market heats up. Also: Apple (AAPL) continues to decline even as Wall Street has third straight day of gains.

The average rate for a 30-year mortgage experienced its largest one-week increase in more than a quarter-century, as the housing market continues a booming turnaround from the crisis that precipitated the Great Recession.

Mortgage buyer Freddie Mac reported Thursday that the rate had increased from 3.9 percent to 4.46 percent in the past week, the highest rate recorded in more than two years. The rise in the mortgage rate is even more striking when comparing it to near-record-lows experienced less than two months ago — in early May, the average rate was 3.35 percent. Bankrate.com reported that the 3.35 percent rate on a $200,000 mortgage would result in monthly payments of $881, while the 4.46 percent rate would cost a buyer $1,008 a month.

The rise comes as the housing market roars back to life so quickly that some in the Bay Area have asked if the region has entered another housing bubble. Home prices in the Bay Area hit their highest average in five years in May, according to DataQuick, returning to levels last seen before the Great Recession had most of its effects on the market. That mirrors a national rise, with the Standard & Poor’s/Case Schiller index tracking the highest annual gain in home prices since 2006 in April, as San Francisco joined three other large metro areas in increases of more than 20 percent.

130629-mortgages-forsaleWe’ll stop you right there with a reminder that we called Bay Area Bubble 4.0 and have continued to call Bay Are Bubble 4.0 months and months ago. You can see how behind the Murky News is on this, running a story by one of their own reporters and using an AP photo of a house in, we kid you not, Illinois.

130629-mortgages-openhouseflagAlthough maybe we shouldn’t point and laugh, because houses in the Real Bay Area sell too fast for anyone to bother with For Sale signs anymore.  Instead they use For Sale flags.  Much faster to wave one around for a couple of minutes, collect the overbids, and head back to the air-conditioned office.

We like this one, especially because the tree is doing the agent’s job.

Are you trying to buy a house or do you know someone who is? Are you trying to refinance and are you kicking yourself for waiting too long? What kinds of rates are you being offered by your bank or mortgage broker? 

Comments (12) -- Posted by: madhaus @ 7:06 am

June 19, 2013

Ni Hao! Why housing prices in the Bay Area can go only go up!

All the time, people ask me “Burbed, will the house prices in the Real Bay Area continue to go up?”

My answer: Are they making any more land… that Chinese people want to buy?

But enough of my pithy subjective comments, let’s look at this certified Bar Charts™:

http://thefrontsteps.com/2013/06/03/san-franciscos-gender-sexual-preference-income-ethnicity-marital-status-and-more/20130618paragon

Now, let’s face it: China is a country full of rich people. Full of them! And what do they want? US real estate!

Whether it be rich parents buying apartments for their high school aged children so they go to prep schools here, or for their 2 year olds, they are buying real estate. Now, granted, these two previous links were mostly about NY because of the lamestream media’s perpetual bias towards NY – but those of us in the Yay Area know better.

Looking at that chart above, you can see a trend. The blue bar is the biggest, and will only grow bigger. It’s almost touching the other edge of the chart, and that means there’s room to grow. In fact, if you look really hard, you can see that the bar is accelerating.

By the end of this decade, Chinese people will account for 105% of the Real Bay Area – that’s right, you heard it here first. They will all be coming here with their suitcases full of RMBs, buying all the real estate in sight. You think cash only offers are crazy today? Just imagine the future when you’ll be getting cash only with a LV suitcase offer.

With any luck, the Chinese will help the entire Real Bay Area finally edge out Manhattan for the highest $/sqft in America by the end of the decade, if not the the world.

Enter the dragon… the Open House hours are 9a-9:15a. xie xie!

So… Burbians… how are you doing in your Mandarin classes?

Comments (4) -- Posted by: burbed @ 5:03 am