July 28, 2012

Most Fascinating Statement of the Week: Golden Bear Edition

Did you know that there’s a Real Estate department at UC Berkeley?  No, we don’t mean that Cal or the Regents are buying up foreclosed homes nearby.  There is an actual academic department that studies and teaches real estate.

120724-haas-logoAs an academic discipline.

To, among other students, real estate “professionals.”

At UC Berkeley.

The crown jewel of our taxpayer-funded college system.

Yes, there is an actual place called the Fisher Center for Real Estate and Urban Economics and it’s part of Cal’s Haas School of Business.  Here’s their mission statement:

The mission of the Fisher Center for Real Estate & Urban Economics (FCREUE) is to educate students and real estate professionals and to support and conduct research on real estate, urban economics, the California economy, land use, and public policy.

Well, that doesn’t have to be a crisis signifying the lack of integrity of academia, does it?  If they study real estate in a disciplined, methodical and rigorous manner, the subject could certainly be well worth the effort.

Then again, maybe not.

In Tuesday’s SJ Mercury News, Professor Emeritus Kenneth T. Rosen, who is the chairman of the Fisher center, was quoted for a story on the improvement of home values in the second quarter .  Let’s listen in on his brilliant observations on the problem of a stalled regional housing market due to negative equity:

“It’s becoming less negative as house prices are going up around the Bay Area… It only affects those people who bought at the peak two or three years. Part of the reason they have negative equity is that they borrowed a lot of money.”

Ya think?

Comments (1) -- Posted by: madhaus @ 5:03 am






October 14, 2010

I’m Shopping Around for Something to Do that No One Will Like

That’s a Jerry Garcia quote, but he wasn’t talking about his house.  Maybe someone will like it (the house, not the quote).  Maybe you could own it.  But unfortunately the previous owner sold all the Garcia fixtures to raise money for charity.  So you cannot have The Jerry Garcia Toilet.

55 El Mirador Dr Nicasio, CA 94946
$3,995,000

image

Beds: 5
Baths: 6
Sq. Ft.: 7,189
$/Sq. Ft.: $556
Lot Size: 10.47 Acres
Property Type: Residential, Detached, Single Family
Style: Spanish/Mediterranean
Stories: 2
View: Canyon, Forest/Woods, Hills, Mountains, Panoramic, Ridge, Valley
Year Built: 1989
Community: Nicasio
County: Marin
MLS#: 21025911
Source: BAREIS
Status: Active
On Redfin: 32 days

Former Estate of Jerry Garcia. Gated, private – situated on top of a sunny ridge with beautiful views. 5bd/5 full and 2 1/2 baths, 6 car garage, Artist Studio that was Jerry’s, pool w/ waterfall, organic garden, children’s playground, Fabulous for entertaining in this exquisite mediterranean estate with access to the outside grounds from most rooms. Close to SF.

Jerry Garcia

Jerry Garcia, the lead guitarist of The Grateful Dead, owned this house at his death in 1995.

Alas, the estate doesn’t even have a Deadhead name like Terrapin Station or (Crap) Box of Rain.  And while the current owner claims to have lots of stories about Garcia and the remaining members of the band, none of them were included in the listing.

And do check that listing out, as it is so overflowing with houseporn you’ll doubt Jerry ever had anything to do with this place.  Here’s just a sample of the purple prose that awaits when you read the property features:

The Master Suite is elegantly appointed with dark teak flooring, wood-burning fireplace, Fortuni chandelier, four door access to a paver deck overlooking the pool and back patio offering views to the East and South. This elegant sleeping area has two entrances. The Master Bath brings together function and form with his and hers sinks marble tops Elgin fixtures, and ample mirrors. Further in are private toilet and bidet with telephone accessibility. The master also offers full length glass enclosed Sauna with one-way glass enclosure to the outside grounds. The walk-in marble shower is also fully enclosed and contains two facing shower heads enclosed in a marble finish and with length size bench. The water pressure would make a power washer jealous. The Master Closet is a room in and of itself. One would be hard pressed to fill this closet and itis a room that has to be seen to understand how true that is.

It is easier to fill a large closet if you own a lot of crap.  Perhaps the agent doesn’t understand how true that is.  So, you think the above language is overdone?  There’s also clunky language:

Along with the stunning architecture and overall design of the house itself, the grounds boast impeccable landscaping.  Its rolling lawns, along with mature palm trees mix spectacularly with the surrounding native forest. Its 73,000-gallon swimming pool and enormous spa are complemented by palms, lawns, and rose gardens adjoining a spacious sun drenched patio area beneath sunlit skies during the day and moonlit skies at night.

It’s a good thing this isn’t one of those ordinary properties that has moonlit skies during the day and sunlit skies at night.  I hate when that happens.

But the agent got one thing right.  Two photos of the hot tub,  (George HW Bush wrote an apology to Marin County residents, saying he’d never use the phrases “Marin County” and “hot tub” in the same sentence again.)

This is the perfect place to celebrate Proposition 19 passing, in a Marin County hot tub, formerly owned by Jerry Garcia.

Comments (6) -- Posted by: madhaus @ 5:23 am

June 6, 2010

The next generation of home buyers has too much college debt to buy a house

Last week, The New York Times ran a particularly depressing article about how college students are taking on too much debt to ever pay back.  Lenders were encouraged to do this, because not only were the loans government-backed, but the new bankruptcy laws don’t discharge educational loans.

The Times showcased a recent NYU graduate, Cortney Munna, who ended up owing over $100,000 in student loans and had to enroll in night school to avoid the unaffordable monthly payments that would start once the classes stopped.

While many viewed this article as yet another example of the Brazilification of the United States, thank goodness Danville Realtor Greg Fielding has put this story into the proper perspective.  Who’s Greg Fielding?  He founded the group blog housingstorm, and also runs Bay Area Real Estate Trends.

Greg Fielding believes that high college debt is a problem because indebted graduates can’t take on further debt to become homeloaners!

From a real estate perspective, this could impact the starter-home markets for the a decade or more as the next generation of first-time homebuyers is already burdened with too much debt.

And if they have so much debt they have to stay in night school forever, so much for saving up a down payment on that cute little 800 sf condo.  Just as the lenders threw money at anyone who could fog a mirror and wanted a house in 2006, it’s happening with college loans now.

All of these actions were taken in the name of helping students, but few ever stopped to consider that loaning an 18-year-old kid $40,000 a year might not be “helping” him. In fact, just like housing, the beneficiaries weren’t the borrowers, but the lenders, brokers, and sellers. It is their collective, repugnant greed to blame.

A Real Estate agent speaking against the excesses in the mortgage market (by way of criticizing the college loan market) is quite refreshing!  So, how bad is this problem?

60% of student loans are either in forbearance or default (with interest piling up). A full 60% of these predatory loans are NOT being paid back. This is a staggering number. A full 60% of recent grads are watching their loan balances grow with less and less hope of ever paying them back.

Wait, wait, wait.  Math class is hard, but can we agree that if 60% of the loans are not being paid back, that this does not mean 60% of recent grads are affected?  The example in the Times, which Fielding himself quotes from, has one student with four different loans.   Is it possible that the same people are defaulting on multiple debts, leading to a lower percentage of college grads at risk?

Okay, that’s a digression.  20% or 60%, this is a problem.  There is $730 billion in student loan debt, and only 40% of it is being repaid. The rest is either in deferment (no payments, no additional interest), forbearance (no payments but interest accrues), or default.  And this is a problem, because:

This generation will have a harder time qualifying for home loans, and will certainly qualify for smaller loans, until these debts are paid off. But we are making NO progress. In fact, the situation is only getting worse.

They will have a harder time qualifying for home loans.  Priorities!  And speaking of home loans, here’s an example from the Wall Street Journal article showing the difference between home loans and student loans:

Heather Ehmke of Oakland, California, renegotiated the terms of her subprime mortgage after her home was foreclosed. But even after filing for bankruptcy, she says she couldn’t get Sallie Mae, one of her lenders, to adjust the terms on her student loan. After 14 years with patches of deferment and forbearance, the loan has increased from $28,000 to more than $90,000. Her monthly payments jumped from $230 to $816. Last month, her petition for undue hardship on the loans was dismissed.

Fielding doesn’t just see this as preventing future home sales.  He questions whether all these people should be buying in the first place, or whether they should borrow for college.

But “more people in college” is not the answer any more than “more people in homes”.

Fielding wants these debts addressed in bankruptcy proceedings, but he thinks government is beholden to colleges and banks.  Then government will help colleges and banks instead of debtors.  More loans, not fewer.  More “debt slavery” rather than less.  This Greg Fielding makes too much sense.  He almost sounds like a Socialist.

It’s an interesting way to sell houses.

Comments (132) -- Posted by: madhaus @ 5:01 am

April 12, 2007

NAR to adjust the median

April 12, 2007

globeandmail.com: Rare drop in U.S. housing prices forecast in 2007
“We’ve never seen a distortion of this effect. . . . This is a weird event,” NAR spokesman Walt Molony said.

That’s because house prices are rising in a vast swath of the country, including much of the mid-Atlantic, the Northeast, Midwest and Texas.

It’s just that homes there generally cost less, skewing the national median price.

Mr. Molony said the distortion is so significant that the NAR is working on an adjusted median price to better reflect what’s actually happening in most of the country.

Oh sweet! A new method of accounting. Expect an “adjusted median” to be the new hotness, replacing the old “median”.

Yep, this is going in the quotes file.

Click here to post a comment -- Posted by: burbed @ 7:19 am

April 11, 2007

Marin: "It's God's country"

April 10, 2007

Marin Independent Journal – Economist sees Marin holding its own in housing slump
A prominent real-estate economist predicts that troubles will persist in the California housing sector throughout the year, but she said Marin’s unique market is weathering the downturn better than other areas.

“It’s God’s country, what can I say,” Leslie Appleton-Young, chief economist for the California Association of Realtors, told an audience of agents Tuesday in Terra Linda. “When is the 30 percent decline in Marin County’s market going to happen? Not in my lifetime.”

Yep, this is going in the quotes bucket.

Click here to post a comment -- Posted by: burbed @ 3:49 pm

April 7, 2007

"prices to jump by 10% or more in 2008"

April 5, 2007

cbs5.com – NorCal Real Estate Market Heating Up, Realtors Say
Byron Alvarez of the REMAX Real Estate Center, a 27-year real estate veteran, expects prices to jump by 10 percent or more in 2008.

“We’re going to be sitting here 4 or 5 years from now when we’re at the peak of the up cycle saying: ‘Remember ’06 and ’07?’ We should have been buying everything on the market,” Alvarez said.

I’m adding a new category of posts called “Quotes” – let me know if you see any good ones.

Click here to post a comment -- Posted by: burbed @ 9:14 pm