January 2, 2007

"renting, it’s just cash in the trash" – bus driver

MORTGAGE MELTDOWN / Johnnie Pitts
Beaming with pride and talking a mile a minute, Johnnie Pitts stacked up piles of legal documents on his living room floor the Wednesday before Christmas. The San Francisco Muni driver had just returned from having his signature notarized on agreements that permanently modify his once-exorbitant mortgage to a reasonable interest rate, allowing him to keep the three-bedroom bungalow on Oakland’s MacArthur Boulevard.

[snip]

At the same time, he boosted his income by racking up overtime – an extra 10-hour day every week – to catch up on some missed mortgage payments and property taxes. “It’s not like I was trying to shirk my responsibility and run,” he said. “My family and co-workers said, ‘Why don’t you just do a short sale?’ but this is my house. This is the major purchase of my life.”

When Pitts bought the run-down house for $429,950 with 100 percent financing in 2005, his interest rate on the larger of his two loans from Chase was fixed at 7.2 percent for two years and then could reset to as high as 10.026 percent. New increases could come every six months. Now Chase has agreed to lock the rate at 6.75 percent for the 28 years remaining on the loan and has made similar modifications to the second mortgage.

[snip]

Pitts’ monthly mortgage will now be just shy of $2,800. Property taxes and insurance add another $700 a month. The $3,500 monthly total is still quite steep for a man whose base income is about $4,000 a month, although he can earn another $1,000 or so through overtime.

[snip]

“When it comes to renting, it’s just cash in the trash,” he said. “You can’t win no way when you’re renting, especially if you’re single and in the 35 percent tax bracket. Owning a house is the best thing you can do for yourself. It’s worth it to have some stability.”

Now that the word “modify” has entered his vocabulary, Pitts frequently invokes it. “I’m going to modify my lifestyle,” he said. “I shop at the dollar store; I buy in bulk and on sale. If push comes to shove, I may have to get a roommate.”

 

It’s true! Just imagine, your landlord raises your rent by 10% – can you negotiate it down?

NOPE

Can you do the same with a mortgage? Of course!

And that’s the lesson for today folks.

 

Click here to post a comment -- Posted by: burbed @ 4:26 am






June 20, 2006

No need to worry: Millionaires thriving

No need to worry: Millionaires thriving
The millionaires club keeps getting bigger and bigger.

In the Bay Area, nearly 111,600 out of 2.5 million households had a net worth of at least $1 million or more in 2005, excluding the value of their homes, according to a new study.

Over the next five years, that total is expected to jump by nearly 53 percent, while the population is expected to grow by only 20 percent.

“It’s like the Napa Valley, which is a great place to grow grapes because of the various environmental factors,” said Rich Hogan, a San Francisco senior vice president at Merrill Lynch, which released the data Tuesday, along with its annual “World Wealth Report.” “In the Bay Area, there is a well-educated, sophisticated population, unparalleled access to investment managers and an area that tends to be very aware of what the next big thing is.”

Further proof that Bay Area house prices will always go up!

Click here to post a comment -- Posted by: burbed @ 11:45 pm

June 2, 2006

Only 12% of SFers can afford a home. Families leaving in droves…

Lots of toddlers, fewer school-age kids in S.F.
Only an estimated 12 percent of San Francisco households earn enough to buy a median-price home, which costs more than $760,000, according to the California Association of Realtors and DataQuick Information Systems.

In some ways, this isn’t terribly surprising. 12% does seem a bit low – especially when you think about how many properties in SOMA are second homes. But what’s really shocking is the chart. No one is moving to Santa Clara! I checked with the author of the piece and this is not a mistake. Whoa!

Click here to post a comment -- Posted by: burbed @ 5:00 am

May 25, 2006

Home sales drop to 5-year low / Steep decline sparks debate over whether the Bay Area real estate boom is over

Home sales drop to 5-year low / Steep decline sparks debate over whether the Bay Area real estate boom is over
Despite a record for Bay Area home prices in April, sales tumbled to their lowest level in five years as a chill continued to creep through the region’s housing market.

Experts remain split on whether the slower rate of appreciation and softer demand during what is typically a robust sales season signal a pause or the beginning of prolonged slowdown in a sector that has bolstered the region’s economy and vastly increased wealth for many homeowners in the past few years.

The median price for a single-family home in the nine counties last month was $664,000, up less than 7 percent from a year ago, and just above the previous record of $656,000 in autumn, according to real estate information firm DataQuick.

Uh oh! Quick! We need some more IPOs!

Click here to post a comment -- Posted by: burbed @ 5:00 am

May 11, 2006

$697,000 for a meth "super lab" in East Palo Alto

So I saw this article the other day:

EAST PALO ALTO / Hospital setup found during meth lab bust / Medical tools may have been intended for injured criminals
An East Palo Alto home where police found a “super” drug lab last week also housed an elaborate hospital-like operation — stocked with thousands of dollars in medical equipment, surgical tools and supplies — that authorities believe was to be used to treat injured criminals.

The top floor of the Runnymede Street home was filled with “boxes upon boxes upon boxes” of medical supplies and contained a room equipped with a hospital bed, fresh linens, scalpels, IV stands and surgical tools, according to Lt. Tom Alipio of the East Palo Alto police department.

“It was set up just like a hospital room,” said Alipio, who said a second room was in the process of being set up. “We found a kit that a surgeon would use to reassemble a joint — like a hip or a shoulder.”

So I found myself wondering… “Gosh! How much does a meth super lab/hospital cost these days?” Fortunately, with some simple sleuthing, I was able to find the address and this ZEstimate:

Zillow.com – xxx Runnymede St, East Palo Alto, CA 94303
MethLabRunnymede.jpg

Residence: Single family
Bedrooms: 2
Baths: 1.0
Total rooms: 5.0
# Stories:
Sq ft: 760
Lot size: 18,768 sq ft / 0.43 acres
Year built: 1935

Hey! Wow… 760 sqft sounds small. Fortunately, the article provides more details…

Alipio, who said the items appeared to have been stockpiled to treat gunshot or chemical wounds, said everything appeared brand-new, but he couldn’t be sure if the room had been used to treat any patients.

Alipio said he was stunned by the sheer volume of the items, which he said would fill a semi-trailer truck.

“This goes above and beyond the taking of a garbage bag or a bottle of soap,” said Alipio.

Investigators said wounded criminals could use such a place to avoid going to regular hospitals, which are required to report suspected criminals to authorities.

The room and supplies were discovered in the upstairs front unit of a house that had been divided into three units and also contained a drug lab that had been fortified with concrete cinder blocks, steel doors and metal bars. The entire property had been wired with an elaborate security camera system that police said was not being monitored at the time of the raid.

A single mother of five young children had been living in the back of the home at the time of the raid but was not connected to the drug operation, police said.

Hey! That sounds like a lot of livable space! And its prewired for security! Keep your eye out for this jewel when it shows up in court. Could be a good buy!

Click here to post a comment -- Posted by: burbed @ 5:00 am

March 15, 2006

Is Bay Area Real Estate Market Scary?

A BULL, A BEAR AND THE BUBBLE / What’s ahead for the real estate market? Two respected analysts — and now authors — hold markedly different views
Talbott regards the latest data on the Bay Area housing market as mounting evidence for his prediction: rising interest rates, decreasing appreciation, 10 straight months of declining sales and, in January, the lowest number of sales in five years.

The problem, he says, is that home prices are way overvalued — just as Internet stocks were during the 1990s before that sky collapsed. As evidence, he points to the growing discrepancy between Bay Area home prices and rents, an indicator commonly used by economists to determine a property’s true value.

Novato’s RealFacts puts the average Bay Area apartment rent in the fourth quarter at $1,324; DataQuick calculates that the typical home buyer in December committed to a $2,867 mortgage payment.

“It paints a very scary picture,” Talbott says. “Something has economic value because it has cash flow. If you discount for general inflation and go back 120 years in history, you’ll discover that, in real terms, housing prices were relatively flat until 1997 — then (they) shot up about 70 percent.”

To buy these overvalued homes, he says, many consumers overextend themselves financially by borrowing more from banks. They end up paying an inordinately high percentage of their monthly income on mortgages. In Los Angeles, he points out, the average new homeowners, usually a young couple, are spending 55 percent of their monthly income on a mortgage payment.

But like everyone says – the Bay Area is the best place in the world to live! Isn’t it worth giving up living to live here?

Comments (1) -- Posted by: burbed @ 5:00 am