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.

Under Water around the Bay Area has been taken off SFGate.  This was an interactive feature that showed what percentage of each zip code’s homes had mortgages on them for more than they were worth.  While it was a great idea, the data hadn’t been updated in several years.  Thanks to Burbed reader JF for reporting the broken link; we’ve removed it from our collection.

Meanwhile, when Burbed readers send in listings to some neighborhoods, we can’t write them up fast enough.  This cute Palo Alto house sold for over $300K, or 23% over the asking price.  And the Redfin agent says it’s impossible to park nearby! 

With this crazy overbidding, can the $800,000 crapshacks of 2006 be far behind?  Is Burbed about to discover that what’s old is new again?  This is going to be GREAT!  We can rerun every single house from six years ago and nobody could tell the difference!

Tell us what you’re seeing at Open Houses, or about anything.  It’s Open Thread time!

You know how to make a small fortune in real estate, right?  Start with a large fortune. 

This is a story of someone with a decent fortune who managed to lose it all, by buying can’t-lose inflation-proof real estate.  Let’s see how well that went.  Thanks to Burbed reader nomadic for sharing this modern morality play.

Family’s Fall From Affluence Is Swift and Hard

By GERALDINE FABRIKANT
Published: November 25, 2010

WAMEGO, Kan. — Grateful to have found work in this tough economy, Nick Martin teaches grape growing and winemaking each Saturday to a class of seven students in a simple metal building here at a satellite campus of Highland Community College.  (photo, right)

Then he drives 14 miles in an 11-year-old Ford Explorer to a sparsely furnished tract house that he rents for $900 a month on a dead-end street in McFarland, a smaller town. Just across the backyard is a shed that a neighbor uses to make cartridges for shooting the prairie dogs that infest the adjacent fields.  (photo, below)

It is a far cry from the life that Mr. Martin and his family enjoyed until recently at their Adirondacks waterfront camp at Tupper Lake, N.Y. Their garage held three stylish cars, including a yellow Aston Martin; they owned three horses, one that cost $173,000; and Mr. Martin treated his wife, Kate, to a birthday weekend at the Waldorf-Astoria, with dinner at the “21” Club and a $7,000 mink coat.

That luxurious world was fueled by a check Mr. Martin received in 1998 for $14 million, his share of the $600 million sale of Martin Media, an outdoor advertising business begun by his father in California in the 1950s. After taxes, he kept about $10 million.

Photos: Steve Hebert, New York Times

In some ways, this story is similar to many sympathetic treatments of less wealthy people losing their homes due to not understanding the basics of finance.  If you owe more than you own, you’re not moving in the right direction.  And if you sign papers you don’t understand, you’re setting yourself up for a world of hurt.

What’s amazing is how Nick Martin still seems to think what happened to him is somehow somebody else’s fault, maybe multiple somebody elses.  Unlike the numerous victims of manufactured documents and hard-sell subprime Pay Option ARMs, Martin seems to have sought out what became his undoing.

I do recommend you read the article, but here’s the shorter Nick Martin: He bought a bunch of crap he couldn’t afford, so now he’s broke.  That’s a fairly common story, it’s just most of them don’t start with getting a phone call asking where you want your $14 million deposited.

Please share your advice for Nick Martin, or for anyone about to enter the exciting world of buying and selling real estate.  How would he have fared if he’d bought in the Real Bay Area instead? 

536 Laidley St San Francisco, CA 94131

$875,000

Beds:	5
Baths:	3
Sq. Ft.:	2,136
$/Sq. Ft.:	$410
Lot Size:	-
Property Type:	Single-Family Home
Style:	Contemporary
View:	Panoramic, City Lights, Bay, Park, Hills, Mt. Diablo
Year Built:	1906
Community:	Glen Park
County:	San Francisco
MLS#:	364602
Source:	San Francisco MLS
Status:	Active This listing is for sale and the sellers are accepting offers.
On Redfin:	24 days

Great extra wide property on quiet Laidley Street in Glen Park. There are two separate detached units, each with a garage. The front 3bd. 2ba. house has new central heating, 2nd floor deck with crow’s nest, ground floor studio, views of Mt. Diablo, San Bruno Mtn, and Bay views. The rear unit is a legal 2 bd. Each needs some work. 4 blocks to GLEN PARK BART. This is a short sale. Offers will be reviewed as they come. Open Sundays 2 – 4pm and Tuesday Tours. Call or write for other times. Come see!

Some people trash their house when they know they’re going to be foreclosed… these folks apparently decided to paint the exterior to vent their frustrations.

Seems that with tenants, the owners would’ve been able to keep up with the payments.  They originally put 20% down to buy it (according to PropertyShark).

This seems to imply that the design was in malice. Personally, I think this is exactly the kind of house that San Francisco is famous for – individualized, iconic, controversial. Just think of how this house is already cheering up this Friday at Burbed!

If you’re not proud of owning this house and its color scheme, then this house probably isn’t for you.

Now, to onto the nitty gritty: offers will be reviewed as they come. So, it’s definitely in your best interest to bid early and at a very high price. Otherwise, this could easily slip away. Maybe you should even go as far as to place multiple bids under secret names – each higher than the last! Now that’s a strategy that any realtor would approve of. Ignore the fact that there are no interior pics – it’s probably just too fabulous.

And, with the separate detached units… in a word… cashflow. Sweet sweet cashflow.

Happy friday!

Silicon Valley home values plunge at record pace; 20 percent of homes are ‘underwater’ – San Jose Mercury News

Against a backdrop of dire economic news and a crumbling stock market, home values in the San Jose metropolitan area dropped more steeply in the fourth quarter of 2008 than anytime in at least 12 years. The decline left nearly one in five of all homeowners “underwater,” owing more on their mortgages than their homes would likely fetch in a sale.

The value of all homes in the San Jose metro area fell 17.2 percent in the final three months of 2008 compared with the same period in 2007, to an estimated median value of $587,360, according to real estate valuation company Zillow.com. It was the sharpest decline since at least 1996, which is as far back as the company calculates values, and the lowest median value since the first quarter of 2004.

“By a long shot, it’s the worst drop we’ve seen in the San Jose area,” said Stan Humphries, vice president of data and analytics at Zillow, which launched in 2006. In the third quarter last year, for example, the area’s median value was down only 13 percent compared with a year earlier.

Across the San Jose metro area, which includes all of Santa Clara County, all homes lost a total of $58.8 billion in value in 2008. The lion’s share of that loss, nearly $29 billion, occurred in the fourth quarter, when the severity of the economic downturn was becoming more obvious with nearly every passing week.

Sigh. Yet another poorly written MSM piece that doesn’t recognize the distinction of the Real Bay Area, versus Silicon Valley.

Let’s use the wisdom of the crowd instead – what have you seen in your neighborhood lately? Have you seen this?

The Zillow report found that home value declines were serious in some Santa Clara County neighborhoods, and slight in others. In Gilroy, for example, the median home value dropped 38 percent from fourth quarter 2007. But in Los Altos’ 94024 ZIP code, values fell just 5.4 percent.

Palo Alto’s ZIP code 94301 was the only place in the county to post a higher median value, up 5.2 percent.

Go Palo Alto!

1 in 7 homes in Santa Clara County is ‘underwater’ – San Jose Mercury News
In Cupertino, for example, only 1 percent of owners who purchased their homes since 2003 were underwater — also called “upside-down” — in the third quarter. In San Jose’s 95122 ZIP code, 62 percent of recent buyers had negative equity. In Gilroy, 51 percent did.

That’s bad news for many homeowners in the San Jose metropolitan area. But, said Stan Humphries, Zillow’s vice president for data and analytics, “When you compare it to other major metro areas in California, it actually fares very well.”

Seriously? People are talking about Gilroy when they talk about the Bay Area? Still? Come on MSM (Main Street Media)! Get with the times!

Here’s a corrected map of the Real Bay Area:

Let’s focus on the real news:

Humphries noted that home values in Santa Clara County cities such as Cupertino and Mountain View finally began to slip in the third quarter, despite the fact that other parts of the county already have seen double-digit depreciation.

“Prior to this quarter we were thinking of those as oases,” he said. “It’s very evident just how much the San Jose metro region has been buoyed by the tech sector.”

In Cupertino, Los Altos, Mountain View, Palo Alto and Sunnyvale, the company said, the median estimated value of all homes declined between 1 and 2 percent in the third quarter, compared with a year earlier. Monte Sereno was the only community in the county where values rose compared with third quarter 2007, rising 1.3 percent.

Good! Good riddance. All those Real Bay Area wannabees will finally be purged, so we can focus on retaining the best Real Bay Area homeowners. So 2008 isn’t going to end with a bang… that just sets us up to be in an even better position for 2009! OH YEAH!

BTW, Monte Sereno, you are my new BFF.