February 9, 2013

More Bubblicious Signs of Bubbling Bubblicity

Sometimes, there’s a message out there with your name on it, so you get hit on the head with it again and again and again.  Here are some of the messages we got yesterday, and they all add up to the same thing.

130208-bubble-foreclosureFirst, looks like HELOCs are coming back.  No, they’re not at the insane rate of the glory days of 2006, but there’s more in 2012 than 2011.  So that’s something for us to keep an eye on. 

One of the problems with HELOCs was HELOCity, where every homedebtor used the line of credit not for major home improvements or emergencies, but as a full-time ATM.  People bought a lot of giant-ass SUVs and vacations and bling using the equity in their homes.  Why would they do something that stupid? Do they really think they’d never have to pay it back?  Some of us actually do remember when second mortgages were subprime mortgages throughout the industry.

Speaking of subprime, you know what else is back? Subprime mortgages! That article we featured last weekend on the Dignity Mortgage wasn’t the only sip of subprime sangria.  Gotta love this quote:

The Revival of Subprime: Will This End Badly?

By Matt Clinch | CNBC – February 8, 2013

The sub-prime market – risky mortgage backed securities – is hot again and its revival is exceeding many people’s expectations, the chief market strategist at Rosenblatt Securities says. He believes this will end badly.

The subprime mortgage crisis which led to the financial crash of 2008 involved institutions making loans to those that had difficulty maintaining their repayment schedule.

Wall Street brokerage firm Rosenblatt – which has been monitoring the situation since the last storm – says the credit-led bull market is well under way.

"The subprime market’s revival is proving to be even stronger than we had anticipated," Brian Reynolds said in a research note. "This is just a credit cycle, and it will eventually end badly like the others."

We are sure you are thinking the same thing we are: How can we best profit from so many other people’s stupidity?

130208-bubble-pamaiNext, several different reports of an increasingly skewed seller’s market.  We’ll have one up bright and early to start the week, and it’s a doozy.  Here’s a smaller example, an on-the-ground report from Definitely Not the Real Bay Area.  This poor agent says she listed a Blossom Valley property and now her phone is ringing every ten minutes.  Won’t someone let her get some quiet time and please offer twice the asking price already? 

130208-bubble-downpaymentBuyers now have to write beg letters to get noticed when there’s 40 offers on the table. And who can forget the lottery line for just 4 Gale Ranch models in San Ramon.  Need we remind you, Gale Ranch is not only in the East Bay, it’s in a place where they are still making more land. 

If you haven’t already seen this 2007 (!!!) video, enjoy it.  And if you have, sing along, because HERE COMES ANOTHER BUBBLE.

Comments (32) -- Posted by: madhaus @ 5:05 am






July 11, 2012

COMPLETELY UPDATED: $4.2 million teardown in Belvedere

Burbed has visited this high-priced peninsula before, but we’ve never reported on a teardown at Hillsborough-with-Baywater.  Thanks very much to Burbed reader Pkamp3 for the find.

A $4.2 Million Tear-Down House in Belvedere, California

By ALAN FARNHAM | ABC News – Fri, Jun 29, 2012

120710-belvedere-abcIn Marin County, California, where people tend to have money, people in Belvedere tend to have more. Even so, a recent decision by Clark and Sharon Winslow of 337 Belvedere Avenue to buy the home next to theirs for $4.2 million — and then tear it down — might seem extraordinary.

It’s not, say locals and real estate professionals.

“There are houses being torn down all the time,” says Bill Smith, realtor and ex-mayor of Belvedere. In neighboring Tiburon, he says, a buyer not long ago paid $20 million for the home of tennis star Andre Agassi and wife Steffi Graf, then announced his plan to raze it.

While the article specifically mentions the house that isn’t being torn down, we’re left to guess which property is getting the extreme makeover.  And we think it’s this one.

Update 9:30 AM: And we are completely wrong.  Burbed reader gallileo provided the evidence that it’s the house on the OTHER side.  Correct info added to end of article, because we hate to waste a good housing rant.

341 Belvedere Ave
Belvedere Tiburon, CA 94920
Sold on 01/14/2000 for $2,100,000

120710-belvedere-redfin

120710-belvedere-satelliteSource: Public Records
BEDS: 3
BATHS: 2.5
FINISHED SQFT: 2,831
UNFINISHED SQFT: –
TOTAL SQFT: 2,831
FLOORS: –
LOT SIZE: 8,400
STYLE: Single Family Residential
YEAR BUILT: 1964
YEAR RENOVATED: 1975
COUNTY: Marin County
APN: 06022128
LAST UPDATED: August 24, 2011

The interesting thing about buying and tearing down a perfectly good house isn’t that someone with way too much cash went ahead and did it.  It’s how much the house was worth in the first place.  Zillow says… ZEstimate of $1,876,100.  Which means the new “owners” spent more than twice what this house may be worth just to make more land.

Yes, the purchasers live in that 9524 square foot housing tumor on the left.  Let’s see what they got for $4.2 million!

120710-belvedere-streetview

Oh yeah.  Perhaps they’ll be tearing down this place next, since it’s blocking their Bay access.  (See #42.  Only 1017 days on Redfin!)

Update: Here is the correct house.  gallileo provides a link to SocketSite with the story, and there’s a further link to a piece in the Marin Independent Journal.  So, without further adieu, the actual house that was purchased for $4.2 million only to be torn down.  That and more, after the break.

(more…)

Comments (10) -- Posted by: madhaus @ 5:15 am

February 12, 2012

The Richest Cities Where No One Wants to Move

Many thanks to Burbed reader Michael Boltonestater for passing along this article, which was summarized on Yahoo Real Estate.

The Richest Cities Where No One Wants to Move

24/7 Wall Street
By Charles B. Stockdale, Michael B. Sauter; Posted: February 3, 2012 at 7:01 am

Many Americans still are holding off on buying homes in some of the country’s most expensive cities. While home prices fell 23% on average in the largest cities since the housing crisis began, for many home buyers the drop was not enough. Based on a new report released by Trulia, 24/7 Wall St. identified the 10 metropolitan areas to which no one wants to move.

Trulia ranked the 100 largest metropolitan areas by their Metro Movers ratio, which measures homebuyer activity and interest metropolitan areas. The ratio compares the number of online searches of local residents looking to buy elsewhere to the number of out-of-town homebuyers looking for real estate in the area. According to the report, a ratio of two means that there are twice as many home searches by people looking to leave the area as to move in. All of the cites no one wants to move to have a ratio higher than two.

The cities that attract few buyers experienced modest home price declines since the recession began, especially relative to their high home value. As a result, home prices in these areas are forecast to decline further, and homebuyers are waiting until they do. All of the 10 cities no one wants to move to have among the most expensive homes in the country. Newark and Bethesda, two cities with twice as many people looking to leave as looking to move in, have among the top 10 highest median home values in the country. Home prices in these cities declined at just the national average, and next year, they are projected to decline more.

120211-blightI think this 24/7 Wall Street site has forgotten how the real estate market works.  Expensive markets do not stop being expensive because other markets are not expensive.  Expensive markets are Special, and the decline of other markets makes Special markets More Special.

On the other hand, the list of the Top Ten Places Where More People Want to Move Out Of Than Move To is not as full of Specialness as you might expect.  Consider this conclusion:

People do not want to move to cities that are largely older and more densely populated. Regions in the northeast that are of little interest to out-of-town buyers include Philly, Newark and New Haven. Other older metropolitan areas include San Jose and Seattle. Kolko suggests the move away from urban areas has a lot to do with expense. “Even though people often say they want to live in urban neighborhoods where they can walk more and drive less, they get more for their buck where the car is king. Most long-distance searches are toward smaller, suburban, more sprawling areas, not toward the older, dense cities of the northeast.”

120211-i680-trafficYes, that explains completely why exurban areas are increasing in value compared to close-in neighborhoods near major employers.  Just look at the price increases in a community of newer homes in Danville, compared to a worn-out community full of tired, old houses in Palo Alto.  And the price of gasoline going up shouldn’t have any effect on communities further from high-paying jobs, either.  After all, the car is king, and if you’re going to sit in traffic for an hour and half, your reign will last longer.

California Zillow Home Value Index

Ah well.  On to the list of places people can’t wait to leave.  Have you made any predictions which metro areas will qualify?

For the chart below, the Metro Movers Ratio is the above mentioned proportion of residents looking at homes outside the region versus other people looking at homes in the region, per Trulia.  The home value decline is from peak pricing, and the forecasted percent change in home price is through third quarter of 2012.  For comparison, the national unemployment rate was 8.7%, while the typical home declined 23% from the peak nationwide.

Rank City/Metropolitan Area Metro Movers Ratio Median Home Price Home Value Decline Unem-ployment Forecast % chg price
10 Omaha-Council Bluffs, NE/IA 2.04 $138,000 -2.8% 4.7% +1.5%
9 Camden, NJ 2.11 $180,000 -24.7% 9.5% -3.3%
8 Seattle-Bellevue-Everett, WA 2.11 $350,000 -29.2% 8.2% +0.1%
7 Baltimore-Towson, MD 2.17 $258,000 -22.3% 7.2% -0.8%
6 New Haven-Milford, CT 2.21 $220,000 -21.1% 9.2% -1.6%
5 Bethesda-Rockville-Frederick, MD 2.25 $700,000 -28.9% 5.4% -5.6%
4 Philadelphia, PA 2.40 $265,000 -12.9% 8.2% -1.7%
3 Washington-Arlington-Alexandria, DC/VA/MD/WV 2.54 $390,000 -27.7% 6.0% -3.3%
2 San Jose-Sunnyvale-Santa Clara, CA 2.60 $546,000 -32.5% 9.8% -3.8%
1 Newark-Union, NJ/PA 3.65 $400,000 -24.7% 8.9% -4.6%

120211-sanjose-yahooCurses!  Losing out the #1 spot is bad enough, but losing to NEWARK?  This is a grave insult.  People may want to move out of Newark, but I assure you, it isn’t because it’s too expensive.  It’s because it isn’t Special, and no doubt residents aspire to relocated to Places of More Specialness.

I mean, can you really take this analysis seriously, when this is what they have to say about our being #2 on the list?

Image of San Jose from Yahoo News Story; Sean O’Flaherty / Wikimedia Commons

The median home price in the metropolitan region of San Jose-Sunnyvale-Santa Clara is $546,000, the third highest in the country. The median family income is the fourth highest in the country. Home prices may simply too high for many people. The median mortgage payment at the peak of home prices as a percentage of median monthly family income was 46%. This is one of the highest rates in the country, reflecting the exceptionally large burden home prices place on residents in the area.

There is no price that is too high for the Real Bay Area.  These writers are clearly spending too much time in those tired and broken down urban hellholes of the Northeast, and couldn’t recognize Specialness if it bit them on the ass.

Look at this kitchen.  Now this is the kind of Specialness you can only get in San Jose for half a million dollars!

High home mortgages are not a burden, they’re a reward for getting to live here!  Plus, they’re tax deductible!

Comments (16) -- Posted by: madhaus @ 5:18 am

June 25, 2011

Another Foreigners with Suitcases Full of Cash Story!

Thanks to Burbed reader Real Estater for bringing this up in comments yesterday.

The Chinese Go on a Global Homebuying Spree

businessweek

Kelvin Wong, Nichola Saminather and Hui-yong Yu, On Friday June 24, 2011, 8:08 am EDT

On a sunny Saturday in early June, Larry Zhou strolled the floor of a property exhibition in Hong Kong, wondering whether it was time to buy another home — not in the city, where residential prices have soared 50 percent in the past two years, but maybe in Thailand or Malaysia. "My wife and I have been thinking about investing outside of the country since we already own an apartment in Shanghai," says Zhou, a 38-year-old civil engineer, who was visiting the Hong Kong Convention and Exhibition Centre before wrapping up a business trip and returning home. "I’ve known people in Shanghai who like to bring their money and invest in Hong Kong properties, but I think Hong Kong is way too expensive."

The two-day event that lured Zhou and 3,000 others is one way that China’s expanding wealthy and middle classes are finding investment properties and second homes around the world. They are grabbing everything from $68,000 foreclosed condominiums in Florida to $2 million beachfront villas in Vietnam. "Some of them will buy homes considering better education opportunities for their kids, while others look for immigration options," says Mo Tianquan, founder and chairman of Beijing-based SouFun Holdings (NYSE:SFUNNews), which runs China’s biggest real estate website and organizes buying excursions abroad.

Vietnam beachfront villas?  Don’t be silly.  Every single one of them wants to buy a house in… Vancouver?  The smart ones, though, are buying in Silicon Valley, especially places smart enough to work the magic word “Cupertino” into the listing somehow.

In the U.S., Chinese buyers have helped support home sales and prices in Silicon Valley and Hawaii, while they are an increasing presence in Las Vegas and New York, according to local brokers. […]

Las Vegas?  What the heck are they thinking?  There’s no Apple Campus in Las Vegas!

This is an Open Thread.  Let us know what Open Houses you’ve seen full of foreign buyers.  Or any buyers.

Comments (8) -- Posted by: madhaus @ 5:00 am

September 24, 2008

We’re not #1: Millions spend half of income on housing

Millions spend half of income on housing – Yahoo! News

In San Francisco, more than one out of five homeowners with a mortgage spends half or more of their income on housing.

That’s also true in 13 more of the largest 100 metro areas analyzed by the Associated Press. Other places include California metro areas of Stockton, Los Angeles, Riverside, Oxnard-Thousand Oaks, San Francisco, and San Diego. Also in the top 10 are the Fort Myers, Sarasota and Orlando metro areas in Florida, and New York-Northern New Jersey-Long Island.

But the most cost-burdened homeowners in the country live the Miami-Fort Lauderdale-Miami Beach metro area: 58 percent of homeowners spending 30 percent of their income on housing costs, and 29 percent spending half of their income or more on housing.

Sigh. It’s nice that we got an honorable mention – but still I’m dismayed that we’re not in the Top 5.

We can do better. I know we can. Perhaps next year.

Comments (8) -- Posted by: burbed @ 4:42 am

June 13, 2006

Washington area richest, most educated in US: report – Yahoo! News

Washington area richest, most educated in US: report – Yahoo! News
The Washington area has the wealthiest households and most educated work force of any metropolitan area in the United States, according to a report released on Thursday by a local business group.

The greater Washington area, including the District of Columbia, and neighboring areas of Maryland and Virginia, had the highest U.S. median household income, at nearly $72,800, ahead of the San Francisco area at $71,201 and Boston at $63,958, according to the report from the Greater Washington Initiative, which cites data from the U.S.
Census Bureau, the Bureau of Labor Statistics, market data firm Claritas Inc and other sources.

The report also found the Washington area, which has seen a major increase in defense-related technology employment in recent years, to have the largest science and engineering work force of any U.S. metropolitan area, at 324,530, ahead of the combined San Francisco and San Jose, California, work force of 214,500 and Chicago at 203,090.

The report said 42.5 percent of Washington-area residents have a bachelor’s degree and 19 percent have a graduate degree, greater than San Francisco’s bachelor’s degree rate of 37.3 percent and graduate degree rate of 14.1 percent. Washington also claims the highest percentage of PhDs, at 2.5 percent of the population.

Housing costs in greater Washington were ranked 4th, with a 2005 median price of $424,700. San Francisco was highest at $715,700, followed by Los Angeles at $529,000 and New York at
$446,000.

That’s impossible! Everyone knows that the Bay Area is the best-est place in the world! With the smartest and richest people in the world! It’s the only place where you can have nerds! That’s why we have the highest housing prices! And if you don’t believe it, you don’t need to get a 40 year mortgage and live here!
What heresy!

Click here to post a comment -- Posted by: burbed @ 5:08 am

April 27, 2006

America's rags-to-riches dream an illusion: study

America’s rags-to-riches dream an illusion: study – Yahoo! News
America may still think of itself as the land of opportunity, but the chances of living a rags-to-riches life are a lot lower than elsewhere in the world, according to a new study published on Wednesday.

The likelihood that a child born into a poor family will make it into the top five percent is just one percent, according to “Understanding Mobility in America,” a study by economist Tom Hertz from American University.

By contrast, a child born rich had a 22 percent chance of being rich as an adult, he said.

“In other words, the chances of getting rich are about 20 times higher if you are born rich than if you are born in a low-income family,” he told an audience at the Center for American Progress, a liberal think-tank sponsoring the work.

Quick! Think of the children! Buy a home in the Bay Area now so that they can be rich in the future!

Click here to post a comment -- Posted by: burbed @ 4:00 am