Prediction: California Real Estate

[honobob]

Quote:

Originally Posted by twaddle honobob, for that to work I'm pretty sure you need to say it three times while clicking your heels together.

Twad Don't I always give you at least three good comps?

1920 Jones +500K
461 2nd St. 102G +$379K
429 Baker +$388K

You have no power here! Now begone, before somebody drops a house on you!



Glinda, the Good Witch of the North(ern California)

[twaddle]

Quote:

Originally Posted by honobob Twad Don't I always give you at least three good comps?

I appreciate your efforts, but the OFHEO has you beat. Like you, they use a repeat sales methodolgy. But unlike you, they have a large sample size -- about 40% of actual sales (limited by the mortgages that Fannie and Freddie purchase).

[honobob]

Quote:

Originally Posted by twaddle I appreciate your efforts, but the OFHEO has you beat. Like you, they use a repeat sales methodolgy. But unlike you, they have a large sample size -- about 40% of actual sales (limited by the mortgages that Fannie and Freddie purchase).

Good try Twad! I am their source and I access 100% of the actual sales! I wonder if any of the resales I've posted were used in their limited sampling? Could make their efforts meaningless. You have a graph that shows 100% is more than 40%, right?

But really it's just about you believing in half price beach front property. Well maybe in Kansas. Just posting some factual information. Your beliefs don't change that a bit. Get your OFHEO to give you an address of a lower resale and wave that to the masses. It's not an arguement.

[mb]

Quote:

Originally Posted by Brat Bay area is not one market. The south Bay is impacted by options, aka Google employees and their ilk.

I have heard that there is a pretty significant Google effect in Mountain View.

[mb]

The antedotal evidence that I have seen suggests that honobob is at least partially correct. He is not saying that real estate is up everywhere just in some of the areas that he is interested in and from what I have seen that is right.

It really seems to be a tale of two markets in the SF bay area.

A couple of weeks ago they had an article in the San Jose paper about the Mountain Home development. IRRC, recent buyers had paper losses on the order of $100k in a couple of months. This is an area in the central valley on the out skirts of the metropolitan area where there is a lot of land and a lot of new mini-McMansions and where houses are cheap for the bay area because the commute is terrible.

That same week I got a flyer in the mail showing that about 1/3 of the sales in my area were ABOVE the asking price. Now that is a bit of a decline because a couple of years ago it was 2/3. This is a close in area with modest homes built after WWII. But prices are high because it is a very easy commute to all the major employers in Silicon Valley. Prices are $700k-$1,200k for a 50 year old 1400 to 2000 sq ft house. There is little new housing in the area because it was built out many year ago and there isn't any land left. There was little turn over during the run up. I don't know how many were refinancing and taking money and that's a factor that I can't even guess at. But the economy is good and no one is losing their jobs so very few are forced to sell because of a drop in income. My impression is that prices have been stable for the last couple of months. I don't think that there are any major factors driving the prices higher but I also think that many of the factors causing major decreases elsewhere aren't as strong in my particular micro-market.

Now I don't think that bay area real estate will be a particularly good investment over the next couple of years in even the better markets. I think that it will probably go side-ways at best for a while and it is just so expensive that many people are priced out of the market. But I have been wrong on that prediction for the last 20 years and may be wrong for the next 20. Sort of a market can stay irrational for longer than you can stay solvent sort of thing.

MB

[tryan]

Quote:

Quote: Originally Posted by cube_rat pssst: the rental market will become increasingly strong. Great news for the landlords in this area My landlord is offering a one-bedroom in my building (S.F.) for $2,350 which I'm sure he will get. A year and a half ago it was rented for $1,600. Scary to know that Google is busing people to their apts. into the city. Rumor has it that the buyout offers for one bedroom apts. are $24,000 and up to mid-five-digits.

Interesting ... rents - and therefore prices - will certianly continue to increase as long as GOOGLE keeps pumping. Question is how long can they keep pumping ... and is this a one horse town?

pssst: I won't be buying SF RE any more than I'ld be buying google stock.

[honobob]

(It's not that easy to find 03-04 pruchases that then sold in 07. Most people hang on for the appreciation.
1919 Broderick condo 04 $855,000 Sold 07 $1,100,000 +245K 10.5% yearly
2565 Washington condo 04 $1,710,000 07 $2.4M + $690,000 12.5%
2312 Divisadero condo 03 $1,300,000 07 $2,350,000 +1,050,000 16%

[tryan]

ah-oh ...

Quote:

In the Bay Area - which, by the California Association of Realtors' measure is made up of Alameda, Contra Costa, Marin, San Francisco, Santa Clara, San Mateo and Solano counties - sales of existing, stand-alone homes plunged 45.6 percent between September 2006 and September 2007, while the median sales price slid 5 percent to $702,240. September's median was a whopping 17.7 percent below May's peak of $853,910. "We see a sea change almost overnight in the Bay Area," said Robert Kleinhenz, economist with the trade group.

Home sales plunge in September

[honobob]

Quote:

Originally Posted by tryan ah-oh ...

And yet actual resale prices are up 12%. Makes you wonder what a reporter will do to sell some papers. Of course he is reporting on a very large area and seems to attribute the decrease not to lack of demand but to the mortgage mess. After the taxpayers bail out the mortgage companies and the subprime borrowers I think we'll see a spike in sales and prices above the normal double digit appreciation.

[calmloki]

Property tax statements have hit the mailbox: What's your guess; did they go up or get higher? You're right! Perhaps worthy of note: the tax appraiser's True Cash Value (lower than what i think the properties would sell for) is up more than 10% over last years TCV. That means the appraiser thinks the value of our properties went up about $60k more than we showed as total income on last year's taxes. Dang rentals.

BTW: Oregon here, not Califormia

[kcowan]

Would the immediate need for 1800 more homes be expected to rescue SOCAL this year?

[honobob]

The Bay Area's pace of home sales were slightly worse, down 42 percent from a year ago. But the median price climbed almost 9 percent from a year ago, to $810,490. The median home price gained 3.3 percent in October over September's.

There’s another $73,000 to put in the old equity bank!

And nationwide……Over 70% of “ranked MSAs are up!

• Of the 287 cities on OFHEO’s list of “ranked” MSAs, 204 had positive four-quarter appreciation and 83 had price declines.

Makes you wonder if we’re being manipulated into using our tax dollars to add to the astronomical profits already made by the builders and lenders.

[REWahoo]

I didn't see any link or reference for the data in the previous post, but it sure seems to conflict with this information released today by the US govt.

U.S. home prices are falling, first time in 13 years

"U.S. home prices marked a quarterly decline for the first time in 13 years in the third quarter, according to government data released Thursday that provide fresh evidence of the housing market slump.

Home prices dipped 0.4% nationwide in the July-September period, compared with the previous quarter, the Office of Federal Housing Enterprise Oversight said."

"Price declines were steepest in California (down 3.6%), Massachusetts (2.3%), Michigan (3.7%), Nevada (2.4%) and Rhode Island (2.2%)."

[twaddle]

Here's the link honobob didn't want you to see:

Bay Area median prices rise, but overall home sales news grim


Sales in the Bay Area, which the group defines as Alameda, Contra Costa, Marin, San Francisco, Santa Clara, San Mateo and Solano counties, fell 41.5 percent. The median price in the region was up 8.9 percent to $810,490, compared with $744,300 a year ago. Median price is strongly affected by the composition of homes sold; in the Bay Area the median has been buoyed because a greater number of more-expensive homes have been sold.

Looks like the GOOG effect. Maybe google can save us all. Keep buying their stock and mint a few more stock option millionaires!

[tryan]

Yeah, it's getting hard to say the glass is half full:


House prices slip in half of U.S. cities - MSN Money

[twaddle]

You want optimism? I've got some optimism for you! As prices drop, affordability goes up. In Orange County, CA affordability has doubled!

(from 2.4% to 4.8%)

Lansner on Real Estate » Blog Archive » O.C. home affordability ‘doubles’ … to 4.8% - OCRegister.com

[deserat]

I live in Solano County - halfway between SF and Sacramento. I know the selling prices have gone down *however* those selling prices are still about double the 2000 prices out here. What's interesting is there's a lot of new housing being built, but I notice it has creeped to a stall - plus lots of incentives to buy - price reductions, nice freebies.

Don't know about the rental market, but when I rented out this house, the interest rates were low enough that people could buy a house for what they were renting, so the pool of 'good' tenant applicants significantly decreased.

I'll still make money when I sell in either a year or two - and leave the state of CA.

[haha]

I saw an article in the Seattle Times that Microsoft is going to slow down its hiring. They have been on a headcount tear for several years, so this should impact the Seattle Market over time. I think of the cartoon- is it the fox who runs off a cliff- and stands there running in midair for a bit before down he goes?

Real estate agents are to use the most charitable term, very optimistic. So they will always be talking up the great opportunities to buy now.

I find myself gripped by the anchoring heuristic. I have seen prices go up for so long without any break, no matter what pessimistic ideas were put forth, or what doubts I had, that I find it quite hard to believe that it won't just continue forevermore.

It probably will, and eventually affordability will be 0.01%, and no transactions will take place. When people divorce they will just move their new lovers into the guest room. When older folks die, their kids will parcel out the rooms and live like a big happy extended family.

You see folks, it's all good.

Ha

[twaddle]

Quote:

Originally Posted by haha is it the fox who runs off a cliff

A fox? Suffering succotash!

[honobob]

Quote:

Originally Posted by REWahoo "U.S. home prices marked a quarterly decline for the first time in 13 years in the third quarter, according to government data released Thursday that provide fresh evidence of the housing market slump. Home prices dipped .004 (.. thats 4 thousandths !!!) nationwide in the July-September period, compared with the previous quarter (NOT YOY Let's see..April May June prices higher..could be that nationwide those are more active market times vs. late summer/ fall period) , the Office of Federal Housing Enterprise Oversight said." "Price declines were steepest in California (down 3.6%), Massachusetts (2.3%), Michigan (3.7%), Nevada (2.4%) and Rhode Island (2.2%)."

So almost four years of beating this horse..er...house we've dropped as a nation for the first time in 13 years 0000.4%? At least they said dipped vs, the standard paper seller "plummet". I thought you publicly proclaimed me on your "ignore list"? Quit supporting my position.