Bay Area Real Estate Rant
ryan
334 Posts
What is this world coming to? We wanted to live in the City but can't afford it. We wanted to live in Berkeley but can't afford it. And now, I just found out that we got out bid on a piece of shit starter house in El Cerrito (where???) that is within a mile radius of 5 registered sex offenders, across from a neighbor who keeps a portable toilet in the front yard, and needs a new roof, new plumbing, and new electrical. Apparently, they they can get more money for such luxurious accomodations.Total fucking bullshit!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! End of rant.
Comments
ummm. spaghetti, chilli and cheese.
an interesting website is http://www.zillow.com/
plug in any residential address and you can see what it's ballpark value is along with houses in the neighborhood. if the address however, hasent been sold recently, the figure will be on the low side. but it's useful to check out neighborhoods.
ive had half a shoelace in the real estate game for a while and it's retarded to see condos going for 500-600k. condos.
but real estate is that shit. and they arent making any more land im fairly certain of that, well with the exception of sub oceanic lava flow in hawaii.
and wait for those glaciers to melt in greenland and the sea levels rise by 22 feet!
I love chili spaghetti. Haven't had it in a while....have to make some this wekeend.
aaaahhh skyline. My homie has it shipped out to LA, not quite the same though.
I hate Cinci politics though... ass backwards.
yeah, dude i used zillow in order to figure out my bid. a great resource. although their prices for Bay Area homes are a little undervalued.
Check my location.
Five bedroom/Five Bath/8 Car Garage/Pool/Pond/7 acres./5,770 square feet
May I suggest the Four Way (onion) and two coneys with everything?
yeah "berkeley" and "duplex" immediately conjures up figures of 750k and up... the bay aint no joke.
The problem with this is that the Bay Area housing market hasn't cooled off despite all the predictions. And the Bay Area has higher average and median housing prices than the Southern California.
ballerific!
TX is looking mighty nice compared to killafornia
the housing "bubble" is due to burst though, freals
interest rates rise.
folls with adjustable monthly payments start to get slammed because the rise in rates.
people with 5 year interest-only loans and 5 year fixed loans have payments go adjustable after 5 years and see the monthly payment rise 20% to 30%.
people fail to pay or are forced to sell due to the change in the cost of monthly payments.
prices begin to go down because of increase in inventory due to the sell off.
as prices fall, people begin to foreclose on properties due to the fact that the properties are worth less than the amount of the loans.
people owe $500,000 on a property that is worth $450,000 so they are forced to sell off at a loss.
market crash occours.
it happens everytime. check the prices in 1989 compared to 1996. it is never going back to 1996 prices again but you can expect to see a 20% to 40% drop across the board. throw in a natural disaster, riot or terriost attack and watch the prices plummet faster.
we have never had a market before where so many people are using instruments such as interest only loans for such low mothly payments. that shit is a recipe for disaster when the interest only fix comes due and peoples interest rates rise from 5.25% to 6.5% PLUS interest. this takes in account the current rise in rates over the past three years. rates continue to rise.
in short it's not the time to buy... unless of course you want to risk having a loan that is larger than what your property may be worth in 5 years time.
ap
I checked out Zillow a few days ago after reading about it in the USA Today. Too bad they didn't have a single value listed for anything in my city. That surprised me too since it's a city of 300,000 and property values for this city are actually available online via a search engine on the local PVA's website.
I was, however, surprised to see that the house my parents had built when we moved to Itasca, Illinois, in 1977 is now listed at $365,000 on Zillow. That's not a lot to the Cali people but in the midwest that's a reasonably expensive house, especially if that estimate is on the low side.
Two housing booms ended in California in the 1980s and the 1990s due to recessions and changes in jobs, yet prices in the Bay only took small dips and then continued to rise.
An article that just appeared in the SF Chronicle a litte while ago said that in 1990 the median home price in the Bay was $225,000. Then it dipped down to $205,000 because there was a recession, but by 1996 it was back up to $229,000.
When the internet bubble burst and thousands of people lost their jobs in the Bay Area, an estimated 450,000, the housing market took a dip again, but then went right back up to record highs. During the same time as the internet layoffs however, the interest rates hit a record low, which also helped people buy homes and keep prices high.
Interest rates are going back up slowly, and there is a little dip in January sales in the Bay, but prices are still at a record high. An article said that only 12% of Bay Area families can afford the median price of houses here, yet prices continue to climb. They are at above $660,000 right now. There also is not a glut of new houses on the market right now to help bring prices down in the Bay.
The time to buy a house in the Bay Area was freaking 15 years ago!
I think San Francisco will defy the "burst" that the rest of California will inevitably suffer.
San Francisco is a different market. It is small, compact city, surrounded on three sides by water. There is nowhere to expand and there is no undeveloped properties. Furthermore, incredible forces are at work in San Francsico to prevent the further development of low income housing to satisfy the demand.
Sure, you hear people like Chris Daly talk about low income housing all the time. But try to get anything over three stories built outside the downtown area and you'll be out of luck. There are plans to expand the Geary corridor to include high density housing but I don't think that will prevail. When someone buys a tiny two bedroom dump for $750,000 they want a good view of the city and they will do anything to prevent a shadow from being cast on their house.
However, I don't see how prices can rise much more than they already have. A period of stagnation or even slight depression will follow.
I do agree with AP's crisis scenario regarding the rest of CA. When these mortgages come due for new interest rates, things are going to get ugly really quickly...unless wage inflation grows at an even quicker pace.
This is a good strategy actually. But don't feel like a foll when you are living in a $400,000 house that you paid $650,000 for. When this happens your interest rate will not feel so low because your monthly note will be high compared to the other homes that have become available on the market.
My father died in 1988 when I was 19. My brother who is older than me bought a house in Mar Vista with the money he inherited from my father. I was still in school in the Bay Area. By the time I got back to L.A. in 1996 I was ready to buy because I knew I would be staying here.
I found the house I bought in one day. The market was glutted with houses for sale. You could just pick and choose. A bidding war was unheard off. You basically could buy foreclosures for nothing with little down. When I bought that house in Venice it had been on the market for four years sitting empty.
So what I bought was a 1700 square foot craftsman four blocks from the beach for $210,000. We sold it in 2003 for a lot of money. I am not going to say how much but lets just say well over 4 times what I paid for it. We are now building a house with the equity gain from that place in Venice.
Buying low is a beautiful thing.
San Francisco or anyplace else is not immune from a dip in real estate values. Making a statement like this the equivilent of a dot commer five years ago saying that the stock market will never go down. It is the exact moment that people begin to believe these kind of wild sentiments that the market usually tanks.
ap
thanks AP..for the
i`m hoping this is true for the rest of cali..i have 100k coming soon from the sale of my mother in laws land in brazil and looking to invest in property here.my ideawas to be patient and you just helped me decide that is the best thing to do.
We were really serious about it and last summer had our Lawyer / Real Estate dude looking with us. We even were lining up financing and decided to bail. It was just too high at the time.
Our instinct has paid off so far as the commercial buildings have now started to drop too.
We wound up leasing a 5500 square foot building just West of Downtown L.A. for really, really cheap. 5 year lease.
By the time the lease is up on that place we will be buying entire city blocks for $100K. That of course will be after Osama blows up the Port of LA and the bird flu kills everyone but at least we won't have have a note we can't afford!
your dad couldn`t have asked for you to spend that money wiser..
Damn, the flat I rent is worth $1.1 million!