patrick.net

Mijita at 1:30 is cool with me.

Where is the nearest parking? Does the ferry building have a lot where spaces are always open? Or is it a nearby garage, or what?

Where is the nearest parking? Does the ferry building have a lot where spaces are always open? Or is it a nearby garage, or what?

I believe Ferry Building has a lot (with fees). I do not remember whether you can get validations.

I’ll plan on meeting at 1:30, but we’ve been getting hit with some heavy fog around here, and it doesn’t burn off until noon. So if the fog is really bad on Sat, I may not make it in.

I totally understand that. I usually do not count on being able to leave Sacramento before 11:30am during the winter months anyway. :)

Will it be better if we make it 2pm or 2:30pm?

Don’t go changing anything on my account. It would be hard for me to come in too late anyway. My son’s birthday is Sunday, so I have to plan for a B-day party and I’m afraid being gone too late in the day wouldn’t work either. I’ll just plan on being there if the weather holds, otherwise I’ll catch the next party.

Okay, 1:30pm then. Give me a call if the weather does not hold. It is too dangerous to drive in the fog anyway. :)

Will it be better if we make it 2pm or 2:30pm?

2 pm would be preferable for me, but I can make 1:30 as well.

Regarding parking: I'd advise parking inshore from the ferry building. All those office lots are rather empty on weekends, and may offer better hourly rates.

So looking past my monitor out the window where there’s perfect visibility of the car park the paddocks beyond that and the ridge 10 miles away beyond thatan idle thought starts to form

Yes, winter in the US. :(

Especially Sacramento winter, with visibility of 2 meter. It is not safe to drive on the freeway with less than 200m visibility.

(In otherwords, only ONE recent year’s total appreciation given back over the next 3 to 4 years.)

How is that possible? If RE is really so stable then perhaps I should invest in it. :)

Huh?

Thanks for understanding. The fog came in kind of heavy today and I had an uh oh moment. My Mom made me promise I wouldn’t drive if the fog got too heavy.

I lived in Davis for four years. I know what fog means. :) I also remember the pile-up near Elk Grove a few years ago... people always drive faster than conditions would allow.

Today’s max was 27C (about 80F) with a bit of a breeze and about 30 miles visibility if you’re high enough to see that far.

Nice. In the Bay Area, we had a fine day with a high of about 16C. Not too bad. Silly Valley does not usually get horrible fog. :)

I remember visiting Canberra about 15 years ago. It is a nice place.

SacQT have you considered taking the train from downtown Sacramento? It takes about 90 minutes to get to Richmond, then you can walk across the platform and BART it to downtown SF in about 30 minutes.

I use it sometimes to visit the in-laws in Sacramento. They have to pick us up, but often it is faster than taking the 80.

Fake P writes:
Well, like I pointed out back in March 05, Patrick should change the title of this website so as not to mislead people. A title like “SF Bay Area Housing Appreciation Continues” is much more appropriate…:p

Ok, I'll bite.

Well, Fake P, I do hope you put your money where your mouth is and leverage yourself up a bit more.

If you could please buy yourself a nice 5BR house (>2800SF) in a good, quiet area in the South Bay, preferrably Cupertino, Los Altos, South Sunnyvale?

I'll take the property off your hands in five years at market price.

If all goes well, I get my house at at reasonable price and you're in the hock for the difference between today's price and the price then for the next 30 years, slowly paying off the early retirement of the guy you bought it from.
If it doesn't and the price actually goes up, then I will admit publicly that you're a genius, real estate really only goes up, and there will be enough buyers at any price. Thus, it's risk-free to get in, even at the higher prices then.

I win either way, you don't. ;-)

Fake P writes:
I guess you missed my point. I do not know what will happen in the future and I certainly do not believe that real estate will continue to appreciate non stop.

Fake P also writes (2 hours earlier):
The bubble is not going to BURST. The best that a housing bear can hope for now is a slight decline, which btw…might not even happen…:)

Whatever, Dude... :-) :-)

The best that a housing bear can hope for now is a slight decline, which btw…might not even happen…:)

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The bubble is not going to BURST. The best that a housing bear can hope for now is a slight decline, which btw…might not even happen…:)

Well, if it's an actual bubble, bursting is what bubbles eventually do.
All the same, I'll hold off judgement until next spring.
In the meantime, I'll spend my equity on that new BMW I'm eyeing.

However, I am against a lot of people in this blog who knows only the extremes, always using words like “CRASH” as the only possible outcome.

How is "crash" an extreme word?

I propose that this is not the case, because between appreciation and crash, there are an infinite number of other possibilities. I hope we could see eye to eye in this matter

Like "mini crash", "moderate crash", "crash", and "super crash"? :)

SacQT have you considered taking the train from downtown Sacramento? It takes about 90 minutes to get to Richmond, then you can walk across the platform and BART it to downtown SF in about 30 minutes.

Train takes forever in here.

California is probably the 5th largest economy in the world... but I am sure it ranks 180th in rail development.

The bubble is not going to BURST. The best that a housing bear can hope for now is a slight decline, which btw…might not even happen…

The bubble has bursted. It is happening in slow motion. We can even estimate how low it will go... the only real uncertainty is timing or the speed of decline.

By the way, gold price appears to be retracing.

However, I am against a lot of people in this blog who knows only the extremes, always using words like “CRASH” as the only possible outcome.

...Because it is.....Think of the housing market as a giant rubberband and the more it is stretched, the higher the price. Think of the buyers as hands pulling on the band, but the strongest of the hands (those who use monopoly money) are losing their grip because they are finding it harder to get loans because of tighten of lending standards and higher rates....so they let go...and the weaker of the bunch are left pulling the band, but there is too much tension on it and they cannot hold it...some of them will let go (sell for whatever they can get) while others will try holding on, but as more and more hands let go, the harder it is to hold on. Eventually the band will spring back taking those who are left holding on with it!

As I’ve said before, in order for this housing bubble to collapse, an interconnected sequence of events must occur, converge, and result in massive foreclosures, and there is a huge difference between delinquencies and foreclosures, as the article clearly shows. All roads must lead to massive foreclosures.

Again, reflexivity. One will lead to another. All WILL converge.

The fact of the matter is that the credit market and lending practices for housing in this country have changed, that is obvious, and I believe it will never again be as it was.

Credit market changes according to the prevailing psychology of the market. It is itself a trend-follower and so it reinforces any trend. Be fearful when the trend changes direction!

I am NOT a fan of Soro's political views. But he has been a great speculator and market participants. His theory on reflexivity should be taken seriously.

Current high price/rent ratio is because of high expectation of future appreciation. When this psychology changes (it is changing already), the ratio will tend to mean-revert. Unless something will increase rent sharply, I cannot see how prices can remain high.

Actually, with the THOUSANDS of units being converted from apartments to condos one would likely expect rents to be increasing somewhat dramatically. Why does this NOT appear to be happening?

Because there is an excess supply of housing units.

Even though rates are still very low, many many people are going to face much higher mortgage payments in the near future.

Lower interest rate is making this an especially dangerous game.

Hey Girgl, you seem to think that there is a contradiction in my statements. Just want to let you know that I’m an engineer by trade and writing statements with contradictions is uncommon and goes against the very fabric of my being. You could reconcile the two statements by having the appreciation go flat…:)

The statement "I do not know what will happen in the future and I certainly do not believe that real estate will continue to appreciate non stop." is contradictory by itself.

Engineers tend to overestimate the validity of their logic. :)

@ Mr. Fuck_Up

You are totally correct, but for the wrong reasons, everyone with any money what-so-ever has moved to California, in fact California is now the center of all profitable industries, RE, manufacturing, banking, you name it. Fuck all those fucks that think just because housing is >70% overvalued by traditional measures in the Coastal regions such as Santa Barbara and SLO it will fall. They are just pussys. You greatly deserve the equity you have gained, I say take it out and buy another Hummer, you are clearly a fucking genius and are correct about the confluence very unlikely events that need to happen to cause a "crash". I say take out all your equity (if you haven't already done so :) ) and buy a couple of mid priced, say 600K, condos in SLO.

Well, the certainty of a “belief” and the knowledge of a fact are two separate issues. One deals with a faith on something that one believes to be true, the other deals with the truth.

Then perhaps you have chosen your belief (with "certainty") without adequate knowledge? :)

I was joking. I like you all right.

Belief

Many corporations make lots of money from that fat dude and his sleigh.

You mean there is no santa?

Felcher-X,

And a Merry F*cking Christmas to you, too.

It is getting hard to tell... are you guys all right?

how will your children ever be able to afford a house?

Ahh babies, the other, other, white meat.

Fake P writes:
Hey Girgl, you seem to think that there is a contradiction in my statements. Just want to let you know that I’m an engineer by trade and writing statements with contradictions is uncommon and goes against the very fabric of my being. You could reconcile the two statements by having the appreciation go flat…:)

Oh goody. A permanently high plateau. Then I can continue to save >$2,000 a month by renting, and I won't miss out on all the appreciation. It's a win-win situation.

About the question when rents will finally go up: Rents aren't as flexible as mortgage payments. Remember, it's money down the drain, so you can't fool yourself about "making it up in appreciation". You'll probably check whether you're *actually* able to afford the payment.
Also, as in any market, you need a supply problem for prices to rise. And I just can't see that around here, not even in the next few years, especially with all the folks leaving, and all the small-time RE tycoons getting squeezed.

Good to be back on RE talk after all the event planning traffic. :-)

Mr. Up says:
[For the bubble to burst, ...]All roads must lead to massive foreclosures. If any one of the required events (high interest rates, strangled liquidity, speculators dumping units, massive unemployment) can be averted,

You mean all four events (that happen to be interconnected by positive feedback loops) must happen at the same time for good clean burstage?
Never I say, NEVER.

Um, isn’t this the blog party thread? I thought all the RE talk was the traffic.

Yes, Any serious RE talk would be seriously off topic. :)

SQT says:
Um, isn’t this the blog party thread? I thought all the RE talk was the traffic.

Sorry about the off-topic drivel then :-)
Who can create threads?

DinOR --excellent post!

I have created a new thread from it: "Lagging Vs. Leading Implosion Indicators"

Also, has anyone sent an email to Patrick inviting him to the party?

I thought anyone reading here is invited. Since Patrick is special, perhaps we sould send him an e-mail.

how exactly do we find eachother since most of us don’t know what the other’s look like

Good question...

Massive foreclosures are not a requirement at all. Think of it like a margin call.

Massive foreclosures will first be the effect of the initial crash and then the cause for further collapse. Feedback loop.

SQT, according to weather.com, fog is possible on Saturday in Roseville. So let's wait and see.. I have sent you my cell phone number. (I will be in SF on Saturday morning so I will not be blogging.)

how exactly do we find eachother since most of us don’t know what the other’s look like?

Majita isn't a very big place, and I've met Peter and Jack already. Look for 3 guys discussing real estate?

Btw, what time did we settle on: 1:30...or 2?

Btw, what time did we settle on: 1:30…or 2?

1:30.