patrick.net

I think there's a bubble in trying to spot bubbles...

It's almost 1/2 of its 2007 price. I'd say that thing deflated.

32 offers? I'm sorry I'll need to see the proof.

Regardless, inventory is low because so many are waiting to be foreclosed on; but again, 1/2 off of peak, I'd be interested as well.

gregpfielding says

So here is a bit of color from the Inner Mission

Inner Mission is so over. Anyone who wants to live there now because it's "hip" is about 15 years too late.

I lived there in the late 80's and early 90's, and yes, it was super fun. But I was in my 20's then and childless.And now the artists and lesbians and Latinos have been priced out, and it is fast becoming just another shi shi boutique neighborhood.

Ditto for Bernal Heights, formerly known as Red Hill due to all the leftists and communists who lived there. *sigh*. Too bad, too, because both those nabes were great, and are now playgrounds for the rich.

But no neighborhood stays the same. Such is life. Time marches on.

The Latinos in the Mission resent the white hipsters moving in, just as the Irish in the Castro didn't like the gays taking over their neighborhood. And so it goes. The Italians in the Portola resent the Chinese.

Next "cool" neighborhood in SF?? There's not a lot left. Dogpatch is too small and too close to Potrero Hill millionaires. SOMA is over. The Bayview has stubbornly resisted gentrification (to the chagrin of all the folks that bought out there at the height of the bubble expecting it to turn around).

Maybe the Excelsior? Nice houses to be had at about 400K. Yards, garages, street parking. Still pretty sketchy at night over there, though. Gangs and the proximity to Sunnydale housing projects will make gentrification go slowly.

Just made an offer this week in the East Bay on an REO.

Received a letter notification of multiple offers and was told there are at least 10 by my REA...

Could be a lie, could be that the bank priced it below market value to stir interest, could be other reasons as well.

http://www.contracostatimes.com/real-estate-news/ci_20235269/buyers-compete-short-supply-homes-bay-area

Love this

1sfrenter says

Love this

Guess I can't embed video here. Here's the link:

http://www.youtube.com/embed/UOXsmNhvPEU

For anyone who lives in a trendy neighborhood.

gregpfielding says

No typo, 32 offers.

If it was true(which I doubt very much), most of them with a pre-approval letter from the bank for which the banks will pull the plug at the last time. 2 or 3 of them will be an all cash offer at or below asking price. As I said before,let the bidding wars happen. Who cares? cuz prices are still heading down. There will be buyers all the time - all the way to the bottom.

There does seem to be something in the air this year. RE seems like some sort of stupid positive feedback system. If ENOUGH rumors of multi-bid insanity and hot sales get fed to the masses, the masses seem to respond by going & doing just that. Never mind that there are, in fact, no good new reasons to jump into the RE market.

The cattle will race each other to that big dark building at the end of the pasture. So what if the sun is shining & the grass out in the field is great...all the other cows are running for that big structure, and none of them come back out...SO IT MUST BE FILLED WITH SOMETHING WAY BETTER THAN YUMMY GREEN GRASS AND SUNSHINE!!!!!!!!! I NEED TO GET OVER THERE BEFORE IT IS FULL AND I CAN'T GET IN!!!!!!!!!!!!!!!

http://www.redfin.com/CA/San-Francisco/2857-22nd-St-94110/home/733910

Listing:
Listed at: $459,900
$/Sq. Ft.: $323

Estimates for this property:
Zillow.com Zillow $526,113 $835,100 $1,027,173
Eppraisal.com $965,999 $1,136,470 $1,306,940

Redfin median $/sqft for this area:
Mission $699,000 $432

this property is listed 25% below the median $/sqft (323 vs 432).
around 50% below estimates (granted these are zillow/eppraisal estimates $460k vs $835k and $1.1M).

there's $400k-$600k minus costs to be made on a flip assuming it's sold at the estimated value.

if someone priced a house for a ridiculous price of one thousand dollars in palo alto and five thousand people bid on it, are we in a bubble? if you're a bull or realtor, we are.

FYI, this wasn't my story - but from another agent who contributes to our blog (as well as minyanville and some others). It is legit.

bmwman91 says

RE seems like some sort of stupid positive feedback system. If ENOUGH rumors of multi-bid insanity and hot sales get fed to the masses, the masses seem to respond by going & doing just that. Never mind that there are, in fact, no good new reasons to jump into the RE market.

Yep. That's how all economic bubbles work. Positive feedback (in the positive direction) on the way up, and positive feedback (in the negative direction) on the way down.

bmwman91 says

There does seem to be something in the air this year. RE seems like some sort of stupid positive feedback system. If ENOUGH rumors of multi-bid insanity and hot sales get fed to the masses, the masses seem to respond by going & doing just that. Never mind that there are, in fact, no good new reasons to jump into the RE market.

this is a good observation.

it's typical sheep behavior. it happens every year around this time(spring) where people get crazy.

the only change from year to year is how bad the spring delusion gets. this year it's particularly strong. it'll fade this winter like it does every year.

realtors love to mention overbidding. this is their favorite tool to make sales because it's the most effective tool:
1) overbidding is a sign the sheep have jumped on board and it's time for other sheep to join.
2) there's no official overbidding/multiple bid stat and is completely opaque so realtors lie about overbidding/multiple bids constantly.
3) the herd mentality is very strong so once you hear people are buying and over paying you have to buy too, even though it doesn't make sense.

also notice, the buyer who has been able to wait has had better prices every single year. i expect prices in the $600k-$1M range next year to be better than this year. the lower end is probably just going to bounce around - not up, not down.

Yeah, I usually use "positive feedback" in its control systems type meaning...it's almost always a bad thing! It's an error (unwanted) signal that gets added back into the input, rather than subtracted, which only serves to increase the system's output error, which repeats until the system hits its linear operation limits and starts behaving non-linearly, often failing catastrophically.

I have always wanted to try to develop a control system model of the housing market. Linear single input/output systems are enough work...non-linear multi-input/output ones like the RE market...yeah, don't think so!

Hysteresis says

it's typical sheep behavior. it happens early year around this time(spring) where people get crazy.

So when does this "spring fever" usually end? June? September?

Does California even have a "spring" season? I thought there were only two seasons out there: wet and dry.

Hysteresis says

if someone priced a house for a ridiculous price of one thousand dollars in palo alto and five thousand people bid on it, are we in a bubble?

This is an annoying realtor tactic. There are plenty of houses out there sitting on the MLS and not getting overbid.

Don't believe the hype.

Multiple offers don't tell you much about housing market in general. (in 2009-10 during first time home buyer's sucker tax credit days too there used to be multiple offers)

What is happening is, if a house is in good school area and is in turn key condition, there will be multiple offers. No big deal. There was a house on which seller had spent about 100K to make it turn key. It was an awesome house. It was listed for 525K (This house in similar condition would have sold for more than 700K in bubble days!). I wrote and offer on asking. This house attracted 13 offers. Highest being 551K and lowest being 505K!

Does it signify another bottom? I don't think so. Same house if was not turn key would have sat there for months with no or very low offers.

So there are no systems in place to give visibility to the actual number of offers, fine.

What action ( and to who ), can be taken if it were uncovered that an agent deliberately lied to their client about the number of offers on a property?

For the sake of argument, let's say I have an audio tape of said person describing to their colleague that this is tactic that was used on a particular transaction that I was apart of...

What action should be taken? Bonus points for answering in flowchart form ;-)

Some of them may be expecting a treasure chest buried underneath that place. :)

My experience is well priced homes that are not trashed will go quickly, probably a week or less.

Homes that are priced at 2007/2008 prices sit for a very long time, 100+ days, and continue to sit even now.

Add the fact that inventory is extraordinarily low right now for the Spring, going on Summer season, and it's obvious the bubble isn't back.

Goran_K says

Add the fact that inventory is extraordinarily low right now

I'm looking at this site and it agrees with your statement about inventory:

http://www.realtor.com/data-portal/Real-Estate-Statistics.aspx?source=web

YY Inventory:

Oakland: -47%
San Francisco: -29%
Sacramento: -30%

I don't think anyone in their right mind would truly believe that the bubble is back, but when supply is down this much, sure, it will push prices up and multiple offers won't be uncommon.

It's ridiculous.

The bad guys literally won. They got super low artificial rates, artificially constrained supply, and now we've got a false bottom building.

The crooks run this country now. Sorry people who didn't HELOC a $1,000,000 home for all the equity with no down payment, you lost.

1sfrenter says

SOMA is over

Over? http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/04/09/BUET1O0RN2.DTL

Seems like a bubble's a buildin' out my window.

I've become more bearish as time goes on, but with the new Transbay Terminal and other developments popping here, SOMA seems to be on the move. Nice parks on their way too!

Goran_K says

It's ridiculous.

The bad guys literally won. They got super low artificial rates, artificially constrained supply, and now we've got a false bottom building.

The crooks run this country now. Sorry people who didn't HELOC a $1,000,000 home for all the equity with no down payment, you lost.

God Bless America.

APOCALYPSEFUCK is Tony Manero says

I believe everything I am told by a Realtor®

Now that's a good little sheeple. Here's a sticker to put on your shirt and a lollipop.

+1

Greg, the regular inventory is low. People don't wanna sell, so the supply is lower than the demand. It's no bubble; only market fluctuations. I actually expected home prices to experience a bump this year, but they dropped.

Hysteresis says

http://www.redfin.com/CA/San-Francisco/2857-22nd-St-94110/home/733910
Listing:
Listed at: $459,900
$/Sq. Ft.: $323

SOLD in 2007 for $ 915,000...

Rumor has it they fished the dead body of the former homeowner after lept from the GG bidge.. Dead men tell no tale... WE WILL NEVER KNOW!

BayArea says

Just made an offer this week in the East Bay on an REO.

Received a letter notification of multiple offers and was told there are at least 10 by my REA...

Could be a lie, could be that the bank priced it below market value to stir interest, could be other reasons as well.

http://www.contracostatimes.com/real-estate-news/ci_20235269/buyers-compete-short-supply-homes-bay-area

Could be a lie but probably not. Even the fixer we bought had two backup offers.

gregpfielding says

buying Instagram this week for $1 billion, “bubble” is now on the tip of everyone’s tongue.

Much of that will count as "Good Will" which will have to be reviewed each year for impairment. And it will be eventually impaired like the $500M impairment charge that hit Sun Micro Systems after a year or so it purchased MySQL. The shareholders lose..

The idiot fuckhead marketing people who usually drive these deals ought to be hung by they feet and their insides ripped out... they have no clue what profitability and future positive cash flow means.

Yes if you been involved in M&A ... its not pretty when shit hits the fan....

wthrfrk80 says

Goran_K says

It's ridiculous.

The bad guys literally won. They got super low artificial rates, artificially constrained supply, and now we've got a false bottom building.

The crooks run this country now. Sorry people who didn't HELOC a $1,000,000 home for all the equity with no down payment, you lost.

God Bless America.

The bad guys have run things for a veryCL says

1sfrenter says

SOMA is over

Over? http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/04/09/BUET1O0RN2.DTL

Seems like a bubble's a buildin' out my window.

I've become more bearish as time goes on, but with the new Transbay Terminal and other developments popping here, SOMA seems to be on the move. Nice parks on their way too!

This will always be a nice place to live. God, for whatever reason, saw to that.

gregpfielding says

No typo, 32 offers.

5 home for sale.. 5 buyers.. each buyer puts 2-3 bids on different homes.. same 5 buyers create 15 or more bids chasing same 5 homes...

really a false sense of actual miltiple bids...