patrick.net

He lied about the vaccine too. We don't need no stinking vaccine. I think he basically had to.

True part was the companies saying, "Yeah we're ready", False part was bureaucratic approval.

Or maybe I misheard.

B.A.C.A.H. says

I just can't wrap my head around someone committing to a large mortgage payment and a huge tax bill at the same time.

Me either. Me. Either.

NDrLoR says

My parents were born in 1898 and 1902, but were never unemployed during the Depression, my mother being a teacher. They would talk about it from the perspective of a gallon of milk cost five cents in the 30's

My paternal grandmother was born in 08, lived until 101 and was sharper than most up until 100.

Lost her job at a bank in San Antonio when the great depression hit. Moved to the Texas gulf coast, met my grandpa, made babies, said, "Nobody really noticed the great depression down there."

Shrimp boats, agriculture. Everyone ate.

Boats are all gone these days. Out competed by Asian farms. Looks pretty desolate in particular after hurricanes over the past 40 years.

It's always a good time to lock in your Prop 13 tax basis.

There was a someone who identified as a resident of SJ with handle "E-man".

He shared a lot on Partick.net about his prowess as a Bay Area real estate investor and landlord. Seems like recently he fell off the face of the earth, or at least got erased or self erased from this blog.

That's too bad.

It'd be interesting to read what he would chime in on this topic.

He's still around. Commented Aug 14: https://patrick.net/post/1334449?offset=0#comment-1694010

Hey, @EMan you here?

Case/Shiller Ess Eff Bay Area Home Price Index hit an all time high and reversed direction after two months of decline. Inconceivable! (Seriously, this is unprecedented). Bear in mind this is a five county index that includes east and north bay (but not southern bay area).

EBGuy says

Bay Area Home Price Index hit an all time high

God Bless them all for funding Local Government pensions and retirement medical benefits. The higher taxes they will pay because of the higher assessments because they bid up the prices they paid will take some fiscal pressure from the rest of us Tax Donkeys.

Gotta love those rich fat cats with their money sitting on the sidelines bidding up their tax assessments and tax bills.

I also recall for years Logan M said early to mid 2020s would have very strong real estate demand, from a demographic perspective.

B.A.C.A.H. -- are you swimming in the Bay much these days? For some reason the open water seems to be beckoning me. Not sure how polluted this side of the bay is, though.

Rents appear to be in free fall over here (or at least until the students come back...)
The dismal market has forced property managers to get creative. Sorokin convinced one landlord in a new building downtown to slash rents from $4,000 to $2,000, expecting a flood of prospective tenants at the gates. That hasn’t exactly happened. “We’re literally getting two or three groups each week even at those prices,” he says. “It’s a bizarro world – there’s just literally a lack of any interest whatsoever in apartments right now.”

Patrick says

He's still around. Commented Aug 14: https://patrick.net/post/1334449?offset=0#comment-1694010

Hey, @EMan you here?

Yup, I’m still around and doing well. Onto another flip to MOGA! Make Oakland Great Again that is.

B.A.C.A.H. says

There was a someone who identified as a resident of SJ with handle "E-man".

He shared a lot on Partick.net about his prowess as a Bay Area real estate investor and landlord. Seems like recently he fell off the face of the earth, or at least got erased or self erased from this blog.

That's too bad.

It'd be interesting to read what he would chime in on this topic.

Truth be told, Patnet holds a special place in my heart. Seriously.

To answer your question, I’m always a buyer and a seller regardless of where we are in the cycle of the housing market. I’ll buy for the right price, and I’ll sell for the right price.

Check out the link to the flip in Oakland that Patrick shared above. I bought it for the right price, and I sold for the right price.

My partner and I recently closed on this deal. We’ll see how much we’ll sell it for when done. Should be a quick in and out rehab/flip.

https://www.redfin.com/CA/Oakland/1749-24th-Ave-94601/home/909190

EBGuy says

Rents appear to be in free fall over here (or at least until the students come back...)
The dismal market has forced property managers to get creative. Sorokin convinced one landlord in a new building downtown to slash rents from $4,000 to $2,000, expecting a flood of prospective tenants at the gates. That hasn’t exactly happened. “We’re literally getting two or three groups each week even at those prices,” he says. “It’s a bizarro world – there’s just literally a lack of any interest whatsoever in apartments right now.”

@EBguy, can you share a link to the article? We had the most turnovers during SIP. 22 turnovers within 4 months, March - June. However, we were able to re-rent them quickly at the same price or slightly higher during these months. Average turnover was 5-7 days between tenants for studios and 1-bed unit. 2-bed units were slower to rent, and we had to reduce the price a bit. Before, 3-4 girls would share a 2-bed unit, but Rona changed that.

The new tenants have been all young professionals. Most of our rentals are around SJSU. September was a little slow. Rent is just a tad softer (5% lower) now. We had 2 units to fill. One went within a week while the other took 3 weeks to rent. Have 2 more vacancies for Oct.

EBGuy says

B.A.C.A.H. -- are you swimming in the Bay much these days? For some reason the open water seems to be beckoning me. Not sure how polluted this side of the bay is, though.

Haven't done it yet, still need to get a wetsuit. Ceffer recommended a surf shop in S.Cruz. I was saving extra cash. Then came COVID. The gym closed so I stopped swimming laps in pools. I think this concept's on hold for a while till I can rebuild my swim stamina in the pools.

Eman says

Patnet holds a special place in my heart.

E-man, thank you for sharing.

CA is in a totally different position than much of the rest of the US, mainly because of its politics, prop 13 and the zoning laws (esp. bay area). There is no price discovery as there's neither healthy demand nor healthy inventory, so for the time being you will see a stable housing market, adjusting with inflation. Mainly SFH though, not so much Condos or apt bldgs which have not been as stable as SFHs. For housing prices to drop in the bay area you would need the forbearance to end and foreclosures to pile on, if that happens it's not going to be before mid-2021, perhaps not before 2022. If prop 13 falls all bets are off.

Eman says

B.A.C.A.H. says

There was a someone who identified as a resident of SJ with handle "E-man".

He shared a lot on Partick.net about his prowess as a Bay Area real estate investor and landlord. Seems like recently he fell off the face of the earth, or at least got erased or self erased from this blog.

That's too bad.

It'd be interesting to read what he would chime in on this topic.

Truth be told, Patnet holds a special place in my heart. Seriously.

To answer your question, I’m always a buyer and a seller regardless of where we are in the cycle of the housing market. I’ll buy for the right price, and I’ll sell for the right price.

Check out the link to the flip in Oakland that Patrick shared above. I bought it for the right price, and I sold for the right price.

My partner and I recently closed on this deal. We’ll see how much we’ll sell it for when done. ...

Hey @Eman,

I checked out the prior link. So somehow you got to purchase it for 100K below the initial asking (750k) for 640K and then sold it for a double? How much money did you put into renovations? I mean if people crave it and are willing to pay for it then there's no arguing that, but I have a hard time believing somebody would look at the history and then buy at a 100% premium unless you put 200-300K in renovations into it and make it top notch. Anyways I will be watching the next one.

mell says

Eman says

B.A.C.A.H. says

There was a someone who identified as a resident of SJ with handle "E-man".

He shared a lot on Partick.net about his prowess as a Bay Area real estate investor and landlord. Seems like recently he fell off the face of the earth, or at least got erased or self erased from this blog.

That's too bad.

It'd be interesting to read what he would chime in on this topic.

Truth be told, Patnet holds a special place in my heart. Seriously.

To answer your question, I’m always a buyer and a seller regardless of where we are in the cycle of the housing market. I’ll buy for the right price, and I’ll sell for the right price.

Check out the link to the flip in Oakland that Patrick shared above. I bought it for the right price, and I sold for the right price.

My partner and...

@mell, the house had foundation issue. Too big of a job for the average Joe or Jane to take on. The house had about 650sf of addition, which was not documented. We raised the house, installed new foundation, and installed a subdrain system around the foundation to collect hillside run-off water. We legalized the undocumented 650sf, etc....

The house was languishing on the market forever and kept dropping the price. I made an offer of $600k to start, but eventually settled for $640k as I felt an ARV of $1.2M was achievable.

Once it was done, I saw a sale price of $1.275-$1.3M was achievable. The offer came in on target so I took it immediately rather than playing games.

We spent $330k to rehab the house. It paid off. My little brother was the GC on the job. We gave him 20% bonus on the net profit for his efforts in addition to his salary. This is the only way to retain good help.

Eman says

mell says

Eman says

B.A.C.A.H. says

There was a someone who identified as a resident of SJ with handle "E-man".

He shared a lot on Partick.net about his prowess as a Bay Area real estate investor and landlord. Seems like recently he fell off the face of the earth, or at least got erased or self erased from this blog.

That's too bad.

It'd be interesting to read what he would chime in on this topic.

Truth be told, Patnet holds a special place in my heart. Seriously.

To answer your question, I’m always a buyer and a seller regardless of where we are in the cycle of the housing market. I’ll buy for the right price, and I’ll sell for the right price.

Check out the link to the flip in Oakland that Patrick shared above. I boug...

Thanks that makes sense! I will be watching the next flip - better than property brothers! Good luck!

All new high in August.

one society forgets, this happened 12 years ago!

Patrick says

Literally, in much of California.

When does it crash again Patrick ? And by how much ?

https://www.longtermtrends.net/home-price-median-annual-income-ratio/

,

theoakman says

one society forgets, this happened 12 years ago!

Work from Home (WFH) making people to increase the existing bubble. Anyone buying now at best will have home values below their purchase price for at least 5 years from now.

theoakman says

one society forgets, this happened 12 years ago!

12 years is nothing to us, old farts, but it's literally half of a lifetime for some fresh college grad.

EBGuy says

All new high in August.

I didn’t think the housing market would go above 235-240 on the HPI before we top out. Wow! It’s dejavu.

Eman says

I didn’t think the housing market would go above 235-240 on the HPI before we top out. Wow! It’s dejavu.

Yeah, I'm a bit in shock as well. Always appreciate your field reports. VC's continue to air drop money into the Bay Area at a clip of $50-$60 billion per year. Until that abates, there's plenty of dollars flowing into the housing market.
There's been $37.5 billion invested in later stage deals in the first three quarters, already topping last year's $32.8 billion and within reach of the $50.9 billion from 2018. But there's only been about $1.4 billion in seed and angel funding here through Q3, compared to full year totals of $2.3 billion in 2019 and $2.1 billion in 2018. Early venture rounds in the region finished Q3 with $8.3 billion raised, compared to $15.3 for all of last year and $14.5 billion in 2018.

Eman says

EBGuy says

All new high in August.

I didn’t think the housing market would go above 235-240 on the HPI before we top out. Wow! It’s dejavu.

Hi Eman, I was wondering if you wouldn't mind sharing your opinion on a housing issue I'm trying to figure out. I live in Pacific Grove, CA., currently taking care of my mom with Alzheimer's. We have a house here, and I'm trying to figure out whether to rent it out or sell. We're getting mom into assisted living in AZ (near my brother), and I'll be moving in with my girlfriend in Tracy, so we have the opportunity pick a new path with the Pacific Grove house.

Our SFH (3 bedroom, 2 bath, completely remodeled) has appreciated from $965,000 to $1,250,000 since 2017 when we purchased it. In the event that we sell it, I'm learning swing trading so I hope to be proficient enough to grow the equity that could be extracted from the house (about $600,000). I'm hoping to be able to do this no matter which direction the stock market goes in the future. If for some reason I can't reach a proficient level within a year or so, my backup would be to purchase a rental or two in any part of the country where it could produce a better monthly cash flow. Housing market is on fire here currently, with people flocking here from the Bay Area, so perhaps it could be a very good time to cash out.

The other option is to try to hold onto the house and rent it, which is basically a break-even cash flow situation unless rents really start to go up. So we'd be relying on future appreciation and an eventual sale, possibly in just a few years, depending on whether my mom's condition gets a lot worse (it's early stage and she's been stable.)

All that background to ask, do you foresee a major housing correction on the horizon, particularly in a place like Pacific Grove that's somewhat insulated? I'm driving myself crazy trying to figure out which would be the dominant factor, a potential economic downturn that could hit housing prices, vs. inflation which could cause them to skyrocket. Of course, everyone has their opinion, but it would be really nice to hear what you think about it as a skilled real estate investor. I'm very grateful in advance if you might be willing to share your thoughts.

@EMan ^^

Housing in the Bay Area is absolutely out of control. Would hate to be on the buy side today

If prices around here are up, it's all profits from the Wuhan Virus making a billion people into captive customers of big tech.

Perhaps the biggest scam in history.

Patrick says

If prices around here are up, it's all profits from the Wuhan Virus making a billion people into captive customers of big tech.

Perhaps the biggest scam in history.

They aren't, certainly not in SF which is approaching $700/sqft and falling, down from $1100/sqft. Some are leaving CA and the rest is bidding on the surroundings which have historic low inventory due to Covid. And of these 10 shacks per small town 5 are overpriced shit shacks which don't sell for months until severely reduced, and the other 5 are well kept or nicely remodeled and priced to sell, so they usually fetch multiple offers and sell a few percent above the ask or at the ask. I wouldn't call this a hot market, rather a highly selective market unless you own in SF, then you're screwed. I've seen multiple properties bought for 2MM+ 2 years ago cut to 1.2MM-1.4MM.

But if you own well kept SFH prime property in the burbs and are willing to sell you can make some decent bucks now, some small towns are achieving parity or overtaking falling SF in terms of $ / sqft.

It’s the Bay Area burbs that are rocketing upward.

What's worse is the majority of these shacks have significant moisture, dry rot and woodeating and other pest infestations, I'm surprised about the lack of quality construction and upkeep. Outside of SF the climate is pretty dry yet there is moisture in the crawl spaces seeping into the houses (which often aren't that old), and even leaking roofs. So yeah, if you have decent standards and don't want to piss money away on expensive repairs while risking buying the top then your choices are somewhat limited at the moment.

Brendan22 says

Eman says

EBGuy says

All new high in August.

I didn’t think the housing market would go above 235-240 on the HPI before we top out. Wow! It’s dejavu.

Hi Eman, I was wondering if you wouldn't mind sharing your opinion on a housing issue I'm trying to figure out. I live in Pacific Grove, CA., currently taking care of my mom with Alzheimer's. We have a house here, and I'm trying to figure out whether to rent it out or sell. We're getting mom into assisted living in AZ (near my brother), and I'll be moving in with my girlfriend in Tracy, so we have the opportunity pick a new path with the Pacific Grove house.

Our SFH (3 bedroom, 2 bath, completely remodeled) has appreciated from $965,000 to $1,250,000 since 2017 when we...

@EMan I thought I’d bump this up again to see if you’re around and willing to weigh in. Thanks!

In the NY metro we're seeing prices rise as people bail on NYC. Why deal with the traffic and small apartments when you can live in the country and work from home? Also nightlife in NYC is dead (thanks Covid) but from what I hear comming back slowly.

So yeah, I've seen crazy appreciation since I bought in 2012. Here's my one piece of advice. Stay within your means. I know one guy who stretched himself thin to buy shortly after I did, almost lost everything, and now he's back to renting a small apartment in the hood.

If you don't catch this wave there will always be the next one. Hosing bubbles come and go, every seven years or so.

GreaterNYCDude says

Hosing bubbles come and go, every seven years or so.

The housing bubble popped in 2007/2008. Prices declined since 2005 (peak).

Look at any housing price graph.....housing has been on the uptrend since then. I highly question your rule of thumb ("every 7 years or so"). For house prices to tank you need a severe change such as a steep incline in mortgage rates or high unemployment (high paying jobs). We are headed to an environment like Europe> the price of a house essentially doesnt matter anymore....its the monthly payment that matters. In Germany they have mortgage rates of 1-2%. Think about it another way.....can the US economy even handle it if the FED raises the Fed's funds rate significantly? How do you think the real rulers of the US like higher rates (fortune 500 companies)?

Don't think it's a good time and suicidal in the most liberal states.