patrick.net

robertoaribas says

misstrial: except for proving evidence of the obnoxiousness of many southern californians, what was the point of your post? that you are rude?
Patrick runs a real estate blog. you might notice that fact from oh, say the fact that he posts real estate news from boston, seattle heck even china on occasion.
“I am tired of California being slammed on account that some newby poster decides that commonly known facts about their own State do not meet their liking.” First off as to newbie, I wrote Patrick personally from this site in about 2006, back in the days when all anyone talked about was sushi… so there goes newbie, though I did forget my original password.
I post rent/price ratios from Phoenix which I know extremely well, to show how poorly those same metrics compare in the bay area, and get responses like, “nobody wants to live in Phoenix” an oddity considering 3.5 million people have chosen to live here.
Furthermore, unless I am mistaken the summer heat effects renters and buyers kind of equally. So, I’d expect rent to buy to be rather unaffected by days over 100 degrees.
But lets compare some fun facts: California has the very worst state budget deficit of all, and even higher unemployment rates than Arizona. So, once again, if I’m not supposed to be bothered by “commonly known facts about their state” being posted, then pretend you aren’t a raving hypocrite ok then, and don’t get your panties in a twist about commonly known facts about your state? Don’t let limited logic ability hold you back!

^AZ Real estate agent and/or troll.

~Misstrial

magnolia2000 says

I live in south bay near Cupertino area with some great schools and houses that’s still too expensive to afford. I’ve been to some open house lately. I noticed an increasing number of real estate agents selling their own houses. It’s not the house they currently live in, but the ones they bought as investment and rent out. They bought the houses long time ago when the price was still low. If this is not just coincident, I wonder why they want to sell it now. I could think of these possible reasons below and I’d like to hear from other what you think.
1) The house price will drop next year, so they want to sell it now.

2) It’s tough to find tenant nowadays.

3) There are some other bargains out there somewhere. So they want to take the money out and invest somewhere else.

Cupertino res here (Monta Vista).

They are probably selling for all the reasons you listed.

My understanding is that homes are taking much longer to sell as compared to the past, so its probable that they need the income from the property sale, that is, if the property has any equity in it.

(Recent example: a realtor acquaintance recently sold her investment condo at a loss of $220k.)

Could be that they have a funny money loan on the property that has a reset due and that could be another reason. Or a heloc loan that must be paid off and a divesture has to take place in order to make loan payments or pay off the note.

btw, my landlord's Los Altos property went down over $800k in estimated "value" this year alone. All of a sudden earlier this summer she started behaving, well, less than generous relative to rental repairs. Follwoing that, I went on to zillow and that explained the why's...

Whatever the case may be, real estate is not the investment vehicle it used to be - commodities, gold, oil, and certain currencies having supplanted RE. RE is deleveraging while those investments I listed are going up, up, up.

~Misstrial

Misstrial says

^AZ Real estate agent and/or troll.
~Misstrial

So if someone likes Phoenix better than CA then they are a troll? That's pretty funny...

Dan8267 says

toothfairy says

only 1 house in Oakland is a buy?

You mean, “a house in Oakland is a buy?” Isn’t Oakland, CA the murder capital of the known universe? Why would you want to live, er, die there?

it's mostly terrible and you wouldn't want to live there which is why there are so many "deals".

The low in market crashed because half the owners were flippers and decided to walk when prices didn't go up.
high end market will only crash when jobs crash or in the case of most expensive areas people who live there dont really need jobs so may never crash.

I live in Burlingame, in a house my family has owned since the 30s. There is unquestionably a multi-generation wealth effect supporting prices here and I believe that is something that can be relied upon going forward. People are willing to pay an insane premium to live here (for good reason, I might add; it's a fabulous area). If I had $3M cash to invest buying a 25-30X annual rent house here might make excellent sense as long as low-risk investment return is in the toilet. What else can you do with the money if you're not risk-tolerant?

Talk me out of this line of thinking, please. ;-)

You can live here and enjoy everything about the area without paying that insane premium though. Just rent the same thing, or better.

You can hold that $3M and guarantee that you at least don't lose in nominal dollar amounts. If you buy a house with that much money, even a few percent loss is a lot of money. Not to mention property tax, maintenance, etc. A house is a guaranteed cash drain.

Am I talking you out of it yet?

toothfairy says

high end market will only crash when jobs crash or in the case of most expensive areas people who live there dont really need jobs so may never crash.

WHEN jobs crash? Har, stop it, you're killing me.

> Am I talking you out of it yet?

It's a start. I have a lot of thinking to do.

>You can live here and enjoy everything about the area without paying that insane premium though. Just rent the same thing, or better.

That is almost the situation I have now. I pay considerably below market to live in an inadequate house in a terrific area. The intelligent thing to do with this property would be to renovate/expand, but that's off the table for complex and utterly stupid reasons not worth going into here. The money's sitting there earning squat, everybody wants to move WAY up, prices are 35-50% too high and it's hard to see how that is going to change much due to the high net worth of the community. Yet rents ARE depressed here as everywhere else. Your math says it would be better to spend as much $8-10K/month on rent than buy a $3M house and you're almost certainly right, especially as it's hard to build a case for any future appreciation in prices. There is more likely to be a very sloooow downward spiral over a long time. No crash though. Too much old money that isn't going anywhere.