Archive for January, 2008
January 31, 2008
If you are a teacher or firefighter or a nurse, chances are you can’t afford to buy a house. Both CNNMoney.com and Marketwatch unfortunately reported that an analysis recently done by the Center for Housing Policy concluded that most of the middle class don’t bring home enough moola to be a homeowner. This includes those who educate our children, protect our homes and care for our friends and families when they are ill.
The report, appropriately called “Paycheck to Paycheck,” assumes that the old rule of 28% of your income should go to making housing payments and 10% of the home price is available as a down payment. Using these rule of the thumb guidelines, a person or household in San Francisco needed just over $250,000 to afford the median priced home of $770,000. And it doesn’t get much better in other areas, even though prices are not as astronomical as the bay. ”Registered nurses, for example, can’t afford the median-priced home in 108 markets, a slight improvement from the 114 markets they were priced out of in 2006. “ Ouch. And it really hurts when our health workers can’t afford to live nearby to take care of us. On a side note - this provides a glimpse into how the recent mortgage and foreclosure problems came into being - a lot of folks who probably couldn’t really afford these homes somehow got financing to buy them.
Overall, the news isn’t pretty for the bay. According to the report, five of the top 10 most expensive home areas are here. Something has to give to make this place more affordable. Either prices need to drop or we pay these folks much more. Or we all get comfortable with the fact they live 2 hours away… What will it be?
Chart: Center for Housing Policy
January 31, 2008
I often think of Emeryville as part of Oakland but it’s actually a separate entity, with its own mayor and everything. Emeryville’s interesting because it’s a fairly small channel of land between Oakland and Berkeley yet is practically a shopping mecca for its neighbors’ citizenry. With Ikea, Emery Bay Public Market, Powell Street shopping and now the new Bay Street, who needs San Francisco? (Just kidding.) But seriously, Emeryville does satisfy the consumer needs of many an East Bay-ite and as an avid Ikea/Home Depot shopper, I can attest to that (yes, I am a new homeowner). On top of that, Emeryville is home to a host of film, biotech and software companies such as Pixar, Chiron and Leapfrog, making it a fairly easy (reverse) commute for San Franciscans or possibly a nice place to live for those who want to live and work on the same side of the bay. Much of the housing is relatively new condos, however there are a good number of older SFR’s that are undergoing renovation such as 928 63rd St. a 3bd/3ba gem of house built in 1906 but looking quite fabulous (pictured right).
928 63rd St, 3/3, $649,500, Sun 1:30PM-4PM
5855 Horton St #810, 1/1, $439,000 Sun 12:00:00 PM - 2:00:00 PM
5540 Beaudry St # A, 3/2, $509,000 Sun 2:00:00 PM - 4:30:00 PM
1500 Park Ave #404, 2/2, $729,000 Sun 12:00:00 PM - 2:00:00 PM
January 31, 2008
Here are some Hayward deals under $400,000! These are great for families just starting out, students, or for rental investments. It has been quite a while since we’ve seen any type of housing in the Bay Area getting down below the $400,000 mark. I think when people start buying up these lower priced houses our economy will start picking up, far more than just handing out a few hundred dollars to everyone to go shopping with.
New Listings:
1573 170th Ave. - 2/1 - 1112 sf $349,950
27567 Capri Ave. - 3/2 -1441 sf $399,900
26890 Portsmouth Ave 1128 - 3/2 - 1128 sf $379,000
2052 Sleepy Hollow Ave. - 3/2 -1128 sf $329,900
28441 Thackeray Ave. - 3/1.5 - 1140 sf $399,900
27039 Underwood Ave. - 3/2 - 1153 sf $324,900
27477 Verona Ave. - 3/2 - 1128 sf $319,900
Price Reductions:
1454 170th Ave - 3/2 - 1497 sf $399,000 (was $449,900)
47 Crystal Gate Cmn - 2/1 - 1150 sf $355,000 (was $411,000)
23462 Fuller Ave - 3/1 - 1393 sf $349,000 (was $399,000)
21564 Meekland Ave #18 - 2/1.5 - 953 sf $244,950 (was $265,000)
2549 Oliver Dr - 2/1 - 884 sf $312,000 (was $327,750)
24485 Park St - 3/1 - 1041 sf $339,900 (was $364,900)
794 Sageleaf Ct - 2/1.5 - 896 sf $240,000 (was $260,000)
19029 Waverly Ave - 3/1 - 1182 sf $359,900 (was $370,700)
393 Willow Ave - 2/1 - 840 sf $299,000 (was $389,500)
REAL ESTATE TERMINOLOGY:
Easement - A right, privilege, or interest that one party has to use the land of another; a legal right to use another’s land for one’s benefit or the benefit of one’s property (right-of-way).
January 31, 2008
Before we get to today’s post, let me point out that Redfin rolled out its new version today. New fonts, new layout, much larger map, the addition of eAppraisal.com, as well as nearby similar listings and sales, and listing price history. Redfin got it right with these new additions. It gives you even more information to make an informed decision on homes and their potential sales price. So don’t forget to check it out, or just click on one of the links below, to see what’s been done to help you, the consumer.
As for what’s hot and what’s not, we had some big numbers on the Daily Stats board today, with three homes standing out from the pack with big viewing numbers. So what are you looking at and what is not on buyer’s radars?
HOT: 25 Avenida Espana, San Jose. This 3/1.5 home on a slightly oversized corner lot is located in the Santa Teresa area. Priced at $499,000, this rancher has a gourmet kitchen, hardwood floors and several other upgrades/updates. On the market 77 days, it last sold in October of 2006 for $637,000, and was originally listed at $569,000, meaning a 12.4% drop in price. Sure wish there were more (and better) pictures and better listing
NOT: 7202 Lomas Via, San Jose. Also in the Santa Teresa neighborhood, this 3/2 corner home with a pool has been on the market 202 days and isn’t selling with the current price tag of $589,000. It started out in July at $710,000 and 17% in reductions doesn’t seem to be helping.
HOT: 1733 Scott Street #2, San Francisco. This two-level townhouse has 2 bedrooms, 2.5 baths and is only 6 years old. Located in a 3-unit building in lower Pacific Heights, the price tag of $1,195,000 buys you a parking space, private deck with views, built-in office, and other high-end amenities. On the market 13 days, this unit last sold in 2005 for
NOT: 2021 Webster, San Francisco. This 3-story Pacific Heights SFR is charming (with 27 photos to prove it), but has been on the market for 182 days. Priced at $2,849,000, it has seen what the realtor calls “drastic price reductions”—three of them for a total of 18.5%. Still, no takers.
HOT: 5896 Lean Way, San Jose. This 3/2 rancher is in Blossom Valley and very near to Highway 85. The best thing about this home is the backyard. There is an enclosed sun room and a backyard that looks like it belongs in a rural, bucolic setting along a creek, with its stone lined grassy area and shade trees. On the market 84 days, this home has seen one price reduction (just last week) of almost 17%, which means the sellers are serious. Last sold in February of 2006 for $725,000, which means a 30% fall in value in just less than 2 years. Ouch!
NOT: 5898 Pontius Court, San Jose. Also a 3/2 in Blossom Valley, this Spanish-inspired rancher has been on the market 220 days. Last sold in April of 2003 for $477,000, this home has undergone 4 price reductions, but for a total of only 17%, with each reduction being between 3-6%.
Recent Sweet Digs Posts:
SF: Safety in Your ‘Hood
Former Countrywide VP Sues Employer, KB Homes
Tri-Valley Price Cuts: Short Sales, New Construction and a Fixer
Who’s To Blame? Rapacious Realtors, Amoral Agents, Beleagured Buyers?
Why I’m Shunning Portland And Sitting Tight In The Bay Area
January 30, 2008
A comment on my last post on 6th Street got me thinking: how much does safety come in to your plans for home ownership? Are you more interested in a safe ‘hood than a swanky kitchen? You might have to decide: a lot of the new loft type condos are going up in the SOMA area, which can be pretty damn terrifying at night (or in full daylight). So you might get that brand new kitchen, but you’ll have to order everything delivered anyway because you don’t feel safe walking outside.
The SOMA is not, let me clarify, entirely unsafe. And most realtors will tell you “it’s up and coming,” and that “it’s not as bad as it looks,” phrases that are to some extent true. But certainly, the Tenderloin is one of the highest crime areas in the city, along with Western Addition, the Mission, and Bayview/Hunter’s Point (according to 2007 crime statistics). Myself, I was robbed of my purse at a club called Roe on Howard at 2nd Street just last weekend, so I add my experience to the stats for 2008. For a more accurate read on what goes on, and where, you have several resources at your fingertips. For instance:
Metroblogging offers the SF Murder Map, both for 2007 and 2008. If you’ve followed the news, you know homicide rates in the city and uncomfortably high, and you can keep track of who died, where, and how. Morbid, but important.
Fortuantely, we have many more property crimes than violent ones ( approximately a ratio of 6:1) , as you can tell from this graph at CityRatings.com. You can also read, in detail, about virtually any crime that has made it to the police blotter, on the regularly updated (and chilling) sfcrime blogspot.
If you’re interested in exactly where the most crime takes place, or if you want to check a specific district or neighborhood’s stats, you can do that too. As long as the crime was reported to the police, SFPD keeps track, by location. Go to SF Crime Maps, a police run site that, to quote,
has been created to allow people with an interest in public safety to easily produce maps and reports of incidents from data contained in SFPD police reports. Now members of community groups and neighborhood watches can get public safety information whenever they like - as often as they like.
And indeed, you can type in a specific address, or a city block, or search around a landmark. Any of these searches will yield a location-specific record of all crimes reported in that area.
So when your realtor tells you that house you’re looking at is in a neighborhood that “is not that bad,” find out for yourself just how bad it is, and decide, intelligently, whether you feel comfortable living there. Surely that security matters as much as chrome and Corian in the kitchen.
January 30, 2008
According to the San Jose Mercury News, Mark Zachary, a former regional vice president of Countrywide Financial Corp has brought suit against the lender for wrongful termination. Zachary received an excellent performance review just three months before he was fired.
Why was he fired? Zachary blew the whistle on the joint venture between KB Homes and Countrywide for fraudulent lending practices - detailing instances in which he was strongly encouraged to inflate appraisals by as much as 6%. It is practices such as this that have left many homeowners owing more than their home is worth, and has helped created the current housing crisis we are experiencing.
Zachary also claims that Countrywide loan officers would advise applicants who were denied a prime loan rate about what income level to claim so they would be approved for sub-prime or no documentation loans.
Naturally, Countrywide denies all of Zachary’s claims. Countrywide lost $1.2B in the third quarter of 2007.
I find it also interesting that KB Homes has declined to comment in this drama. Could they all be afraid this whistle blower is just the tip of the iceberg?
I suspect that many more former loan company employees, executives, and home builder’s employees will be coming forth with their sordid yet true tales in the months to come.
January 30, 2008
I’m intrigued by a brief article in the Tri-Valley Herald today that reports “Livermore to continue pace of development“. Essentially, the Livermore City Council approved the building of “450 new housing units” per year until the year 2010. It sounds quite banal, I know. So why my intrigue? I guess I’m just wondering how cities/counties make decisions about new housing construction in times such as these. With a flattening housing market, new construction seems like it would normally be put on hold or at least reduced. It sounds as though the majority of the units to be built in Livermore will go up in downtown, perhaps part of their downtown revitalization campaign? If there’s anyone out there who is knowledgeable about Livermore, particularly the workings of civil planning and new construction, I’d love to hear from you! Thanks! In the meantime, check out some of the price cuts around Livermore and Pleasanton below.
Photo Credit: “Traffic Sign” by Sundstrom on stock.xchng
Livermore
870 Keystone
4bd/3ba 1737 SF built in 1965
Short Sale. Previously sold for $629,000 in July 2005. Currently reduced from $649,000 to $610,000.
2113 Rivers Bend Circle
4bd/3.5ba 3735 SF
Description states: “To be built; Move in time approximately 7 months.”
Hmmm, good luck. It’s not even built yet and it’s been reduced $50,0000 from $1,199,000 to $1,149,000. I’m guessing it will take even steeper cuts given this market.
1026 Lomitas Ave.
3bd/2ba 1728 SF Built in 1971
Short Sale. Previously sold for $642,295. Was listed at $649,900 now priced at $599,000. Sunset East neighborhood.
Pleasanton
1124 Piemonte Dr.
5bd/5ba 5950 SF Built in 1998.
Short Sale. Previously sold for $2,450,000 in July 2005. Currently just reduced from $2,175,000 to $1,850,000, that’s about a 15% price reduction.
343 Amador Ct.
3bd/1ba 1103 SF Built in 1952.
Fixer. Reduced from $599,000 to $555,000.
2801 Victoria Ridge Ct
4bd/3ba 4018 SF
Short Sale. Previously sold for $1,100,000. Reduced from $1,219,000 to $1,099,000
January 30, 2008
Foreclosures are decimating Stockton, Pittsburg and other Bay Area cities; fallout from the credit crisis is worsening; the housing slowdown continues. As Stan Laurel used to say, “Another fine mess you’ve gotten us into.” But who, exactly, got us into this?
Was it Alan Greenspan, who lowered interest rates in 2001, stoking the housing market, then throttled back? I have a feeling Adam Schwartz, who posted his disdain for Realtors in an earlier Redfin blog entry, might point the finger at real estate agents. And another reader, Doug, says adults need to take the responsibility for their actions; perhaps he would point the finger at irresponsible buyers.
And what do you think? Is it all of the above, one of the above, or some other factor entirely? (Train wreck photo: Erik Charlton on flickr.)
January 30, 2008
I visited Portland for the first time recently and fell in love. With the city that is, not a new man. The immediate appeal of the place may be one reason Portland is one of only three cities out of 20 in the US that has seen a rise in house prices over the past year (the other two are Seattle and Charlotte, NC).
Overall though, of course, prices are down — by 7.7% in those 20 spots. The Bay Area is hurting less than others with just a 0.2% fall but there’s no doubt it’s feeling the pain with 38.1% fewer homes sold this past December compared to December 2006. This all according to the National Association of Realtors as reported in today’s San Francisco Chronicle. (Another report, by S&P Case-Shiller, puts the decline at 10% — either way it’s only going one way.)
So I do feel sorry for anyone working in real estate right now. But I can’t help feeling a little gleeful too that these gloomy numbers spell good news for “moi”. As Karl Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, puts it: “It’s a good time to be a buyer.” (And with a job title like that, he must know what he’s talking about, right?)
With this in mind I am sitting tight. Homes are coming on the market and I’m dutifully visiting them. Some of them are even tempting. And their prices are definitely lower than they would have been a year ago. But I’m taking a wait-and-see approach. I don’t see people falling over themselves to put offers on these homes. Rosen reckons it will take a year and a half before the market improves “in any meaningful way”. My challenge is to strike before it starts improving.
Meantime, I’ve noticed that flipping has gone out of fashion. Who wants to take on a fixer-upper as a investment opportunity in these uncertain times? I visited this $779,000 Oakland house at 6450 Regent Street (above) in the Elmwood yesterday. It’s been on and off the market for a while and is a sad-looking brown-shingle duplex, but I think it could be turned into something pretty nice — a SFH with some good original features — and it’s in a great ‘hood. I’m not taking it on — too scary. But someone out there will and I can’t wait to see the results.
Other Berkeley fixers for those who are braver than me:
1620 Josephine Street: 4/2.5 house in north Berkeley with “tons of space” but needs to be “decluttered and repainted”. Price: $900,000.
418 Avon Street: 2/1 cottage in lower Rockridge which needs “a lot of love”. Price: $449,000
5788 Vicente Street: 4/2 Oakland house with a motivated seller that “needs work”. Price: $700,000.
[Portland picture credit: www.legendsofamerica.com]
January 30, 2008
Tracking foreclosures seems to be the new game in town. Everywhere you look there is a new statistic. Yahoo Finance has a recap of last year with “Home Foreclosure Rate Soars in 2007.” CNN Money has a similar story, “Foreclosures up 75% in 2007.” Closer to home, BusinessWeek wrote “California Defaults Soar in 4Q.” No end in sight……
And as if the foreclosure issue is not enough doom and gloom for you, head over to Marketwatch, where Paul Farrell puts a real damper on things in “In America, land of the bubbles, the next pop will be the biggest.” Equating today’s woes with that of 1929, he puts an interesting spin on things, saying that America is subsisting on bubbles, which eventually burst. I’m not so sure I agree with him, but it makes for interesting reading.
The Brits get in on the action as well, predicting that the “US recession will dwarf dotcom crash.” Edmund Conway of the UK’s Telegraph tries to make Brits feel a bit better about their own situation by telling them that the US is in worse shape. Are we?
I’m not so sure that I’d want the job of cleaning up abandoned, foreclosed properties. People in dire straits do stupid, insane things. People forced from their homes often leave a wake of destruction. And some of these things are listed in “Cleanup Crews Often Can Tell Why Eviction Happened,” which has a few sad and horrific stories to tell. Yes, it’s Ohio, but California being what it is, probably is ten times worse.
….and now for a bit of Redfin News: The New York Times did an article on Monday, “Despite Housing Slide, Real Estate Sites Sell,” which featured Zillow, Trulia, Terabitz and Redfin. CEP Glenn Kelman got his mug at the top of the article, surrounded by Redfin For Sale signs. The article talks about the success of these online sites, despite the downturn in real estate.
Recent Sweet Digs Posts:
Alameda County: What’s Selling in the 700K Range
SF and Daly City: What Can You Buy for Less than 500K?
AdAge Rips Realtors a New One
