Comments on: $100k or More Off Please: Oakland Price Reductions http://blog.redfin.com/sfbay/2008/04/100k_or_more_off_please_oakland_price_reductions_.html Redfin Bay Area Sweet Digs Tue, 07 Feb 2012 16:59:16 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: SurveyKid http://blog.redfin.com/sfbay/2008/04/100k_or_more_off_please_oakland_price_reductions_.html/comment-page-1#comment-4023 SurveyKid Tue, 22 Apr 2008 18:05:49 +0000 http://blog.redfin.com/sfbay/2008/04/100k_or_more_off_please_oakland_price_reductions_.html#comment-4023 Using the language of Options--Vallejo and Oakland were the Call Options during the Bubble, and the City of SF was--and remains--the Underlying. The implied volatility of the Options was high, and so the Rate of Change experienced in place like OAK and Vallejo was high. Think leverage. Think: magnification. Marginal OAK and Vallejo properties went up as much as 500%. In some cases, even more. When you see a property in a marginal neighborhood go from 100K to 500K or more, and then back--what that tells you is that everything Prime, everything that appears safe, like Marin, SF proper, and so on--is going to give back--eventually-100% of the price rise from the year 2000. Not every house. Not every micro-neighborhood. But, it's telling you that the "risk" now favors the analysis that the plague which surrounds the entire B.A. will eventually visit itself upon "Prime." Trophy Victorians which sold for 900K in Noe Valley, and then were renovated with 500K of upgrades, and then were sold for 2.8 million will eventually transact for 1.4 million. -The Kid Using the language of Options–Vallejo and Oakland were the Call Options during the Bubble, and the City of SF was–and remains–the Underlying. The implied volatility of the Options was high, and so the Rate of Change experienced in place like OAK and Vallejo was high. Think leverage. Think: magnification.

Marginal OAK and Vallejo properties went up as much as 500%. In some cases, even more. When you see a property in a marginal neighborhood go from 100K to 500K or more, and then back–what that tells you is that everything Prime, everything that appears safe, like Marin, SF proper, and so on–is going to give back–eventually-100% of the price rise from the year 2000. Not every house. Not every micro-neighborhood. But, it’s telling you that the “risk” now favors the analysis that the plague which surrounds the entire B.A. will eventually visit itself upon “Prime.”

Trophy Victorians which sold for 900K in Noe Valley, and then were renovated with 500K of upgrades, and then were sold for 2.8 million will eventually transact for 1.4 million.

-The Kid

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