Archive for September, 2008
September 30, 2008
My fellow blogger Janis Mara wrote about the government’s bailout of financial insitutions several days ago, noting that the majority of Redfin readers didn’t think it was fair to bailout homeowners back then, so should we offer a lifeline to financial institutions? 
In reading the tons of articles that swirl around on the rescue plan, it seems to me that those who are opposed to the plan feel that Wall Street is getting what it deserves. Banks and other financial institutions, they argue, got greedy and gave out credit to anyone who asked. They too, rode the home buying frenzy, thinking home values would keeping going up, up, up and got the average joe into loans that were probably unsuitable and loaded with risks.
While I agree with all those points above, what I have found particularly interesting is that everyone is pointing their fingers at everyone else. This whole credit crisis, I believe, is the responsibility of not only the banks and financial institutions, who doled out more credit than they should, but also the consumers who readily took on credit that maybe they shouldn’t have. Like a marriage or partnership that doesn’t work out, there are two parties to this transaction. And it is the responsibility of both parties to understand what they are getting themselves. When it doesn’t work, it’s easy to lay blame.
Yes, I think the banks and financial institutions went too far with exotic mortgages, no-doc loans, minimal down payments, etc. However, let’s not forget that on the receiving end were homebuyers that probably also thought buying a home was an instant profit making machine, since prices kept skyrocketing. With no-doc loans, many probably stretched a little bit and in interest only loans, they too were making a bet on the housing market.
This credit crisis is more serious than I had imagined. It has seemed to spill out of just the housing market to affect everything else. I haven’t been a fan of bailing out anyone. Especially as a taxpayer that sat on the sidelines and didn’t take on a mortgage during the heyday I wasn’t too sure that I could pay in the long run. However, I do support the plan, only because this credit crisis seems to have infiltrated not just the housing market, but everything from car loans, credit cards, small businesses, etc. I just only wish that folks stop pointing fingers and be willing to admit that they probably contributed to this problem.
September 30, 2008
A couple of weeks ago, I wrote about several Oakland properties north of me that have been inching closer in price to the amount I paid for my house two years ago. I lamented that I would have done well to wait out the housing bubble: had I done so, I likely could have scored a larger house in a more valuable neighborhood. One of the properties, 1267 Bates Rd., was puzzling since it’s price ($529,000) did not seem to match its location (the coveted Trestle Glen). Readers Rbehs and Optionarm pointed out respectively:
I believe Bates is under large powerlines
and
In the street view for Bates, if you angle the view upwards you can see the large powerstructure
Sure enough, checking out the Google street view for the Bates home, you can see a humongous transformer in the backyard. Ahhh…Nothing like Redfin readers to give you the lowdown on real estate. This prompted several other cool readers (hi Art, David, Jackie and Adam!) to discuss the perils of having a huge hunk of power structure hovering over you: loud humming, definitely not eye candy and possible adverse health effects from EMFs (electromagnetic fields). Thanks dear readers! Not only did you educate me on yet one more item to be aware of when purchasing a house, you got me investigating EMF’s (for this thirtysomething, I hitherto only knew EMF as the band that sang the catchy “Unbelievable”, you know, that song that was played at proms and clubs across the US in the ’90’s?) Interestingly, I couldn’t find much that has been written about EMFs after 2002 when the California Environmental Health Investigations Branch was commissioned to do a study on their alleged health hazards. (See California EMF Program and their Short Fact Sheet on EMF ).
The World Health Organization (WHO) website also has a pretty comprehensive and user friendly overview of EMF’s. What sturck me most was one of their tables comparing acceptable exposure limits. They note that 5,000 V/m (volts per meter) is the highest acceptable “public exposure” while 10,000 V/m is the highest “occupational exposure”. Ok. Fine. So just know what you’re getting into if you work in a field where you’ll have high occupational exposure, right? Not so fast. You should also be aware of possible high exposure if your home is close (under?!?) a power transformer, since “powerline exposure beneath large power lines” is estimated to be around 10,000 V/m (compare this to only 100 V/m exposure for homes not near power structures). Of course, this brings me to the Trestle Glen homes. How much will you be exposed to under those big suckers? While much of the research has not found conclusive evidence of the health risks they pose, WHO states:
There is no doubt that short-term exposure to very high levels of electromagnetic fields can be harmful to health. Current public concern focuses on possible long-term health effects caused by exposure to electromagnetic fields at levels below those required to trigger acute biological responses.
and
Despite extensive research, to date there is no evidence to conclude that exposure to low level electromagnetic fields is harmful to human health.
However, the 2002 California study found:
an association between leukemia and…high magnetic field exposure such as living very near a powerline…
All of this sheds some light on why some of these Trestle Glen homes might be having a hard time selling (on top of our already disastrous market). But what do you say? Would you think twice about living under a power transformer? Let me know your thoughts, and again, a big shout out to everyone who brought my attention to transformers and EMFs in the first place!
More links discussing EMFs:
National Institute of Environmental Health Sciences, National Institutes of Health
US Department of Labor OSHA ELF Radiation Hazard Locations and Solutions
Wi-Fi As A Health Hazard
Electric Power Research Institute
September 30, 2008
There has been a rush of new listings on the Berkeley market this past couple of weeks. On one day alone I counted 11 newly listed homes in my Redfin update email.
My assumption is that people are getting their houses out there before the winter sets in. The economic meltdown will also be playing a part — if you’ve lost your job or a huge slice of your pension has been wiped off the slate, downsizing on your home and stashing some cash under your mattress sounds like a good idea right now.
It will be of some comfort to home sellers to know that, at least over the past month or so, prices are holding their own in the city. Check out Bob Blumberg’s monthly sales report for August and look closely at the “list price versus sales price” percentages — a majority are comfortably close to 100%, with many in excess of that.
The tables below show two weeks’ worth of homes sold in Berkeley in September (weeks ending 21 and 28).
Let’s look at how these homes fared in terms of ticket versus closing price:
10% UP: 699 Hilldale Avenue, a 2/1 1930s home with inner courtyard and partial views, sold for $810,000 on a list price of $735,000.
2% DOWN: 3122 Eton Avenue (pictured right), a brown-shingle duplex with 2+/1 upstairs and 3/1 down and a two-car garage, sold for $1,170,000 on a list price of $1,198,000.
8% UP: 76 Plaza Drive, a 1961 3-bed one-level in a pricey neighborhood, sold for $1,285,000 on a list price of $1,195,000
SPOT ON: 1481 Campus Drive, a 3/2 mid-century “livable light fixer” in the north Berkeley hills, did take almost a year to sell, but it went for $750,000 on a list price of $749,000.
12% DOWN: 1531 Oregon Street, a 3/2, 1,294 sq ft home, sold for $350,000 on an asking price of $399,000.
3% DOWN: 1357 Northside, a 3-bed home unfortunately associated with a heartbreaking family murder, perhaps understandably, sold for $599,000 on a list price of $620,000.
September 30, 2008
When I was growing up in San Carlos, there were two bakeries (in the same block) and my grandmother frequented both of them, several times a week. She bought their fresh bread and always had fresh breakfast pastries for us to snack on: bear claws, donuts, muffins. It was such a departure from the Wonder bread and frozen coffeecake of my own home. It was sad to see both of these old-fashioned bakers disappear. With the lone exception of the Chocolate Mousse bakery, there have been no other independent bakers in town…until now. Recently opened by San Carlos native Christi Perego, is Vanilla Moon Bakery, located at what used to be the rarely visited, but up-and-coming edge of downtown at 872 Laurel Street. This little family owned and run bakery is just the kind of independent shop I like to see open up on the Peninsula. Vanilla Moon strives to a present top-quality product, including Caffe del Doge coffee (the only other location outside of Italy and Palo Alto to do so), Mighty Leaf teas, teacakes, muffins, cookies, and their specialty: cupcakes (regular, filled, and mini). I had a chance to go by yesterday and check out their 3 featured cupcakes of the day, as well as their four regular options. My husband and I tried the chocolate/hazelnut and red velvet versions on the premises with cappuccinos and were not disappointed. I purchased 3 more to bring home and try (carrot, cookies and cream, and cuatro leches with meringue and dulce de leche caramel), and they did not last long. I’m not the only one who knows a good thing. When I mentioned we had stopped by Saturday right after they closed, I was told that I would have gone home empty-handed. They actually ran out of cupcakes for the first time since opening day! Their website will go live later this week, so you can check out the daily flavors ahead of time, or order a batch to go. In addition, they will begin offering lunch in the near future.
Meanwhile, in the housing market, there are a few new properties on the market that might be of interest, depending on your size and price requirements. Housing continues to be expensive in this town, and these newly listed SFRs are no exception. Prices range from $729,000 to $1,649,000 and $525 to $805/sf (average list price in this city is $1,136,000 and $617/sf). There are six listings priced under $1mil, almost all 2 bedrooms, while the cheapest home per sf is actually quite large, a 3/2.5 with 2570 sf. I’ve chosen three to spotlight, based on Proximity, Price, and My Personal Pick of the Week. They are available after the jump.
Read the rest of this entry »
September 30, 2008
The results from July are in, my friends. The monthly Case-Shiller report, which tracks changes in the value of residential housing, covers 20 metropolitan areas in the United States, with three of those being in California: San Francisco, Los Angeles, and San Diego.
Overall, housing values are down about 1% over June of 2008, but six of the twenty markets gained value in July: Atlanta, Boston, Denver, Detroit, Minneapolis, and Dallas. Last month this positive number was 9, with Charlotte, Chicago, Cleveland and New York falling off and Detroit making its first uptick since June of 2007. Within our own fair state, Los Angeles took a 1.7% downturn, with San Diego and San Francisco both coming in -1.9%. The big losers this month were Las Vegas and Phoenix, a mantle they cannot seem to shake.
San Francisco has seen a downturn in all but two months since July of 2006. March and April of 2007 rebounded just a wee bit, we’ve been on a freefall ever since, dropping 4.2% from July 06 to July 07 and another 24.9% between July 07 and July 08. That’s a big OUCH!
If pricing follows last year’s lead, December, January and February should be good months to buy, with big drops in housing values taking place. But the current credit crisis and the election will have an impact…we just don’t know what kind as of yet.
Recent Sweet Digs Posts:
Searching for the Elusive Bottom: Kinda Sorta Good News
September 29, 2008
Considering how badly things are going on the economic front, the latest forecasts for Contra Costa County and the East Bay seem downright cheerful: a “shallow but long downturn” lasting into 2009, according to the Stockton-based Business Forecasting Center at University of the Pacific.
Given the meltdown some two weeks ago, hey, a “shallow” downturn sounds just peachy to me. The reason for the long tail? The housing-related ailments that plague the economy here are spreading to other sectors, Jeffrey Michael, director of the center, told the Contra Costa Times.
I’ve been thinking there’s gonna be another Great Depression and it’s not like I’m alone. Frequent commenters and very smart guys david and Adam Schwartz didn’t seem to quarrel with my conclusion in an earlier post. (Am I right, guys? Hope I didn’t mischaracterize.)
Compared to my fears, these predictions seem downright upbeat. Could we be approaching the bottom? Considering the jaw-droppingly low prices of homes in many parts of Contra Costa, it seems likely. I just found a house for sale in Richmond for $178,000 and a house for rent in that same area for $1450. At 5 percent interest on the mortgage, couldn’t you buy this and rent it for a positive cash flow?
Bargains in Richmond:
2501 Gaynor Avenue, Richmond: 3 bedrooms/1 bath, 1,138 sq ft, $179,000. Hardwood floor, fireplace, listing says the place gets a lot of light. The outside looks lovely, but there’s only one dark photo of the bathroom (the bathroom? Eh?), so considering the low price, this might require a healthy dose of caveat emptor.
2121 Gaynor Avenue, Richmond: 3 bedroms/1.5 baths, 1,431 sq ft, $299,000. While the shockingly low-priced house above could turn out to be low-priced for unfortunate reasons, this place looks really good in the photos. It’s a white split-level home with, the listing tells us, a balcony off one bedroom. Couple of things to keep in mind: It’s about a half-block on the wrong side of 23rd Avenue, which is a sort of dividing line between relatively safe streets and unsafe ones; and the listing agent is related to the seller.
2546 Clinton Avenue, Richmond: 4 bedrooms/2 baths, square footage not available, $299,000. This is a two-story pale blue house that looks charming from the outside. The interior photos, which could be used as examples in a “How Not To Stage a House” lesson, at least seem to indicate that it’s not falling apart inside, or at least not visibly. The kitchen *seems* to have one o’ those vertical door stainless steel fridges I personally lovelovelove, though hard to be sure thanks to the pieces of paper taped to it; kitchen also has what appear to be natural wood cabinets and the canonical granite countertops under the clutter.
533 28th Street, Richmond: 2 bedrooms/1 bath, 999 sq ft, $280,000. This is quite the Mystery House. It’s in the best location of all four of these properties, and looks lovely in the exterior photos. The listing tells us there’s a “great studio in back of home, non-conforming yet-perfect for guests or inlaw.” Wow! However, the mystery: No interior shots and “other disclosures” (call-see agent). Uh oh. Intriguing: is there a meth lab inside? Squatter with pitbulls? (Photo of the bottom by macsurak on flickr.)
September 29, 2008
I started with a very cool property designed by Joseph Esherick, which appears to have sold within the first week. Last Monday, we looked at 3157 Baker, a newly built Mediterranean-style mansion, unfortunately located on a triangular block in the Marina, facing 3 streets. After 10 days, it is still on the market. This week I took a look at those homes over the $10 million mark. There are 6 in the $10-20mil range, which we will focus on today, and another 3 that are priced over $20mil, which we will finish up next week.
Of the nine mansions currently lists in the “mid” price range of $10-20mil, 2 are in Pacific Heights, 1 in Presidio Heights, 2 in Cow Hollow, and one in Sea Cliff.
At the “low” end is my favorite, located at 2510 Jackson Street in Pacific Heights, across the street from Alta Plaza. This four-story Edwardian was built in the late 1800s and personifies magnificence. The home is ornate, with old-world charm and character; the type of home used to shoot period films. I can imagine the ballroom filled with musicians, champagne, and beautiful people in beautiful attire, waltzing the night away. Originally priced at $14,900,000, the price has been reduced almost 10% to $13,495,000 and on the market 164 days.It is, unfortunately, a bank-listed foreclosure.
For $15mil you can have a full-floor apartment in Pacific Heights (pictured right), but I’m not sure that it’s even the penthouse. While the views are wonderful, and you’d have no lawn to tend to, I can’t imagine spending this type of cash on an apartment, unless it were some swanky New York address.
Available at $16,950,000 is a home designed by Albert Schroepfer in Cow Hollow, plus the parcel next door that houses 4 units (probably a converted mansion). So you can be a luxury-living landlord and keep an eye on the tenants. The problem here is that it is located on a corner, basically lot line, with no real yard to speak of. Probably the best house in the neighborhood.
The Presidio offers the next mansion, a Beaux Arts masterpiece with an elegant circular stairway that works its way up the four stories. Looks like the current owners have two small children, so what I want to know is: How does someone so young afford something like this????? Priced at $17,500,000 and on the market just 12 days.
Over in Sea Cliff, is an $18,000,000 contemporary residence, put together with glass, stone and timber in the 1960s. It has a unique feature, a re tractable glass roof, allowing you to get that salt air and better hear the lapping of the waves. Cool virtual tour here, which lets you see the gorgeous views of the Golden Gate.
The last home in this price category is 2820 Scott Street, also in Cow Hollow (pictured right). Listed at $19.975,000, this home is the perfect bookend to the first mansion above. Built in the late 1800s, this home has large rooms, with opulent features like a grand entrance, Tiffany-styled stained glass arched skylight, and architectural details in every corner of every room. The amount of craftsmanship in this home alone is worth a dissertation. Four stories, 16,000 square feet, and 53 photos that give you a real glimpse into how the other 2% live.
Recent Sweet Digs Posts:
Got Falling Real Estate? An Oakland Eyesore
Taking the Plunge – Are You Ready for Pool Ownership?
SF: Will Landlords Be the Next Victims of Economic Woes?
So Close But Yet So Far: Marin Homes Falling Out of Contract
San Jose’s Piece of the Pie, Let’s Get Homes Occupied Again!
SF: Why Won’t These Homes Sell?
Marin Shoppers: Get Smart
What a Difference a Day Makes
September 28, 2008
Reading Tracy Taylor’s A Building So Beautiful It Has to Bode Well for Oakland prompted me to write about several properties I see on my way home from work. If you take Oakland’s 14th Avenue exit off of 580 W and drive south (down 14th), you’ll pass Highland Hopsital on your right and then a curious scene will emerge on the hill to your left: a bunch of falling real estate. Literally. Three homes on Wallace St. in Oakland’s San Antonio District are cracked and sliding off the hill. Uninhabited for a number of years now, the three homes had to be abandoned by their owners due to foundations damaged by moving down the slope. However, according to an inside source, though several investigations were done to determine the cause of the houses’ movement, engineers have not been able to figure out just what has caused this unfortuante (and heartbreaking for the owners and neighbors) situation. From what I hear, the city is finally agreeing to pick up the tab to demolish the homes (since the homeowners’ insurance has not covered it). Yet with Dellums’ recent call to trim the city’s budget due to the deficit, could this promise be in jeopardy?
Pictured below is a side view of one of the properties that shows the tilt downward:
September 28, 2008
When I moved to California from the Midwest – one of the benchmarks I set for myself in order to be assured that I had truly “made it” and become successful was having a pool in my back yard. Many years later, I achieved my goal – but was it truly worth it? Now while I shop for yet another new home, this question again has come up. My kids have an obvious opinion on owning a pool – a house is not a home without one! But from an adult’s perspective, things are a bit different.
The pros to pool ownership are numerous. There is nothing like floating on an air mattress and sipping a Calistoga during triple digit heat. Swimming for exercise is easy, and pool parties are fun and exciting. There IS a downside, however, and one that never occured to me until I owned my very first pool.
Pools require maintenance, and this is not something that you can just skip when money is tight unless you want to grow new strains of green algae in your backyard. And green algae has expensive consequences for delicate pool pumps and equipment. PG&E bills can be heavily impacted by pool pumps, and even solar heated pools require pumping.
Teens love pools, and do crazy things in them. It is impossible to watch your pool 24×7 – and there is CONSIDERABLE liability involved in owning a pool. I used to see lawsuits everytime a teenager did a belly flop off my diving board.
If you have small children – you either need a locking gate or eyes in the back of your head to prevent any accidents. There is nothing more tragic than an accidental drowning of a small child.
Pools also take up a LOT of your lot space, so if you want a nice garden or room to play, better think twice about a pool.
So what is my solution? I am trying to find a community pool that I can just belong to, so I have the benefits without the hassles. I will give up the midnight skinny-dipping for some peace and quiet.
September 28, 2008
Here’s a weekend in review, edited version:
Friday
-bought gas: $60 (up from $25)
-bought bread, milk, and cereal: $11 (up from $6.50)
-met with a friend to comfort her; she’d been laid off that afternoon ($30 for 4 glasses of wine and a cheese plate, although I should not be putting a price on comforting someone. The lost job is the point.)
Saturday
-got notice in mail our rent is going up the allowed amount (2.5%) so will now by $1968 for a 800 square foot 1 bedroom with a large closet they claim is a second bedroom.
-bought dog food ($30). Geez! I do want him to eat healthy, non-filler, organic food, but… he needs to get a job. Wait, there are no jobs. Read on…
-met friends to see a movie. Two of the four had been laid off Friday. That the movies now cost $11 per ticket (I admit we did not go to an art house theater– my mistake!) was a salt in the wound. We decided, to my dismay, that we simply had to forgo $6 popcorn.
When the movie turned out to suck, everyone was quite bitter and the ensuing bar tab was too high to mention.
Sunday
-read in paper that deal on $700 billion bailout has been reached. Really? Where’s my bread and cereal money? Who’s paying my friends’ rent now that they’ve lost their jobs? Somehow I don’t think those provisions are part of the deal.
Okay, so now I get to the point of this post. We see inflated prices on everything, including things we cannot go without out (so I differentiate between say, popcorn, which I could I suppose, give up; and actual food, which cannot be healthfully avoided). We see people losing their jobs. We see our investments tank. So will we also see a decline in rents?
It seems possible. After all, if people can’t afford to stay in the city, they’ll have to leave; thus, the demand that allows rents to be so high will logically dissapate. The spending bill also lifts the ban on oil drilling along the Pacific Coast. Will SF be so beautiful with oil rigs, greasy water, and dead birds littering the beaches?
And for those of us committed to trying to stay (I love my job, and luckily, it’s unionized. I am pretty safe unless the entire State University system crumbles), how many will sign leases for one bedrooms that cost $2400 a month? Further, even if we hate our current apartments, we have no incentive to look for better: most of us enjoy rent control. Moving would take it away.
Interested in the idea that rents can’t possibly stay so high in this market, I did a search for “reduced” on Craigslist San Francisco apartments for rent. A whole page of listings came back. I also saw several “first month free” and “flexible lease terms,” all signs that the strength of the “landlord” position is weakening. Overall, the prices are still very high, but I see a chink in the armor.
If rents do go down, does that have an inverse effect on buying? After all, many of us speculated that high rents serve as incentive to buy: If I’m already paying what amounts to a mortgage, why not actually own the house? But if rents go down and real estate stays high as it is, and frankly as scary as it is right now, who’ll buy?
