Housing Market Dried Up

[jnm2.0t]

That's kinda where we are right now. We would give up the house hunt and battle to own if renting wasn't MORE expensive than buying. $1300+ for an outdated 3 bedroom apartment from the 90's just doesn't sit well with me. I guess they can charge high rent because they know people will pay it. Many people are recovering from financial trouble and aren't wanting to buy.

I would KILL for $1300 for a 3br. At one point we had a 625 sqft 1br, if we were to go rent that now it would be $2,082 - $2,323. A 3/2 same place is up to $4,649. This isn't even downtown or close to the city.

[firefighterjunkie]

That's insane! Or, I guess..."normal" for California. I don't think I could ever get used to that. And we definitely couldn't afford to live there.

[rich!]

I would KILL for $1300 for a 3br. At one point we had a 625 sqft 1br, if we were to go rent that now it would be $2,082 - $2,323. A 3/2 same place is up to $4,649. This isn't even downtown or close to the city.

almost double from 10 years ago when i was in silly valley

[maskedSONY]

I would KILL for $1300 for a 3br. At one point we had a 625 sqft 1br, if we were to go rent that now it would be $2,082 - $2,323. A 3/2 same place is up to $4,649. This isn't even downtown or close to the city.

This is in Palo Alto/SF Area? Damn. And I thought I had it bad in Westchester NY.

[jnm2.0t]

Just poking around CL...

$4500 / 2br - 1142ft²

Granted its a nice new building in a very hot area but still...

[Papa Dras]

I have friends and also my SIl that live in SF area. I don't understand the mentality because they bitch and moan about being broke and how much rent is, but continue to live there. They can't afford to do anything or enjoy the city, but don't move. It's weird.

[titleist1976]

It's easier to bitch about it than it is to find a new job and relocate.

Plus, it's just one of those young peoples things to do. Just call your sil a hipster, that'll shut her up.

[SAPJetta]

It's easier to bitch about it than it is to find a new job and relocate.

I could relocate just about anywhere with my current job, but I just prefer to suffer and bitch about it.

[GeoffD]

This is in Palo Alto/SF Area? Damn. And I thought I had it bad in Westchester NY.

The difference is that NYC has viable public transportation so you can live 60 miles out where housing is more affordable. In the Bay Area, BART is something of a joke and most people are forced to drive on very congested roads. That limits how far you can be from work and places a huge premium on housing that is close to the big employment centers.

My Bay Area tech startup buddies always say "You don't buy housing here off W-2 money". You either inherit it or hit with your company. I have a few friends who telecommute their jobs from Tahoe. They drive down the hill every week and do 2 work days and an overnight in a hotel. With the crap traffic issues, tons of companies are encouraging it since it saves them huge on facilities.

[maskedSONY]

The difference is that NYC has viable public transportation so you can live 60 miles out where housing is more affordable. In the Bay Area, BART is something of a joke and most people are forced to drive on very congested roads. That limits how far you can be from work and places a huge premium on housing that is close to the big employment centers.

My Bay Area tech startup buddies always say "You don't buy housing here off W-2 money". You either inherit it or hit with your company. I have a few friends who telecommute their jobs from Tahoe. They drive down the hill every week and do 2 work days and an overnight in a hotel. With the crap traffic issues, tons of companies are encouraging it since it saves them huge on facilities.

I keep hearing that NYC has viable public transportation and about how great it is, yet I don't get why other parts of the nation don't embrace it better. Is that too much socialism for Americans to accept?

Edit- I just used google maps to determine that the drive from Tahoe is freaking 220 miles long. And also, that's a serious climb up those mountains. Are your friends in Tahoe or in Reno? I'd think housing in Reno would cost alot less. Are home prices in Gilroy or Salinas (or in that area) reasonable at all? Those places seem closer/easier to drive from.

[AZGolf]

I keep hearing that NYC has viable public transportation and about how great it is, yet I don't get why other parts of the nation don't embrace it better. Is that too much socialism for Americans to accept?

You need extremely high population density to make major public transit systems work. From a quick Wiki check, the SF Bay area has a population density of 1024 residents per square mile. Meanwhile NYC is sitting at 27,243 per square mile. Clearly things like mass transit are easier to pull off when you have more than 25 times the population density.

[jnm2.0t]

Edit- I just used google maps to determine that the drive from Tahoe is freaking 220 miles long. And also, that's a serious climb up those mountains. Are your friends in Tahoe or in Reno? I'd think housing in Reno would cost alot less. Are home prices in Gilroy or Salinas (or in that area) reasonable at all? Those places seem closer/easier to drive from.

Tahoe is gonna be a few hours from here, but the Donner Pass can really screw things up even in non-winter months.

I don't know anyone that does it from Gilroy and certainly not Salinas. There's areas of San Jose that are cheap enough that you don't need to go that far. Furthest I may hear about is Morgan Hill. Actually, lots of people are in the Santa Cruz area but hwy 17 is a hellish drive especially on vacation weekends.

[rich!]

had a few coworkers that bought homes in stockton and commuted down to SJ; one even lived in sac. do they still do that santa cruz shuttle?

[6cylVWguy]

I'm in the middle of purchasing a house right now and it's been an interesting experience. Unlike what others have said, it's not all doom and gloom, IMO. I'm looking outside of philly and it certainly doesn't appear that the RE market is nearly as bad off as some of the places that are being highlighted.

There are definitely a good selection of foreclosed properties, if that's your thing, but plenty of standard sales as well. In fact, for a decent house that's good physically and has recently been updated, it's very likely that it won't be on the market for more than a month. There are exceptions to this, of course, and a lot of it depends on how aggressive the seller is on the price of the house. The problem we found is that there are probably about 100 houses that would fit most of our criteria, but most of them are either not updated and/or they're of the 70's cookie cutter development style of home. Those types of houses are all over the place---you want something like that, you won't have a problem. You want something with a bit more character, you're going to wait. There are a ton of really nice houses in the 20 mile radius we're looking, but most simply aren't for sale. We got lucky however and found a decent house, that when we made the initial offer was only only on the market for about a month.

It doesn't appear that home values have tanked nearly as much as they have in other areas. But like all things, sellers want too much and buyers want to pay too little. So there's that balance. Our agent estimates that based on the amount of work the sellers put into the house, they will be losing some money by selling the house for what we agreed on. But they're still selling the house for a good amount more than they paid in 2008 (divorcing couple---I chuckled when Geoff mentioned that earlier in the thread).

What will be the kicker is that the current owners got the house apprasied in 2010 presumably after they got all sorts of work done on it. They sent us the appraisal and so I know how much they felt the house was worth back then (certainly more than we're paying for the house now!). I will be very interested to see how (or if) the appraised value changed from then to now. I should know that info next week.

[jnm2.0t]

had a few coworkers that bought homes in stockton and commuted down to SJ; one even lived in sac. do they still do that santa cruz shuttle?

Down to SJ isn't such a bad deal from the east bay, though Stockton is... well if you can't say anything nice...

No idea on the shuttle but doing a shuttle over hwy 17 would get very old very fast. I could see myself just getting off halfway and walking back home.

[vasillalov]

Chicago is currently one of the best deal markets to get into when it comes to real estate. Prices are very low because there are a lot of foreclosures and short sales. Probably about 40-45% of all listings are foreclosures and short sales.

I bought a 2-bed 2-bath condo with garage (2006 year built) with a lot of other amenities last year. Runs me about $1200 per month including principal, interest, property taxes, fees, insurance and condo assessments. Not bad for a a condo 5 minutes walk from the lake, 2 min walk from the trains and about 20 minute metro ride to downtown.

If I had 20-30K I'd buy another one and rent it out.

[MixmasterNash]

As another data point, the market in Chapel Hill has also completely dried up in the last 6-9 months. Probably half as much on the market this summer as in 2011.

[beng]

A "stabilized" housing market means less inventory... which is the result of legislation and changes in the lending environment (lower rates, refi programs, principal forgiveness, and a much longer foreclosure process). So, at the peak of the crisis, all of the low hanging fruit (subprime) came to market at the same time....but now it's reversed.

[Vision33r]

A "stabilized" housing market means less inventory... which is the result of legislation and changes in the lending environment (lower rates, refi programs, principal forgiveness, and a much longer foreclosure process). So, at the peak of the crisis, all of the low hanging fruit (subprime) came to market at the same time....but now it's reversed.

That is not a good solution to the overall problem. What's gonna happen is the housing supply will come back and get exploited again and we have these mini housing bubbles again. Then another crash then what do we do?

[GeoffD]

That is not a good solution to the overall problem. What's gonna happen is the housing supply will come back and get exploited again and we have these mini housing bubbles again. Then another crash then what do we do?

Exploited? Bwahahaha!

Unless you are a moron and bought at the top of the market, who cares? Real estate has always been cyclical.

[jnm2.0t]

Found a house we like on paper... looks great in pics, listed for $729k. Had been on the market 4 days when I found it and asked the realtor about it. He said there were already 30 agents that had requested disclosure packages in just the 4 days. The problem is it is 1 of 5 houses under $750k for sale anywhere in the area and adjacent towns. 3 of the others are east of 101 in the sloughs and the fifth is a massive fixer upper. Still just no houses, hoping after Labor Day it picks up.

[SAPJetta]

Nevada is calling....

[jnm2.0t]

Wanna see what a sub $700k house in San Carlos looks like right now?

http://www.redfin.com/CA/San-Carlos/...0/home/1036249



And I am seriously considering it.

[firefighterjunkie]

Wow That's...a dump.

[maskedSONY]

And I am seriously considering it.

Don't let real estate destroy you man.

[SAPJetta]

Ex-hoarders house?

[jnm2.0t]

Don't let real estate destroy you man.

I wouldn't offer anywhere close to their asking price, but a little cleanup isn't a big deal. The issue is the cleanup is so bad you cant see what may be lurking underneath and you have to assume they didnt take care of the rest of the house. San Carlos is a great little town to be in though, long run its a good thing.

Ex-hoarders house?

Not sure if hoarder or just someone really old that lost control of things. We looked at the house across from my inlaws, it looked the same but the son said his parents just couldnt keep up and ended up in a home. He paid some laborers a weekend of work to gut the trash and dig up the lawn, now looks like the best house on the block.

[maskedSONY]

I wouldn't offer anywhere close to their asking price, but a little cleanup isn't a big deal. The issue is the cleanup is so bad you cant see what may be lurking underneath and you have to assume they didnt take care of the rest of the house. San Carlos is a great little town to be in though, long run its a good thing.

Not sure if hoarder or just someone really old that lost control of things. We looked at the house across from my inlaws, it looked the same but the son said his parents just couldnt keep up and ended up in a home. He paid some laborers a weekend of work to gut the trash and dig up the lawn, now looks like the best house on the block.

It's a hoarder, an old person, or a drunk.

And yeah, you touched upon just what I was thinking - you may be buying somebody else's problem.

[Papa Dras]

Wanna see what a sub $700k house in San Carlos looks like right now?

http://www.redfin.com/CA/San-Carlos/...0/home/1036249

And I am seriously considering it.

Damn, that would make me depressed.

[g60vwr]

you may be buying somebody else's problem.

My #1 approach to buying anything. ALWAYS assume you are. Its a hope for the best, prepare for the worst senario that has served me well.

[a_riot]

This is good news for those of us who already own. Glad the prices are starting to rebound, if only a little bit. Definitely frustrating for those looking to buy however.

The price increase is artificial and temporary and will likely be bad for housing. As prices creep up sellers who have been waiting to sell will offer their homes, bringing prices back down. Its the same in the stock market when you have thousands of stock holders who are trapped and looking to get out on any price advance. It will be years perhaps decades before we see housing prices rise to where they were in 2007.

[rich!]

plus we'll see a dip when shadow inventory is released and foreclosures clear the from the backlog... but at the same time (at least in our very depressed market) rent prices is about 2-3x what standard mortgage payment would be (i'm sure underwater homeowners are keeping that up + subprime fallouts who want a home but can only rent); the rent demand is very high down here with permits/building for new apt complexes have sprung up everywhere.

[jnm2.0t]

So we went looking this weekend, there are some that are starting to show up, I wouldn't call it a large number of houses but certainly more than before.

[bubbagti]

I have some friends that live in Cupertino. Housing out there is just insane. I don't envy you trying to find a house.

[jnm2.0t]

Well Cupertino has even better schools than Palo Alto plus has Apple. I don't like it as much personally but it is certainly in the tops for prices. Not as much as Saratoga or Los Altos that border it but way up there.