According to the February 2009 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 3.3% from January ’09 to February ’09, down 31.0% year-over-year and down 44.9% from a peak in May 2006.
For the broader 10-City composite (CSXR), home values fell 2.1% from January to February and are down 31.6% from a peak in June 2006 (down 18.8% year-over-year).
Looking at the data from peak-thru-February 2009, Dallas has suffered the least, down 11.1% from its peak in June 2007; while Phoenix is down 50.8% from its peak in June of 2006. The rates of decline from the respective peak of each market are evidence of how much each market has given back from the gains earned in the past 10-15 years. All of the 20 metro areas are in double digit declines from their peaks, with ten of the MSA’s posting declines of greater than 30% and seven of those — Detroit, Las Vegas, Los Angeles, Miami, Phoenix, San Francisco and San Diego — in excess of 40%.
San Francisco MSA single-family home prices continued to fall across all three price tiers.
The bottom third (under $281,438 at the time of acquisition) fell 3.7% from January to February (down 37.7% YOY); the middle third fell 2.9% from January to February (down 22.4% YOY); and the top third (over $501,978 at the time of acquisition) fell 4.1% from January to February (down 19.4% YOY).
According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have retreated to below June 2000 levels having fallen 59% from a peak in August 2006, the middle third has fallen below April 2002 levels having fallen 40% from a peak in May 2006, and the top third has fallen to November 2003 levels having fallen 28% from a peak in August 2007.
Condo values in the San Francisco MSA fell 1.1% from January ’09 to February ’09, down 23.3% on a year-over-year basis and down 28.4% from an October 2005 high.
The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the “San Francisco” index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).
∙ The Pace of the Decline in Residential Real Estate Prices Slowed in February [S&P]
∙ January S&P/Case-Shiller: San Francisco MSA Decline Accelerates [SocketSite]
Can you imagine if someone had told you in 2006 that, 3 years later, prices would be down almost 50%? You would have laughed them out of the room.
I don’t have to imagine it. I lived it.
I, and several other posters on SS, can imagine it because we did predict 30-40% declines in real pricing and you are right most just “laugh us out of the room.”(heck some of them still are)
Of course, I am sure someone will be posting soon about how the CSI is “meaningless”. 😀
Where is the room located that said laughing took place, Vacaville?
Well, if I am reading the chart correctly, that said laugh could have taken place in the bottom third of the SF MSA.
Notice that in the last 6 months the rate of decline in the top tier has caught up to the lower tiers. I suspect that if we could see a top decile, we would (and will) see the steepest declines there. Cheap GSE and FHA loans are providing some support to slow the decline at lower price levels (the decline will be the same — just taking longer) but much less so in jumbo territory.
I just haven’t seen these figures in the real market. I’ve both bought and sold in recent months, in the northern part of the city, and it seems eerily normal. I’ve haggled a little bit and the price goes a few percent below list.
But then I never bought or sold anything during the bubble. Maybe SF has been so crazy in the past that what seems to me like a normally functioning market is an aberration.
I read the chart too, Chuckie. What’s your favorite restaurant in MSAville?
A girl that I was pretty serious about actually broke up with me because I told her mother (“real estate is like a runaway freight train”) that they should sell their Vegas houses and take the profits while they still could (this was back in 2006).
Asian people REALLY believe in real estate & no price is too high to get it, apprently.
That conversation took place in Orange County in early 2006, btw.
The central valley is where the real nastiness is taking place, of course.
In recent months I’ve gotten in my pink convertible and driven down to Bakersfield to see if there are any good deals. The typical foreclosure SFR has been at about 150k; these are fairly small, cookie-cutter houses that tend to be on the outskirts. As foreclosures, they need some work. The appliances are gone and the houses are dirty and tend to stink. These are houses that sold during the bubble for 350 – 400k.
I still think prices there have plenty of room to fall. The air is difficult to breathe , the crime rate is high and the schools are bad. It might cost you a million to get the same square footage in SF, and is a million dollar place in SF better than 7 crappy Bakersfield houses? You bet it is.
anonn, you once again prove your absolute predictability. S&P repeat-sales data: “well, San Francisco is completely different from its own MSA because, well, it just is.” SF only data: “well, median sales prices don’t mean anything.” Apples-to-apples sales: “well, the earlier buyer overpaid, it happens.”
And finally, “SF is down 5% to 10% because I say so and I’m more experienced and I win every argument so I don’t need any actual evidence to support anything I claim.”
Joe,
Stop it with the fake quotes already. All I’m saying is that there is a still a disconnect in my opinion. Your mileage may vary. People in the SF market right now certainly have mileage that varies with yours.
anonn, that would be fine if you just stated your opinion. This is just an anonymous blog. But that is not what you do. You tirelessly mock anyone who has a different opinion than yours (see your 9:16 am post for one of countless examples, mild by your standards), even if that different opinion is backed up by solid evidence.
Don’t tell me what would be fine and what wouldn’t be fine when you are impersonating me with fake quotes. In this thread, BDB set it up. I came through with, yes, a very mild nudge or two, both with a little humor. But you? “Wham wham wham aggro aggro aggro.” enough already.
I’m not clear on why everyone here piles up on anonn. He/she has said on at least one occasion that SF r.e. is down 15 – 20%. That seems about right. Also, he/she has agreed that prices may continue to fall.
Finally, anonn’s optimism about SF r.e. is only natural. Anonn income depends on home sales. I’m sure most of us here would spin facts in order to put food on the table.
Also, as a bonus, anonn’s a pretty good writer.
Wow, yet another data point to price recognition. Thanks again to SocketSite for their dedication to this task.
The top tier is now catching up with the top 2 tiers if that were not already obvious before. And as we now all recognize, top tier is very much representative of SF as a whole. OK, not micro-markets but the compounding of all SF.
From 190 to 140, that’s a 25% decrease. Locally that will be different. But still one of 2 years of this and SF will actually be affordable to actual people who live there.
All I’m saying is that there is a still a disconnect in my opinion.
I wrote this on a previous thread a while back… but there is no question that there are disconnects in the various RE markets.
a thought on this:
-part of the diconnect is that there is severe information assymetry in the RE markets. Much of the information is proprietary and thus held out of the public’s domain. Only the Realtors know it. And they manipulate that data, making much of the data worthless. As example, DOM is useless because it is fraught with erros… $/sq ft has issues due to the number of properties without sq ft measurements. making prior to current apple comparisons is difficult due to the amount of properties that are renovated, etc.
thus, it really is hard to figure out what is going on.
to complicate matters, we look at different data. anonn tends to look only at his market, a very small segment of the overall SF city market (by his posts, it tends to be the nicer neighborhoods). so his judgement is skewed towards what happens in those micromarkets, while he tends to ignore places like Bayview and Outer Richmond as example.
many of Socketsiters focus on pac heights, Noe Valley, and SoMa. again, not many posts about Excelcior as example.
the national data conglomerates tend to focus on SF MSA, which is different than SF city. (although SF city data is often available too).
thus, like everywhere, people argue becuase it depends on what they’re looking at and how they interpret the data.
I of course interpret all data perfectly. you should all just listen to me.
(that’s a joke for you humor impaired!)
Also pretty interesting to note that top tier houses were pretty flat from Jan 01 to Jan 04, so not much decline required to move current prices in that tier back to the Jan 01 level. Of course, all this is just optics. All that really matters is affordability. Still watching that painting of grass growing dry….
seven of those — Detroit, Las Vegas, Los Angeles, Miami, Phoenix, San Francisco and San Diego — in excess of 40%.
anonn:
see, i’m not the only person who compares SF to Miami and SD.
be careful, or I’ll start equating SF to Detroit and Phoenix!
🙂
Most SS posters were predicting a these larger declines in SF Prime and that has not happened (yet). I think it is a bit overstretching to cherry pick predictions and quotes. Anyone that has followed this forum and really understands the motives behind individuals here would see that the players have all remained very consistent in their predictions. If anything, annon has come off his initial reports to state what he is seeing in the market; and his reports seem accurate to me. In kind, the bears here who speculate on the downward trend have also been correct. The disconnect is the diff between real time observations and future forecasts.
Back on topic, any hope for a real recovery is gone and most people are spinning the good news around a deceleration of the rate of decline, which may be true, but is in no way a sign of recovery. It’s just a signal the the initial bump has been taken here. In terms of SF impacts, I continue to have several close personal friends that are having issues getting appraisals and / or loans to come in at acceptable figures.
And some of the all cash buyers I know have decided to just wait out the market on the basis that the probability of further declines far outweighs the prob of increases. I generally agree with these results, but I do think that there are some price floors that will hold, and I also think that there are bargains out there for the early birds.
writing from KC. i’ve been watching SF market last year or so from afar and while it is down the good stuff is now catching a bid. looks like $500/sq ft is bringing out the buyers, but once again it’s for stuff that looks good to me. place on Ashbury St and another cool loft more Hayes getting multiple offers but around those levels. still lots of crap hanging out there at inflated levels. but signs of life last couple weeks.
Tons of cash flow positive houses and apartments in the East Bay. I’m getting outbid on every one.
when the 4 liines (Chicago, LA, NY and SF)meet and cross, we will be near bottom.
I am still on target for buying Q2 10.
KC? Kansas City? Why would someone from the midwest be following a SF real estate blog?! I’m genuinely curious.
I am beginning to think that fluj/anonn is part of the socketsite team or was hired to keep us all entertained. I for one plug in to get my 2 min fluj/anonn comedy show every day 🙂
Keep it up socketsite and pay your clown a nice bonus.
You’re a particularly mean little type of rodent, aren’t you “anon” ? What do you have to say about anything, ever, “anon” ?
I always thought San Francisco had too small a supply of housing stock. Now, they can’t sell off the existing housing stock? I guess the “experts” are full of it. Confusing.
^^^They can’t sell for the prices that they’re asking. They could certainly sell for lower prices.
Rule of RE:
don’t buy it if you can’t afford it
Rule of the internets:
Don’t dish it out if you can’t take it (and that includes changing your screen name when your nastiness bounces back on you)
[Editor’s Note: And with that, back to the numbers at hand…]
“Asian people REALLY believe in real estate & no price is too high to get it, apprently.”
uhh.. the statement might be properly worded “…in 2006 Asian, Black, White, Latin, Pacific Islander, everyone really believed in real estate & no price is too high to get it, apparently…”
Generalizations are never a good thing.
I’m Asian, and the biggest doom and gloomer you can find. I’ve been a doomer (the sky is falling, house prices will drop, top ramen for lunch and swansons tv dinners, no f-cking way) since earlier this decade. Most of my family and Asian friends are also now in the same “property will drop” camp, which worries me alittle since I hate being one with the herd.
“David” at 10:36 —
when you say “East Bay,” are you talking San Leandro/Oakland/Piedmont/Montclair/Albany/Berkely/Kensington/El Cerrito area?
Or Brentwood/Antioch area?
Or Lamorinda/W.C./P.Hill area?
Generalizations are never a good thing.
Irony alert.
“Asian people REALLY believe in real estate & no price is too high to get it, apprently.”
Why do you single out Asians? Because one shallow chick broke your heart?
A lot of people of all colors and nationalities “apparently” believed that no price was too high to get it. On the evidence of the last decade, you could easily substitute “White American”, “Hispanic American”, “Black American”, “Irish (from Eire)”, “English”, “Spanish”, “Australian”…..and so on.
———-
“Also, as a bonus, anonn’s a pretty good writer.”
Surely you jest.
the editor will probably delete this message soon, but “irony alert” debt? I have a feeling I know where this is coming from, but please do explain.
Nah, real estate mania is definitely more common with older FOB asians. Its got something to do with the culture back there, maybe the way that landless peasants were ruthlessly exploited by the landowning classes up until the Communist revolution? And still are exploited in some places, we’re told.
“There is no wealth without land.” How about that one?
Or the way they like to hoard little gold bars and such — just in case they need to use them as currency to get out of the country during a communist takeover…
It a whole ‘nother paradigm, not always shared by the ABCs but its ingrained in the older folks.
Once again – with more of an business-focused point of view.
Sat in two meetings this week with two of the bay areas largest employers / economy drivers, and both of them are planning for a 3-5 year flatline (vs. any sort of recovery).
If unemployment #’s stay in the high single digits for the next 5 years, that just means more destruction of real estate here. Lasts till people get bored of talking about real estate as an investment, then we’ll be at the bottom.
LOL at the notion of quipping about someone’s writing ability with the archaic “surely you jest.”
There are two kinds of people in this world; those that split the world into two kinds of people; and those that don’t
2 generalizations:
Bullfighters are brave
Generalizations are bad
Just a linguistic observation.
Your dismissal of generalizations as never good was itself a generalization.
Generalizations are always bad whether positive or negative.
Bullfighters are not always brave.
Asians do not always do well in school.
Elmwood residents are not all closet-racists.
How can anyone, on a thread discussing an index (which is itself a form of generalization!!) claim that generallizations are never good? Generaizations are extremely useful in making sense of otherwise intractable problems e.g. “what conclusions can we draw about the recent resale prices of homes in the 7-county SF MSA relative to past months?”
Or, “if I’m dating an Asian, what topics should I avoid discussing with her parents at all costs?”
Debt: I get it. I’m trying not to be obvious. I’m trying the Socratic method to help mrbogue understand your irony post
speaking of %s, Most of Pac Hts 2bdr condo market (the only market i am closely watching) is down about 30% from Q1 2008 (this is when that market leveled).
I stated in 07 that i thought mid-2010 would be at least near bottom and still think that is the case. I am getting more comfortable with the prices, but still think the Pac Hts 2bdr Condo market will hit a total 30% drop from Q1 08.
Am looking for a very specific type of property. 2bd 2ba + parking + top floor + lots of light
Wow – the “top third” is now down to about > 500k (I realize it’s MSA, and not SF county, but still).
Jimmy,
Maybe the girl dumped you because of certain stereotypes and prejudices you held against her people? Just a thought.
Yeah Jimmy you’re right on that one, my mother (very old school) was the biggest optimist of all, for years she always complained that I didn’t buy houses/land like my peers. In 2005-early 2007 when alot of younger Asians (Chinese) were purchasing homes with zero down interest-only loans, she recommended I do the same (I was appalled my own mother would recommend such a thing!)
Fast forward to now, late 2008-2009, she and many of her old school friends (my “aunts” and “uncles”) are doom and gloomers telling me to stay *far and away* from real estate (shoulder shrug), although i’ve finally built up a worthy downpayment. I’m starting to wonder if the old school Asian ‘buy buy buy’ mentality is starting to sway.
btw debt and rubicon. Thanks for the enlightenment. 🙂
This board needs at least a few people like anonn, otherwise we run into the same problem as RE cheerleaders during the boom. This site can’t be all about doomsday. Let’s not be clouded by our POV. Prices will not return to 90s lows. In the early 90’s, I would never live in Bernal, Mission, Hayes Valley or Lower Haight, but in 2009 I most certainly would! Where in the doomsday data is that fact represented?
If you look at historic monthly mortgage to monthly income ratios, many properties in D10, D3, and parts of D9 are nearly back to normal.
In 1992, a lowerish-middle class family of 4 would move into shabby Bernal Heights with no help from parents, jumbo interest rates of 10%, and DTI capped at 31%. In 2009, a well educated power couple moves in with 5% jumbo interest rates, 150k from their parents, and 250k saved up from waiting on the sidelines for 5 years, with DTI capped at 45%. Some people might ask, how a shabby Bernal home could be 250k in 1996 but remodeled one be 750k in 2009. Well, the above “story” tells you how. Lending is different, the neighborhood is different, and the people moving in are different, thus we expect prices to be dramatically different. What price is a fair price? I don’t know? If the neighorhood continues to gentrify and attract wealthy people and lending remains DTI 45%, 5% jumbo interest, then I think prices could level. It’s possible.
No one knows what is going to happen, so its best if we get ALL opinions. I myself hope prices come down a lot so I can afford a home.
Your charts are nice, but I have been looking for 1 year now, and I just don’t see that data in real life.
[Editor’s Note: A couple of real recent examples (and a bushel of others). And for the record, we’re not about “doomsday” but simply what’s happening in the market (good, bad, or ugly).]
Does the editor of Socketsite have a real estate license?
If so, why can’t he/she provide accurate data.
If not, hire someone or hit the books (how long does it take? a month or two).
I bet there are hundreds of real estate agents who have access to MLS who would love to work part time with ya.
Jeremy is very correct, without RE bulls like fluj the socketsite forum will become another run-of-the-mill “housingbubbleblog”.
Not Jimmy– nah, I formed this opinion afterwards.
“EDITOR: A couple of real recent examples (and a bushel of others). And for the record, we’re not about “doomsday” but simply what’s happening in the market (good, bad, or ugly).]”
Socketsite. I agree with your POV. I have been talking about this bubble since 2003. I even “predicted” (by sheer lucky) a global credit crisis in 2007 after reading an article from the economist. My last post was much larger but I paired it down because it was too long. I said that lots of data points shows negative outlooks, and we are merely calling what we see, but I still think that sometimes, there is more information that we are not capturing because of our POV.
As for your real recent examples, I like those, and I understand that they are real, but in my experience, it is a bit different out there. For example, you showed 110 Faith st in Bernal Heights as an example. I went to go look at the property as I was interested in it. That property had several GLARING flaws. It isn’t so much that it fell by 170k from 2005 so much as the idiots who bought it back then over paid, even for back then. It was a rotten apple. I then saw a much better home in Bernal that didn’t drop nearly as much as 110 Faith st. The first offer came in 5 days, and a bidding war pushed the price up. For me, I wouldn’t own 110 faith st. The ones that I would own, are being bid up. Even today! So desirable properties on the lower end are actually going up in price since the November 2008 low point, while really crappy ones that people overpaid for (even by bubble year standards) are showing weakness. But even those weak properties that couldn’t sell in Bernal from Oct – Jan 2009 began to move quickly, and for over asking.
Now, I do believe that in any recovery, there are false starts. I believe we are experiencing a false rally and that things will Ebb more in the coming months. However, many of my friends are still buying because
a) SF is just more desirable for upper middle class people than before
b) Lending is so freakin cheap and easy for people with 20% down
c) Parents continue to give them tons of cash to buy real estate.
I appreciate what you guys do here. The idiocy of the past 5 years have been so painful!
“speaking of %s, Most of Pac Hts 2bdr condo market (the only market i am closely watching) is down about 30% from Q1 2008 (this is when that market leveled).”
MISTAKE on my part. I meant to say 20%, not 30%
“Nah, real estate mania is definitely more common with older FOB asians.”
Dude, we just went through the mother of all real estate bubbles worldwide. I very very highly doubt that there were enough FOB Asians with “real estate mania” to create massive bubbles in such disparate places like Ireland, Spain, Great Britain, Poland, Brazil, Dubai, Australia, South Africa, India, China (where no Chinese person is “FOB”) or Miami to give you a domestic example.
It is obvious then that “real estate mania” is NOT more common amongst the group you describe (or any other group). On the contrary, it is clear that “real estate mania infects MANY kinds of groups of people (however you wish to classify them; by race or by nationality or by income level or by sex or by profession and so on). That said, there are some groups who seem to have avoided this mania for reasons structural or cultural. Like the Germans, to name but one.
——————————-
“Its got something to do with the culture back there, maybe the way that landless peasants were ruthlessly exploited by the landowning classes up until the Communist revolution?”
There may be some truth to this statement, but your error is thinking that the Chinese are a unique case. America is full of the descendants of exploited peasants from all corners of the globe. Perhaps not coincidentally, it is also a country where owning a house (property) is an integral component of the “American Dream”.
——————————–
mrbogue (11:56 am)
If you were to substitute “White Americans” for “Asians(Chinese)”, your anecdote would ring equally true.
————————————-
“Not Jimmy– nah, I formed this opinion afterwards.”
So, you based your opinion of an entire continent of races and peoples based on one single experience with a Chinese chick who dumped you?
————————————-
Jimmy, I’ll leave the hair-splitting about generalizations and racism to others, but your assertion is simply absurd.
nnona — don’t hate on the Germans. They make the best cars. While we’re on this topic, what is it about their superior cultural background that makes them averse to real estate manias while people from other countries succumb?
Please do tell as I’m very interested in this topic.
Oh yeah, and by the way, the only Asian guy on this board agreed with me about the old FOB asian real estate mania thing.
You’ve only gotta look at Vancouver (aka Hongcouver, my very own home town, to see the effect of the Asian property mania taken to extremes).
AND, let’s not forget that said ABC Asian guy who agreed with me used a SINGLE data point from HIS OWN elderly, FOB MOTHER as an example, and generalized from there.
Jimmy, my mother has probably been in the U.S. longer than you were alive. Calling her a FOB (Fresh off the boat) is totally incorrect and downright wrong.
I did not generalize, I merely said “I’m starting to *wonder* if the old school Asian ‘buy buy buy’ mentality is starting to sway.”
You are obviously a hateful, racist troll.
What “old school Asian “buy buy buy’ mentality” are you referring to, exactly? Is that a generalizaton I hear?
Because I’ve been informed by several posters here that no such mentality can possibly exist, and if it does, it cannot be measured or verified because there might be ONE “old school Asian” somewhere out there in the world who doesn’t believe in buying up every piece real estate you can possibly lay your hands on.
Hey, and one more thing, I am also a first-generation immigrant, having traveled all of 40 miles south from Vancouver to the US border when I came to the US.
So I do in fact have that in common with some people who may or may not have a “buy buy buy” mentality.
The stereotype of the Asian buyer that I have heard is more along the lines of “buy and hold” than “buy buy buy.”
nnona,
You are absolutely correct. I wrongly used my experience with my own family and family friends to generalize that somehow “old school” Asians enjoy amassing real estate more than other ethnicities/age groups. I failed to realize that the global real estate bubble created an incredible RE bullishness that knows no demographic boundaries.
I’m still utterly amazed that nnona can, in the same post, nay, in the same SENTENCE,
1. insist that there can be no cultural propensity towards owning real estate (vs. any other asset class), and then
2. assert that certain cultures (eg. Germans) have exactly the opposite predisposition.
And THEN, you, mrbogue, go ahead and kowtow to him because he played the race card?
So I’d have to ask, in light of this, do cultures exist at all? Or is the concept of culture just a series of unverifiable, bogus generalizations imposed by (racist) outsiders?
Jimmy: KC is in fact Kansas City, i’ve been out to SF twice in last year, considering a move sometime next year, will be in Sonoma in August checking out the little towns on coast and the two valleys. KC quite nice (after many years NYC, Miami) but at some multiple SF makes sense
ah. I drove through Kansas City once. I can totally see the appeal of living in Sonoma over KC.
Also I read that, without resorting to generalizations, that prices in Sonoma had dropped quite substantially (although not in “real” Sonoma ;-).
I nominate this thread for the accolade of Most Retarded Thread Ever (my apologies in advance for the wording not being politically correct).
“ah. I drove through Kansas City once. I can totally see the appeal of living in Sonoma over KC”
Great way to evaluate the livability of a city – drive through it once.
Well, I would’ve stopped but the U-haul was a bit cumbersome to maneuver around town.
And, I’ll happily take credit for steering this thread WAY off topic & invite the editor to just delete everything I’ve written (and nuke anyone’s response to it, too).
Hey Jimmy,
I am in fact an Asian. I happen to have Asian parents that are truly fresh of a boat…seriously no joke, we came on a boat. In fact many of my family’s friends come off a boat. Funny that none of them fit your stereotype of Asians. In fact, my parents prohibited me from buying back in 2005. But what do I know about Asians…you are obviously the expert on Asians, especially fobs.
Oh btw, you really should rethink why the girl dumped you. The subconscious often does reveal true racist tendencies.
jimmy –
>Or, “if I’m dating an Asian, what topics should I avoid discussing with her parents at all costs?”
Actually we had a big fight because I moved up here for work and that was the end of it all.
So, no, tony, she’s not my wife.
Tony, Is this you?
When Heather Chan became pregnant, she and her husband, Tony Swei, a software company employee, decided to put down roots in the Bay Area. They had enough money to buy a home, even in the midst of the housing market frenzy, but did the unexpected and found a three-bedroom house in Rockridge to rent instead…
In Swei and Chan’s case, they are saving each month: the amount they pay in rent is about half of what it would cost them to own. “For now, I’d rather invest in the stock market,” Swei says. They don’t want all their eggs in one basket, he says.
Great, I came to see the latest with CSI, and this. Jimmy (Still Bitter), would you take your case to Dr. Phil and leave us to discuss Case Shiller? He’ll do a better job counseling your inter-racial love life and feelings towards Chinese.
This data includes too much data outside SF proper; the average value of a home in San Francisco above $1 million is not substantially off the peak. Check out this data from Case Shiller:
http://www.firstrepublic.com/lend/residential/prestigeindex/sanfrancisco.html
It shows the average SF house worth over $1 million was as of 12/08 worth $2,938k ($507/sqft), off from a peak of $3,085k ($533/sqft) in 9/07, on par with 6/07, and substantially higher than $2,238k ($386/sqft) in 12/03.
It goes to show how much the nationwide price runaway was really driven by hear-no-evil-see-no-evil lending, which never really penetrated into the seriously jumbo mortgage crowd. After all, people can afford to do a little underwriting on $2 million mortgages.
“nnona — don’t hate on the Germans. They make the best cars. While we’re on this topic, what is it about their superior cultural background that makes them averse to real estate manias while people from other countries succumb?”
C’mon now Jimmy, why do you have to go and try to claim I wrote stuff that I clearly didn’t??? I know that is a typical tactic here at SS when one’s argument is weak, but still.
READ MY POST AGAIN.
Where do I “hate on the Germans”? And if I did “hate on the Germans” (which I didn’t), why would you then make sh*t up and state TWO SENTENCES LATER that I referred to their “superior cultural background”??? If you go back and actually READ MY POST, you will find no such assertion on either count. You will see that I wrote for “reasons, structural and cultural”. Where do I write or imply “superior”? Where do I write or imply “background”?
I never made a value judgment on German culture. I never called it superior, nor did I call it inferior. Also, there is a huge difference between “cultural reasons” and “cultural background”.
Since you are clearly ignorant of what “cultural reasons” means in this context, let me give you some examples. 40% of Germans own their own houses as opposed to just under 70% here in the U.S. In Germany (unlike the US), there is no CULTURAL stigma against renting as opposed to owning. In Germany (unlike the US), there is no CULTURAL tradition of using home equity gains to fund college educations or retirements, etc…
On a different note, I will say that I do agree with you about German cars.
“I’m still utterly amazed that nnona can, in the same post, nay, in the same SENTENCE,
1. insist that there can be no cultural propensity towards owning real estate (vs. any other asset class), and then
2. assert that certain cultures (eg. Germans) have exactly the opposite predisposition.”
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Hey Jimmy (Still a Hoser, Eh), READ MY POSTS AGAIN. CLOSELY.
1. Where did I “insist” that there can be no cultural propensity (ANOTHER PHRASE I DID NOT USE NOR IMPLY (see post directly above)) towards owning real estate (vs. any other asset class)? Quote me. Go ahead.
Wait…let me quote you…
“Or the way they like to hoard little gold bars and such — just in case they need to use them as currency to get out of the country during a communist takeover…”(11:22 am).
So which is it Jimmy (Still a Hoser, Eh)? Do “they” hoard property or do “they” hoard gold?
2. Where did I “assert” that “certain cultures (eg. Germans) have exactly the opposite predisposition (YET ANOTHER PHRASE I DID NOT USE NOR IMPLY)”????
Jimmy (Still a Hoser, Eh), somehow you have twisted “cultural reasons” into a)”superior cultural background”, b)”cultural propensity”, and c)”certain cultures have exactly the opposite predisposition”.
If you knew how to comprehend English (they do teach that in Vancouver, right??), you would know that I made no assertions period about letters a), b), or c) in the paragraph above.
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“Or is the concept of culture just a series of unverifiable, bogus generalizations imposed by (racist) outsiders?”
I don’t know why you, Jimmy (Still a Hoser, Eh), took the very simple to understand concept of “cultural reasons” and spun it into the unintelligible statement above?? All that BS just to try and obscure the fact that your original statement and example remain patently absurd.
And most important of all, you need 40% down to buy a house in Germany. That would rule out 80% of the Bay Area home “owners”
Good point anon
A good example of a “structural reason”(no doubt influenced by cultural ones). Without having studied all the possibilities in depth, I would tend to agree with you that this structural reason is more important that the aforementioned cultural reasons in explaining why Germany didn’t experience a housing bubble.
So, Jimmy (Still a Hoser, Eh), do you now understand what is meant by “reasons, structural and cultural”??? Or are you going to write yet another post intentionally misquoting me??
Reflecting on it, the misguided arguments you weakly try to put in my mouth really seem to derive from your own neurotic ideas of race and culture. It appears that you never really got over your “yellow fever”.
I am sure this was not confined to China, but I have in my possession an authentic land lease agreement from the late Qing Dynasty (1644-1911) that illustrates the plight of the peasants and greed of the landowners. The simple hand inked, signed document from around 1880 outlines the terms which can be summarized as follows: ‘Lessee shall maintain year round all roads and structures on the leased land and deliver to the lessor(landlord) 80% of all crops produced each year as rent.’ The Maoist army sent many of the landlords to the firing squad in 1950 but many peasants in China to this day still believe the road to wealth is through land (real estate) ownership. This belief was further validated by the post WWII emergence of a new wave of billionaires in non-communist controlled city like Hong Kong who made their fortunes from commercial and residential real estate development. So Jimmy’s statement is generally correct but he could have saved himself some griefs by substituting ‘Asian People’ with ‘Asian Culture’. By the way, present day Asians are not only into real estate but they are heavy players in the stock markets which make them double casualties in the latest economic downturn.
Canadians are all bitter renters– especially those from Vancouver.
Btw, there are other Asians on the board (me, for one) who think your comments are off the mark and just off. Of all of the people I know over the last five years who took out Neg am and IO’s to buy property that they couldn’t afford because it can only go up, or those who bought spec in LV or Arizona, or just buyers in general in SF, very few happened to be Asian. Sample set biased, I’m sure.
Hey folks, I’m about to jump in my car to get a coffee— better clear the roads for me because I can’t drive but man I love real estate!
Hey guys, thanks for a great laugh this morning reading all your responses!
Jimmy the FOB “Fresh Outta my BMW,” No-longer Bitter, No-longer Renting, Oh-So-Over the Yellow Fever and Moving On To The Next Thread(TM)
(And yes, true story, I did in fact immigrate while driving a 6-series, so I guess I’m a FOB too).
Rubicon,
When I refer to the East Bay, I refer to the “inner East Bay”
I’m a snob like you SFer’s who think the Bay Area is only SF:)
So yeah, outbid on cash-flow positive properties, mainly in Oakland, but also San Leandro. Not many, if any. are cash flow positive in other parts of the “inner East Bay.”
But I’m seeing houses in, say, 94605, selling for what they sold for in 1994.
But I’m seeing houses in, say, 94605, selling for what they sold for in 1994.
If you can find those prices, I say jump on it. Probably not too much downside risk, and at these low interest rates, it should be a good bet that paying 1994 (nominal) prices will turn out to be very good investments over the medium term imo. I do think that there is a very real risk of materially lower rents in the Bay Area, though, and I wouldn’t be surprised to see 0% nominal rent growth over the next 10 years in segments that are not rent-controlled. So, I guess I wouldn’t stretch too far to get into income property.
“So Jimmy’s statement is generally correct but he could have saved himself some griefs by substituting ‘Asian People’ with ‘Asian Culture’.”
What’s up Jimmy (Still a Hoser, Eh)??? Nice try posting as “Outsider” to throw out one last defense of your laughable premise. What am I saying?? What a lame try.
You still miss the mark. Not all Asians are Chinese. Why is it so hard for you to understand this simple concept??? What do Thais, Koreans, Malaysians, Mongolians, the Japanese etc.. etc… have to do with your “document”???
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“By the way, present day Asians are not only into real estate but they are heavy players in the stock markets which make them double casualties in the latest economic downturn.”
Once again Jimmy (Still a Hoser, Eh), my friend, you are talking completely out of your ar*e.
The Asian-American homeowner rate in the US is BELOW the average. It is 62% as opposed to 69% overall (and 76% for White Americans). I haven’t found any breakdown on individual shareholders, but I would very highly doubt that the Asian-American percentage were higher than the White American one.
Oh, here is an article that you might be interested in….
http://www.asianweek.com/2008/11/14/home-run-asian-american-homeowners-and-the-subprime-mortgage-fallout/
If you are referring to Asians from Asia, stock ownership is in the SINGLE DIGITS by percentage of population in China and Korea, for example. Contrast that to the US where, thanks to mutual funds and retirement plans, the rate of ownership is at least several times higher.
Actually I didn’t write the “Outsider” post (but I appreciate the support). Looks like the board is about 50/50 on my side regarding the old-school Asian crowd.
And, I’m pretty sure that the Chinese didn’t have a monopoly on feudalism, although it may have persisted there longer than in other parts of Asia & the rest of the world.
And lastly, I don’t really know or care what % of Asians own stocks. I can’t even imagine how that would be relevant to this discussion.
Hey EBGuy. Nope, not me; we live in SF… at least for now.
“Looks like the board is about 50/50 on my side regarding the old-school Asian crowd.”
Wow Jimmy (Still a Hoser, Eh), you’re as delusional as anonn. Or more.
Interesting little interactive chart from the Times on long term price/income ratios.