Sunday, April 17, 2005

"The Numbers Say It All"

Thanks to the reader who posted this SFGate graph of the median income needed to buy a home in San Francisco.

11 Comments:

At 2:23 PM, Blogger John Law said...

I clicked the link above the chart and found this:

(Forget the stock market or working for a living. e more money last year simply occupying their lofts, townhomes and suburban tract houses.

At least on paper.) it's just not that easy.

("You pay the bills and (the value) goes up. It almost seems too good to be true,") it is!

(they cite the large percentage of risky interest-only loans in the market -- 62 percent of total loans in San Francisco last year, according to market researcher LoanPerformance. )

WOW.

and I see a prophecy here!

(But Gabriel, like many invested in the market, downplays the possibility of a downturn.

"I don't see a lot of risk," said Gabriel, who is in the midst of buying a second home in Oakland for $633,000. "It might flatten out for a while, but it won't crash. It's not like my other property will go down to $215,000 or something.")

 
At 2:46 PM, Blogger J. Stanley said...

I think I'd just quit my job, get a HELOC to pay my bills and kick back. Why even work if you're making more money from appreciation than slaving 9 to 5?

It's good to see this time around the government has decided to position itself not to bail out the landslide of future banckruptsys. I'm ready to buy beamers, benzs' and boats at firesale prices. The Greenspan legacy is soon to be significantly altered. (see Realtybites.blogspot.com)

 
At 3:10 PM, Anonymous BoyInTheBubble said...

"I don't see a lot of risk," said Gabriel, who is in the midst of buying a second home in Oakland for $633,000. "It might flatten out for a while, but it won't crash. It's not like my other property will go down to $215,000 or something."

"I don't see a lot of risk," said Gabriel, who is in the midst of buying another 100 shares of Nortel for $120 a share. "It might flatten out for a while, but it won't crash. It's not like my Nortel stock will go down to $2 or something."

See? It really is just like the stock market.

 
At 3:21 PM, Anonymous Anonymous said...

Got a big laugh out of that comparison. What is the real downside. Gabriel's $660k house probably won't go down to $6,600, but at some point (when fundamentals kick back in, as they always do, and sometimes overshooting in the process) the rental value of the place will act as the price base. If the rental income would only support a $500k value, is Gabriel screwed. What's the tipping point for these folks?

 
At 3:38 PM, Anonymous Anonymous said...

J. Stanley: your blog looks interesting, but you need to allow anonymous (non-Blogger) comments, and you need an RSS feed! I think the explosion in housing bubble blogs must surely be an indicator that we're close to the top....

 
At 3:54 PM, Anonymous Anonymous said...

Answer to the last two comments:

1. The 'tipping point' is when either credit dries up, there are no new buyers to support prices or a natural disaster hits.

2. I second the notion of adding an RSS feed. Great page.

-Generic

 
At 4:37 PM, Blogger J. Stanley said...

I believe we're actually at the top looking down. RealtyBites is now open to all comentators! Thanks Anoymous! The RSS feed is soon to follow.

 
At 9:22 PM, Blogger Ben Jones said...

J Stanley,
(It's good to see this time around the government has decided to position itself not to bail out the landslide of future banckruptsys)

If the US government bailed out Mexico twice, NY city, Chrysler, 1,000 S&L's, etc, don't you think they'll bail out Fannie and Freddie. Besides, there is no other entity that will accept the load. Type "Resolution Trust Corporation" into Google. The US has done this more than once before. Thanks for commenting.

 
At 10:01 PM, Blogger J. Stanley said...

Ben, it's a question whether the American tax payers will go for it this time (which I concede they really don't have a choice). Large tax increases on the middle class will have to be levied. I believe the S&L crisis of the 80's was to the tune of around $380b. I think Fannie and Freddie will be to the tune of $1.5-2 trillion. This along with a weakening dollar, increasing trade deficits and the continued GWOT, Americans will witness one of the largest re-distributions of money in its history.

Someone's going to have to pay. Maybe the government can set up personal debt accounts, similar to the personal retirement accounts the bush administration is pushing. Everyone starts with an equal amount to pay off in monthly installment until your balance is zero. Then you get a lapel pin that claims you are debt-free.

 
At 10:12 PM, Blogger Ben Jones said...

J Stanley,
The S&L bill was $500 billion, after it was raised several times. And that was 1989 money. A trillion isn't out of the question.

We are all going to pay, lets remember who got us there. Cheers!

 
At 10:16 AM, Anonymous Anonymous said...

I live in SF. I was talking to a friend while our kids were at a birthday party this weekend and he told me about the absolutely crazy prices homes are going for in his neighborhood.

The home is not in good condition, build around 1940, with no updates since the 70s. There are foundation problems and the estimates were that it needed about $100k in foundation work [minimum].

So it was listed at $825k and after showing it for a few weeks, the offers came in. It sold for $1.3M.

 

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