Housing Market - Big burst or slow trickle?

[Diamond Dog]

What does everyone think of the Bay Area and the US's housing market. Are we in for a big bubble burst? Or are we in for a slow, steady trickle?

[Roger Slocum]

I know I am not sure, lets ask those developmently greedy experts at Bay Meadows Land Company. They certainly know the lay of the land and also have the deep, deep pockets to hide all the dirt.

[Diamond Dog]

I know I am not sure, lets ask those developmently greedy experts at Bay Meadows Land Company. They certainly know the lay of the land and also have the deep, deep pockets to hide all the dirt.

Does that mean they think it's not going to burst?

[havebookwillteach]

When we compare the Peninsula housing market with almost anywhere else in California, it is quite a story. Yes, sales volume is down. And yes, prices are generally (not invariably) off their 2005/6 peak levels. And yes, loan foreclosure actions are up. But, the price slides are moderate compared with those in a number of towns just a few miles away (and elsewhere, generally, in the state). And, the actual number of completed foreclosures is far far less than in the East or North Bay, or Sacramento, or the Central Valley, and so forth. San Mateo may have a few dozen foreclosure proceeedings while there are hundreds and hundreds in towns like, say, Antioch or Stockton or Sacramento or Fairfield or.... In short, the headlines (even in Bay Area newspapers) about a terrible housing slump apply only partially to the Peninsula, and this is true (so far, anyways) even though a high percentage of purchase loans in the last few speculative years were of the "lie about your income" and "teaser rate" types. Memory is a tricky thing (and statistics are even trickier) but I have seen 5 previous realty slumps and this one is so far (right around San Mateo and Palo Alto, etc.) quite far from the worst. These matters are discussed more in some of the real estate courses at College of San Mateo. The most interesting question is, of course, what may happen next with property investments in this area. There is discussion now that the "bail-out" program from Washington may not work very well, if only because it will take only a few loan-investors (holders of promissory notes) to challenge (in court) any abrogation of their contract rights... and there are thousands or millions of these including various mutual funds, pension funds, individual investors, etc. who were not represented or consulted in the "bail out" deal. In other words, the "bail-out" for housing may itself be a "house of cards," we will see. Even assuming this, however, the positive difference in the Peninsula marketplace as compared with most of the other localities discussed in the headlines -- remains. So while the days of "easy money from flipping" are certainly gone, real estate can still be a very good investment (at least as part of a balanced, diversified , long-term portfolio). [And no, I do NOT know what is the next really "hot" get-rich-quick-without-any-work-or-risk type of investment, sorry about that!]

[havebookwillteach]

Good news. Amidst all the very-generalized "national" and "state-wide" bad real estate news, the paper just reported the more positve LOCAL news. While sales volume is certainly down and some towns are indeed showing price drops, the overall San Mateo County/Peninsula median home price level is up for the year 2007. Also, the foreclosure rate is far, far less in most Peninsula communities than it is elsewhere in the state. We've known this for most of 2007, and we track this in real estate class at College of San Mateo -(please see "marketplace" discussion section at this website for note about enrollments now in progress) --...BUT we've seen almost no news articles until now that really point this out -- that we are living in a little "real estate bubble" of our own -- with stronger market conditions than many other places that are featured in the many real estate articles that are printed. This can be partly attributed to the continued success (and large management bonuses or stock options) of several of our local leading places of employment -- and especially to continued immigration of many very wealthy people from overseas. These foreign buyers do not seem to settle much in Oakland, Antioch, San Jose, Fairfield, or Vallejo -- they like San Mateo and Palo Alto and surrounding towns. This has helped boost our local RE market relative to the other Bay Area cities. I do not wish to argue that this result is completely wonderful or even fullyl desirable for everybody, I realize that any direction the market takes (for any reasons) will result in winners and losers, economically and socially speaking. That we are finally beginning to see some more careful or accuate reporting of the actual market conditions in this large local area is, I believe, a promising step forward -- it helps us all see more clearly. I'd take this opportunity to again encourage media to avoid (or at least go beyond) "national" and "statewide" statistics when reporting real estate or economics news. Real estate is, after all, about "location, location, location" and "economics is (very) local," as the old sayings go. Media, continue please to inform us what's going on here in our local area. Thanks, and compliments to this paper.

[havebookwillteach]

We observe the slower market in most neighborhoods these days, with some price declines. We also observe that if you bought the so-called median priced home one year ago for $830,000, it would have gone up to $875,000 today (after reaching even higher inbetween). That's just sitting there -- a really nice price increase in a very short time. These data reflect the slower as well as the better-performing towns, meaning that some properties did even better (and some not). We see that the local real estate market is still here, quite alive, and if not fully well at least a lot stronger than one might be led to believe from some of the headlines and nightly TV news stories.
Of course, most people are interested in purchasing a home to live in -- and we'd never recommend housing for "quick profits" as nobody can predict what any economic market will do tomorrow. The days of "flipping" are gone, there will almost certainly be more badnews stories -- and time to learn more about real estate princples (www.collegeofsanmateo.edu), and what genuine opportunities it can afford, is at hand. It is a fascinating subject, try to get beyond the headlines and you'll really come to like it a lot! Happy New Year!

[havebookwillteach]

That address for local real estate (and other) classes is, of course, www.collegeofsanmateo.edu
Thanks, and Happy New Year!
HB

[havebookwillteach]

Thanks to all those who have signed up for our real estate, businesss, computer, English, Math, and other class offerings this (Spring) term! There are still a few seats available for anyone who has not enrolled (www.collegeofsanmateo.edu). Local rents are going up again (residential) per December data survey, prices are not crashing in most Peninsula areas as they are in many other parts of California, USA...
some prices going up (generally, higher end properties) and some sliding (generally, lower priced areas) ... lots of interest here as other areas have the kinds of problems we read about in the mass media almost every day. Looking forward from campus we see the California State Universities announcing earlier student deadlines to reduce their enrollments for budgetary reasons, many of these people are expected now at local community colleges (Sacramento Bee article of 17 January 2008) so when and if you decide to take a community college class(es) do sign up EARLY to help assure you can still get the class(es) you want; they are likely to fill up even faster with all these state university students coming over.
And...most importantly of all.. HAPPY New Year! HB

[havebookwillteach]

The latest news is that Peninsula foreclosures are going for an average of 19 percent discounts. I'd be appreciative of any postings or responses to verify that figure (and any information on what it was measured against, in your particular transaction). Of course, there are much larger discounts available in other parts of the Bay Area, but the San Mateo/Palo Alto area has its own market characteristics -- please share your experiences -- it helps our students keep current on today's real estate marketplace -- thanks very much!) And as ever, thanks also to all those who are registering for real estate principles (Summer, Fall, and Spring) (and a range of advanced real estate courses in Fall and Spring semesters), enrollments for Summer AND Fall are now underway right here online at www.collegeofsanmateo.edu, do please click over and sign up for any classes you may wish (day or evening offerings, easy access and plenty of parking) ... now is a really GREAT time to learn about real estate and, of course, all are welcome at CSM your local public community college.
Thanks again//
Oh yes, anyone who has bid at one of those big foreclosure auctions being held in San Mateo and around this area, if you did not bid cash then did they provide you with convenient financing on good terms or what was your experience? Thanks again very much for sharing!

[efto1]

The latest news is that Peninsula foreclosures are going for an average of 19 percent discounts. I'd be appreciative of any postings or responses to verify that figure (and any information on what it was measured against, in your particular transaction). Of course, there are much larger discounts available in other parts of the Bay Area, but the San Mateo/Palo Alto area has its own market characteristics -- please share your experiences -- it helps our students keep current on today's real estate marketplace -- thanks very much!) And as ever, thanks also to all those who are registering for real estate principles (Summer, Fall, and Spring) (and a range of advanced real estate courses in Fall and Spring semesters), enrollments for Summer AND Fall are now underway right here online at www.collegeofsanmateo.edu, do please click over and sign up for any classes you may wish (day or evening offerings, easy access and plenty of parking) ... now is a really GREAT time to learn about real estate and, of course, all are welcome at CSM your local public community college.
Thanks again//
Oh yes, anyone who has bid at one of those big foreclosure auctions being held in San Mateo and around this area, if you did not bid cash then did they provide you with convenient financing on good terms or what was your experience? Thanks again very much for sharing!

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