A Special, Special Part Of The World
The Marin Independent Journal reports from California. “The median price of a single-family home in Marin soared to $1.1 million in September while sales dropped 13 percent from a year ago, according to CoreLogic DataQuick. Sales were down in most Bay Area counties, dropping 6 percent in the area overall and 7 percent in San Francisco. Sales have been declining in Marin and the Bay Area for many months. Regardless of the differences within the county, Fred Kusin of Bradley Real Estate said, ‘Marin is unique. We live in a special, special part of the world.’”
The Telegraph. “According to figures released this week by Forbes magazine, the quiet suburb of Atherton, in Silicon Valley, is now the most expensive postcode in the United States. Estate agents say many of their Chinese buyers looking for homes here are happy to buy sight-unseen and almost all pay upfront in cash - some 80 percent of the $10million homes they sell. ‘I think we have several more years of growth left,’ said Mr DeLeon. ‘It’s a real property boom and not just a bubble.’”
“‘It’s the curse of Silicon Valley,’ added one long-time resident. ‘I just pray that before long, they’ll move on to the next shiny penny.’”
The Press Democrat. “After lagging for most of the year, Sonoma County home sales jumped last month to the highest level for September in nine years. Prices may continue to rise over the next six months, said Jeff Schween, an agent with Pacific Union International in Santa Rosa, because those sellers coming to market now may do so with the thought that ‘this is the kind of price I want to get.’”
“Lori Sacco, manager of Vanguard Properties office in Sebastopol, said some buyers of upper-end properties may be willing to pay extra to get that home they really want. But she cautioned that recent sellers of more modest homes have failed to sell promptly because they sought more than buyers were willing to pay. Her advice: ‘Price it right or it’s going to sit around.’”
The Orange County Register. “A fall chill crept into the Orange County housing market in September, freezing the median home price below the $600,000 threshold touched briefly earlier this year and keeping a lid on sales. The median price of an Orange County home was $585,000 last month, CoreLogic DataQuick reported. Last month was the first time in more than two years that none of the Southern California’s six counties posted double-digit year-over-year price gains. ‘Price appreciation has dipped into single-digit territory as more would-be buyers get priced out, investors back off and incomes rise modestly at best,’ DataQuick Analyst Andrew LePage said.”
The Los Angeles Daily News. “CoreLogic DataQuick analyst Andrew LePage said that September’s small sales increase by no means signals a market turnaround. ‘We still have some summer activity closings, so I wouldn’t read a whole lot into September,’ LePage said. ‘We’ll see what happens over the next couple of months.’”
“Last month the median price across the six-county region increased from $382,000 to $413,000. It fell 2 percent from $420,000 in August, which was the highest median price since $425,000 in December 2007. Economist William W. Roberts, director of the San Fernando Valley Economic Research Center at Cal State Northridge, said that prices have been flattening out since the spring, and he expects that trend to continue for the rest of the year. Sales had lagged last year’s lackluster total until September, in part because inventory remains tight. ‘It’s going to be another crappy year,’ he said of the region’s market.”
The Glendale News Press. “For the first time in over three years, the median prices for single-family homes and condominiums declined last month in Glendale compared to September 2013. The median price for homes slid from $825,000 in September of last year to $740,000 last month, according to statistics compiled by Realtor Keith Sorem with Keller Williams Realty in Glendale. At the same time, the number of homes sold declined almost 18%.”
“‘Prices are stabilized,’ said Margi Simpkins, a Realtor with Coldwell Banker in Glendale. ‘There’s no real sense of urgency on the part of the buyer.’”
The Bakersfield Californian. “In theory, people should be approaching retirement debt free. But life is a long way from theory. A new study by the non-profit Employee Benefit Research Institute reported that an increasing number of boomers are retiring with mortgage debt. The EBRI report found housing-related expenses are the largest category of costs for seniors, consuming 40 to 45 percent of an older homeowner’s budget. By comparison, health costs consume 8 percent of the budget for people 50 to 64 years of age and 19 percent for seniors 85 years of age and older.”
“The Consumer Financial Protection Bureau recently painted an even bleaker picture. The federal agency reported that sixty-five percent of retirement-age people have mortgages today. This is up from 52 percent in 1992. And while many are struggling to make their mortgage payments, the bureau estimates about 5 percent of seniors are seriously delinquent on their debts.”
“My clients Bob and Mary illustrate some of the reasons why many retiring boomers are not debt free. In early 2000, when Bob was receiving promotions and pay raises at work, the couple decided to trade in their modest three-bedroom home for a larger one in northwest Bakersfield. Their children were in high school and the family needed room to stretch out. They seemed to buy just at the right time. Shortly after they moved in, home prices spiked in their neighborhood. They refinanced three times, taking equity out to help pay for their children’s college educations and to pay for one daughter’s wedding. Their monthly mortgage payment climbed to about $3,000.”
“Then the housing bubble burst and the Great Recession of 2009 hit. While Bob did not lose his job, as many of his neighbors did, his wages have not increased significantly in recent years. And Mary, who has worked part time for years to be home with her children, has been unable to find a full-time job.”
“I advised them to consider all their current and future expenses and income. Downsize. The ‘empty nesters’ have put their home on the market, with plans to buy a smaller home, or rent. They are hoping to reduce their mortgage payments and shed related homeowners’ costs. They also will cut spending on entertainment, travel and ‘non-essentials,’ while increasing their funding of retirement investments.”
“It took years of decisions and spending for Bob and Mary to get into their financial situation. There is no easy, one-step solution to getting out. It will take time and discipline to secure their retirement.”
“… increasing number of boomers are retiring with mortgage debt.”
A thing of beauty.
“The EBRI report found housing-related expenses are the largest category of costs for seniors, consuming 40 to 45 percent of an older homeowner’s budget.”
Pass the cash.
“The federal agency reported that sixty-five percent of retirement-age people have mortgages today.”
Sixty-five percent? Only sixty-five percent? Definitely more work needs to be done in this area.
A nation of fools.
Notice the article said sixty-five percent of “retirement-age people”, not “retired people”.
You’re too hard on yourself sometimes Mr. Banker - you’ve done your work quite well, no?
Payments, maintenance, and property tax till the day they die.
‘Damon Grow is your classic San Francisco techie – smart, aggressive, and talks as fast as he thinks. He’s an all-or-nothing guy. He came to the city nearly 20 years ago at age 19, and got involved in a few start-ups. He did okay. Then, the recession struck and the venture capital dried up. He ate ramen, or ordered off the McDonald’s Dollar Menu.’
‘Finally, he raised a half-million dollars from a Dutch billionaire. His startup blossomed, and as the Bay Area began its economic rebound, Damon cashed out.’
‘Today, Grow lives in San Francisco’s signature residential high-rise – the 58-story Millennium Tower – in the city’s booming SoMa neighborhood. The Millennium’s average unit sells for nearly $2 million.’
‘New buildings are popping up everywhere - and not just any buildings. Skyscrapers, like the 61-story Salesforce Tower under construction across the street from Grow. “These companies are just exploding. Residentials are being built. They’re extremely expensive, but the system supports itself, right? Because if it wouldn’t, it would collapse,” Grow says.’
`… but the system supports itself, right? Because if it wouldn’t, it would collapse,” Grow says.’
He’s got that half right. Ponzis do in fact support themselves… until they don’t. Then, they collapse.
And the established process of cratering prices and catering demand is like a slow motion trainwreck.
“Damon Grow is your classic San Francisco techie – smart, aggressive, and talks as fast as he thinks. He’s an all-or-nothing guy.”
In other words, he’s a total dick.
….. With empty pockets and a lifetime of debt obligation like everyone else in that he’ll hole of a state.
“he’s an all-or-nothing guy”.
Mostly nothing.
He’s not salt of the earth, he’s salt of the wound.
Dear Mr. Grow: Yes, if the system didn’t support itself, it would collapse, just like it did that one time when you were eating Ramen and $1 McD items. Logic, my dear, logic.
‘Palm Springs real estate agents like Eric Meeks know well the lure of the desert for Canadians seeking the sun and a break from freezing winter temperatures, snow shovels and the kind of cold, blustery weather that turns umbrellas inside out.’
‘Which explains why Meeks, who works for Coldwell Banker and partners with his Langleyborn wife Tracey Wrubleski Meeks, says 70 to 80 per cent of his business is Canadian buyers, mostly from the western provinces, and why he continues to see a growth in interest from north of the border. It doesn’t hurt, he admits, to have a Canadian wife who has helped their business grow courtesy of her Canadian contacts.’
“We sometimes joke that other agents might pick on neighbourhoods that they ‘farm,’ ” says Meeks. “We farm Canada.”
Check out the photo of these goobers.
They think they are so smart and talented, but it has nothing to do with them. They are riding a wave of fake wealth created by disastrous central bank decisions.
“Check out the photo of these goobers.”
What is the odd thing they are doing with their hands?
‘Call it America’s $11 trillion advantage: Consumer spending is likely to steer the U.S. economy safely through the shoals of deteriorating global growth and turbulent financial markets.’
‘The combination of more jobs, falling gasoline prices and low borrowing costs will help lift household purchases. Such tailwinds probably matter more than Europe’s struggles or the slackening in emerging markets that caused the Dow Jones Industrial Average last week to erase its gains for the year.’
“We’ve got a lot of things working in favor of the consumer right now,” said Nariman Behravesh, chief economist in Lexington, Massachusetts, at IHS Inc. “To have that kind of strength is the biggest asset for the U.S. It’s a pretty rock solid footing.”
‘Household purchases make up almost 70 percent of the $16.8 trillion U.S. economy and have climbed an average 2 percent in the recovery that’s now in its sixth year.’
“We’ve got the proverbial 800-pound gorilla — the consumer,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. “Households are more fixated on the good news here, and a big part of that is the labor market. The U.S. is going to be pretty immune to the rest of the world.”
Economic Report
Retail sales fall for first time since January
Published: Oct 15, 2014 8:47 a.m. ET
A 0.3% drop in September would have been worse if not for iPhone
Retail sales head down in September.
By Jeffry Bartash
Reporter
WASHINGTON (MarketWatch) — Sales at U.S. retailers fell in September for the first time in eight months and only the release of Apple’s new iPhone 6 prevented an even steeper decline.
Sales at retail outlets dropped a seasonally adjusted 0.3% last month, showing a continued reluctance among Americans to splurge on consumer goods. Economists polled by MarketWatch expected a 0.2% reduction.
…
“The U.S. is going to be pretty immune to the rest of the world.”
Because of the 800 pound Debt Donkey in the room?
And it probably really does weight that much, too.
Purchases of PPE and chlorine bleach in the coming months will really boost the economy!
These articles are a good reminder that you can ask retail price plus 300% for your ______(fill in the blank), but where is the buyer at that price?
Remember. Housing demand is at 20 year lows in an environment of 25 million excess empty houses.
So Fred Kusin is carrying water for Lester Appleton-Young now? The only thing “special” about Marin is the hyperegotism of the people who live there.
Once reality is realized cognitive dissonance will lead to severe depression followed by unparalleled fatalism.
“Regardless of the differences within the county, Fred Kusin of Bradley Real Estate said, ‘Marin is unique. We live in a special, special part of the world.’”
You’re right, the level of hubris is unmatched.
I worked throughout Marin Co. until recently and it is in fact stunningly beautiful…but insanely expensive and some of the residents are truly insufferable, this goes waaay back, a very funny novel on all this was published in 1977.
http://en.wikipedia.org/wiki/The_Serial
Am here now. Marin has blocked a lot of public transportation access and has very low minority populations. This is well known and it attracts a white population that is very fearful of “the others” (racis!).
Extremely high cancer rates, breast cancer rate is one of the highest in the world.
Amazing number of a-holes (male and female) driving BMWs and Audis (many of them Realtards).
It’s overrated and of course the house prices are absurd.
Sounds like the People’s Republic of Boulder.
Is Marin County also a People’s Republic? You know the type, full of granola-eating elitists who have theirs and strive to keep others out.
I lived in a small So. Utah enclave for a few years that was inhabited by a big move-in contingent of what I can only describe as “Marin Co. wannabees”. Having seen that particular variety up close and personal, I can only imagine what the real thing must be like.
That is their specialty. Hubris.
I’m a Marin native, and it was a wonderful, wonderful place to grow up.
What’s nice about Marin is that it is stable and doesn’t change much – it’s like how the world was 30 years ago. I love to visit, and my parents still love living here.
All I heard growing up was that Marin is a safe little cocoon, definitely not the “real world.” In fact, aspects of Marin today are like what I imagine the “real world” used to be before serial asset bubbles corrupted our financial system and way of life. Here’s a little about my neighborhood to illustrate:
I grew up on a street of 2500 sq ft middle-class houses on decent size lots surrounded by open space. Of the 30-odd houses, about 50% are still owned by their original owners, who bought as young couples in the 1970s and stayed. They raised their kids here, sent them to the local public school, and have retired in these homes – no need to move-up or downsize, and thanks to prop 13 they will not get taxed out of their homes.
These homes are not rentals or second homes, they are all owner-occupied full time. From what I can tell, almost all of the retirees’ homes are paid off. The houses are well-kept but not uber-renovated. Looking out the window now, the cars I see are a 1980s station wagon, a 1990s truck, 3 Toyota Carollas and a mid-2000s Lexus, so people are not taking out HELOCs or piling up credit card debt for new cars or granite counters.
It was such a nice place to grow up that a lot of kids return - in one case, kids that grew up on this street bought their parent’s house and are now raising their own kids here. In another, the kids bought the house across the street from where their parents still live. Most feel lucky to be able to afford a similar lifestyle to what their parents had when many of their peers cannot.
This is not to justify crazy Bay Area prices, or crazy prices around the world. In fact, I see it as the opposite. We have a high quality of life in Marin, one that was affordable to many people for many years. It is shocking to see how the housing bubble has drastically reduced the standard of living for most people, making this middle-class way of life either unaffordable through inflation or impossible due to overdevelopment.
My street proves is that not everyone wants to use their house as an ATM or investment property, not everyone takes out loans they cannot afford, not everyone wants to live in a giant McMansion and not everyone wants to flip their way to a quick buck, and that everyone is better off when housing is seen not as an asset but as a place to live long-term.
What got me thinking about it all, aside from today’s IJ article: last month an older couple down the street sold to move to a retirement home, and before they moved out they threw a party for the new owners to introduce them to the neighbors. What a lovely, old-fashioned, community-building idea. You can bet that doesn’t happen in neighborhoods where homes are flipped every 6 months, where bidding wars force people to pay more than they can afford, where buy-to-let houses sit vacant while absent owners await appreciation, where HELOCs for luxury cars lead to foreclosure.
Apologies for the long post, and this is not to say that Marin is special or better than anywhere else. This is merely to say that now, in 2014, EVERYWHERE really ought to be better, and that, as everyone on HBB knows, there are many ways the housing bubble has impoverished us all, not all of them financial.
Sounds like the Chinese are buying it all up anyway.
I still maintain all this euphoria about a place is bubble talk. When I was growing up, Texans lived in the best place in the world. Of course, it just happened to be the hottest real estate in the world, but that was just a cherry on the cake! And like California, at first it was Dallas and maybe Houston. Then it was this little burg or some other town you never heard of (helped if there was oil nearby). Pretty soon, every town, every college, every business opportunity imaginable was the sweetest, bestest ever known to man! And naturally, everybody wanted to live there.
Maybe you can’t see it when you are in it, but I can see it a thousand miles away.
The “best place to live” phenomenon is very common everywhere. NY to Fargo…..nothing special about the places or the feelings. It has nothing to do with bubbles and everything to do with human nature.
It’s not “common” J._Fraud. It’s a new trend that coincides with the onset of the housing fraud starting in 1996.
Get yourself right - sided with honesty.
So with all that has been said….where does anyone see Sonoma county(Sebastopol) area, Bay Area housing prices going…continue up or down hopefully…
Experts please give your thoughts!!
I dunno about Sebastopol specifically, that is a strange place and would be VERY leery of buying there due to the loony Berkeley/Santa Cruz type politics. But do think that the Sonoma Co. market is stalled and prices will drop in 2015. The runup over the last two years was fueled by speculators and flippers, not more positive and real factors like new family formation, job growth, etc. I tried to buy in Santa Rosa in 2011/2012 with a big down and a preaproved mortgage and it was impossible to compete with the 100% cash flippers and specuvestors…may try again after Bubble 2.0 pops but renting makes more sense for me in the meantime. Another wild card is the extreme drought, if it continues far a few more years things could get very ugly and having been forced to rent might be a blessing…if that comes to pass I plan to move up to Portland OR, they have a surplus of rain and water.
I agree, people in CA are thinking of water now.
CA’s high taxes, crumbling infrastructure, gangs, illegals, bad schools, smog, traffic…..
There is a much higher quality of life elsewhere…
In expensive areas of CA the greatest dead cat bounce ever seen is rolling over. If you buy in these places now you are a colossal idiot, unless of course you don’t care that the price of your house will be going down for the rest of your life. Some people like to subject themselves to endless torment so it might work for you in that way.
Get this; the month just reported saw 20% investors in the bay area. What will these houses rent for? Obviously, these buyers think they will profit on appreciation alone. One in five buyers are probably of that mind.
Here’s something odd. Where I live planes come in to airport one after another this time of day. Usually every 3 or 4 minutes. I was just outside and didn’t see any in 15 minutes.
Most likely a runway change for some reason, and a different approach. Maybe they are doing routine maintenance or there is a cloud in the sky.
I agree with this. The airlines have already created their schedules for October. Even if demand was down, they wouldn’t be cancelling a bunch of flights so soon. I work for the airlines, and am starting a 4 day trip tomorrow… So far everything is still there, ha ha.
Ebola scare?
The train(wreck) is vibrating and shaking like a dog $hittin’ razor blades.
Lay your paws on every dollar you can. You’re going to need every penny.