Home prices still too high. (Oakland, San Mateo: foreclosed, rental, sex offender)

[Ultrarunner]

Originally Posted by BayAreaHillbilly

Here the garbage crews consist of guys in their 20s, 2 per truck, one drives the truck and operates the compactor, the other literally runs down the street with a 75 gallon steel can on wheels, dumping 2 -3 customers' cans into it then into the truck - they are clearly assessed based on speed. I imagine they live in crummy apartments and as soon as they get a bit older, either go on to another career, get promoted or leave the area.

From what I know... Trash collectors are paid by route... the sooner they get done the sooner they get home... the pay is the same... at least that is how it worked in my city.

[Ultrarunner]

Originally Posted by Michael Tryn

You are right ! One could say the same for any city ! If one bought 50 yrs ago, one made out. I wish to say some of the postings here give a false impression of things. For example "How many couples are making the $200 grand/yr. one poster gave in an example" ? Give us a break. Maybe 1 in 10 K ? That almost wipes out 90% of the so called minorities from living there. And I may get a flag on this question but , "Who takes out the garbage in Santa Barbara or S.F. " If one can't live there on less than $100 grand a yr wages ? I can't imagine the common folk making min. $75k /yr with Calif. bankrupt. My wife wants to move there but we are not one of "the privilaged" !

Interesting points..

I would like to help clarify and perhaps my experiences living in Oakland and working in the East Bay are not typical...

The young 25 year old couple are the first on both sides of their family to graduate college... he is African American and she is Filipina... her parents emigrated to the United States with nothing... I attended her graduation and her Grandfather said that nothing in his entire life could make him more proud than the day his granddaughter graduated from Nursing School...

Oakland is not a White City... the people living in the hills are just as likely to be African American, Pacific Islander or Hispanic than they are to be White.

It's a little funny that parents of young couples I knew back in the 1980's were bemoaning the fact of their children "Never" being able to buy a decent Home like they did and having to deal with mortgage rates 15% or higher...

Today, the children of these same people that bought in the 80's are saying the same thing about their parents generation which said the same thing about their parents generation...

Each generation thinks no one before every had is as hard as they have it now...

I bought a home from a Husband and Wife that owned it since 1931... They paid $2,700 for it and his parents and their friends told them they should wait till the economy was better as in the Great Depression... They both said it meant so much to them to own their own home and to know their mortgage payment would stay the same that it was worth the sacrifice...

You do not need to be privileged at all... you do need to have a skill that is in demand combined with a work ethic to get the job done... and a little luck always helps. If it were only for the privileged... there would be no immigrants arriving with nothing but the desire to succeed living their American Dream...

[bayarea-girl]

Home prices are still too high IMHO and will most likely continue to fall. Although homes are listed for a million in some areas people aren't buying them and or can't get loans so the homes are just sitting.

Until unemployment declines significantly and we have some economical growths I don't see too many people running to buy.

[BayAreaHillbilly]

Originally Posted by bayarea-girl

Home prices are still too high IMHO and will most likely continue to fall. Although homes are listed for a million in some areas people aren't buying them and or can't get loans so the homes are just sitting.

Until unemployment declines significantly and we have some economical growths I don't see too many people running to buy.

That is absolutely not true in the specific places I've previously mentioned in San Mateo County. Homes are sitting only a few days longer and are selling at the prices I mentioned. The numbers mentioned are actually selling prices, not list prices. My observation of buyers is they are genuinely wealthy - not relying an weird mortgages. Some are buying with cash. Some are foreigners. No doubt many of them have been waiting on the sidelines for years. Now, with a 10% decline versus the same time in 2008 (which is when the "crash" began in these areas) they are going for it. No doubt they'll stay for years / decades / etc. Schools and location are the key criteria.

[bayarea-girl]

I didn't mention San Mateo County and am not familiar with the market in that area. Houses in CA are still over priced and that is a fact. From what I've seen in Southern CA and many parts of the bay area homes will continue to fall. Not everyone in CA or the bay area are millionaires nor do they have the 20% down payment banks are now asking for.

For instance some people that I know who live in Blackhawk, Lafayette, Walnut Creek who had fabulous jobs are unable to sell their homes. Companies are not paying as much as they did either and unemployment is still at a record high so it makes sense that homes will go down.

Foreign investors are buying less here and I don't blame them. They can get more for their money in other parts of the country.

[jaynetarzana]

Originally Posted by bayarea-girl

Home prices are still too high IMHO and will most likely continue to fall. Although homes are listed for a million in some areas people aren't buying them and or can't get loans so the homes are just sitting.

Until unemployment declines significantly and we have some economical growths I don't see too many people running to buy.

I tend to agree with this. There are only so many wealthy people out there to buy these homes. The existing pool might be purchasing homes right now, but if prices were continuing to go up, they wouldn't be buying either. I've read over and over again that home prices are still not affordable for most Californians. We've yet to see the impact that future foreclosures are going to have on the market. These people who have been losing their jobs are going to be defaulting on their mortgages. So that is going to begin the 3rd wave which will no doubt have an affect on home prices.

I emailed back and forth with an REA this weekend and I was shocked by the response I got since it was so atypical for a REA: "The good news for you is that time is on your side. Prices will continue to drop, I'm convinced, for at least the rest of this year, and quite possibly well into next year also. Some are even calling for price drops through 2011, that's a bit far out for me to comfortably make a prediction. But when I look at the state of the economy, unemployment, and the huge numbers of people in default on their mortgages, I don't see how it adds up to anything other than further declines in home values, even in "prime" areas."

[BayAreaHillbilly]

Originally Posted by bayarea-girl

I didn't mention San Mateo County and am not familiar with the market in that area. Houses in CA are still over priced and that is a fact. From what I've seen in Southern CA and many parts of the bay area homes will continue to fall. Not everyone in CA or the bay area are millionaires nor do they have the 20% down payment banks are now asking for.

For instance some people that I know who live in Blackhawk, Lafayette, Walnut Creek who had fabulous jobs are unable to sell their homes. Companies are not paying as much as they did either and unemployment is still at a record high so it makes sense that homes will go down.

Foreign investors are buying less here and I don't blame them. They can get more for their money in other parts of the country.

Foreigners are not buying for investment but to live (or to put up their kids going to grad school / working as expats). It's a lot cheaper than the French Riveria even at these prices. Many are from Asia, but a surprisingly high number are from Europe. Most of these folks would have zero interest in anything in the East Bay other than a few places in the inner communities, but in general, their targets are the City, parts of the Peninsula, and less commonly, Marin.

[BayAreaHillbilly]

Originally Posted by jaynetarzana

I tend to agree with this. There are only so many wealthy people out there to buy these homes. The existing pool might be purchasing homes right now, but if prices were continuing to go up, they wouldn't be buying either. I've read over and over again that home prices are still not affordable for most Californians. We've yet to see the impact that future foreclosures are going to have on the market. These people who have been losing their jobs are going to be defaulting on their mortgages. So that is going to begin the 3rd wave which will no doubt have an affect on home prices.

I emailed back and forth with an REA this weekend and I was shocked by the response I got since it was so atypical for a REA: "The good news for you is that time is on your side. Prices will continue to drop, I'm convinced, for at least the rest of this year, and quite possibly well into next year also. Some are even calling for price drops through 2011, that's a bit far out for me to comfortably make a prediction. But when I look at the state of the economy, unemployment, and the huge numbers of people in default on their mortgages, I don't see how it adds up to anything other than further declines in home values, even in "prime" areas."

There are almost no defaults or foreclosures in the places I mentioned. Sure, a smattering, but too few to really consider much of a trend. People in the micro market I mentioned never used unusual mortgage products, and did not take out seconds for cash out to buy stuff. They are execs, or, have hereditary wealth. Even if jobs are lost, there is enough buffer to get by for a long, long time.

By the way, I don't consider this the most healthy thing.

Look at the future - the rich, the poor, and almost no middle class.

[clongirl]

Originally Posted by jaynetarzana

I tend to agree with this. There are only so many wealthy people out there to buy these homes. The existing pool might be purchasing homes right now, but if prices were continuing to go up, they wouldn't be buying either. I've read over and over again that home prices are still not affordable for most Californians. We've yet to see the impact that future foreclosures are going to have on the market. These people who have been losing their jobs are going to be defaulting on their mortgages. So that is going to begin the 3rd wave which will no doubt have an affect on home prices.

I emailed back and forth with an REA this weekend and I was shocked by the response I got since it was so atypical for a REA: "The good news for you is that time is on your side. Prices will continue to drop, I'm convinced, for at least the rest of this year, and quite possibly well into next year also. Some are even calling for price drops through 2011, that's a bit far out for me to comfortably make a prediction. But when I look at the state of the economy, unemployment, and the huge numbers of people in default on their mortgages, I don't see how it adds up to anything other than further declines in home values, even in "prime" areas."

I agree also...there just aren't as many wealthy "feeling" people. I say "feeling" because the wealth that was created was through the housing market bubble itself ... It was all an illusion. People didn't really have the cash, but an endless supply of credit or did well when the stock market was doing well.

Salaries were not even keeping pace with inflation, yet people were convinced they were rich. Ask yourself when the last credit card offer you receive in the mail was?

There are only so many truly wealthy people that actually have that kind of cash on hand (ie 20% down) There are over 50 houses in my area between 1-2million. A few are selling, more than a four weeks ago, but there are a whole lot more sitting..have been for a year or more.

I still remember when they were calling this a "soft landing"! It took 13yrs for this bubble to be created..it'll take about the same time for property to correct to the salaries of any given area. It's just not possible now days for people to stretch for something they can't truly afford.

[jaynetarzana]

I agree. Lenders are going to be conservative for some time to come. One day they will have forgotten about this mess, but not any time in the near future.