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Million Dollar Shack: Trapped In Silicon Valley's Housing Bubble

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From the you ain't gonna believe this shit file.............

$595,000 A House has 3 Bedrooms, 1 Full Baths, 1 K and 1 Family Room Opens up To Large
Tiny House Lover


Published on Jan 8, 2018
10325 Dibble Ave NW, Seattle, WA 98177 $595,000 3 BD 1 Full Bath 1,470 SqFt

Property Description

Well kept home with lots of upgrades. Roof, siding, and sewer line replaced within the last 5 years. Hardwood floors under carpeting. Family room opens up to large level back yard that is all fenced.

Lot Topography Level Annual Taxes $1,552 Tax Year 2017 School District Seattle Potential Terms Cash Out, Conventional ENS Natural Gas Appliance Dishwasher, Dryer, Range/Oven, Refrigerator, Washer Bedrooms Main 3 Lot Details Curbs, Paved Street, Secluded, Sidewalk

http://www.seattlehome.com/property/1...

More Videos: #tinyhouse #tinyhouses #smallhouse #cottage #cabin #tiny #tinyhome
 

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Roommate Nation: 30 percent of working adults are now living with a roommate.


With the rent being too damn high, many Americans are now opting to live with a roommate (or two or three in the case of San Francisco and Los Angeles). We now have a record number of adult Americans living with roommates. This coincides with a stagnant growth in the homeownership rate especially in crap shack intensive areas like SoCal. The market continues to be constrained by low supply and Taco Tuesday baby boomers living in properties that they would not be able to purchase today at current price levels. Many older home owners bought during an era where one income (even one blue collar income) was enough to purchase a home. That is no longer the case in many metro areas where dual income professionals and all cash buyers are the dominant buying force. So how many adult Americans are now living with roommates?


Roommate nation

As it turns out, many people are dealing with high rents by finding roommates:

“(Zillow) As rent consumes a growing share of household income in many cities, some people must relocate or find ways to offset rising prices. An increasingly popular way to cut costs is by adding a roommate. Nationally, 30 percent of working-age adults—aged 23 to 65—live in doubled-up households, up from a low of 21 percent in 2005 and 23 percent in 1990.”



So much for the affordability argument. Living like sardines is the new solution. And this is a record number of adult Americans living with roommates. And no, this isn’t looking at married people or couples:

“We define a doubled-up household as one in which at least two working-age, unmarried or un-partnered adults live together. For example, a 25-year-old son living with his middle-aged parents would constitute a doubled-up household, as would two 23-year-old roommates who are not partnered to each other. A doubled-up household contains people who might choose to live apart under different circumstances, financial or otherwise.”

And of course the rates are much higher in expensive areas like Los Angeles:



I’ve driven around many cities in SoCal and you see streets packed with cars and in some other areas you see five to six cars in places were only two to three cars should go. So you see this congestion already taking place. The idea of having a big lawn and open space just doesn’t fit in with our crowded market. In SoCal we have 22,000,000+ people all trying to live within 100 miles of the coast. And you feel this in the massive traffic in various cities.

Is this sustainable? As we have noted, much of the new housing construction is catering to the new needs of Millennials which is rental apartments or condos which are glorified apartments with mortgages. Sure, you have some Millennials wanting to be Taco Tuesday baby boomers version 2.0 but the stats don’t highlight this. First, many are marrying later if they are marrying at all. Also, the size of a family today is much smaller. So why the need for insane McMansions? The needs are clearly different.

You also see this being reflected in roommate changes. Millennials are more open (obviously) to living with others. But this trend of rooming up is hitting all groups. So this is being driven by necessity and lifestyle choices. For example, a Millennial might be happier living in San Francisco with roommates versus having a McMansion out in Oklahoma.

One way to cut housing costs is to get roommates. An old fashioned solution to the high rental cost situation.

Did You Enjoy The Post? Subscribe to Dr. Housing Bubble’s Blog to get updated housing commentary, analysis, and information.


http://www.doctorhousingbubble.com/...rcent-adults-living-with-roommates/#more-9173
 

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The evaporation of housing inventory: What a continued drought in housing inventory will mean for the real estate market.


The housing market continues to operate in a very lean environment. Home builders are building but are focusing their efforts on multi-family units to cater to a growing renting population. Builders are also shy about placing big bets given the recent memory of the previous housing bubble. Places where they can build freely like Arizona, Nevada, and Florida are known to pop as quickly as they go up in value. And in areas like California, where NIMBYism rules the day, people are now convinced that prices will never go down so the ratio of bulls to bears is extremely high. The sentiment seems to be that there could be no wrong in purchasing real estate even if it means leveraging up into a crap shack. Yet what is very telling is that inventory is still very low after many years.


Bouncing at the bottom

Inventory has been bouncing near the lows for almost six years now:



Nationwide inventory is down 10 percent year-over-year from an already low year.

In Los Angeles, inventory is down 22 percent year-over-year from an already low year.

What this means for house buyers is that you are going to encounter slim pickings, house lusting shoppers, and a market sentiment favoring sellers. If you are buying, you are not in the driver’s seat. If you are selling, you can command top dollar even for a shanty crap shack.

One thing that has changed since the late 1990s is that we now seem to live in a perpetual boom and bust cycle. Housing being a safe investment that tracks inflation is no longer the case. Real estate is now like a hot stock with big leverage behind it. When things are good, it can be very good. When things go bad, they can turn quickly. And for most people, the challenge in the last housing bust was simply making the mortgage payment. Recessions tend to expose those who are over leveraged in debt.

People seem to think this hot market is because of the current administration which is hard to believe. Timothy Geithner set the markets on fire in 2009 with QE:



Quantitative Easing essentially reversed the market and we have yet to look back since 2009. But this happened nearly a decade ago which is hard to believe. Yet to think all of this euphoria is happening because of current policy is incorrect. And clearly anyone in power is going to leverage positive factors to their side, regardless of party affiliation. But one things is clear and that is things are looking frothy across multiple asset classes.

The housing market is deep into a FOMO stage. There is a deep seated fear now that people will miss out: That $700,000 crap shack will be $1 million. Bitcoin will be $30,000. The Dow will hit 30,000. Everything seems to be going up yet the homeownership rate is stagnant and housing inventory is in the dumps.

The continued drought in inventory means that people will be bidding up crap shacks. The typical home in the US costs $206,000. The typical L.A. home is $632,000. It’ll be interesting to see how much more this market can sustain because the bull fever is definitely out:



The VIX Index shows near record low volatility meaning people expect the party to go on forever. The index nearly looks as low as housing inventory.

Did You Enjoy The Post? Subscribe to Dr. Housing Bubble’s Blog to get updated housing commentary, analysis, and information.


http://www.doctorhousingbubble.com/housing-inventory-2018-us-and-los-angeles-homes-for-sale/
 

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The future of California will be with rentals: California’s homeownership rate will remain stagnant for the next decade.


While indicators of the economy seem to be doing well, the homeownership rate in California is telling a different story. The unemployment rate looks healthy, the stock market is still very high even with the recent correction, and people seem to be spending beyond their means once again with credit card debt solidly above $1 trillion. Euphoria is oozing out of Taco Tuesday baby boomer beer guts and the saliva is dripping when they pull up their Zestimates on Zillow. Yet somehow, the homeownership rate remains stagnant. Millennials are living at home in record numbers especially in California. The recovery started in 2009 almost a decade ago yet people aren’t out buying homes in droves (yet inventory is pathetically low). The future of California will be with rentals.


Rentals will dominate the future

I know it is hard to believe but rentals will dominate the future of California. Many of the larger construction projects coming online today cater to multi-family units. In other words, apartments. You have older home owners selling properties in a very low supply market. So of course, even a turd of a house will look desirable to house lusting buyers. The crap shacks that come across my email box are laughable. At this point with such low inventory, home buyers have beer goggles when looking at properties and are willing to buy anything just so they can get in. Yet the future is with rentals:



The homeownership rate in California remains near generational lows. Take a look at the following chart:



Between 1991 and 2009 most building permits were for detached homes. This was your single family building craze. But starting from 2009, most of the building permits taken out have come in the form of multi-family units largely for apartments. Builders realize that future demand is going to be in the form of renting.

Millennials and Generation Y also have an increasing tendency towards renting rather than owning. Of course older generations think that everyone is like them and that at some point, they are going to get the McMansion bug. But guess what? Generations are different. Smaller families, later marriages, and less job security are creating a very different generation. And the rental trend is showing this as well.

So it actually comes as no surprise that those that want to walk in the shoes of the older generations now have to compete for single family homes in a very low supply market. Here is what $500,000 gets you in Santa Ana:



2518 W Stanford St,

Santa Ana, CA 92704

4 beds 2 baths 1,024 sqft

How are the schools in the area?



And this is for $490,000 and you get bars on your windows. And Millennials in California are more prone to living at home:



“(OC Register) Brown’s father, Greg, understands the economic forces keeping his daughter and his 25-year-old son under his roof. He also says it’s different, today, than what he experienced at the same age. After Greg Brown graduated high school, in 1980, he moved briskly through the typical young-adult milestones — finishing college and earning a master’s degree and marrying his wife by his mid-20s. Today, he’s a real estate contract manager.

The elder Brown said he’d like to see his kids move out, but doesn’t want to rush them out the door without a career and proper financial footing.

“Our expectations for our kids are probably in line with what we were expected to do,” Greg Brown said. “But we understand, for several reasons, for some millennials, it’s gonna take a bit longer. In some cases maybe a lot longer.”

This time it is different. The fact that the homeownership rate is stagnant speaks volumes and builders are catering to the demand of renters. The future of California and new household creation looks to lean to renters.

Did You Enjoy The Post? Subscribe to Dr. Housing Bubble’s Blog to get updated housing commentary, analysis, and information.


http://www.doctorhousingbubble.com/...-with-renters-and-rental-household-formation/
 

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The future of California will be with rentals: California’s homeownership rate will remain stagnant for the next decade.


While indicators of the economy seem to be doing well, the homeownership rate in California is telling a different story. The unemployment rate looks healthy, the stock market is still very high even with the recent correction, and people seem to be spending beyond their means once again with credit card debt solidly above $1 trillion. Euphoria is oozing out of Taco Tuesday baby boomer beer guts and the saliva is dripping when they pull up their Zestimates on Zillow. Yet somehow, the homeownership rate remains stagnant. Millennials are living at home in record numbers especially in California. The recovery started in 2009 almost a decade ago yet people aren’t out buying homes in droves (yet inventory is pathetically low). The future of California will be with rentals.


Rentals will dominate the future

I know it is hard to believe but rentals will dominate the future of California. Many of the larger construction projects coming online today cater to multi-family units. In other words, apartments. You have older home owners selling properties in a very low supply market. So of course, even a turd of a house will look desirable to house lusting buyers. The crap shacks that come across my email box are laughable. At this point with such low inventory, home buyers have beer goggles when looking at properties and are willing to buy anything just so they can get in. Yet the future is with rentals:



The homeownership rate in California remains near generational lows. Take a look at the following chart:



Between 1991 and 2009 most building permits were for detached homes. This was your single family building craze. But starting from 2009, most of the building permits taken out have come in the form of multi-family units largely for apartments. Builders realize that future demand is going to be in the form of renting.

Millennials and Generation Y also have an increasing tendency towards renting rather than owning. Of course older generations think that everyone is like them and that at some point, they are going to get the McMansion bug. But guess what? Generations are different. Smaller families, later marriages, and less job security are creating a very different generation. And the rental trend is showing this as well.

So it actually comes as no surprise that those that want to walk in the shoes of the older generations now have to compete for single family homes in a very low supply market. Here is what $500,000 gets you in Santa Ana:



2518 W Stanford St,

Santa Ana, CA 92704

4 beds 2 baths 1,024 sqft

How are the schools in the area?



And this is for $490,000 and you get bars on your windows. And Millennials in California are more prone to living at home:



“(OC Register) Brown’s father, Greg, understands the economic forces keeping his daughter and his 25-year-old son under his roof. He also says it’s different, today, than what he experienced at the same age. After Greg Brown graduated high school, in 1980, he moved briskly through the typical young-adult milestones — finishing college and earning a master’s degree and marrying his wife by his mid-20s. Today, he’s a real estate contract manager.

The elder Brown said he’d like to see his kids move out, but doesn’t want to rush them out the door without a career and proper financial footing.

“Our expectations for our kids are probably in line with what we were expected to do,” Greg Brown said. “But we understand, for several reasons, for some millennials, it’s gonna take a bit longer. In some cases maybe a lot longer.”

This time it is different. The fact that the homeownership rate is stagnant speaks volumes and builders are catering to the demand of renters. The future of California and new household creation looks to lean to renters.

Did You Enjoy The Post? Subscribe to Dr. Housing Bubble’s Blog to get updated housing commentary, analysis, and information.


http://www.doctorhousingbubble.com/...-with-renters-and-rental-household-formation/
Well, the reality is we can't carpet every inch of land in America so that every family can own their very own 3br, 2 bath stand alone house on .75 acres.
 

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FWIW (DYODD)

REALIST NEWS - Existing Home Sales Extend Plunge, Biggest Annual Drop Since 2014
jsnip4


Published on Feb 22, 2018
Article: https://www.zerohedge.com/news/2018-0...
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Crypto Songs! https://www.youtube.com/c/cryptokaraoke
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Where do I buy Silver from?
https://sdbullion.com/jsnip4

http://www.jmbullion.com/?utm_source=...

http://www.realistnews.net
 

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Can't Buy A Home? - That's The Idea And This Is Why - The David Icke Dot-Connector Videocast
David Icke


Published on Feb 23, 2018
 

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Median home price in San Francisco hits $1.42 million: A standard condo in San Francisco is now selling for $1.15 million.


San Francisco housing has entered into a new reality. Tech money and foreign cash continues to flood the market and pushing prices to astronomical levels. The typical San Francisco crap shack now will cost you $1.42 million, a new record high with condos going for $1.15 million. The city is entering into escape velocity of gentrification. You have older Taco Tuesday baby boomers with rudimentary tech knowledge that bought decades ago living next to a new generation of wealth and tech savvy professionals. You see this as well in Los Angeles. Some real estate “experts” barely have a working understanding of tech but definitely know how to navigate to Zillow to view their inflated prices. San Francisco is such an odd case study. A city that outwardly states it supports the poor but when you look at prices even making $100,000 a year makes you part of a new high income poor – at that income level a sizable amount of your net income is going to go to simply paying for housing unless you want to be part of the mega commuting culture that is now emerging in California. What is going on in San Francisco?


The new ultra rich in San Francisco

It is hard for people to wrap their minds around the cost of housing in a place like California. Not so much that it is expensive, but once you look at the property and price you realize people are paying high prices for crap shacks.

Take a look at prices in San Francisco:



And people are still active and buying. You’ll notice that prices for the U.S. and California overall are merely back to their previous peak price points. Adjusting for inflation, things are moving along more carefully. In San Francisco, we are in a different dimension.

You have foreign money flooding the market and you also have dual income high tech households trying to buy up what little inventory exists. This new class of wealth would rather live in a million dollar dump than spend horrendous hours in a commute. The new sign of status is living near your work, not a McMansion out in the middle of nowhere.

And properties are moving along nicely in San Francisco even at a median price of $1.42 million:



What is telling is that the media is now in unison championing why real estate is a great buy, even at these prices. Forget about the multitude of factors that now face our economy including jobs that don’t last for a lifetime or the necessity for mobility with the new workforce. You have the Taco Tuesday baby boomer mentality where people want to stay put forever and assume everyone is going to follow in their same footsteps. Apple wasn’t built following the old. Facebook wasn’t built by following the old. Tesla wasn’t built by following the old. This generation is different and their need in housing are reflecting a changing tone.

Beyond the obvious, even at $1.42 million most are not going to have the money to buy these properties. So what does this do to the current market? What does it do to neighborhoods? Or how about the local school systems?

I think people just assume that high prices are always going to be part of the equation in California. But recent history shows that we go in booms and busts. For those that seem to think the market can only go up they should be out in the market buying real estate. That is their position. For those renting, you are already taking a position. And many parts of the state are becoming renting majority counties.

San Francisco real estate continues to go up. Who is buying right now? Funny how those buying real estate at these levels don’t see it as speculation but think stocks or crypto are “crazy” – everyone picks their “investment” product and the market seems frothy across all areas.

Did You Enjoy The Post? Subscribe to Dr. Housing Bubble’s Blog to get updated housing commentary, analysis, and information.


http://www.doctorhousingbubble.com/...e-price-and-condo-prices-new-high-ultra-rich/
 

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Californians fed up with housing costs and taxes are fleeing state in big numbers
  • More Californians are moving from the Golden State, particularly lower-income residents, although even middle-class residents are saying goodbye.
  • The trend is a symptom of the state's housing crunch and, for some, high taxes.
  • Census Bureau data show California lost just over 138,000 people to domestic migration in the 12 months ended in July 2017.
  • Lower-cost states such as Arizona, Texas and Nevada are popular destinations for relocating Californians.
https://www.cnbc.com/2018/03/19/cal...ousing-costs-and-taxes-are-fleeing-state.html
 

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Total value of U.S. homes is $31.8 trillion – Los Angeles homes now valued at $2.7 trillion, the size of the U.K. economy. Chinese home buyers in the U.S.


Housing values in the U.S. have reached a new peak. In total, U.S. homes are valued around $31.8 trillion according to Zillow. That is 1.5 times the GDP of the U.S. and close to three times the GDP of China. Crap shacks in Los Angeles are now worth $2.7 trillion, which is more than the United Kingdom’s GDP. What is very telling is that real estate values across the country in virtually every large metro area are near peak values. In places like San Francisco, they are in a new stratosphere. The allure of real estate is now fully engulfing the nation and flipping rates are at decade highs. People want to get a piece of the action. You also have many ex-pats now taking their money abroad and retiring in more affordable countries where they can stretch those Taco Tuesday dollars while money from China is flowing the other way and boosting prices in some areas dramatically.

The housing market is peaking again
Money from China is rushing back into the U.S. via real estate purchases, businesses being bought out, and overall investment. So it is no surprise that hints of trade war will send the stock market into a dive.
Here is the growth of real estate values in the U.S.

Source: Zillow

Home values are once again near a peak. And this growth has occurred in nearly all metro areas. Yet money from abroad is flooding the market:


Those that live in places like San Francisco or even parts of SoCal understand the power of this money on local real estate values. It is very clear that buyers from China are buying in prime areas. Taco Tuesday baby boomers like to believe their crap shack in a marginal area is suddenly going to be worth $1 million but alas, that is not the case. In some areas however $1 million will get you a tiny box as zip code chasers are out in mass in this market.

The question becomes, are prices inflated? Bubbles are hard to spot but it is clear that real estate is now a boom and bust industry. There was a time when real estate was a boring hedge that barely kept pace with inflation. Now, the amount of house horny euphoria courtesy of HGTV shows and infomercial math is making the public delusional on home prices yet again.

25 percent of homes in SoCal are still being bought with all cash:


Compare this to nearly 10 to 15 percent in more “calm” times but of course this is anything but calm.

Sales volume continues to be low because home builders are not building new homes since they know that broke Millennials are looking for rentals, not single family homes. High income households and foreign money in some markets is all that is needed to keep prices inflated on low inventory. But that doesn’t really explain why places in marginal areas are priced so high. These are the markets to monitor when the inevitable correction arrives because there is always a price to pay for a party (the hangover).

While real estate values nationwide hit a peak, sales volume continues to be weak. The homeownership rate continues to trend near generational lows. And foreign money flooding into the market is at record levels. But at least we have social media to distract us and once again people are flocking to housing cheerleaders like moths to a light. This always ends well.

Did You Enjoy The Post? Subscribe to Dr. Housing Bubble’s Blog to get updated housing commentary, analysis, and information.


http://www.doctorhousingbubble.com/total-value-of-us-real-estate-housing/
 

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High cost of living driving residents out of San Francisco
RT America



Published on Mar 27, 2018
The rising cost of living is driving residents out of San Francisco, California. San Francisco has lost more residents in the last quarter of 2017 than any other city in the US. RT America’s Natasha Sweatte has more.
 

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From Sept 2017...............

Making It | What It Costs To Live In San Francisco
VICE News



Published on Sep 11, 2017
Perennially perched at or near the top of lists of America’s most expensive and affluent cities, San Francisco is increasingly out of reach for people who would be card-carrying members of the American middle class elsewhere. VICE Money spent a day with a state university professor to see how her family of four deals with the city’s high cost of living.
 

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This Is How Crazy San Francisco’s "Feverish" Housing Boom Really Is


by Tyler Durden
Thu, 04/05/2018 - 10:19




In San Francisco, a boom is always associated with its essential - and subsequent counterpart - the bust. They’re as typical to the city as sun and fog. And currently, judging by the insatiable appetite of homebuyers in the city's red-hot real estate market who appear completely unfazed stock-market volatility, tax-law changes, and tech sector gyrations, the city is in one heck of a housing boom, perhaps the biggest one ever, and national indices don’t do justice to how over-the-top mind-blowing crazy the situation has gotten.

Take for example, the S&P/Case-Shiller Home price index which covers not just the city (or county) of San Francisco but includes four other Bay Area counties: Alameda, Contra Costa, Marin, and San Mateo. There are more counties in the Bay Area, but they’re not included in the index. In terms of home prices, the five-county Case-Shiller index for “San Francisco,” though showing a significant, double digit annual gain of just over 10%, waters down the insanity happening every day on the streets of San Francisco.

To get a far more accurate, and granular neighborhood-by-neighborhood data for San Francisco itself, we go to Paragon Real Estate Group’s March-April 2018 report, and what we find are vertigo-inducing price increases that have now beautifully spiked.

During the prior nationwide housing bubble that blew up with such fanfare, helped take down the world financial system, and caused central banks and governments to instigate the largest bail-out schemes the world has ever seen – from banks to entire countries – well, during that bubble, while it was still going on, homes in San Francisco reached what afterward were called totally crazy valuations, with the median price topping out in November 2007 at a mind-boggling $895,000. People were shaking their heads at the time. But after the boom came the inevitable bust. By January 2012, the median home price had plunged 31% to $615,000.

By then, however, the tsunami of money that global central bankers had unleashed was already washing over San Francisco from multiple directions: a stock-market and startup boom that the city is so dependent on, a tourist boom from around the world, wave after wave of Chinese, Russian and Petro-oligarchs desperate to park their ill-gotten cash in real estate, and of course, the veritable flood of nearly free funding. Everything came perfectly together. Then, over the course of just a little over three years, the median home price about doubled to $1,225,000, and we duly noted the unprecedented surge in prices back in the spring of 2015.

It turns out, that was just the start, because according to the latest Paragon report, the median sale price of a house in the city has since soared to a record $1.6 million in the first quarter, a 24% jump from a year earlier, and more than double the annual price increase reported by Case-Shiller. Q1 also rose above the previous high set in the fourth quarter of 2017 by $100,000.

This is what a real boom looks like.




As the report's authors observe, prices in the city have been soaring for several years, as “feverish” demand far outstrips supply. Putting the recent price explosion in context, the median home price is now 80% above the prior-bubble completely mind-boggling median price that afterwards everyone admitted had been based on totally crazy valuations. Surely, this time is be different?




When compared to either California or the US, San Francisco houses and condos are in a world of their own: the median SF house sales price in 2017 was $1,420,000 (up from $1,325,000 in 2016), and for condos, it was $1,150,000 (up from $1,095,000). Looking just at the 4th quarter, median prices were $1,500,000 for houses (up from $1,350,000 in Q4 2016) and $1,185,000 for condos (up from $1,078,000) respectively.



On a neighborhood-by-neighborhood basis, the differences in median home prices are enormous. In the table below, the median house prices range from $960,000 in Bayview, one of the more troubled neighborhoods, to over $5 million in Pacific Heights. It is in this exclusive, gorgeous, and groomed neighborhood, endowed with breathtaking views of the Bay, where you find the humble abode of the champion of the poor, former Speaker of the House Nancy Pelosi.



How much bigger can this bubble get?

As the report's authors write, "it is still very early in the year to come to definitive conclusions about where the year is going, but right now, in most market segments, buyer demand is competing ferociously for a limited supply of listings. Indeed, by some standard statistical measures of supply and demand - days on market, months supply of inventory, absorption rate - the SF market is about as heated now as it has been at any time in the past 10 years. This is especially true in the more affordable home segments, and particularly for house listings."

The situation is somewhat more complicated in the highest price ranges, especially in the luxury condo segment where supply has been rapidly increasing. Of course, whatever the property type or price segment, it all ultimately depends on the specific property, and its location, appeal, preparation, marketing and pricing, although if there is a place where the bubble will pop, it will be in the ultra luxury segment, where the supply is off the charts:



The rest of the market, however, remains incredibly tight: only about 2% of house owners are putting their homes on the market each year, which is incredibly low by historical measures - and why should they? For many owners, the house doubles as a real-estate piggy bank where funds are parked for the indefinite future. Meanwhile, about 5% of condo owners sell their homes each year, plus the new-construction condos that come on the market. This dynamic has made houses into the scarce commodity, and has fueled dramatic house price appreciation.

Looking at the charts above, one thing is clear: the dynamics of the housing market in San Francisco have put the 2005-2007 bubble to shame - what is taking place is unprecedented, much the same as parallel events in capital markets. However, just like in the stock market, so among San Francisco housing what the catalyst will be that punctures this appreciation utopia, is still very much unknown.


https://www.zerohedge.com/news/2018-04-04/how-crazy-san-franciscos-feverish-housing-boom-really
 

Thecrensh

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This Is How Crazy San Francisco’s "Feverish" Housing Boom Really Is


by Tyler Durden
Thu, 04/05/2018 - 10:19




In San Francisco, a boom is always associated with its essential - and subsequent counterpart - the bust. They’re as typical to the city as sun and fog. And currently, judging by the insatiable appetite of homebuyers in the city's red-hot real estate market who appear completely unfazed stock-market volatility, tax-law changes, and tech sector gyrations, the city is in one heck of a housing boom, perhaps the biggest one ever, and national indices don’t do justice to how over-the-top mind-blowing crazy the situation has gotten.

Take for example, the S&P/Case-Shiller Home price index which covers not just the city (or county) of San Francisco but includes four other Bay Area counties: Alameda, Contra Costa, Marin, and San Mateo. There are more counties in the Bay Area, but they’re not included in the index. In terms of home prices, the five-county Case-Shiller index for “San Francisco,” though showing a significant, double digit annual gain of just over 10%, waters down the insanity happening every day on the streets of San Francisco.

To get a far more accurate, and granular neighborhood-by-neighborhood data for San Francisco itself, we go to Paragon Real Estate Group’s March-April 2018 report, and what we find are vertigo-inducing price increases that have now beautifully spiked.

During the prior nationwide housing bubble that blew up with such fanfare, helped take down the world financial system, and caused central banks and governments to instigate the largest bail-out schemes the world has ever seen – from banks to entire countries – well, during that bubble, while it was still going on, homes in San Francisco reached what afterward were called totally crazy valuations, with the median price topping out in November 2007 at a mind-boggling $895,000. People were shaking their heads at the time. But after the boom came the inevitable bust. By January 2012, the median home price had plunged 31% to $615,000.

By then, however, the tsunami of money that global central bankers had unleashed was already washing over San Francisco from multiple directions: a stock-market and startup boom that the city is so dependent on, a tourist boom from around the world, wave after wave of Chinese, Russian and Petro-oligarchs desperate to park their ill-gotten cash in real estate, and of course, the veritable flood of nearly free funding. Everything came perfectly together. Then, over the course of just a little over three years, the median home price about doubled to $1,225,000, and we duly noted the unprecedented surge in prices back in the spring of 2015.

It turns out, that was just the start, because according to the latest Paragon report, the median sale price of a house in the city has since soared to a record $1.6 million in the first quarter, a 24% jump from a year earlier, and more than double the annual price increase reported by Case-Shiller. Q1 also rose above the previous high set in the fourth quarter of 2017 by $100,000.

This is what a real boom looks like.




As the report's authors observe, prices in the city have been soaring for several years, as “feverish” demand far outstrips supply. Putting the recent price explosion in context, the median home price is now 80% above the prior-bubble completely mind-boggling median price that afterwards everyone admitted had been based on totally crazy valuations. Surely, this time is be different?




When compared to either California or the US, San Francisco houses and condos are in a world of their own: the median SF house sales price in 2017 was $1,420,000 (up from $1,325,000 in 2016), and for condos, it was $1,150,000 (up from $1,095,000). Looking just at the 4th quarter, median prices were $1,500,000 for houses (up from $1,350,000 in Q4 2016) and $1,185,000 for condos (up from $1,078,000) respectively.



On a neighborhood-by-neighborhood basis, the differences in median home prices are enormous. In the table below, the median house prices range from $960,000 in Bayview, one of the more troubled neighborhoods, to over $5 million in Pacific Heights. It is in this exclusive, gorgeous, and groomed neighborhood, endowed with breathtaking views of the Bay, where you find the humble abode of the champion of the poor, former Speaker of the House Nancy Pelosi.



How much bigger can this bubble get?

As the report's authors write, "it is still very early in the year to come to definitive conclusions about where the year is going, but right now, in most market segments, buyer demand is competing ferociously for a limited supply of listings. Indeed, by some standard statistical measures of supply and demand - days on market, months supply of inventory, absorption rate - the SF market is about as heated now as it has been at any time in the past 10 years. This is especially true in the more affordable home segments, and particularly for house listings."

The situation is somewhat more complicated in the highest price ranges, especially in the luxury condo segment where supply has been rapidly increasing. Of course, whatever the property type or price segment, it all ultimately depends on the specific property, and its location, appeal, preparation, marketing and pricing, although if there is a place where the bubble will pop, it will be in the ultra luxury segment, where the supply is off the charts:



The rest of the market, however, remains incredibly tight: only about 2% of house owners are putting their homes on the market each year, which is incredibly low by historical measures - and why should they? For many owners, the house doubles as a real-estate piggy bank where funds are parked for the indefinite future. Meanwhile, about 5% of condo owners sell their homes each year, plus the new-construction condos that come on the market. This dynamic has made houses into the scarce commodity, and has fueled dramatic house price appreciation.

Looking at the charts above, one thing is clear: the dynamics of the housing market in San Francisco have put the 2005-2007 bubble to shame - what is taking place is unprecedented, much the same as parallel events in capital markets. However, just like in the stock market, so among San Francisco housing what the catalyst will be that punctures this appreciation utopia, is still very much unknown.


https://www.zerohedge.com/news/2018-04-04/how-crazy-san-franciscos-feverish-housing-boom-really
I would be tempted to sell and get the hell out of there. You can live well on $1.6M (minus closing costs and commission).
 

searcher

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Los Angeles approves plan to pay property owners to build houses or renovate garages in their backyards for homeless people to live in

  • Los Angeles County will pay people to build a home in their backyard in which a homeless person can live and pay rent
  • The homes, dubbed 'granny flats' or 'in-law' units could help cut down on the homeless epidemic in the county right now
  • Pilot program will pay between $50K and $75K to build a home in each yard
  • Those homeowners would then receive loan forgiveness for the rest of the cost
  • In total the goal is to eventually build 10,000 new apartments, but that could take a long time because each home is projected to cost roughly $350K


Read more: http://www.dailymail.co.uk/news/article-5605739/Los-Angeles-officials-want-pay-property-owners-build-houses-homeless-people-live-in.html#ixzz5CS4wcnnW
Follow us: @MailOnline on Twitter | DailyMail on Facebook
 

lumpOgold

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Condemned house sells for $1.2 million in Fremont

Uninhabitable? So what! We’ll give you $1.23M

HOUSING SHORTAGE
Decrepit home in Fremont described as ‘beyond fixer’ snatched up in days
By Marisa Kendall
mkendall@bayareanewsgroup.com

FREMONT » “Home is condemned. Enter at your own risk.”
Those aren’t words you generally see on a listing for a million-dollar home. But they failed to deter buyers interested in one property in Fremont’s pricey Mission San Jose neighborhood.
The decrepit three-bedroom, two-bath house on Bruce Drive sold late last month for $1.23 million, even though it’s uninhabitable. That seven-figure price tag, for a house described in its Redfin listing as “beyond fixer,” further
highlights the intensity of the housing shortage inflating Bay Area home prices.
Despite the home’s condition, buyers lined up, said listing agent Larry Gallegos of Better

This home in Fremont’s Mission San Jose neighborhood went for more than asking price.
COURTESY OF LARRY GALLEGOS

Uninhabitable? So what! We’ll give you $1.23M
House

Home and Gardens, Reliance Partners. “It was nonstop,” he said. “Nonstop phone calls and emails from the day I put it on the market until the day it went pending. Nonstop from morning ’till night.”
Gallegos received at least three all-cash offers for the home, which was on the market for about a week. He requested cash offers, he said, because lenders typically won’t put up funds for a house in such poor condition.
The house ended up selling for about a quarter- million dollars over its asking price.
Gallegos described the home, which had sat vacant for years, as “totally unlivable.” Water came in through holes in the roof, and mildew covered the ceilings, he said. But that didn’t matter to prospective buyers, who hoped to tear down the house and build their dream home on the roughly 9,400 squarefoot lot.
“They didn’t buy the house,” Gallegos said. “They bought the dirt.”
Watching a condemned home sell for more than $1 million is the new Bay Area normal, said Nancie Allen, president-elect of the Bay East Association of Realtors.
“If you’re not used to seeing this all the time, then it’s shocking to you,” she said. “But this is not shocking to me.”
Last week the owner of a burned-out house in San Jose’s Willow Glen neighborhood listed the property for $800,000. Holly Barr, the realtor selling that house, said the price is standard for the desirable location.
Similarly, the Mission San Jose neighborhood, where the condemned house sold last month, has long been one of Fremont’s priciest, partly because of its high-quality schools, Allen said.
But 64-year-old Gallegos, who has lived in Fremont most of his life, remembers when it was an affordable city.
“My father’s first house in Fremont cost $13,000,” he said. “Times have changed.”
The median sales price for a single-family home in Fremont was nearly $1.3 million last month, according to the Bay East Association of Realtors. And prices have been climbing all over the Bay Area.
The median value of a home in San Jose is $1.1 million, according to Zillow.
It’s $1.3 million in San Francisco, and $755,600 in Oakland.
“Because there’s such low inventory on the market,” Allen said, “people are getting into whatever they can.”Contact Marisa Kendall at 408-920-5009.
1523995486685.png

Tuesday, 04/17/2018 Pag.A01Copyright (c)2018 The Mercury News, Edition. Please review new arbitration language here. 4/17/2018
 

lumpOgold

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Update on the burned out house for sale in the Bay Area.

Burned shell of a home sells for more than $900,000 in San Jose
SAN JOSE — The fire-ravaged house that caused a stir with its high price tag last week has sold for more than $900,000 — at least $100,000 over its asking price.

The burned-out shell of a home on Bird Avenue in San Jose’s Willow Glen neighborhood went on the market Thursday for $799,000 and the listing quickly made the rounds on social media, with many surprised that the unlivable home could demand such a high price. But potential buyers were hardly shocked, and swooped in on the property. After less than a week on the market, it has a new owner.

“People want to live in a great neighborhood,” said listing agent Holly Barr of the Sereno Group, who previously said she expected whoever bought the house to tear it down and build their dream home on the lot.

It’s not the first time a decrepit house has sold for top dollar in the Bay Area’s super-charged housing market. A condemned home in Fremont sold for $1.2 million late last month.

The heavily fire-damaged home on Bird Avenue in San Jose, which sold for more than $900,000, is shown before the fire. (Photo from Google Maps) (Photo from Google Maps)
The Bird Avenue sale is pending, and should close in about 10 days, Barr said. She said she could not reveal the exact price the house fetched until the sale is final.

There was no lack of interest in the property. Barr received six offers — all higher than the asking price, and all cash.

sjm-l-birdave-0413-1.jpg

The 1,066 square-foot home, which was all but destroyed in a fire two years ago, sits on a valuable 5,850-square-foot lot in a prime location a mile from the area where Google plans to build a new campus. Several houses on that street recently sold for $1.6 million.


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