Friday, February 29, 2008

Open Thread

By request. Post whatever you want (just keep it clean and relevant). Let the graphic be your inspiration.

24 Comments:

Blogger Tom said...

"Having a roof over your head when it rains is overrated!"

Feb 29, 2008, 11:28:00 PM  
Blogger bob said...

Well, let's see. Where do I start. I suppose for me, the whole issue of housing in California has been a point of contention, irritation, anger, frustration, and now- a sort of slight smug feeling of self-gratification.

It's interesting. I moved out here from TN eight years ago. Back there, homes were just that. Homes. The plumber down the street and the lawyer owned homes. Perhaps some homes would be poked fun of for having junk in the front yard- like the classic epitome of Southern yard decoration- cars up on blocks. But housing didn't seem to be much of an issue for much of anyone. If you were poor, you lived in a small house. If you were rich, a large one.

My introduction to California was at the end of the dot-com. Back then, rent was insane. Me and 4 other people rented a tiny little condo for $2,500 a month. Back then I was making $8 an hour, so just paying rent was hard enough. The idea of owning a home was totally out of the question and it didn't cross my mind. $250k for a house? Were they crazy?

After a few years I gradually got better and better jobs. I met my future wife. She also got better jobs after climbing the same bottom of the barrel scraping type jobs as I did. We eventually made a solid six figure income. It was the that the idea of owning a home was becoming intriguing to me. But using a simple mortgage calculator, I could clearly see that even a modest home would drain most of our income and place us in a situation where if either one of lost our job, we would basically lose the home.

It was then that I wondered WTF was going on. I knew people making less than me who were buying 800k homes. But how? Early in the game, I called a mortgage company. I was told about ARM and IO loans. I had never heard of these. After some research, I could see that these were merely products that bought time. A co-worker of mine who had bought the same year told me his reasoning which was as follows: " If you buy now and use an IO or ARM loan, you will probably be making more in 5 years and also be able to refinance your home into another loan." This sounded absolutely crazy to me. The idea of gambling on something as important as a house... just to be able to afford the still high payments.

It was at that time that I fully decided that Housing here was absolutely wrong and that the factors fueling it were also wrong. I found that many others felt the same way, and it was then that I discovered literally hundreds of blogs, like this one, that were all basically saying the same thing: housing was overpriced and the machine to fuel it was horribly flawed.

I was horribly bitter about the whole thing. The Bay Area seemed to be full of really smug, super self-righteous hippies, hipsters, and so forth. All who thought that regardless the fact that economic law was being violated, the area was completely impervious to the effects of denying fundamentals.

After a few years, I began entertaining the idea of moving elsewhere, saving my income, living a dirt-cheap life of frugality, and simply leave eventually-enough money in hand to buy a home elsewhere, with some leftover for retirement. But after some research, I could see that the bubble was nation-wide. With my then well-tuned awareness that the bubble's pop would likely wreak havoc on the economy, I had to consider what this would do to areas that though cheaper than CA, would also likely suffer from the fallout and what that meant for me and my wife.

Then came the inevitable.The collapse. For the first 2-3 months, the fall was most rewarding. But as the economic news began filing in, the full impact of the bust was far worse than I could have ever imagined.

So now I'm feeling better these days. Clearly we made the right choice. We stayed out of the mess, saved, and will probably be fine. But what this will do to the country, the economy, and our livlihoods is still in question.I wonder if the country we will one day finally buy a part of will be the same once the dust settles.

In summary, this has been a long, interesting, and dramatic story. We will see how it ends up and where I and my wife will eventually end up- whether we stay here or move on someplace else new.

thanks for letting me rant.

Feb 29, 2008, 11:55:00 PM  
Blogger mountainwatcher said...

Hey Marinite,

Thanks for the open thread.

Thanks to Bob for shining a laser beam on the truth of this situation.

I shared his distrust of the mortgage deals being offered at the time and decided to wait for some sanity.

I wanted to be a responsible adult with financial integrity.
Instead of buying a house, I started putting money away.
Now, my invested money is starting to tank as the RE mess/dollar collapses.

I didn't realize how it was all tied in.

I still want to own a home...... sigh

Mar 1, 2008, 1:57:00 AM  
Blogger California said...

Here's my home buying story in this market.

I moved homes 4 times over 8 years due to a [painful] divorce, job transfer, remarriage & upcoming child, and then sold in Spring 2006 to move into an RV with our kids to travel the country for my husband's work. It was that or be without him for weeks at a time as he did work for a grant.

In that 8 year period, I netted $780,000. I look now and think how the heck this happened.

After over a year in the RV traveling the US, we are sitting in a rental property in CA unwilling to buy until things settle down.

Each home move was for life circumstances, some painful, that required going with the flow, trusting instincts about my life needs at the time (and my family's). Not one of the four moves move held a profit motive as its purpose.

I've learned that when I think something is really bad in my life, it's not necessarily so. And visa versa.

I hold onto hope and faith for our current housing situation and each person/family -- whether they gain or lose in economics or spirit.

Call me crazy.

Mar 1, 2008, 11:23:00 AM  
Blogger marin_explorer said...

Bob,
I share very similar sentiments. Not to be blunt, but I really can't stand the smugness most of all--it's a huge blind spot in terms of its effect on market psychology. All the while "smart investors" make another brilliant move--driving up spot metal prices. One bubble after another, at least until every "genius" is insolvent, lol.

Love that graphic, btw.

Mar 1, 2008, 12:54:00 PM  
Blogger Lisa said...

I wonder how soon sellers wake up to the fact that no one will be left standing to pay anywhere near bubble prices on homes.

Wells Fargo is now requiring 25% down in "declining" markets, which I'm guessing is just about everywhere. Wachovia is at 20%+. B of A is at 10% down.

The first time buyers market here in Marin will be DOA, which means the rest of the food chain will slowly start to dry up as well. Can you imagine a $200K downpayment on your $800K dream doll house in San Anselmo, where I live?? Who has that kind of money saved up?? And who will want to plunk it down on a flat or depreciating asset?

And I love that this is happening at a time when basic expenses (gas, food, healthcare) are going through the roof, making it harder than ever to save anything, let alone a big chunk for a down payment.

Mar 1, 2008, 7:04:00 PM  
Blogger sf jack said...

Re: the graphic

I have chosen to see it as Marinite carrying the weight of responsibility for this blog.

I am thankful for this forum's ability to shine a light of reality on the REIC hype-driven market that is Marin real estate!

Thanks Marinite!

Mar 3, 2008, 11:02:00 AM  
Blogger TH said...

"Thank goodness those nice banks and politicians bailed me out so I can keep my house!"

Mar 3, 2008, 12:55:00 PM  
Blogger bob said...

I witnessed a few more goodies this weekend. First of all, I noticed that recently, it seems like another passel of fresh homes just went up for sale in my neighborhood. The ones that have been for sale have had signs for so long that I've memorized them. Absolutely nothing sold over the winter, so the new homes only add to the already large supply.

People in town are just now starting to murmur that their property values 'might' be going down a bit... but that Alameda being Alameda, the "quality of life" will assure the values to stay high. Dataquick shows otherwise, with a 16.3% decline in value.

I also noticed something interesting. A number of blocks away is a couple that bought a house at the very peak of the bubble, a nice flipper house for some ungodly amount. Both drive brand-spanking new cars, one a top-of-the-line- Mercedes. They have a massive flatscreen TV. I only know because when you drive by at night, you can see the thing from the street. Basically, I figured they must be upper executives or partners at a law firm. Either that or the must have inherited a big chunk of money. The only reason I thought so was that I couldn't imagine anyone stupid enough tom buy a house at what was at the time already a time when everyone knew that prices were about to plunge.

Well... turns out that they're actually realtors. I saw them on the side of the road, putting out "open house" signs. The evil little man inside me very much desires to know just how well these people must be doing now being that the market is completely dead. I wonder...

Anyhow, carry on!

Mar 3, 2008, 2:19:00 PM  
Blogger Bynana.com said...

3Br, 2Ba, 12 sq. ft. Offered at $1.2 Million.

Mar 3, 2008, 2:44:00 PM  
Blogger mountainwatcher said...

I recently noticed that the Shoreline Highway yellow 7-11 house has no for sale sign.

Melissa Bradley was the last sign I saw.

Did somebody buy that thing?

Mar 4, 2008, 12:42:00 AM  
Blogger susan said...

The POS at 368 Shoreline was withdrawn (again). It had been listed at $575K. No takers again.

Mar 4, 2008, 8:06:00 AM  
Blogger susan said...

But 368 Shoreline Hwy was shown in the latest Marin housing brochure in the Bradley section (at $575K). I think it will start seeing action at about $300K - or maybe in the year 2020 if they keep it at $575K.

Mar 4, 2008, 10:04:00 AM  
Blogger marinite2 said...

The owners of "368 Shoreline Hwy" should just "walk away" and admit failure. IMO there is nothing wrong with handing the keys back to the bank as the contract they signed made it clear that the house is collateral for the loan. That is what collateral is for... don't pay the loan, forfeit the collateral.

Mar 4, 2008, 4:28:00 PM  
OpenID marinrealestate said...

Is the Marin Association of Realtors in a state of crisis? Many members think so. What do you think?
About 10 years ago the Marin County Association of Realtors maintained the Multiple Listing Service (MLS/property information) database for Realtors in Marin County. This was prior to the internet becoming such an intricate part of our lives and businesses. At that time the Marin Association of Realtors was worried that Microsoft might attempt to make inroads into our profession, and we relinquished the data we owned and controlled to third parties (which is now Bay Area Real Estate Information Services/BARIES.) I was on the Board of Directors at that time, and protested this action. I felt we were allowing our fears to define us.
When the Marin Association of Realtors (MAR) controlled the MLS the "Code of Ethics" and "Professional Standards" were respected. Why? Because if you conducted your business in an unethical or in a non professional manner you could have your MLS privileges suspended. Now that the MLS is operated by a third party, it appears that there are no mechanisms in place to enforce unethical conduct and unprofessional behavior.
Over the last 10 years we've seen realtors, real estate companies, and VOWs (virtual office websites aka virtual offices without walls) marketing other realtor's listings as if they were the listing broker. Misleading? Confusing? That's just the tip of the iceberg!
In the last ten years we've begun seeing what Steven Colbert on The Colbert Report calls "truthiness" being practiced in Marin County Real Estate advertising. It's not the truth, but some variation that has nothing to do with the truth. You think at first that it might be true, but when you examine it, it has nothing to do with the truth.
How can there be two number one real estate companies in Marin County? How can there be multiple agents claiming to have been the number one agent in Marin. How can local newspapers, and other local publications print conflicting ads depicting two different companies claiming the mantel of being number one, oftentimes in the same publication? Not only is this a disservice to the company that truly is number one, but what kind of disservice is this to the public? You might think that the Real Estate profession would have established clear criteria and standards in this regard...wouldn't you?!
What happened to the Code of Ethics?
If there is a real estate agent, broker, or company in Marin County that is disingenuous, devious, deceptive, and dishonest in their advertising, does it matter? Does this kind of behavior affect other real estate professional's ability to practice real estate fairly in the same environment ? Has "truthiness" become the new professional standard?
Is the Marin Association of Realtors in crisis? As long as these kinds of concerns plague the membership many members believe there's a cancer eating away at the integrity of MAR. It appears that the organization has become ineffective and powerless. The Marin Association of Realtors Board of Directors needs to take a long look at where it's been and where it want's to go. Or continue doing what they're doing and run the risk of becoming an unnecessary entity.

This post was originally emailed to the current President of MAR, last year's President and now a member of the Board of Directors at MAR, and Ed Segal Cheif Operating Officer of MAR on 2/26/2008. On 2/21/2008 the Board of Directors had a meeting. Afterwords, Ed Segal, said the Board would be taking actions to enforce the Code of Ethics and Professional Standards.

The Tiburon Film Festival's program for 2008's back cover has an Ad from a new real estate office in Tiburon claiming to be the Number One Listing Office in Tiburon. The problem is they don't have any listings in Tiburon? Not one listing? I've asked an agent in that office if they could explain this to me on February 28, 2008. They said they could not. One agent said they did have a listing but it's been withdrawn so the owner could refinance. She was visibly upset when I asked her if she could explain the ad. Can anyone explain to me how this company is the Number One Listing Office in Tiburon, and does not have any listings in Tiburon?

Mar 5, 2008, 8:07:00 AM  
OpenID marinrealestate said...

Is the Marin Association of Realtors in a state of crisis? Many members think so. What do you think?
About 10 years ago the Marin County Association of Realtors maintained the Multiple Listing Service (MLS/property information) database for Realtors in Marin County. This was prior to the internet becoming such an intricate part of our lives and businesses. At that time the Marin Association of Realtors was worried that Microsoft might attempt to make inroads into our profession, and we relinquished the data we owned and controlled to third parties (which is now Bay Area Real Estate Information Services/BARIES.) I was on the Board of Directors at that time, and protested this action. I felt we were allowing our fears to define us.
When the Marin Association of Realtors (MAR) controlled the MLS the "Code of Ethics" and "Professional Standards" were respected. Why? Because if you conducted your business in an unethical or in a non professional manner you could have your MLS privileges suspended. Now that the MLS is operated by a third party, it appears that there are no mechanisms in place to enforce unethical conduct and unprofessional behavior.
Over the last 10 years we've seen realtors, real estate companies, and VOWs (virtual office websites aka virtual offices without walls) marketing other realtor's listings as if they were the listing broker. Misleading? Confusing? That's just the tip of the iceberg!
In the last ten years we've begun seeing what Steven Colbert on The Colbert Report calls "truthiness" being practiced in Marin County Real Estate advertising. It's not the truth, but some variation that has nothing to do with the truth. You think at first that it might be true, but when you examine it, it has nothing to do with the truth.
How can there be two number one real estate companies in Marin County? How can there be multiple agents claiming to have been the number one agent in Marin. How can local newspapers, and other local publications print conflicting ads depicting two different companies claiming the mantel of being number one, oftentimes in the same publication? Not only is this a disservice to the company that truly is number one, but what kind of disservice is this to the public? You might think that the Real Estate profession would have established clear criteria and standards in this regard...wouldn't you?!
What happened to the Code of Ethics?
If there is a real estate agent, broker, or company in Marin County that is disingenuous, devious, deceptive, and dishonest in their advertising, does it matter? Does this kind of behavior affect other real estate professional's ability to practice real estate fairly in the same environment ? Has "truthiness" become the new professional standard?
Is the Marin Association of Realtors in crisis? As long as these kinds of concerns plague the membership many members believe there's a cancer eating away at the integrity of MAR. It appears that the organization has become ineffective and powerless. The Marin Association of Realtors Board of Directors needs to take a long look at where it's been and where it want's to go. Or continue doing what they're doing and run the risk of becoming an unnecessary entity.

This post was originally emailed to the current President of MAR, last year's President and now a member of the Board of Directors at MAR, and Ed Segal Cheif Operating Officer of MAR on 2/26/2008. On 2/21/2008 the Board of Directors had a meeting. Afterwords, Ed Segal, said the Board would be taking actions to enforce the Code of Ethics and Professional Standards.

The Tiburon Film Festival's program for 2008's back cover has an Ad from a new real estate office in Tiburon claiming to be the Number One Listing Office in Tiburon. The problem is they don't have any listings in Tiburon? Not one listing? I've asked an agent in that office if they could explain this to me on February 28, 2008. They said they could not. One agent said they did have a listing but it's been withdrawn so the owner could refinance. She was visibly upset when I asked her if she could explain the ad. Can anyone explain to me how this company is the Number One Listing Office in Tiburon, and does not have any listings in Tiburon?

Mar 5, 2008, 8:08:00 AM  
Blogger marinite2 said...

AFAIK, the Marin Association of Realtors is supposed to adhere to Code of Ethics put out by the NAR. You can find the The Code here:

http://tinyurl.com/2etnqp

Mar 5, 2008, 9:54:00 AM  
Blogger susan said...

marinrealestate - you make some excellent points. What has happened to truth and integrity? I checked out the Tiburon Film Festival program and saw the full backpage ad for Melissa Bradley realty claiming to be the #1 listing office for Tiburon. I think they have a listing in Belvedere but none in Tiburon. If this makes them #1, I'd hate to be #2 or #3 or #4. Actually, if I were the true #1 (which is probably Frank Allen or Pac Union) I would be pissed.

Now, just as with all the books that claim to be #1 bestsellers, I think most people take such claims with a big grain of salt. But you are right, this is real estate, this is important to the public - and there should be ethics and standards. Let's face it, most people hold realtors in very low regard - and lying and stretching the truth doesn't help. Maybe Bradley meant to say that they are the #1 listing office for properties located at 368 Shoreline Highway.

Mar 5, 2008, 12:09:00 PM  
Blogger mountainwatcher said...

This comment has been removed by the author.

Mar 6, 2008, 12:56:00 AM  
Blogger Max said...

Market Anlysis: In the past 6 days San Anselmo alone has put almost $18 MILLION dollars of housing on the market (roughly 7 homes).

Mar 6, 2008, 9:04:00 AM  
Blogger bob said...

Something I think we might need a discussion about is what we as people who waited for the bubble to subside are going to do now for the future in regards to buying a home.

I've only recently begun to think about this myself since previous to that, the bubble sort of took over and made the concept of home buying totally foreign to me.

Of course I tend to see home prices in the Bay Area as being far too expensive still for me to be interested. A level that I would feel comfortable would be say-300-400k Max, which I think is reasonable considering what prices were prior to the boom, which was lower than that number. As it stands now, most homes that I'm interested in are still upwards of 600k, which means prices still have a long ways to go downward. That could mean several more years of waiting, which I'm not exactly unhappy with since the house I rent is actually nicer than many of those 600k homes and still costs 1/3rd to rent versus own.

But here we are today, another brutal day on Wall Street, with more and more banks, lenders, and financial corporations reporting massive losses and so on. While I think it's safe to say that many of us actually give each other high-fives on days like these since we are partially correct to assume that a troubled economy helps crash housing prices faster and further, I'm starting to be more concerned about what lies ahead for people even like myself who've saved up money for years now.

As mentioned on this blog, Wells Fargo now requires 20% down for a home purchase. Given the still high prices in the Bay Area, that means anywhere from a 150-200k down payment. In my case as I now stand financially, I have just about enough for a down payment, but then again, it would literally clean me out of savings and leave me within a situation where I would have zero fallback money in case I lose my job, or something along those lines.

In other words, even with home sales slumping, prices falling, and so forth, I get a bad feeling that high prices are going to be replaced with very high buying requirements. This is great for helping return the market to a sound footing, but it also beings back the big question in my mind of whether a house here is actually worth that much pain and effort.

Secondly, as I've mentioned a few times, I've been considering the notion of moving out of state. The plan had been to buy somewhere like Nashville, Atlanta, Memphis, or Raleigh, put down a 50% down payment on a 120-150k house, and work freelance or at small jobs since the payments would be fairly minimal.

With banks requiring proof of jobs and income, I kind of wonder if that now means that a move to someplace cheaper might mean that I will now have to buy the whole freakin' house with cash since banks will want to see some sort of high-paying job when in fact my security would have been in the form of leftover cash and savings from my California career.

Anyhow, these are strange days. Sort of scary, self-gratifying, and to say the least- adventuresome.

Mar 6, 2008, 1:53:00 PM  
Blogger Daddy said...

Would you please consider to make a permanent Web Forum on your site where people can discuss your Blog Posts in Threaded organization?

Just try to keep those pesky Real Estate agents from posting BS, but then I bet they would be too scared to post on your Forums. I would love to find a web forum where one could discuss Real Estate matters in Marin.

Comments in Blogs have their purpose, but web forums are sometimes better medium for discussion.

Mar 6, 2008, 3:37:00 PM  
Blogger Matthew said...

As far as I'm concerned, one should not use Realtor and ethical behavior in the same sentence.. they're all full of s ___, and Marin is worse than most places.. They're like a mob family and will do anything for a buck with all the brokers servings as the underbosses for the godfathers at the CAR and NAR..

Mar 7, 2008, 6:07:00 AM  
Blogger marinite2 said...

I am in the process of creating a forum. I will let you all know the url when I am satisfied with it.

Bob,

Your concerns are well justified. Basically I see it this way: In overpriced areas like Marin and the Bay Area at large, it is becoming more and more the case that people who bought fairly recently are becomming more and more trapped in their overpriced houses as few are willing and/or able to pay the sellers' break-even or greater price. That means these trapped sellers will either have to "mail in the keys", or wait many, many years to sell. The people who can afford to sell in the current conditions are people who bought 10 or so more years ago (and who didn't HELOC out the majority of their equity; if they did, they are trapped too).

Today on NPR I heard a discussion about the "woeful" budget crisis in California. Lots of sad, sorry comments about what programs are to be cut etc. Lots of discussion about why we are in this mess but not one person mentioned the real problem that caused all this: lack of housing affordability in CA. That is why slightly lower mortgage interest rates due to increasing GSE limits ultimately won't make any difference because this is not an interest rate/"affordability product" problem, it is an affordability problem. But getting back to the NPR show, everyone was trying to blame bankers, wall street, etc. But no one mentioned the true culprit, people, in aggregate, abandoning all reason and paying stupid prices for houses.

Ultimately, at the end of the day, if you are one of the people who bought a house for an inflated price in the last few years or who sold a house at an inflated price in the last few years, you were part of the problem. I know all about how capitalism works. But at the end of the day at some point you, as a buyer, realized that prices were just plain stupid but you didn't say "no" (readers of this blog excepted of course); instead you said "yes" and bought the place. Why? Because you expected it to further increase in value.

Well guess what? Your Cali POS is, in general, not gaining in value now (unless, maybe, yours is one in the luxury market or has something very special going for it). So buyers today who might have otherwise thought like you will see your stupid asking price and instead of saying "yes" will say "no" because they do not expect it to gain in value over the next few years.

First time Marin buyers from our "feeder" communities in the Bay Area are not buying. That means bottom rung sellers in Marin can't move up to the next rung due to a lack of first-time Marin buyers. That means the third rung up sellers can't sell because the second rung sellers can't sell, etc...

You did this to yourself Marin, Bay Area, California. You let your greed get out of control in the end. You regulated, taxed, and propositioned yourself into a position of outrageously overpriced housing. You did everything you could to prop up your inflated prices. The scaffolding that was created to prop up prices is precarious and is starting to tumble. Get used to it.

Those of you who bought so as to have a place to live and not as an investment have every reason not to care one little bit about what happens to house prices. But the other 95% of you just look in the mirror... you were part of the problem. Thanks to people like you everyone else has to suffer.

So enough I say with the sad discussions about the budget "crisis" or what school has to have its funding cut or about how so-and-so foreclosed. You all wanted unaffordable house prices and so you got what you wanted and everything else that entails.

When do we start hearing in the MSM the real causes of the problem... ourselves? When do we hear about all the selfish decisions made by voters in this state to make housing unaffordable?

Mar 7, 2008, 12:04:00 PM  

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