Bay Area Real Estate Trend….

[Coronita]

Stumbled across this….

http://www.paragon-re.com/3_Recessions_2_Bubbles_and_a_Baby

[bearishgurl]

The Paragon charts speak loudly to the millions of “deep pocketed” residents in the area, esp those longtime residents of THREE counties (SF, Marin and SM). Notice that during the “Big Bubble” (2004 – 2007), it was the lower-end segment of housing (<=$510K) situated in FIVE bay area counties (incl the east bay counties of Contra Costa and Alameda) which suffered the biggest downturn. Why? It was due to the proliferation of NINA loans and other forms of predatory lending offered to a captive audience of homebuyers and highly leveraged “owners” who relied on purchase money mortgages and equity from their homes to send their kids to college, travel, buy vehicles etc, or just simply exist with a source of monthly income. (Buyers of mid-tier and higher-tier homes aren’t as reliant on mortgages for purchase money or “cash-out” needs.)

In SFR’s, those lower-end prices (<=$510K) actually haven't existed in SM, Marin and SF Counties since the early-mid nineties (and only in certain micro-areas). They existed in neighboring Santa Clara County up until late 2000. The middle tier of housing in the five counties ($510K to $925K) was hardly affected by the "Big Bubble." Its effect on the higher tier (above $925K) was short-lived and its values have now far exceeded those of the "Big Bubble." There have been no SFR tract subdivisions built in SM or Marin County for 35-50 years, depending on micro-area. Of course, SF County does not have any SFR tract subdivisions, except for possibly those 65+ year old tracts of "row homes" in SSF. IIRC, the only SFR tract subdivisions built in SM County in the past 45+ years were within its 1971 Foster City annexation which was dredged from a former landfill buried in marsh in the bay. The dearth of new construction over several decades and preservation of open space within SF, SM and Marin Counties heavily contributes to the exclusivity of residing there and the resultant high RE prices. In my mind, SF and Marin Counties are "recession-proof" and SM County's SFR stock is probably "recession proof" as well (no matter what happens in the tech sector). The reason being is that there are just too many well-established property owners in those counties (both in residence and non-resident) who are still alive and whose heirs will eventually utilize Props 58 and 193 to pass those properties to themselves with a very low assessment attached to them. I predict 90+% of them will never be listed as long as Props 13, 58 and 193 are still on CA’s books.

I’ve been looking online again recently (in June) at smallish houses to retire in in Norcal Counties (in mostly rural and semi-rural locales) and those thousands of well-established and deep-pocketed bay area residents have taken over this segment (my brethren boomers) and driven up the prices to over $700K in nearly all towns with a population of 1K or more which are within 60 miles of the coast. They buy them, furnish them and go there whichever weekends they can and let family members use them (for wine-tasting, biking thru the redwoods, etc). Virtually NONE are rented out. I’ve now been relegated to 1950’s ranch homes in South Lake Tahoe (almost too far for a bay area semi-retired person to go to for just 1-2 nights at a time), which is okay. But I feel if I don’t act fast, I’m going to be relegated to Carson City, NV or Truckee (ugh) or Redding/Yreka/Mt Shasta and surrounds, which are much too hot in the summers for my taste :=(

I can’t even buy back my modest (1530 sf) childhood (tract) home today (located 20 miles SE of Oakland) for which my parents paid $17K!

In some ways, I feel I made a huge life mistake back in the ’70’s when I returned to CA. My original plan was to return to the bay area. I had a good job lined up in Half Moon Bay (SM) through my current employer but my prospective roommate for that locale backed out at the last minute to enroll in University of Michigan (their home state). I ended up moving to SD County with a co-worker from La Mesa (who quickly moved back “home” after our arrival in SD to attend SDSU) … and the rest is history. I should have just moved to the SF peninsula by myself and taken the good job offer/transfer! Of course, I don’t regret my kids but I feel I would have been much better off today had I taken that route.

[flyer]

The many members of our extended family who live from SFO all the way up to Santa Rosa, and south, to the Half Moon Bay area, as BG mentioned, have all have been watching this show for years.

The general area has always been a desirable place to live, but, as we all know, the tech boom has definitely fueled a new level of real estate insanity.

It’s a very difficult situation for many people who simply want to work or retire there. At this point, there is no indication things will change in the near future, and I understand their concerns not only for themselves, but for their children.

Personally, we prefer SoCal over the Bay Area for many reasons, even on days like this when the temp at the beach is 89 degrees.

[bearishgurl]

[quote=flyer]The many members of our extended family who live from SFO all the way up to Santa Rosa, and south, to the Half Moon Bay area, as BG mentioned, have all have been watching this show for years.

The general area has always been a desirable place to live, but, as we all know, the tech boom has definitely fueled a new level of real estate insanity.

It’s a very difficult situation for many people who simply want to work or retire there. At this point, there is no indication things will change in the near future, and I understand their concerns not only for themselves, but for their children.

Personally, we prefer SoCal over the Bay Area for many reasons, even on days like this when the temp at the beach is 89 degrees.[/quote]

flyer, I’m not even interested in “retiring” to any “bay-area counties” anymore. I gave up on that idea more than ten years ago.

I was interested in the likes of Sebastapol, Healdsburg, Ukiah, Cloverdale . . . yikes . . . even Yountville! But when a soon-to-be-retiree can’t even purchase a ~1000 sf (possibly run down) older home (with or without garage) in these small towns for less than $500K (less than $700K in two of them), it’s time to develop a new plan. There has been such a dearth of listings in recent years on either side of the 101 all the way from the top of Marin County to the top of the state! What becomes available goes very fast (which is fine if I was able to act fast) and all cash (which is also fine if I was in a position to make an immediate offer). I don’t do bidding wars so I suspect I would be outgunned a few times before getting my offer accepted.

It seems as if I’m going to have to sell my home in SD County and rent something up there temporarily if I want to be in a position to pounce when necessary. Or to even poll resident homeowners of properties I would be interested in owning (as to their desire to sell now or in the future)

I never would have imagined that these sleepy little towns would be “desirable” as vacation and retirement havens for the well-heeled masses. Especially to those who already live an enviable semirural life on the SF Peninsula (read: Hillsborough, Atherton, Woodside, Saratoga, etc) but with the nation’s very best in entertainment, amenities and medical care at their fingertips.

I guess this cohort of my brethren boomers wants a little nest which is far enough away to get them “out of dodge” whenever they feel the need to escape from civilization :=0

[bearishgurl]

H@ll, maybe I’ll just buy a little plot of land (or share a plot with utilities already present) at the foot of Mt Shasta and erect a “yurt” next to my no-so-well-heeled boomer-brethren and go stargazing every night with my neighbors’ telescopes!

[img_assist|nid=25450|title=Yurt (from kit)|desc=|link=node|align=left|width=158|height=119]

[img_assist|nid=25451|title=Yurt interior|desc=|link=node|align=left|width=176|height=120]

Not sure if a window A/C unit would work in one of these …. lol.

I could just rent my place out here (for monthly income) and “try (the lifestyle) before buying!”

[flyer]

BG, when you’re ready, I’m sure opportunities will present themselves. Know you’ve probably thought of this also, but I’d definitely make sure you really want to give up San Diego before you make your final decision.

We’ve known quite a few people who left for “greener pastures,” and later wished they had their SAN home back, and I certainly wouldn’t want to see this happen to you.

[paramount]

[quote=flyer]
We’ve known quite a few people who left for “greener pastures,” and later wished they had their SAN home back, and I certainly wouldn’t want to see this happen to you.[/quote]

Could certainly do a lot worse than SAN.

[bearishgurl]

Oh, and regular professional extermination costs for a small acreage in flyover America can run $3-$5K per year, especially for those which abut water tributaries and irrigation canals or have a “lake” (pond) on them.

[bearishgurl]

[quote=flyer]BG, when you’re ready, I’m sure opportunities will present themselves. Know you’ve probably thought of this also, but I’d definitely make sure you really want to give up San Diego before you make your final decision.

We’ve known quite a few people who left for “greener pastures,” and later wished they had their SAN home back, and I certainly wouldn’t want to see this happen to you.[/quote]

I have too, flyer, but the “greener pastures” were all out of state, namely TX, OK, AL, TN, MO.

They were all humid, bug-ridden pestholes, as spdrun would say :=]. That’s an apt description. These friends/ex-neighbors of mine thought they were really going to score with the large lot (even acreage) they were going to buy with the proceeds from the sale of their SoCal home. Two of them failed to take into account that it is actually an environmental liability to buy a property with your own private lake (pond) on your property in these locales because you will NEVER get rid of the flying, preying insects swarming all over your property and even deck/patio next to your home and make it impossible to go outside several months per year . . . even to chop down high reed and weeds with a sicle and run their riding lawnmowers without getting attacked by swarms of mosquitoes, chiggers, bees, wasps and locusts.

These nicely designed custom homes on 3-5 AC with a private “lake” (pond) looked so enticing and romantic on paper. The reality is a completely different story.

Every one of them came crawling back to SD to rent at an age where their earning power was little to zero. (Two of them were SD Natives.) I have lost touch will all of them and don’t know what has happened to any of them. I would surmise that most are living with their children now (or on their children’s land in a guest house).

This is why I am so adamant about NOT moving to an “environmental pesthole” in Norcal. They do exist in Lake County and along I-5 (which is too hot for me, anyway). Not all counties in CA are rated equal. Some have issues that I don’t want to be a part of.

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