"Yes, people from SF have no idea that a downturn can happen."

I just tend to think they are wrapped up in their own local stuff, like plastic shopping bags and their effect on the environment, and any news that comes from beyond the City is right wing propaganda, worthy to be ignored.

A 7% [nominal] increase in 5 years, with 3% inflation per year, is a [real] price decline of about 8%.

(said like Seinfeld to Newman)

Nemo! What did you do to CR with your damned san francisco beer!

"I'm waiting for this dream home near San Diego to drop 50%. Then it will be a steel."

One tsunami could ruin your whole day.

Same house style and lot size 10 miles inland would cost 1/50 of this bastion of old money.

You're right. I need to set my sights a little higher, and a little further inland. These should do

6896 Poco Lago, Rancho Santa Fe, CA 92067 | MLS# 080047525

6314 El Apajo, Rancho Santa Fe, CA 92067

San Francisco is a lot of neighborhoods, not all equal. Paying $750 to $1000/sqft for a crummy condo that used to be an apartment building doesn't make a lot of sense other than its San Francisco. Same might be said for a 1950's vintage stucco home in the Sunset district. But the 'view' neighborhoods will always have an enormous premium on them. Its location man and prestige. People from all over American and the world want a San Francisco address so its not entirely a local market.

Waiting for things to collapse will take a long time. I grew up in Orange County, and my elementary school teachers repeatedly told us the "big one" would hit by the time we finished high school. (The tsunami was supposed to wipe out all of Newport Beach and Lido Island). Like these houses:

://www.redfin.com/CA/Newport-Beach/87-Linda-Isle-92660/home/3253921

Newport Beach, CA 92660 - #12519607

25% more?

Nice.

Kiss Mr. Banking system good-bye.

California Dreamin..that listing notes plans to replace that adorable little cottage with two (2)! HUGE Spanish Colonials on 4000 sqft lots each. This "massive house on a postage stamp sized lot" crap should be outlawed. That place is perfect as it is and idiots would tear it down so they can look right into the next door neighbors bedroom.

7 hours into it and still going strong.
I need some of that EA2233.

We all do.
Maybe that's the next bubble...pharma....anti-anxiety meds, insomnia meds...all kinds of great drugs that good people can abuse without stigma.

Wow, Fitch with all it's modeling geeks and super computers figured this out like recently.

Damn. They coulda paid me in beer, tin foil, and batteries, and I woulda cranked that out a year ago...hell two years ago. While drinking the beer.

Asshats!

Cheers,

For timing purposes, how long can I refuse to send in payment before someone physically removes me from the house? This is in Orange County, Cal.

100% decline would be pretty severe. Don't think that's going to happen in the "better" areas though.

We have a new greasy hair wig -- 40% off today, and or equal to the price of 2 shares WaMu

Beatle Wig - Wigs

CashOnly: I know, I know. I'm still waiting for someone to offer to pay to take their house off their hands.

Um .... they're already falling in the East Bay. The market in my neighborhood (near Berkeley) has been stagnant for awhile with prices heading down.

Those living in Noe Valley or the Presidio likely have a different pov.

sdtfs: Thanks. That's pretty quick. If the system backs up too much, and people can get 18-24 months, I could see that becoming attractive to people who were otherwise able to pay. Too much pain for 6 months.

It's important to note these are real prices - adjusted for inflation. A 7% increase in 5 years, with 3% inflation per year, is a nominal price decline of about 8%.

Another way to look at it :

Cost of house in June 2007 : $100k
Cost of house in June 2012 : $107k
Cost of house in June 2012 (in 2007 $$) : $107k / (1.03 ^ 5) = $92.29k

Effective price change of house = -$7.71k

Effective loss (in real terms) : 7.71%

Anonymous @ 7:33 pm has written it correctly.

Cheers.

SF's elitist lefty's are about to get an ass mugging.

Fine with me. I read Bob Dobbs blog about a week ago, he had a good take on these people.

Cheers,

km4,

BO will hit the ground harder than Hancock. He's a mo-mo stock. Remember Mondale? Dukakis? Gore? Kerry? 'Nuff said.

CSC: Look at this for a possible defense:

Debtors Win Victories Against Mortgage Servicers - Credit Slips

Here are the first two paragraphs:

Debtors Win Victories Against Mortgage Servicers
posted by Katie Porter

In the last few weeks, several courts have issued opinions ruling that mortgage servicers' actions have harmed consumers. Some of you follow this issue closely, but if you need an introduction, I've previously posted a bit on the basics of mortgage servicing and why it's an important component of the foreclosure problem. After the jump, I summarize three recent and newsworthy decisions. Debtors won big in these cases, variously recovering sizeable damages, having the foreclosure action against their home dismissed, or getting a preliminary injunction issued against a servicer's misconduct. Taken collectively, they all signal an increased willingness by courts at all levels (state, federal, bankruptcy) to take challenges to mortgage servicers' actions seriously. While I'm convinced that legislation, regulatory enforcement, and different market incentives are necessary to stop the misbehavior of mortgage servicers, this trio of decisions shows how litigation can help real families and point the way for further policymaking.

The Jones v. Wells Fargo decision from the bankruptcy court in the Eastern District of Louisiana was a landmark opinion in describing the problems with Wells Fargo's servicing of bankruptcy debtors' mortgages. On July 1, 2008, the district court ruled on Wells Fargo's voluminous appeal. The court affirmed the bankruptcy court's factual findings and legal conclusions that actions like misapplying plan payments violates the Bankruptcy Code. The district court remanded to the bankruptcy court on the remedy, ruling that while the bankruptcy court had injunctive powers to order new accounting standards, the court should first make a finding that there was "no adequate legal remedy as an alternative to monetary punitive damages." If I were Wells Fargo (and I'm grateful that I'm not), I'd be worried that the remand is an invitation to a large sanction. Wells' decision to appeal the new accounting standards is itself noteworthy. Why not embrace correct accounting? Do servicers prefer to pay monetary damages on those rare (albeit increasingly frequent) occassions when they get caught and continue to overcharge debtors in all other instances? It appears the answer may be "yes." I'll post an update when the bankruptcy court rules on the remanded issue.

Grrrrrrr....

Politics intruding.

Cheers,

Sorry Misean.
Rant off.

"Which category do you fall into ?"

I fall into a category that could possibly vote for Obama, unlike a German citizen, if I'm not alienated for some reason beforehand.

Agreed. It's like the Tao. Nobody can describe it, but it's all around. Except instead of being really rad like the Tao, this sucks.

I very rarely comment here, but as much as it pains me to say it (and it really does pain me, a lot), San Fran is different.

It's pretty clear to me that the vast majority of the .com beneficiaries quietly and prudently diversified their .com gains into real estate in desirable SF neighborhoods. And there were a lot of these people. The news made a big deal over people that went broke, but most people saved a fair piece.

Result: A very large number of people in SF simply don't have to sell. And won't have to sell. They may not quite be of independent means, but they can weather a few years of bad economy (as a renter I have 7 years at my current burn rate myself).

Houses in a large number of neighborhoods such as Castro, Noe Valley, The Richmond and Bernal Heights get multiples offers and sell within days.

Take a look on any web based real estate service. You simply don't see that many houses for sale in good neighborhoods, and no foreclosures at all in most of the city.

The ghetto areas are an exception, and these areas are in even more trouble as SF has a "no gentrification" policy which prevents people like risking my cash on stupid political decisions.

Compounding the situation is that wages are fairly high in the professional sector, and mid-30+ yo hipster DINKS really will spend 60-65% of their combined income on a mortgage.

It astounds me.

It would take massive tech sector layoffs here to put pressure on the market. The financial sector layoffs have had very little effect. I just don't see it happening. The blue collar is already gone or under rent control, as is the public sector.

For me, at this point, even if I could buy, I am increasingly reluctant to pour my tax dollars into one of the most fiscally imprudent cities I know of, especially when that imprudence is a result of implementing social policies proven not work.

SF is extremely neighborhood driven, and any statistics purporting to measure the behavior of the city as a whole are misleading. When combined with overall "Bay Area" statistics, they are simply meaningless.

FWIW, I lived here about 5 years before I "got it." I'm staying, but it will be in East Bay most likely.

Hope: Only to find that the developer has mysteriously not completed the project and a local has taken possession of the unit.

Securities and Exchange Commission Chairman Christopher Cox told the same hearing his agency would soon offer a proposal to expand emergency curbs on short selling of 19 financial stocks, including Fannie and Freddie, to the entire market.

Page Not Found | Reuters.com

Can't do it half ass then do it the best you can Chris. Get those short positions while you can.

An Executive Order to be announced as early as Monday would reduce state workers' wages to less than the California state minimum. Holding state employees in fear is the governor's latest tactic to put pressure on legislators to quickly agree to a plan for fixing the budget. Purchases of yachts and private jets are not subject to the taxes that could be one of many sources of money for the state.

Gov. Arnold Schwarzenegger plans to announce deep cuts to state workers' salaries by Executive Order next week.

Sources indicate that 200,000 state workers may see their hourly wages reduced to the federal minimum of $6.55 per hour. Jim Zamora, a spokesman for SEIU Local 1000, which represents 95,000 state workers commented, "Because they can't sit down and pass a balanced budget, state workers must live in fear of having their wages slashed as much as 90 percent. We are not chess pieces, we are real people."

The governor also will order a freeze on state hiring and the immediate layoff of nearly 22,000 temporary, seasonal and student workers. The governor's position is that there is not enough cash in the state coffers to pay them, a fact strongly refuted by State Controller John Chiang.

Huge and Massive news!!

In Budget Showdown, Schwarzenegger Threatens Minimum Wage for State Employees

The Governator appears to have had enough. After months of watching Democrats and Republicans in California's state legislature squabble over how best to close a $15.2 billion budget deficit, Gov. Arnold Schwarzenegger is ready to put his foot down. According to a draft copy of an executive order leaked yesterday to the Sacramento Bee, Schwarzenegger plans next week to slash the pay of more than 200,000 state government employees to the federal minimum wage of $6.55 per hour, saving the state an estimated $1.2 billion a month—and putting a huge amount of pressure on recalcitrant lawmakers to finally come to an agreement on the budget.

"Sources indicate that 200,000 state workers may see their hourly wages reduced"

Need to fire all of those overpaid bastards.

This is BIGGER than Asphalt ... maybe???

Billy: Have you been scouring encyclopedias of theater ever since the post on Real Inspector Hound???

Couple more:

Views run ~$1000/sf. These places go fast. My girlfriend has one. It's absolutely stupendous. Unbelievable. Is it worth it? Hard to say. It was to her. I like it.

Earthquakes: A new 50 story building in SF will be a far safer place in an earthquake than almost anywhere else in the city. Certainly safer than the Marina or China Basin. If you haven't computed the seismic response for these sites and structures under the influence of vertically propagating shear waves resulting from a range of credible earthquake excitation, you probably aren't qualified to comment on their safety or lack thereof.

"What's really important is that our country is about to go bankrupt, social upheaval will start, the government will drop the hammer on us, and those who live will remember this as the time that changed their lives forever.

Too dramatic?"

Who's got the energy for it? Beer and television are cheap.

Ok back to the real show...

Yahoo! 404 - Page Not Found

I'm a strong proponent of Speeds idea in prev. thread of going all in short am and selling wed..this really helps that cause

km4=troll

Nuff said.

Cheers,

callous and unearthly:

I would love nothing more than to be proven totally talking out my *ss. I am just not seeing it yet, and not for lack of looking.

Oh yeah...

Don't feed the trolls. It's kept these pages running well without registration for years.

Cheers,

Speaking of which, a young lady got a bad slashing at 15th and Valencia the other night. Hospitalized. They hit an artery in her neck.

The cops reported it as a purse snatching.

Surreal.

I'm not too amused by the politicized (and naively so) right wing, angry or snide and borderline sex-phobic comments about SF. Won't someone delete them for the sake of discourse?

wally: I have hoping that for years. Hasn't happened yet.

Prices in SF need to come down on the order of 65%. I just don't see it.

dtripper- we dont hire in the bayarea as it costs to much, we have implementation in oregon, customer service in canada..Etc..

Thier is a lot of old money here...Fact..Don't forget this is the home of most of the Nations top venture capital firms..I see money everywhere everyday...

With so much banking, how can SF not be hurt by this? SF is a special case for sure, but wiping out a huge sector of its economy seems like it would have to slam RE.
Maybe I overestimate the importance of banking to SF.

billy pelerin:

Good. That's what I wanna hear. I wanna hear a lot more of that in fact. Like a big hunk of Marin going tits up. I like San Rafael. It's warmer in the summer than Berkeley, but no colder in the winter. Closer to the beach. Closer to Marin Joes. As close to the city. Farther from Berkeley (a plus in my book). Just be careful of landslides and fires...

I toyed with the idea of getting a slot at that mobile home park in Larkspur (yes!). That could actually reduce my housing cost and shave 15 minutes off my drive to my local break (Cronkite). The irony of it all would be priceless: living in a mobile home in Marin. We'll see.

I don't think anybody here believes it's not going to come down but not at the clip as the outlying areas..

Nordstroms had a sale last wknd and the lines were out of this world crazy..Like Xmas..Money is here, heck many people don't have cars in inner city areas. No mos pymnt, no insurance, no gas, no dmv, no maintenance etc...add it up that's over 750 a mos in savings right there...

It will come down but will hold up much better than other areas...

Ok I'll concede. this is more important anyways...

Iran news back in spotlight and its' bigtime..

Yahoo! 404 - Page Not Found

I'm enjoying learning about local markets here (SF). One thought about "SF won't fall" POV - if/when this crash goes on for a decade or longer, anything that seems impenetrable to 50% price declines will learn a new reality: no such things as levitating out of a financial mania.

Iran signaled Thursday that it will no longer cooperate with U.N. experts probing for signs of clandestine nuclear weapons work, confirming the investigation is at a dead end a year after it began.

F.

mtngrown, I don't agree on that 65%....it depends on how much you like the city. You don't like it THAT much. For me, the number is 45 to 50 percent (in prime neighborhoods). I think it's "worth" that.

Neither do I, honestly, even though I do love it. I think it will always be overpriced, and the housing stock is not very good. But I'm renting now and will live in the East Bay in the future.

I visited the BayArea in 04. Those little shacks you call houses were stupid priced then. Supply and demand soon to rear ugly head.

I get that people like SF. I don't..but that's just me. I prefer Santa Monica. But I can't believe that prices won't fall. Loans are becoming more expensive. Wasn't that the point of the spread post earlier today?

And SM is falling, albeit slowly. I was hoping for more as I'd like to live there. We'll see.

Cheers,

Misean,

Actually Sf is similar to Santa monica, having lived off Bundy and wilshire for 2 yrs they have similar traits but no way does SM come close to SF in culture, beauty and people...

Many more fake people down there and I'm born and raised in the LBC..all my family is down there..

Both offer great female viewing opps though..

Ughhh. Deriving inflation's effects on the "real" purchasing power of an asset based on the ratio of "nominal" price changes versus the amount of that asset that can be purchased is analogous to asking a blind man whether he prefers pea green to misty foam.

cd, unearthly:

Paying more than maybe $175/sf is just not in my blood. Not unless I am knocking back $20k/month after taxes.

Santa Monica is lovely! I don't have any problem at all with fake, superficial people. After 11 years of SF smugness, it would be a welcome change.

gerald:

I can relate. This place can really grow on you. If I lived anywhere else in the country, I would very likely own one of the smallest houses wherever I bought. Given how I was raised, it's really nice to not have so much crap hanging around.

S&P is now projecting a 25% reduction in smugness nationwide.

With apologies, I meant to add ...that is the nature (and effect) of a true fiat currency.

It is... majik.

peterpqan,

I appreciate. I just refused to post to km4 at this point. He's been around these parts for a while. But I'm not taking the troll bait on the politics crap. This ain't a politics blog. But thanks again.

nades,

"misean where did you go in soCal? diego? "

Nope, still sweltering in the San Fernando Valley in Encino.

Cheers,

2 Little Known facts about Bob Dylan

1) He wasn't permitted to join a socialist commune in Israel

2) He would pray at the Chabad House in Westwood during Yom Kipur. One year they let his limo into the underground garage after dark (forbidden). He went up to pray, and his son began to roller-skate around the parking lot. Did I say this was on Yom Kipur?

There, I'll shut up now.

The Nikkei was up 170 yesterday so let's just start out the week at Tuesday.

Really the market there is the same BS as it is here. It's just a number...

Where do you think the money starts out from?? .5% interest rate ought to give a clue.

Ciao
MS

MS,

Did you notice Barry gave himself a high-five on his last post? WAFJA!

Max, I was mistaken. It was Joan Baez.

Misean,

SM is unreal on the viewing front I agree, a bike ride from p palisades is something every man should do more than once....I used to go down to the blues bar on 4th-btwn broadwary and sm blvd..good times..

Surf sucked though!

Mtngrwn-I've never see crockett good, I see how their could be and A frame bounce off north side rocks but never seen a good ride off it..Whats the story...

KM- easy, I had a bad day on the market yesterday and didn't get back in today..But still upbeat about future prospects..Ease up...Don't take off in front of Mtngrwn though I hear he has a unreal kick out!

Oil will pop tomorrow on Iran news...

Market will not come back..

Anonymouse-market didn't come back today..were eve

cd, "Surf sucked though!"

Yeah it's seasonal. But ya know...chicks are more important.

Cheers,

Moody's is predicting a 25% reduction in bribery:

Wong guilty on 14 counts - Los Angeles Times

M,

Agree 100% with one twist...

Women are like waves, their extremely beautiful but deceptively dangerous..
I love danger though...

cd,

Well they do get softer as they get older.

Though I'm turning my head aeround alot and trying to post this before I get another head slp.

I made it...Woohoo.

Shit.

Cheers,

4822 writes:
"San Francisco is another town vulnerable to tsunami. There must be something romantic about living in a future disaster area."

Armistead Maupin touches on this subject in "Tales of the City".

I fink you wiseapps no well unnerstand the Nipponjin! You make funny joke, disparage Nikkei, laugh at loose, windy hakata clothes. You mock topknot and ceremony. But you no laugh when Yen buy $10,000. You no laugh when we stop ship of components. You no laugh when we restrict your tamagotchi and anime. Face it pale round eye types, we have superior culture. No buddha bellies, no pretense of freedom, no jeansu that hangi ober ass. You market dead. Well, our market no too good either. But we buy almost $1 with 108 yen. Blow nose in 1000 yen and throw away. Your dollar, nose hanky.

They aren't going to start paying those people in CA minimum wage. This is part of the Governator's strategy that will help explain why he has no choice but to raise taxes.

MLM writes:
I don't know why anyone would listen to Fitch instead of a reputable outfit like S&P or Moody's.

I'll listen to Fitch.

I used to listen to Moodys and S&P, but they were wrong when it mattered. Not just a little wrong... they missed ratings on the monolines by a mile.

Fitch was the first one to reconize the problem. Fitch was the first to downgrade... Fitch was right.

Down 25% over 5 years would be a very soft landing. Houses of GF in Riverside and of friends in San Diego and LA have been declining 3+%/month and are 25% down in the last 8 MONTHS.

NODs, preforeclosures, foreclosures, tax liens and bank owned REOS that I track in those 3 counties and 6 zip codes all continue to rise weekly, not level off or decline, they're all RISING, meaning the steeper 4%/month over month price declines of June and July, combined with a fall/winter sales slowdown, may result in a Half-off sale by Xmas.

What it is that the equity markets and the bank valuations can possibly "know" that would justify the discounting of both the flattening as well as the reversal of the clearly deteriorating foreclosure stats mentioned above is beyond imagination, unless they're discounting not only the future but the hereafter.

I may be wrong in thinking that no amount of ongoing Ben-Hank-Sheila open-mouth-policy coverup and behind the scenes looting can prevent this market from soon dropping 1250 points some morning as it begins to discount the reality of the damage caused by Fed policy and government and financial complicity.

But then I could be right.

Our regards...

Elvis,

"She is hot. And cool, too."

Yeh...she makes my winky get all hot and bothered.

"Just got here, but km4 wants to be appreciated, but it's an idiot. Like that whiney kid who wonders aloud whey the pretty girls don't like it and why they like you"

Just trying to ignore. I'll be alright...thanks Elvis for the support.

Need more pizza.

Cheers,

If this moronic, wreckless, morally hazardous housing bailout bill passes, you'll have T bills at 10%. A complete bond market dislocation. I don't care where you live, SF, Mahattan, Mahattan Beach, Santa Monica, OC...mortgages at 12% make your house value go down. Oil at $200/bbl will hurt too.

Call your Senator. Or prepare for the consequences.

There was a CNN report earlier this month that Manhattan real estate is softening. I see no reason why SF will be any different.

Average sale price of a Manhattan apartment is $1.67 million - Jul. 2, 2008

EngineerJim,

Bold statement. I'd rather surf.

We shall see.

Cheers,

Hee Hee Ho Ho:

Coincidentally those 6,220 adults comprise an amish city.

NEVER trust anything with Reuters written on it. (Who owns reuters now?)

Unless the state uses the same payroll software contractor that LAUSD uses, it should not be that difficult actually. Do they?

Jim, too many questions here. I personally doubt they could supply back pay. I think if their systems are set up properly, it would be quite easy. But the whole thing does seem like a like a bargaining chip.

1) Elvis: you have a good eye for successful Elvicisms.

2) Noam Chomsky is now pessimistic. I've NEVER seen him pessimistic.

3) I have a prominent local politician in my facebook friends list. Don't know him personally. He's new at facebook. He just publicly joined the following group:

Paz Vega | Facebook

Either he's drunk or has a very liberal view of how his constituents will view his openness.

What are you saying dash, that things are bad?

I wonder if these were the Maquarie lonas. Hmmm....

all quite on the blogger front.

Well to go back to a question that was posed in an earlier post:

Is this the greatest transfer of wealth in the history of the world?

I think most would agree that WWII resulted in the largest transfer, to the United States.

This seems bigger. But I guess we won't know who won til the dust settles.