Mike 2-3x income would be a dream for many homebuyers, as that is not just affordable but "easily affordable"

the reality of many SF/Peninsula/South bay area residents is that prices have NEVER been 2-3x income. More like 5-10x income. Now if you want to consider places such as Brentwood/Discovery Bay you can easily get something nice for 2-3x income.

mikef07 said:SUCKISSTAPLES said:Mike 2-3x income would be a dream for many homebuyers, as that is not just affordable but "easily affordable"

the reality of many SF/Peninsula/South bay area residents is that prices have NEVER been 2-3x income. More like 5-10x income. Now if you want to consider places such as Brentwood/Discovery Bay you can easily get something nice for 2-3x income.

Those places are that cheap now?

I definitely know that the Bay Area has been around 5-10x income. I am hoping once I bring my income back up after the move, along with my wife getting a job, we can get into the 3 to 4x income range. It seems as if, as another poster pointed out, we are in the 2001 range. I am thinking (hoping) that once the tax credit expires and the Alt A loans adjust we should see another drop to 1997-1999 levels. I have around 18 months.
It's not like the SF Bay Area is one homogenous housing market. The area covers 9 counties, with a diverse income, crime rates, public school quality, commute times, etc. All these factors play a role in home value and how much that value has been affected by the housing crises. It would thus be a mistake to generalize what your income multiplier is for a Bay Area house value is, much less what it might be in the future, without detailed knowledge of where you'd buy in the Bay Area. Real estate is a local phenomenom, perhaps even more so in the Bay Area. Even neighborhoods adjacent to each other can have a wide disparity in home values.

mikef07 said:glxpass said:mikef07 said:SUCKISSTAPLES said:Mike 2-3x income would be a dream for many homebuyers, as that is not just affordable but "easily affordable"

the reality of many SF/Peninsula/South bay area residents is that prices have NEVER been 2-3x income. More like 5-10x income. Now if you want to consider places such as Brentwood/Discovery Bay you can easily get something nice for 2-3x income.

Those places are that cheap now?

I definitely know that the Bay Area has been around 5-10x income. I am hoping once I bring my income back up after the move, along with my wife getting a job, we can get into the 3 to 4x income range. It seems as if, as another poster pointed out, we are in the 2001 range. I am thinking (hoping) that once the tax credit expires and the Alt A loans adjust we should see another drop to 1997-1999 levels. I have around 18 months.
It's not like the SF Bay Area is one homogenous housing market. The area covers 9 counties, with a diverse income, crime rates, public school quality, commute times, etc. All these factors play a role in home value and how much that value has been affected by the housing crises. It would thus be a mistake to generalize what your income multiplier is for a Bay Area house value is, much less what it might be in the future, without detailed knowledge of where you'd buy in the Bay Area. Real estate is a local phenomenom, perhaps even more so in the Bay Area. Even neighborhoods adjacent to each other can have a wide disparity in home values.

I am well aware of Bay Area RE. I lived in one of the cheapest areas (Morgan Hill) which is currently around $200-$225 sq ft. Except for horrible areas there really is nothing cheaper. SJ Mercury news comes out with housing reports on Saturday and I can assure you all of the good quality areas are still well above 3x incomes. WHile I like Discovery Bay and Brentwood they are a little far out for me so I don't keep up with those areas.
Here are the numbers.

Whoa wait a minute. Morgan Hill is a nice little community with a mix of home types. I have lived nearby my whole life. I would not consider it cheap. There are lots of areas cheaper than Morgan Hill that are not horrible at all. Go a little south to Gilroy for example. Slightly out of bay area but not by much. In San Jose there are areas cheaper than Morgan Hill that are not horrible too. I could go on.

Ironically I was watching KRON TV news this afternoon (move to CA is complete) and they had an investment/Real Estate expert on. Among the various questions asked one caller asked how much house he can afford. The answer was "You should look for a house that is 2.5x your income or no more than 35% of your gross monthly income if you are going by a monthly payment." For not using income as a measure of affordability a lot of people sure do use it.

mikef07 said:cameron2003 said:mikef07 said:glxpass said:mikef07 said:SUCKISSTAPLES said:Mike 2-3x income would be a dream for many homebuyers, as that is not just affordable but "easily affordable"

the reality of many SF/Peninsula/South bay area residents is that prices have NEVER been 2-3x income. More like 5-10x income. Now if you want to consider places such as Brentwood/Discovery Bay you can easily get something nice for 2-3x income.

Those places are that cheap now?

I definitely know that the Bay Area has been around 5-10x income. I am hoping once I bring my income back up after the move, along with my wife getting a job, we can get into the 3 to 4x income range. It seems as if, as another poster pointed out, we are in the 2001 range. I am thinking (hoping) that once the tax credit expires and the Alt A loans adjust we should see another drop to 1997-1999 levels. I have around 18 months.
It's not like the SF Bay Area is one homogenous housing market. The area covers 9 counties, with a diverse income, crime rates, public school quality, commute times, etc. All these factors play a role in home value and how much that value has been affected by the housing crises. It would thus be a mistake to generalize what your income multiplier is for a Bay Area house value is, much less what it might be in the future, without detailed knowledge of where you'd buy in the Bay Area. Real estate is a local phenomenom, perhaps even more so in the Bay Area. Even neighborhoods adjacent to each other can have a wide disparity in home values.

I am well aware of Bay Area RE. I lived in one of the cheapest areas (Morgan Hill) which is currently around $200-$225 sq ft. Except for horrible areas there really is nothing cheaper. SJ Mercury news comes out with housing reports on Saturday and I can assure you all of the good quality areas are still well above 3x incomes. WHile I like Discovery Bay and Brentwood they are a little far out for me so I don't keep up with those areas.
Here are the numbers.

Whoa wait a minute. Morgan Hill is a nice little community with a mix of home types. I have lived nearby my whole life. I would not consider it cheap. There are lots of areas cheaper than Morgan Hill that are not horrible at all. Go a little south to Gilroy for example. Slightly out of bay area but not by much. In San Jose there are areas cheaper than Morgan Hill that are not horrible too. I could go on.

Please do go on. Gilroy is too far out and I look at the SJ Mercury news all the time where they list $/sq ft and Morgan Hill is one of the cheapest. Please point me to where these cities are cheaper: Millbrae, Cupertino, Palo Alto, Hillsborough, San Mateo, Campbell, Santa Clara, Los Gatos, decent parts of San Jose (As in Not South San Jose), Menlo Park, Redwood City, Belmont, Redwood Shores, or Atherton.

Well all those towns have areas that are cheap and expensive, and "decent" is a relative term. But Santa Teresa or Blossom Valley area of San Jose tend to be relatively decent middle class homes which tend to run less than Morgan Hill, last time I checked anyway. Some of those areas you listed are HIGH END areas, so I think you need to scale back a little. Morgan Hill is a good place to check too. Of the towns you listed, Campbell and Santa Clara ought to have areas that are "decent" and comparable or lower in price to Morgan Hill. $/sq ft in the whole town or per house? THat could be a deceiving statistic.

cameron2003 said:mikef07 said:cameron2003 said:mikef07 said:glxpass said:mikef07 said:SUCKISSTAPLES said:Mike 2-3x income would be a dream for many homebuyers, as that is not just affordable but "easily affordable"

the reality of many SF/Peninsula/South bay area residents is that prices have NEVER been 2-3x income. More like 5-10x income. Now if you want to consider places such as Brentwood/Discovery Bay you can easily get something nice for 2-3x income.

Those places are that cheap now?

I definitely know that the Bay Area has been around 5-10x income. I am hoping once I bring my income back up after the move, along with my wife getting a job, we can get into the 3 to 4x income range. It seems as if, as another poster pointed out, we are in the 2001 range. I am thinking (hoping) that once the tax credit expires and the Alt A loans adjust we should see another drop to 1997-1999 levels. I have around 18 months.
It's not like the SF Bay Area is one homogenous housing market. The area covers 9 counties, with a diverse income, crime rates, public school quality, commute times, etc. All these factors play a role in home value and how much that value has been affected by the housing crises. It would thus be a mistake to generalize what your income multiplier is for a Bay Area house value is, much less what it might be in the future, without detailed knowledge of where you'd buy in the Bay Area. Real estate is a local phenomenom, perhaps even more so in the Bay Area. Even neighborhoods adjacent to each other can have a wide disparity in home values.

I am well aware of Bay Area RE. I lived in one of the cheapest areas (Morgan Hill) which is currently around $200-$225 sq ft. Except for horrible areas there really is nothing cheaper. SJ Mercury news comes out with housing reports on Saturday and I can assure you all of the good quality areas are still well above 3x incomes. WHile I like Discovery Bay and Brentwood they are a little far out for me so I don't keep up with those areas.
Here are the numbers.

Whoa wait a minute. Morgan Hill is a nice little community with a mix of home types. I have lived nearby my whole life. I would not consider it cheap. There are lots of areas cheaper than Morgan Hill that are not horrible at all. Go a little south to Gilroy for example. Slightly out of bay area but not by much. In San Jose there are areas cheaper than Morgan Hill that are not horrible too. I could go on.

Please do go on. Gilroy is too far out and I look at the SJ Mercury news all the time where they list $/sq ft and Morgan Hill is one of the cheapest. Please point me to where these cities are cheaper: Millbrae, Cupertino, Palo Alto, Hillsborough, San Mateo, Campbell, Santa Clara, Los Gatos, decent parts of San Jose (As in Not South San Jose), Menlo Park, Redwood City, Belmont, Redwood Shores, or Atherton.

Well all those towns have areas that are cheap and expensive, and "decent" is a relative term. But Santa Teresa or Blossom Valley area of San Jose tend to be relatively decent middle class homes which tend to run less than Morgan Hill, last time I checked anyway. Some of those areas you listed are HIGH END areas, so I think you need to scale back a little. Morgan Hill is a good place to check too. Of the towns you listed, Campbell and Santa Clara ought to have areas that are "decent" and comparable or lower in price to Morgan Hill. $/sq ft in the whole town or per house? THat could be a deceiving statistic.

I just meant overall. Obviously you are familiar with the SJ Mercury news since you live here. Every Saturday they release their Real Estate section which has homes sold and the $/sq ft they sold for. I have no doubt that houses may fall through the cracks and sell for a lower than normal $ sq ft. Both Campbell and Santa Clara are higher. I will look Saturday and post the numbers.

cameron2003 said:mikef07 said:glxpass said:mikef07 said:SUCKISSTAPLES said:Mike 2-3x income would be a dream for many homebuyers, as that is not just affordable but "easily affordable"

the reality of many SF/Peninsula/South bay area residents is that prices have NEVER been 2-3x income. More like 5-10x income. Now if you want to consider places such as Brentwood/Discovery Bay you can easily get something nice for 2-3x income.

Those places are that cheap now?

I definitely know that the Bay Area has been around 5-10x income. I am hoping once I bring my income back up after the move, along with my wife getting a job, we can get into the 3 to 4x income range. It seems as if, as another poster pointed out, we are in the 2001 range. I am thinking (hoping) that once the tax credit expires and the Alt A loans adjust we should see another drop to 1997-1999 levels. I have around 18 months.
It's not like the SF Bay Area is one homogenous housing market. The area covers 9 counties, with a diverse income, crime rates, public school quality, commute times, etc. All these factors play a role in home value and how much that value has been affected by the housing crises. It would thus be a mistake to generalize what your income multiplier is for a Bay Area house value is, much less what it might be in the future, without detailed knowledge of where you'd buy in the Bay Area. Real estate is a local phenomenom, perhaps even more so in the Bay Area. Even neighborhoods adjacent to each other can have a wide disparity in home values.

I am well aware of Bay Area RE. I lived in one of the cheapest areas (Morgan Hill) which is currently around $200-$225 sq ft. Except for horrible areas there really is nothing cheaper. SJ Mercury news comes out with housing reports on Saturday and I can assure you all of the good quality areas are still well above 3x incomes. WHile I like Discovery Bay and Brentwood they are a little far out for me so I don't keep up with those areas.
Here are the numbers.

Whoa wait a minute. Morgan Hill is a nice little community with a mix of home types. I have lived nearby my whole life. I would not consider it cheap. There are lots of areas cheaper than Morgan Hill that are not horrible at all. Go a little south to Gilroy for example. Slightly out of bay area but not by much. In San Jose there are areas cheaper than Morgan Hill that are not horrible too. I could go on.

Morgan Hill and Gilroy are nice communities, but no job. The RE price at Morgan Hill is cheaper compare to San Jose, and the trade off is you will have to drive 15 miles more each way to get to your work place (compare to commuting from San Jose). Same logic, the RE price at Gilroy is even cheaper because it's 30 miles further from where the jobs are.

ifyouhavetoask said:jamesboy said:
You are raising an important point that may very well dictate the future of housing in this country. Low interest rates and tax credits act as a form of "housing stimulus" that artifically keeps prices high. The Fed has kept mortgage rates low through MBS purchases and the tax credit has a cash for clunkers effect. Many people fail to realize that the economy will come roaring back, inflation will kick in, MBS spreads will suffer, and ultimately home prices will need to find a new bottom. I would say that a median price at 2.5X median income would be the low. This assumes no catastrophic move in the yield curve, which would probably bring us down to 2X.Problem is, 2.5x median income is the historic average for nationwide housing. As the pendulum swings in the other direction, it's going to go much lower than 2.5x.

Of course, all of this assumes that incomes don't plummet further as the depression worsens.

Nationwide, housing prices will bottom below $100k, IMO...and they will reamin there for a long time.


Here's today's GREEN SHOOT:

"A $90 million loan secured by the Four Seasons San Francisco, a 277-room, five-star property, is 90 days delinquent and foreclosure proceedings have begun, according to Realpoint. A notice of default has been filed, according to Bloomberg data."

The second, more powerful down leg is about to hit our economy.

Lol, you guy are trying to predict the future . Well, time will tell, and half of us will be right .

You forget about inflation and the devaluation of the dollar. If Fed print enough money, house price won't go down any further, and might even shoot up (note that I said price, not value).

An interesting CNBC article: Real Property, Real Returns.