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Housing madness

Original post made by hoops on May 18, 2013

A few weeks ago I posted about how ridiculous are housing market has become.I mentioned as evidence a 1500 sq ft older home in Valley Trails advertised in PW for 650,000.Well....that home did not sell for the inflated overprice of 650,000.It sold for 720,000 with multiple offers.I saw this house and believe me when I say it was very ordinary.WOW.Low inventory and desperate buyers equals madness.At least the interest rates are crazy low.I saw a 1236 sq ft house about 50 years old with 8 ft ceilings that was listed at 699,000 that had commercial buildings behind it.I can only imagine the shock and dismay someone moving here from another state must feel.

Comments (27)

Posted by It's the schools, a resident of Avila
on May 18, 2013 at 9:39 am

Our town is attracting many families from Fremont for the schools.


Posted by Sam, a resident of Oak Hill
on May 18, 2013 at 12:01 pm

Yeah, the real estate market is getting crazy again. Historically, sale prices in Valley Trails and Val Vista rarely went over $600K but now there seem to be a lot of sales in the mid-600's or even over $700K. Just two years ago the buying sentiment was down and real estate agents seemed desperate to get people to come to their open houses.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on May 18, 2013 at 12:11 pm

The rise in home prices in and around Pleasanton is not reflective of the rest of California where people are exiting in droves on account of high state taxes (compounded with outrageously high federal taxes) driven by unionized public worker salaries and pensions. Outside of the Ptown bubble, Californians are acutely aware of how Calpers and Calstrs are nearly bankrupt and will be so within 10-40 years, or perhaps later, depending on which actuarial account you read and what the economy will look like over that time period. This is a pressing issue, if not for us then maybe for our grandkids or more likely their children (great-grandchildren) or children's children (great-great grandkids). When the bankruptcy occurs it will likely be of biblical proportion. Best estimates are that it will hit like a tsunami. Right now, the exodus from California is akin to rats leaving the wharf area in anticipation of an incoming wall of water. This all will have a real dampening effect upon Ptown homes, leaving many homeowners under water.


Posted by Here we go again, a resident of Another Pleasanton neighborhood
on May 18, 2013 at 5:58 pm

Just like the last time. Greedy and stupid home buyers will listen to greedy and unethical realtors who will work with greedy and evil lenders to get into homes they cannot afford. After a year or two the idiots will claim that life is just so unfair and they will walk away from their loans with no consequences at all.
This will, once again, leave all of those who actually pay their debts holding the bag for those who agree to the price now and back out later. Since when is it anyone else's fault that YOU paid too much for something, that you agreed to pay that price, and then you get to walk away unharmed. There are no do overs in the real world and if you agree to the price then suck it up and pay for it!


Posted by john, a resident of Another Pleasanton neighborhood
on May 18, 2013 at 8:57 pm

"After a year or two the idiots will claim that life is just so unfair and they will walk away from their loans with no consequences at all. "

Not true. Their credit scores will be wrecked for more than 5 years. There will be plenty of consequences for them.

If you want to feel righteous indignation about people who will once again profit wildly only to be bailed out by tax payers when their investments turn sour, look no further than derivatives speculators at investment banks and at insurance companies.

If you want to see a good case study, look at the AIG. (Please don't say all's well, the tax payer got paid back, until you understand how that worked and what the federal reserve did by buying securities insured by AIG's credit default swaps). AIG wrote credit default swaps that they couldn't honor and got a bailout totaling $182 billion when the company collapsed. Many of executives and excessively compensated traders responsible for the collapse not only kept their jobs, but got record bonuses and salaries after the bailout.

You say: "Since when is it anyone else's fault that YOU paid too much for something, that you agreed to pay that price, and then you get to walk away unharmed."

But the homeowners aren't unharmed. Their credit is wrecked. That has real consequences. The bond traders and derivatives speculators at the heart of the problem do walk away unharmed, with jobs, bonuses, and salaries intact. All at the tax payer's expense.

I think your anger is directed at the wrong people.


Posted by b, a resident of Another Pleasanton neighborhood
on May 19, 2013 at 6:50 am

I giggle every time I read Arnold's posts. He is so drunk on the TEA Party cool aid that he can't see what's actually going on.

The rest of the Bay Area real estate market is even more frenzied than here. San Francisco and the Peninsula are insane right now. Same thing in the metro areas of Southern California. The commercial real estate market is also doing well.

Where are all these people who are fleeing California? Maybe they're fleeing Fresno because it is Fresno.

My experience in the decades I've lived here is that the TEA Party/Howard Jarvis/whatever fuddie-duddies periodically invent a crisis. They eventually all flee to Texas, once again leaving this state to those of us who appreciate it. Their departure leaves a little more room for the young, intelligent professionals who continue to flock here for the amazing lifestyle and the innovative, thriving business environment.


Posted by Here we go again, a resident of Another Pleasanton neighborhood
on May 19, 2013 at 9:05 am

John you are wrong about their supposed ruination. I personally know three families who overpaid for homes and walked away only to immediately purchase another one. Ruined credit my butt.
I would love to out the assistant manager of a Bay Area city who has done this TWICE. The latest time she walked not because she was underwater. There was still equity but the home had dropped in value and her loan was at a high interest rate (the million dollars first and the half million dollar equity loan) so she didn't think it was fair to have to pay so much interest when her equity had fallen so far. Not that her $300K plus per year salary was not enough to make the payments. It just was not fair to have to do it.
Wow, wonder how sound the finances are in the city where she works.
These people are NOT ruined although they should be. I am not addressing the AIG thieves of this world. I am simply saying that these deadbeats who agree to the price for something should pay that price. No matter how long it takes and no matter the financial hardship. You wanted it, you bought it, you agreed to the price now pay it!


Posted by b, a resident of Another Pleasanton neighborhood
on May 19, 2013 at 10:02 am

I stand corrected. It turns out that Fresno actually has one of the strongest real estate markets in the country right now. In fact, according to Realtor.com, California overall is leading the nation right now. Web Link Apologies, Fresno peeps.

And it turns out that California's population GREW by 300,000 residents in 2012.

So this is yet another typical Arnold commentary. If the facts don't support your position, just make stuff up!


Posted by AVmom, a resident of Amador Estates
on May 19, 2013 at 10:53 am

I'm Asian, so it's okay for me to say that this largely has to do with the Asian population influx that is ruining both our school system and our property values with their unrealistic values. These values are cultural differences between them and us, and some people can only get what they want by lying, stealing and cheating, if you know what I mean. Please think of the children. Won't somebody please think of the children?!


Posted by hoops, a resident of Mohr Park
on May 19, 2013 at 10:55 am

Well we do all know what happened last time......It is kinda like all the sheep who slow down on the freeway to look at a car pulled over on the side of the road which leads to a traffic jam for NO REASON whatsoever....They cannot help themselves.Some people have to buy now and I feel for them,but the others who do not that are buying in a panic.....good luck and lets all hope someone is not flipping your house a few years from now.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on May 19, 2013 at 12:03 pm

Dear AVMom,
It is not Asians who are to blame. Rather, our woes rest squarely on the shoulders of unionized public workers whose salaries and pensions are unsustainable. We now face a crisis, if not today, then in the future. People will continue to be foreclosed upon because of the current unacceptable tax rate which will only get higher as the baby boomers continue to retire at accelerated rates. Look at Calpers and Calstrs. They claim they are in good shape. They are not. Both will probably be bankrupt within the next 40-60 years, if not beyond. Whose going to pay for this? While we sun bathe on the beach, we need to look at how our children out there swimming in the surf are going to be inundated by a wall of water that will not be pleasant at all. That is why California can't keep its citizens. Those 'in the know' can foretell the upcoming tsunami. It happened in Greece, and it will some day happen here.


Posted by AVmom, a resident of Amador Estates
on May 19, 2013 at 12:19 pm

I agree, Arnold. I guess we're just going to have to agree to disagree on this one. My daughter attends one of the high schools here and although she's about of average intelligence, she has a 4.0. Who's to blame in all of this? Asians. Because they place such a high cultural value on education, this hurts us all. We need to work together as a community to solve this problem, and the first step must be to fire my daughter's union thug math teacher.


Posted by john, a resident of Another Pleasanton neighborhood
on May 19, 2013 at 4:09 pm

" I personally know three families who overpaid for homes and walked away only to immediately purchase another one. "

Those situations are the exceptions, not the norm.


Posted by member, a resident of Foothill High School
on May 20, 2013 at 9:15 am

Web Link


Posted by Nina, a resident of Downtown
on May 20, 2013 at 9:17 am

Web Link


Posted by Pleasantonian, a resident of Another Pleasanton neighborhood
on May 20, 2013 at 9:31 am

Houses sell and prices go us as soon as it gets close to "Schools out for Summer." When school starts again, house sales plummet and prices go down ~

This cycle repeats each year ~ If you want a better deal buy months before School opens and months after school closes.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on May 20, 2013 at 9:38 am

Member/Nina,
I think the Germans coming to America for the gold they accumulated in the thirties and forties is absolutely shameless. What has the incompetent Obama administration done about this? This is why Ron Paul has said Pleasantonians are underwater with their mortgages. But the problem goes much deeper, as our debt problem extends at least 10,000 leagues below the sea, and when it mushrooms to the surface a great tsunami will overwhelm all of us, and if not all of us at least our grandkids or great great grandkids. Have you witnessed the shell game being played by Calpers and Calstrs. Its unconscionable what they are doing. There's no better evidence that we are about to be swallowed by a vast swell of water that knows no bounds.


Posted by Smiley Face, a resident of Golden Eagle
on May 20, 2013 at 10:31 am

It is a simple case of low supply and high demand that drives up the prices around town. I see inventory has picked up in the last few weeks so prices should stabilize. But then again, given the high demand, we may see a steady rise in home prices in the bay area for the next few years.

For those who think this is yet another bubble like we saw before, you are wrong. Most, if not all, banks and lenders are not very inclined on taking risks these days. So, it is less than likely we will see a repeat of those bad loans or 100% lending as we saw in the past.


Posted by Sam, a resident of Oak Hill
on May 20, 2013 at 12:06 pm

Smiley wrote: "For those who think this is yet another bubble like we saw before, you are wrong. Most, if not all, banks and lenders are not very inclined on taking risks these days. So, it is less than likely we will see a repeat of those bad loans or 100% lending as we saw in the past."

If this is a bubble it certainly isn't like the last one. This time it's being fueled by cash buyers and buyers with very good credit and large down payments, that is people who can actually afford the houses that they're buying.

The danger is down the road. If the bull market in housing continues with strong year-to-year gains, then people may start taking large annual increases in housing prices for granted and that's when the craziness really starts.


Posted by Joe, a resident of Ruby Hill
on May 20, 2013 at 1:22 pm

Supply and demand driven by perceived quality of life and schools. My parents live on the Peninsula -same thing is going on. But there is a difference this time: 1.) banks have tightened on lending both for mortgages and 2nd's, which will limit eligibility and dampen any/all impact of a bubble, 2.) premium value placed on quality of schools (price increases aren't happening in Hayward), 3.)shortage of $600-800K housing (a 'starter' home in Pleasanton0, 4.) a surprising % are cash purchases. My bigger worry, and this isn't mentioned in the USNews high school rankings thread, is that both AV and Foothill dropped approximately 50 places from their rankings in 2012. If the quality of schools deteriorates, so will housing prices.
Arnold - that Tea Party Kool-Aid has turned you into a real fun sponge. Germans and gold?


Posted by Sam, a resident of Oak Hill
on May 20, 2013 at 1:42 pm

Joe wrote: "My bigger worry, and this isn't mentioned in the USNews high school rankings thread, is that both AV and Foothill dropped approximately 50 places from their rankings in 2012. If the quality of schools deteriorates, so will housing prices."

With a total of about 27,000 public high schools in the US, a rankings of 331st and 370th in the country (for Amador Valley HS and Foothill HS, respectively) places our high schools in the top 2%. So I would not place a lot of concern over a drop in 50 places, which is a change of about 0.2% out of 27,000. Conversely, if our schools rose by 50 places in the rankings, I wouldn't read too much into that either.


Posted by Joe, a resident of Ruby Hill
on May 20, 2013 at 3:58 pm

It matters to people who place schools as the prime criteria for buying a home and given the seemingly endless string of PR/Admin/Board issues it's a move in the wrong direction which is why the issue isn't being raised


Posted by Jess, a resident of Highland Oaks
on May 20, 2013 at 7:14 pm

It's all Walmart's fault I'm sure!


Posted by Rob, a resident of Mohr Park
on May 22, 2013 at 7:00 am

I am thoroughly entertained by the commentary. We are blaming Asians, the government, union workers etc... What about blaming ourselves. We refuse to move out of Pleasanton because we like the city. We also refuse to build from hilltop to hilltop so supply is further constrained. The local and general Bay Area economy is strong and getting stronger. All of these factors have generated further interest by intelligent investors who see even in the worst crisis in 70 years the home prices were down less than most places. When you adjust for inflation we still have about 25 percent to go to retake the 2007 home prices for the city. Factor in interest rates are lower than they were then you have a magic formula for explosive home price gains. It bums me out though that I know several couples who want to buy in Pleasanton but who too picky in 2010 and 2011 and now are priced out.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on May 22, 2013 at 7:17 am

We are looking at the possibility that virtually all Americans are priced out of the market because of inflated public worker salaries, ridiculous disability benefits, skyrocketing pensions, and unjust medical benefits. What would an America look like where virtually all homeowners are underwater? Well, such is not that preposterous of a prospect with the inevitable tsunami that threatens - nay can be predicted with utmost certainty - to wash over us unimpeded by anything even humanly imaginable. This may not be relevant to us, but it certainly is to our grandchildren and their grandchildren and their grandchildren's grandchildren. This is Big. Many countries do better than us and they haven't had to sell the fish farm in order to provide their public workers with outrageous salaries and pensions. So they continue to farm good albeit sluggish fish while we are likely to be drenched in salt water.


Posted by Kathleen Ruegsegger, a resident of Vintage Hills Elementary School
on May 22, 2013 at 8:31 am

Kathleen Ruegsegger is a registered user.

Here is a great article about the Bay Area from the Mercury News (includes a map):
Web Link


Posted by Teach, a resident of Another Pleasanton neighborhood
on May 24, 2013 at 3:07 pm

"I agree, Arnold. I guess we're just going to have to agree to disagree on this one. My daughter attends one of the high schools here and although she's about of average intelligence, she has a 4.0. Who's to blame in all of this? Asians. Because they place such a high cultural value on education, this hurts us all. We need to work together as a community to solve this problem, and the first step must be to fire my daughter's union thug math teacher."

I think AVMom is my favorite poster ever. In the first two sentences she says she agrees with but disagrees with Arnold. Then she blames Asians (which is okay, because she is one... so, um, it's HER fault?) Her daughter, of AVERAGE intelligence has a 4.0 in what she herself claims is an overcompetitive district... and she's COMPLAINING. And then, my favorite... placing a high value on education hurts us all. POST OF THE YEAR. No. BEST. POST. EVER.


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