January 27, 2009

SocketSite’s Residential Real Estate Outlook For 2009

We currently see across the board weakness in San Francisco’s residential real estate market throughout 2009 as economic woes compound the impact of tighter credit markets and a shift in market psychology.

Downturns in residential real estate have traditionally been triggered by a downturn in either the local or national economy. The reality which we’ve foreshadowed for quite some time is that the majority of the current market weakness in San Francisco, the Bay Area, and beyond has been driven by a contraction in the credit markets (the deflation of a credit bubble) and a recent shift in market psychology (the deflation of a speculative bubble). The real impact of a weakening economy is yet to come.

With an economy that generally lags the financial markets by nine to twelve months, the full brunt of October’s melt-down won’t be felt for at least another six months. And we expect to see continued weakness in both consumer and corporate spending over at least the next couple of quarters which will further depress corporate earnings and likely lead to additional layoffs and stoke the real real estate killer, unemployment.

With no discernable recovery in sight, we expect the financial market’s destruction of wealth both real (investments) and potential (options) to continue to drag down the San Francisco residential market throughout 2009, and to weigh particularly heavy on the luxury market.

Historically low interest rates will continue to benefit those who buy, but we don’t see rates alone significantly driving demand in San Francisco, or at least not offsetting the decrease in demand due to stricter lending standards and the loss in wealth. And the supply and absorption of new inventory will continue to put downward pressure on housing throughout the city, and not just District 9 as a limited number of active buyers are drawn from other parts of the city by unemotional (well, for the most part...) developer price cuts.

We believe the real estate flight to quality we called two years ago, and up until recently provided support to the upper end of the market, is waning. And value (versus growth) is the new darling of the ball. Oh, and that rents in San Francisco will fall (further challenging values on a fundamental basis).

Our outlook has nothing to do with emotion (other than with respect to acknowledging the psychological shift in the market). And it’s not to suggest that we don’t see any opportunities, especially when it comes to adding real value. It’s simply perspective to help manage expectations and actions (be it in buying, selling, renting or staying put).

And yes, while we are currently bearish on the market in the near-term, we’ll be the first to point out the real bullish signs. As defined by analysts, not sales agents or the industry.

First Published: January 27, 2009 7:30 AM

Comments from "Plugged In" Readers

well said.

Posted by: garrett at January 27, 2009 7:47 AM

Is this the entire 2009 forecast? Is there a doc to download, etc - or just this blurb? Appreciated - just assumed given the hubbub re: "working on it" for last several days that I'm being dumb and probably missing something.

Thanks for all the great work - great site.

Posted by: Clay at January 27, 2009 8:12 AM

"And yes, while we are currently bearish on the market in the near-term, we’ll be the first to point out the real bullish signs."

And, we will not hold our breaths.

:)

Posted by: chuckie at January 27, 2009 8:13 AM

Just checked the MTD sales volume at the MLS. Total sales (condos + SFH) so far this month stands at just 96. No surprise of course - but this is really low - maybe the lowest in post-WWII history. Here are the Jan sales counts for the past five years: 08-225, 07-308, 06-295, 05-352, 04-371, 03-335. Forget the Mendoza line (200), we're setting a new low bar.

Posted by: FSBO at January 27, 2009 8:16 AM

Out here in the fake Bay Area (inner East Bay--from El Cerrito to San Leandro), prices have bottomed, yes, I'm calling a bottom in:

San Leandro & El Cerrito
ghetto East Oakland
not-so-ghetto Maxwell Park, China Hill, "Baja" Glenview (below 580).

Clost to a bottom:
Montclair
Adam's Point
Laurel

Need another 10%-15% drop:
Trestle Glen/Crocker
Temescal
Alameda

Need another 15-25% drop:
Albany
Berkeley
Rockridge

Piedmont's weird, not sure where that's going to go--somewhere in the 10-25% drop range.

Posted by: David at January 27, 2009 8:46 AM

It's nice to see a statement like this one linking RE market shifts to broader patterns in the economy. Thanks SS.

What I'd like to know: who do SS editors consider to be analysts capable of spotting trends that would indicate substantive change in the market?

I'd be curious to know, as part of a statement like this, what signs SS editors would consider to be the most robust indicators of a shift in trend.

Posted by: Embarcadero at January 27, 2009 8:47 AM

Great piece. Agreed 100%. The RE/Credit crisis has started affecting the economy but the economy hasn't started affecting RE back yet.

Posted by: 144 DOM at January 27, 2009 8:57 AM

David - I have been very surprised at how resilient Berkeley and Rockridge have been as I have been tracking those areas for almost 2 years now. I also don't quite understand why Montclaire took such a disproportionate early hit versus Rockridge, they are very similar neighborhoods. It will be interesting where these places end up.

Posted by: The Bunk at January 27, 2009 9:08 AM

Just checked the MTD sales volume at the MLS. Total sales (condos + SFH) so far this month stands at just 96.

FSBO - I am not very experienced in MLS, how do you go about checking the MTD (or YTD, etc.) sales statistics on the system?

Sorry to use the public forum for the question but maybe it will help other people out there who are also wondering the same thing.

Posted by: The SkiEO at January 27, 2009 9:17 AM

FSBO,

January's closed deals are reflective of what has been to this point, the nadir, November 2008. The market improved since then. Now let's see what happens post Obama bounce, post further jobs losses. The spring will be interesting.

Posted by: anon at January 27, 2009 9:23 AM


The Bunk,

My theory on Rockridge vs Montclair is that Rockridge is an area very popular with families with kids. I expect those areas to have stickier prices. Same theory would explain Albany and Piedmont also being resilient to the price declines so far.

Posted by: eb_dude at January 27, 2009 9:24 AM

eb_dude

I know many families that live in both and I am not all that sure that there is much of a difference between Montclair and Rockridge for families. I agree that the SFH market in good school districts will be the stickiest, but both Montclair and Rockridge have top elementary schools (though no real solid options beyond that) plus they are right next to each other and both with solid bay views. My only guess is that being a little closer to College Ave makes people pay a premium, but most people in Rockridge have to drive there anyway, so I just don't get why Montclair has been beaten down as it has when compared to Rockridge.

Posted by: The Bunk at January 27, 2009 9:34 AM

The only thing missing here are the external market forces that will be thrust upon our market as a whole; specifically what Obama and his team plan to do over the near term to prevent natural market forces to occur.

I'm personally not sure why anyone would feel the need to call the bottom? If you truly don't see the rising unemployment, forthcoming credit card crisis, continued collapse of the real estate bubble, insolvency of our largest financial institutions, and a non-existent consumer confidence rating as major market forces that will impact ours, and the global economies through 2010 -- and the impact that any one of these would have on the broad markets, let alone a multi-faceted crisis, which is almost inevitable at this point -- I'm at a loss. It's like watching a horror movie and we're all in it and there is not much we can do to solve it. Cash is King, not so sure about the dollar.

But I generally agree with SS's outlook. I'd actually say it is a conservative case.

Posted by: eddy at January 27, 2009 9:49 AM

I think Rockridge is resilient (more so than Montclair) because people can walk to BART and all other amenities. Just like in SF, people are willing to pay for convenience. Montclair is suburbia, Rockridge is not.

Posted by: Noe Nut at January 27, 2009 9:57 AM

And from the San Francisco Office of the Controller:

"The last two months of 2008 starkly illustrate how quickly San Francisco's economy has changed for the worse. December unemployment rose to 6.6% in the city, up over two full percentage points since May. The number of unemployed in the city has risen by over 10,000 over the past year, and by over 2,000 since November. The change occurs in the context of a seriously worsening California economy. The state unemployment rate rose to 9.3% in December, up nearly a full point in one month. San Francisco's unemployment rate is the fourth-lowest among California's 58 counties.
For several months, the city had seen rising unemployment alongside continuing job growth, but this trend has ended. In the wake of the credit crisis, financial services and credit-sensitive industries such as construction and trade are leading a general trend of employment decline across the three-county metropolitan division. Professional, education, and health services are the only sectors still growing in the local economy, and their growth rate has slowed.

The holiday retail season in San Francisco appears to have been disappointing, following national trends. Parking garage receipts were off in both November and December. BART's flat ridership numbers from December 2007 to December 2008 is somewhat deceptive; almost all of the post-Thanksgiving holiday shopping season in 2008 fell in December.
Tourism had been the major source of strength in the local economy, but the latest November hotel and airport statistics show sharp drop-offs in hotel occupancy, average daily rate, and domestic and international arrivals since October. While November is never a strong month for tourism, the sharp drops since last November are likely signs that the global economic downturn has now hit the city's largest industry."

The full report can be found here: http://co.sfgov.org/webreports/details.aspx?id=865

Posted by: Jake at January 27, 2009 10:04 AM

Sorry, I don't want to look a gift blog in the mouth, but I kind of agree with Clay above...was expecting a little more. You know - maybe some charts, some numbers around the predictions, etc.

But I guess I understand that with so many moving variables interacting, it's tough to make any specific predictions today.

Posted by: Dude at January 27, 2009 10:12 AM

Rockridge has more shopping, food choices, public transit etc. Montclair does not. You literally have to drive everywhere.

David, with respect to those areas in Oakland you say are at a bottom I have to completely disagree. If anything they are going to drop a lot further than the blue chip neighborhoods. Unemployment is going to be a real factor, particularly in those working class areas you site.

Posted by: Willow at January 27, 2009 10:26 AM

The strangest economic indicator I have run across:

In December 2008, Rolls-Royce sold ZERO cars in North America, period.

Posted by: redseca2 at January 27, 2009 10:26 AM

David, what are you basing your prediction on? Recent comps? Word on the street? Experience? Just curious.

The economy is still in the process of tanking, so it would stand to reason, Ebay RE will continue to follow the economy down.

Posted by: agressively passive at January 27, 2009 10:35 AM

redseca2 - that is really disturbing news. Clearly we need to divert TARP funds to the Rolls-Royce dealers and perhaps have a no-down payment, no-interest buyer assistance program. Maybe even special tax credits for bankers whose bonuses were reduced from 2007 levels.

Posted by: FSBO at January 27, 2009 10:40 AM

I'll be a slight contrarian again.

I'd just like to restate my opinion that there is sky-high difficulty in forecasting economics when so much is government-influenced.

Although I agree with almost everything that the editor wrote, I must add in "however the govt is a wild card"

it is true that the govt cannot change the end-game in real (inflation adjusted) terms. However, the govt does have real power (for good, or mayhem) in the short/medium term, and especially in nominal terms.

For example, we now have sub-5% mortgages due to govt manipulation. I certainly did not foresee the govt being stupid enough to do this so soon, but they did. there will be other brilliant and idiotic moves done by gobt going forward. How long until they simply nationalize the banks? (something they should have done long ago)

There is evidence that there MIGHT be a wee bit of defrosting of the credit markets right now. Some of the Commercial Paper markets look like they might be able to roll with lessened govt assistance/manipulation. Now those positive effects will take some time to manifest in the "real" economy. but there is some micro-thawing. I am not saying this thawing will continue. Only that there does seem to be a slight glimmer of credit market thawing today compared with a few months ago.

The problem, of course, is that last year's credit event is now cascading into the real economy, which could feed back onto itself.

I still cannot personally be 100% sure that we will see an L vs U vs W shaped recession. V shaped is out, and was never a consideration to anybody except the financially illiterate and the CNBC cheerleaders.

and I'm still not 100% sure if we'll see inflationary recession or deflationary recession. both will suck. hard. but the ramifications onto RE may vary slightly.

however, I still feel that this will take years to sort out. My mantra for some time has been Dec 2011, and nothing that I've seen changes that yet.

Posted by: ex SF-er at January 27, 2009 10:45 AM

Does anyone know how Napa prices have been doing lately? It's one area that I don't hear much discussion about. I'm wondering if this is the best time to be looking up there.

Posted by: jlasf at January 27, 2009 10:50 AM

David -

I have been studying Piedmont pretty closely and haven't been too impressed with price drops over there.

Most acceptable places (>2BR >2BA) are still 1.5 million or more, and those that are less need lots of work.

Seems like owners who don't get their price just take the house off the market. For how long this can last, who knows? But we do know that when the school season starts, people will be clamoring to get into the neighborhood

Posted by: r u kidding? at January 27, 2009 11:09 AM

Very well stated Adam. I particularly liked this statement:

"Historically low interest rates will continue to benefit those who buy".

I'd just like to add that we are starting to see a fair bit of this type of reasoning popping up in the marketplace. Buying now is not for the faint of heart tho, but buyers do have negotiating power we haven't seen. You have to be confident in your future geographically (as in you don't ever want to leave SF, what you're buying will suit you for years to come, and your wife is not pregnant with triplets), and financially (20-25% isn't going to break the bank, and if you lose your job or significant income, you'll still be fine) to buy in this environment, let alone get a loan. You also need to buy and move on from checking comps, reading sites and tracking the market. It's going down, so why torture yourself? It's last call, get your drink and come back for the next happy hour.

Posted by: alex at January 27, 2009 11:17 AM

Fluj, where are you hiding today?

Posted by: Smiling Millionaire at January 27, 2009 11:33 AM

So much uncertainty....seems nobody wants to make any specific predictions. Well, I'll dust off my crystal ball (and tin foil hat) for some hair-brained macro predictions of my own:

1) The Fannie and Freddie foreclosure moratorium will soon be extended for the rest of the year, if not longer. Furthermore, zombie banks such as Citi and Bank of America will be partially or fully nationalized. Wrapping them (along with Countrywide, formerly the largest mortgage lender in the nation) under the Fed umbrella will put a stop to foreclosures entirely. Other banks will be pressured to do likewise via bad PR, bully pulpit, or witheld TARP money. Bitter homedebtors will be allowed to live free until the financial system is near collapse. Which brings me to prediction #2.

2) The new administration will go to the world to borrow trillions to fund all this, as well as other projects and jobs programs. With a global recession, no one will be willing to lend at current Treasury rates. So Treasury rates will rise sharply to finance the bailouts, forcing other rates up as well and stifling recovery. Double whammy.

3) With rates already rising, the Fed will give up the controlled, sterilized approach, and we'll see massive money printing, i.e. inflation, to burn off the debt the government has assumed from corporations and citizens.

4) Home prices will continue falling until at least 2012. But in 2013, The Greys will make official first contact. Diplomatic relations will be established, and it will turn out their entire home world is overcrowded, "world class," and more expensive than even real SF. They'll get visas to come over here, and will start buying up real estate everywhere. Prices will rise at 30% a year for decades, with most humans being priced out forever.

5) Sometime around 2045, space travel will become commercially viable, and terraforming technology will improve to the point where we can colonize Mars. Of course it will all be developed here in Innovation Mecca, where a 10 square foot studio will cost 12 million Republic Dataries.

6) At that time, the Red Planet will become the biggest land rush in galactic history, with life forms of all types rushing out to stake claims on primo spots with crater views. The speculative bubble in Terran real estate will collapse entirely, crippling the galactic economy, and resetting everything to step 1 again.

I'm pretty sure at least some of this may happen, barring intervention by sentient robots or the development of time travel (so ceteris paribus). But I welcome any criticism.

Posted by: Dude at January 27, 2009 11:47 AM

We'll see how long the neuvo-investor crowd who is buying in the east bay with cheap mortgages hangs on over the next few years as prices fall further when mortgage rates rise (as they are doing now) and rents decline (as they are also doing now - both from the impact of the economy AND the impact of all of those investor-bought homes being dumped on the rental market).

My sense is they will hold for a few years, then dump those properties after they have a busted water heater and a problem tenant or two and realize that there are easier ways to lose money.

As for SF, the volumes have simply evaporated. People will talk about mix driving the medians, but here, mix is a symptom of something much broader. The real issue is availability of credit, and that is only easiest for properties at the lower end and that's what's driving the mix.

Credit allows most people to buy homes, and the availability of credit for nonconforming homes has dried up for people who don't have the ability to pay it back. That is directly opposite to as recently as last year. That's what drove prices up since 2001, and before that 1997-2001, it was dot com money flowing in, and I don't see any of that returning for a very long time.

Will we go back to 1996 pricing? As sure as I'm sitting here. When people realize that there was a bubble, and all bubbles burst when there is too much supply, means there is too much supply. We built too many homes. Those who are citing how we are approaching traditional metrics and therefore the market will stabilize forget that we built WAY too many homes. Those old metrics are meaningless because the availability of homes has changed.

Now put the massive number of excess homes into an economy that feels a whole lot like 1996, or worse, and that tells me that 1996 prices are aggressive given the incomes, availability of credit and supply of housing and jobs.

Posted by: tipster at January 27, 2009 11:47 AM

Smiling Millionaire,

Fluj took a day off today, but he seems to have found a worthy stand-in (alex @ frontsteps).

"You also need to buy and move on from checking comps, reading sites and tracking the market" translation: why bother with the ugly reality that makes you not want to buy? put on your cheerleader hat and jump in. Trust me, you'll be happy (and help the economy in the process, specifically, RE agents employment)

Thanks, but... no thanks!

Posted by: asiagoSF at January 27, 2009 11:49 AM


I am not near as smart as you guys at SS. I must not understand your "Residential Real Estate Outlook For 2009" As near as I can tell it predicts continued weakness.

I guess I missed the part where you quantified it. Not really much of an outlook is it?

Posted by: jimmythekid at January 27, 2009 12:02 PM

probably just one of those "Phineas has grown weary" sort of days

Posted by: anon at January 27, 2009 12:03 PM

Regarding BAP (Berkeley, Albany, Piedmont) and SF... NoeValleyJim has hinted at something I'm going to call "The Shift". It's about changing attitudes with respect to (some) urban school districts. Admittedly, these areas can only hold up for so long in the face of rising foreclosures, but as long as there are anxious parents waiting to suck up the inventory, price drops will be moderated.
Severely jammed classrooms at the high school have forced teachers to hold classes inside portables at Washington Elementary School, on the steps of the Community Theater and at times in the playgrounds outside, prompting the Berkeley Board of Education to approve around $1.7 million for six portables and four new classrooms last year that were occupied by students when school opened after Christmas break on Jan. 5.
From the Berkeley Daily Planet.

Posted by: EBGuy at January 27, 2009 12:08 PM

asiagoSF:

Agreed! Investing in an asset class at the very beginnig of its free-fall to support the Starving Real Estate Agent Fund is not my idea of a party. This is just the beginning, folks. I find staying on the sidelines while I actually ENJOY my hard-earned money much more entertaining.

Posted by: Smiling Millionaire at January 27, 2009 12:20 PM

Dude wins. "12 million Republic Dataries" is what put him over the top.

Posted by: missionite at January 27, 2009 12:31 PM

For those curious, the three counties with lower unemployment rates than SF (per Jake's post) are Marin, San Mateo, and Orange County.

Posted by: anonm at January 27, 2009 12:39 PM

missionite: Dude's "ceteris paribus" was icing on the cake -- it's all very micro, after all ;) ;)

Posted by: dub dub at January 27, 2009 12:42 PM

The sales figures FSBO posts are the key player in the SF story IMHO. Not even at triple digits with only 5 days left in the month? Buyers have simply stopped buying (or they cannot buy) while sellers continue to bring out listings. Only one thing will get sales moving -- much lower prices (I suppose the govt could give free money away again to individual home buyers, but I don't see that happening).

I'm curious, what are the numbers for homes at the $1m, $1.5M, and higher price points? My sense is that we may be barely into double digits in January. That is where the real price pressure is being felt. Also, what are the prospects for closings in the near future -- i.e. what are the numbers like in January for units going into contract (rather than closing)? My guess is that number is also low, and a fair number of places are falling out of contract to boot. The demand curve clearly has moved a lot, and I just don't see that changing for a long time. Sellers will move prices down to meet this curve or they simply won't sell.

Posted by: Trip at January 27, 2009 12:46 PM

Another fun unemployment fact:

Going back at least as far as 1990, 6.6% is the highest December unemployment rate that SF has ever had. The previous December high was Dec 2002, when it hit 6.4%. SF unemployment was 2.4% in Dec 1999 and 2.5% in Dec 2000. But no doubt there are strong, legit reasons...[that] condo values should be noticeably higher [in SF] than they were in 1999.

Posted by: anonm at January 27, 2009 12:48 PM

Dude I was with you up until #4.

and -

Alex - thank you..yes, purchased now must stop reading comps etc. you may have freed up a lot of my time.

Posted by: gowiththeflow at January 27, 2009 1:20 PM

Jake - thanks for the link to the controller. Nothing like data to strengthen buyer's arguments.

Smiling Millionaire and AsiagoSF - after a few rather contentious exchanges (that I had nothing to do with) fluj has stopped reading SS comments.

Trip - I share your curiousity re: higher price points, but I'm also curious what people think the impact of the FHA maximum of $625,500 on pricing?

From what I've seen in open houses over the past few Sundays, great places that are listed at $799,000 aren't getting much traffic, but not so great places that are listed at $699,000 are. I'm surmising that it has to do with the FHA max, which puts $699,000 within striking distance for a large group of potential buyers.

Posted by: 1stTimeBuyer at January 27, 2009 1:32 PM

Redseca, where did you see that Rolls Royce stat? Thanks...

Posted by: tkpsoma at January 27, 2009 1:35 PM

East Bay commenters,

Rockridge has long been harder to get into than Montclair. Several of my friends bought in the late 1990's and ended up in Montclair after finding Rockridge too expensive. I think that's mostly due to BART/walkability, but I also think part of it is that Montclair has kind of a weird stock of houses. There are a lot of houses that make me nervous given the possibility of fires, mudslides, and earthquakes.

Posted by: RenterAgain at January 27, 2009 2:01 PM

"what people think the impact of the FHA maximum of $625,500 on pricing?"

Problematic.

I personally was rushed to do a refi with the 725k limit by end of year, thankfully was successful. Could have swung it without the higher limit but overall it was much better relative to qualification, affordability, security, etc.

Having bought a few month prior the banks were not yet set up to fully deal with it's protocol so it really was only open for a window of about 4 months of the year. We tried to get it the first time around with Wells (same bank that eventually made it happen) but they were not geared up to accomodate the changes yet.

If I had not bought and was looking at getting in now with the limit down to 625k and jumbo where it is I would rent.

It really does make a difference on the "$800k to $1.1m or so props because getting more buck on the lower rate obviously helps DTI, etc.

Another catch is the increased temp conf. is really a Jumbo - so now that I am in on the 725k if I want to refi if rates go even lower and it makes sense I have to put the overage on a 2nd, or come to the table with a check to drop to 625k. The banks will not honor the old limit with the new temp conf. int. rates.

Posted by: gowiththeflow at January 27, 2009 2:07 PM

tkpsoma,

Economist magazine (not just something off the internet).

http://www.economist.com/displaystory.cfm?story_id=12926505

Posted by: redseca2 at January 27, 2009 2:12 PM

eddy wrote:


The only thing missing here are the external market forces that will be thrust upon our market as a whole; specifically what Obama and his team plan to do over the near term to prevent natural market forces to occur.

It's not just the federal government. From California homeowner defaults slow as new law kicks in":

Notices of default against homeowners in the state -- the first step toward foreclosure -- dropped to the lowest level in more than a year between October and December, down 20% from the previous quarter and 7.7% from the same period in 2007 to a total of 75,230, according to MDA DataQuick.
In September, the number of default notices dropped for the first time in three years, and housing experts credited a new state law that took effect that month and forced lenders to make more efforts to contact borrowers before initiating foreclosure proceedings.
By December, though, the default notices were back on the rise, nearing 40,000, where they were before the law.
"The law in California briefly slowed it down. Now you are going to see an echo effect where those homes that were in default are now in foreclosure," said Dean Baker, the co-director of the Center for Economic and Policy Research in Washington, D.C. "On top of that, people have been losing jobs at an incredible rate. That's going to create more foreclosures."

I'm not a Peter D. Schiff type like some folks on SocketSite, but I do believe that government interference is only delaying the much-needed and inevitable..(say it with me)...Price Discovery.

Prices need to come down dramatically, a lot more people with mortgages they can't afford need to get foreclosed on and put out of their McMansions in Mountain House, and then and only then will buyers return in "normal" numbers.

Posted by: Brahma (incensed renter) at January 27, 2009 2:31 PM

Quick question that would be interested to know if anyone has looked at in their analysis:

Anyone looked at the inventory of available homes >$750k vs. the total # of households that earn > $250k?

Since all things old seem to be new again - seems like a conservative rule of thumb that you can afford a home thats 3x your annual income might be an interesting look. How many people are there that can afford to buy the inventory on the market. If substantially less than supply, seems like another decent sign of more pain to come.

Could probably snag 2005 census info to get it... but even that isn't gonna reflect all the financiers who made $500k+ in 2007... and $200k in 2008...

Posted by: Clay at January 27, 2009 2:38 PM

@ex-SFer-- I think you are too quick to discount the possibility of a V shaped recovery. I have heard economists from leading business schools predict a V shaped recovery in the 3rd quarter. I share your skepticism about that, but some very financially literate people believe it is going to happen.

Posted by: NoeNeighbor at January 27, 2009 2:38 PM

NoeNeighbor: V shaped recovery...Are you serious? Its not going to happen.

Posted by: Willow at January 27, 2009 2:42 PM

@ NoeNeighbor - As a guy who works daily with retailers can tell you that noone is planning for anything other than 18 mos of suckage.

Posted by: Clay at January 27, 2009 2:50 PM

"V-shaped"?
"Financially literate"?

Link, please.


Posted by: Debtpocalypse at January 27, 2009 3:04 PM

Gowiththeflow - thanks for the insight.

I agree with Willow and Clay - the recovery is looking less like a "V" and more like an "L" - perhaps because people thought the boom period an "r".

Posted by: 1stTimeBuyer at January 27, 2009 3:17 PM

Actually, it will be a 'K' shaped recovery. The rest of the economy will go down, but every owner will believe their neighborhood is still heading up.

Posted by: tipster at January 27, 2009 3:37 PM

"As defined by analysts, not sales agents or the industry."

Are these analysts that we are relying on to forecast the recovery, the same analysts who didn't see the downturn coming in the first place?


Posted by: serenity now at January 27, 2009 3:50 PM

that's it?

i appreciate your work, editor, but to be honest, not much 'value added' here.

i'll take that back a bit. that the bottom end is now the best market segment in the bay Area is not yet well appreciated - but you are dead on. why? cash flow rent vs buy is getting back in line on this segment - so it will drop, but slowly now.

the grind down for those in the top tier will be long and painful. hangnails being pulled out is about right. time for me to get a manicure.

Posted by: poor owner living in potrero at January 27, 2009 4:00 PM

I would be really interested to see a separate analysis on something that's a key part of San Francisco housing stock: TICs.

Given the current environment,
-People who own TICs cant sell them because no one will finance the purchases affordably, no first time (SF) buyers have a 20-25% downpayment anymore due to losses on prior property or in the stock market.
-This removes current TIC owners from the buyer pool because they can't "step up" to a house or larger condo.
-The sudden disappearance of TICs from San Francisco's truly "available" housing stock may be artificially propping up condo prices due to the sudden shift in the supply/demand equation. TICs may be on the market but they're not "emotionally available" for sale.
-I am starting to see some BIG ($100k, which is huge at that range) price reductions on TICs.

Again, the TICs make up a huge swath--probably close to half--of the entry level owned property in this town. Kick that leg out from under the chair and there's an interesting domino effect.

Is there a break-out anywhere of how many TICs are still selling and for how far under asking?

Posted by: Jason at January 27, 2009 4:01 PM

Who wrote this "outlook", someone from the last wave of layoffs at the SF Chronicle?

I love SS, but this isn't worth much, just a bunch of quite obvious generalizations.

Let's call Ken Rosen next year and get the real thing.

Posted by: gh at January 27, 2009 4:11 PM

Couple responses:

1) Montclair has dropped more than Rockridge because yes, it's less walk-able, and less convenient, and less established. Montclair, looking at distressed sales, had a lot more houses bought in the bubble years with young families "stretching" to get into one of the 4 good grade schools in Oakland (Thornhill being one of them)

2) "Bad parts" and less desirable areas of Oakland are already bottoming. Why? Because there are investors, yest investors, coming in to buy, and those "working class" folks are going back to what they should have been all along--renters.

3) 1996 pricing? Heck, we're at 1994 pricing in East Oakland. You could buy blocks of houses at $75-$115K/pop and rent each of them out for $1000-$1400/month. With the excess cash flow you could hire two burly bodyguards and a pit bull and collect rents just fine and have profits to spare. Even if rents drop, are they going to drop to 1994 rents? $500/month? Heck, you're still cash flow neutral at that. What else am I basing my bottom call on -- well, in San Leandro especially, ANY house that drops to around $300-$350K is getting bought. Quickly. Even if it needs work. Why? it's cheaper than renting. (even with very conservative assumptions, i.e. my house is cheaper than renting the same house as long as prices appreciate 1.8% annually over 15 years, and assuming a 6.25% tax free investing rate for my down payment--which is higher than any muni bond I could get and equivalent to 8-9% annually in stocks)

4) In summary, I'm basing my bottom call on the fact, yes, observational fact, that houses in the areas I described are either at or below the price levels that support cash flow, or in a owner-occupied situation, make more sense than renting. In the other areas that have not hit bottom, those numbers are generally the drops required to bring house prices to that level.

Check back in a year and see if I'm right.

Posted by: David at January 27, 2009 4:57 PM

Jason: It seems to me that there are zillions of TICs on the market. The problem is that it's the entire TIC that is for sale, not the individual shares. Any solvent person would be crazy to buy into a TIC right now when the odds are so good of the other shareowners losing their jobs and defaulting.

Posted by: Jeffrey W. Baker at January 27, 2009 4:57 PM

I think you are too quick to discount the possibility of a V shaped recovery

I don't.
The only way that I see a "V" shaped recovery is if there is some sort of massive govt intervention with severe subsequent monetary inflation (dollar devaluation). However, it is improbable that the govt could intervene on a long enough time scale to complete the end of the "V", thus you fall into a "W"

I have pointed out several times that a "W" shaped recession is in theory possible. At first, a "W" will look like a "V". Overall, I still see a "U" or "L" as more likely, but the "W" probability cannot be ruled out. I cannot discern which is most likely at this time due to govt intervention.

As example: it looks as of today like the "bad bank" idea may be floated again. we also may see a $850B+ stimulus. there are other govt forces at play as well. If the velocity of money increases it would not be unreasonable to see what looks like a "V" shaped recovery initially. But I have a hard time believing that this type of recovery is sustainable given the debt we will need to achieve this. (UNLESS we see significant inflation/dollar devaluation). however, inflation out of control will quickly feed on itself, and I don't see how the bond market will accept this, so interest rates will need to rise making the Govt intervention more costly over time... thus we fall back down into the "W" shape recession.

I've said this before: my personal crystal ball is very cloudy right now. Too much government intervention, and we've just seen a sea-change in govt. I don't really know what Obama will bring to the table. Thus far it looks like more of the same. Geithner. Bair. "Bad Bank" (basically what TARP was originally going to be). Refusal to outright nationalize quickly.

In my opinion a "V" shape is in theory possible, just like spontaneous combustion. but highly unlikely. I have not seen a single intelligent investor that I trust say otherwise.

However, I do hear this "V" rediculousness from many of the CNBC cheerleaders, those in govt positions who don't always speak the truth, and those who had no idea what was happening in the first place. (The same sorts of people who told us that AIG would make the taxpayer money, and told us that our issue was "just a subprime" problem that was "contained")

A "V" shaped recession after a major credit event would be a first, as far as I know
A "V" shaped CONSUMER-led recession would also be rare, to my knowledge.

we've seen Great Depression-like events the last 12 months. I"m not saying we'll have GD2, just saying that it's grim. hard to imagine we catapult from GD events to a recovery quickly.

As I acknowledged earlier in my CONTRARIAN post, the credit markets ARE starting to thaw. But only small segments (such as some of the commercial paper market) and it is at a snail's pace. But that will take a LONG time to translate to the market. (just like the initial credit shock took a long time to affect the "real" economy). and we haven't seen any prolonged thaw. things start to thaw, then plunge into catastrophe at a moment's notice.

Posted by: ex SF-er at January 27, 2009 4:58 PM

PS. If anyone wants to join me in SlumLord, LLC, I'd love to buy a few houses and apartment buildings that would produce very nice cash flow yields. I even have a rent collection agent in mind, with a pit bull.

Posted by: David at January 27, 2009 5:01 PM

I agree with gh @ 4:11 p.m. I, too, am disappointed with this post. It offers nothing new or particulary insightful. It's just summarizing what has neen echoed on SS for the past seeral months, if not years, and is just restating the obvious.

Posted by: that's it??? at January 27, 2009 5:08 PM

Hasn't the ship already sailed on the V shaped recovery? I don't know if there is a well accepted timeline for V shaped economic recoveries but we've officially been in recession since December 07. As a result I'd conclude we have already moved to the U phase. Any economic professors out there that can validate?

I too was underwhelmed by the "outlook" but this is just a RE blog after all.

Posted by: Willow at January 27, 2009 5:24 PM

David - that makes sense. I like your thinking. And in some places it may be true that units are getting snapped up and purchased. Indeed, sales numbers are up in some areas. But in SF, from the controller's Economic Barometer (thanks again Jake) we see average rent for a 1 bedroom apartment is $2,142. If you figure 6% over 30 years is about, the PV is $357,268. Let's simplistically assume a 3% FHA downpayment of $11,000. For renting to be on par with selling, the average one bedroom apartment in SF would be about $370,000. There's a long list of places in the Bay View and Silver Terrace for that price, and a few studios in the Tenderloin, but that's about all I see.

So a "rent v. purchase price" analysis, even at the bottom tier in SF which is typically thought to be "closer" to hitting bottom, may still have a way to go. (But I've gotta admit it's closer than I thought.)

Posted by: 1stTimeBuyer at January 27, 2009 5:34 PM

465 words.
5 sentences beginning with "and".
0 insights.

Posted by: amused at January 27, 2009 5:47 PM

Regarding the TIC/condo question, it looks like the ratio of sales between TICs and condos has been relatively constant. Here are sales for TIC's and condos (inc loft condos & coop) by period:

Jan 09: 10 TIC sales, 34 condos, 23% of total are TICs
Dec 08: 32 TIC, 106 condo, 23% TIC
Year 08: 432 TIC, 1,856 condo, 19% TIC
Year 07: 722 TIC, 2,349 condo, 24% TIC
Year 06: 652 TIC, 2,549 condo, 20% TIC

Current active count: 184 TIC, 588 condo, 23% TIC

So the TIC % of the category has been relatively constant - including for active current listings. Note the months of supply implied by the active count: For December's sales volume, it's about 5.6 months of supply (for both TIC and condo). But based on the current low January sales volume (which will continue to rise somewhat with new reportings), the implied months of supply may be approaching 15.

Posted by: FSBO at January 27, 2009 5:51 PM

1st time buyer - what do you think a 3 bedroom would rent for based on your analysis?

Posted by: gowiththeflow at January 27, 2009 6:06 PM

Here is my prediction:

The Arizona Cardinals will win on Sunday versus the Pittsburgh Steelers if they can score more points.

And in other news, the sky is blue (stole that fromk some tipster, forgot who.)

Posted by: Paul Hwang at January 27, 2009 6:24 PM

I plan on moving to SF come October 2009 and am going to start looking for a RE Agent soon. I know the general feel is that RE prices in SF will continue to drop into next year. Is it pie in the sky scenario to see single family homes in the mid-$500s in somewhat desirable neighborhoods in SF?

Posted by: MovingtoSFfromNYC at January 27, 2009 6:25 PM

@movingtoSFfromNYC

Define "somewhat desirable neighborhoods". Somewhat desirable to me is where I can easily walk out my door and score crack or a date with a tranny hooker, but for others it is proximity to shops and restaurants!

Joking, of course. There are homes in the mid 5's.

Here is a sample.

Here is the link to the district map. All of the homes on that list are in D3 and D10.

Whether those areas are "somewhat desirable" is likely now up for debate.

Posted by: alex at January 27, 2009 6:48 PM

I live in district 3, check out jackson square. It's nice enough for most people :)

Posted by: jessep at January 27, 2009 7:02 PM

I wonder if it would make sense to buy a fixer upper in a nice neighborhood like Noe and then do a down to the studs remodel. I recall reading some cost breakdown for this type of scenario and the numbers were really high. However, given current market conditions and the fact that contractors are, my guess, looking for work. Maybe it is possible to get a good deal? I don't know, just throwing it out there.

Posted by: MovingtoSFfromNYC at January 27, 2009 7:15 PM

On the subject of market forecasts, does anyone have a link to the Goldman Sachs report on real estate markets, discussed in today's WSJ?

Posted by: cse at January 27, 2009 7:25 PM

The minute people started called Noe Valley prime is when I knew we were in a bubble.

Posted by: lolcat_94123 at January 27, 2009 7:42 PM

moving to sf from nyc,

There are contractors out there doing work for very little profit just to keep there crew employed/busy, so I would think a savvy prospective end user could find a good contractor right now for a better price than 6 months ago.

Posted by: anon at January 27, 2009 8:57 PM

With the market declining 2% per month, a better strategy than buying a fixer and spending 6 months fixing it up is to just rent for 6 months to a year for half the price of buying, and then buy a completely remodeled home for the same price as a fixer 6 months prior, and save yourself all of the trouble.

Posted by: tipster at January 27, 2009 9:30 PM

Yes, 1st Time Buyer, SF is still overpriced. Any measure of the bust will tell you that the East Bay has dropped more than SF, ergo SF is still overpriced. But as we saw with even "nicer" areas of the East Bay, it's not immune from price cuts, and so shall SF fall under the knife of fate (feeling poetic).

Moving to SF from NYC....
1) Why buy overpriced SF R.E.? rent for a bit, watch prices come down and figure out where you want to live...or
2) Buy in the East Bay. Trust me, the commutes are shorter from a 500K SFR in a nice Oaklandish spot (or San Leandro) than they are from the hell of the Outer Sunset (unless you're commuting to South SF or the Peninsula, but judging that you're moving from NYC, I'm betting you're working in the FiDi). I work in the FiDi, my commute is shorter than two of my coworkers who commute from the Inner (!) Sunset and Outer Mission.
3) Contractors....well, my contractor worked for very little profit, and is also AWOL, not having finished a lot of minor bits to the job (which is kind of ok, as they're things I can do myself, but still)...You get what you pay for and fixing a spot in SF is not cheap due to ridiculously stupid permit processes. The people I see making significant $$ from those kind of purchases are usually contractors themselves with access to cheap, illegal labor and/or have a nice bribe conduit to speed the process up (time is money). But maybe that's my former life in Chicago talkin. Thanks Rezko!

Posted by: David at January 27, 2009 9:38 PM

With the market declining 2% per month, a better strategy than buying a fixer and spending 6 months fixing it up is to just rent for 6 months to a year for half the price of buying, and then buy a completely remodeled home for the same price as a fixer 6 months prior, and save yourself all of the trouble.

If you truly believe that, why doncha take that advice and tell us what happened in a year's time?

Posted by: anon at January 27, 2009 10:15 PM

Moving to SF from NYC....

best strategy in SF: find a rent controlled unit, hold onto it for 20 years, and file for protected tenant. You will own a good unit in real sf for $500 a month. Ask Spencer how he did it.

Posted by: ester at January 27, 2009 10:41 PM

Some of you RE Bulls on here will not want to hear this.... but read this interesting article about where RE prices are heading from here.

http://www.huffingtonpost.com/dave-johnson-and-james-boyce/double-bubble-double-trou_b_161357.html

Posted by: Mavo at January 27, 2009 11:18 PM

Moving to SF from NYC....
You don’t want to buy anything now since you will get more for your money in the next few years. With property tax revenue dropping like a rock every municipality in the state will soon have a lot of layoffs and early retirements and many of these people will be leaving the state (joining the thousands of private sector people that were/will be laid off or forced to retire)…
You don’t want to do a remodel in SF since unless you know the right people (Chinese and Irish) that run the building department in SF it will cost a lot more than you expect and take a lot longer than you planned (assuming you can do any work at all since the neighbors may protest ripping out “historic” plaster walls or aluminum windows…
P.S. When I was in grad school a classmate (who knew a lot of Silicon Valley property owners through his Dad a developer) set up a company to do assessment appeals. Does anyone know a good assessment appeal firm that works on the Peninsula (A friend just told me that the home he bought in Burlingame for $1.8mm in 2006 is now worth at least $300K less)?

Posted by: FormerAptBroker at January 28, 2009 8:00 AM

Moving to NY and all the commenters to him;

1) There is a lot of time to do a remodel, but you don't need bribes, or illegal labor.
2) Good contractors are busy so mind who you hire
3) A decent architect can get you through the permit process just fine.
4) Your neighbors have no say on a "down to the studs remodel" if the work is interior. So, don't worry about the plaster.
But, 5) and most important the cost of the fixer in good neighborhoods has not come down as much as the cost of everthing else. (see Douglass $1.1M place that went into contract in a week).

Posted by: sparky-C at January 28, 2009 8:49 AM

"With property tax revenue dropping like a rock every municipality in the state will soon have a lot of layoffs and early retirements and many of these people will be leaving the state (joining the thousands of private sector people that were/will be laid off or forced to retire)…"

I am waiting for this scenario but somehow I think it might not be a massive migration out of SF (at least in comparison to when 70% of Wall Street was laid off and people moved out of Manhattan to Queens, Brooklyn and Jersey).

I definitely have thought about just renting (month to month) in SF and then tracking the market for the next year.

Sorry to be kind of off-topic.

Posted by: MovingtoSFfromNYC at January 28, 2009 10:46 AM

MovingtoSF: San Francisco is a combination of different neighborhoods, each with a different feel (I imagine NYC is the same). If you're moving here for the first time, I would rent anyway just to give yourself a chance to see which shoe (neighborhood) fits better.

As for getting back on topic, I'm starting to hear a lot of activity on the (extreme) low-end of the market. What have others heard?

Posted by: Usually Named at January 28, 2009 12:03 PM

Yes "Usually Named", I work in the real estate dept. of a bank, and amid all the doom and gloom (and SS "Red Dawn" scenario believers) almost every day I hear from investors buying foreclosures and calling me for our REO properties. Many real estate people stayed away from stocks, and now they're putting that cash to work in Sonoma and East Bay counties. A positive sign.

Posted by: gh at January 28, 2009 1:08 PM

Good to hear that investors are buying up REOs. That means less money to compete with when the buying gets good.

Posted by: The Milkshake of Despair at January 28, 2009 1:42 PM

Blogging is not necessarily equivalent with expertise. This blog has enviable positioning. End of story.

Posted by: anon at February 1, 2009 11:22 AM

A Coldwell Banker perspective:
Earlier this week, the National Association of Realtors reported that in December, existing home sales rose unexpectedly while inventory declined, led by a surge of sales in the West.

The national real estate organization reported, “Existing home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December from a downwardly revised pace of 4.45 million units in November, but are 3.5 percent below the 4.91 million unit pace in December 2007.”

In the West, existing home sales jumped 13.6 percent to an annual rate of 1.25 million in December and are 31.6 percent higher than a year ago. However, the median price was $213,100, down 31.5 percent from December 2007.

Here at home, CAR reported this week that home sales increased 84.9 percent in December in California compared with the same period a year ago. No, that’s not a typo. 84.9 percent. On the flip side, the median price of an existing home fell 41.5 percent, a continued symbol of buyers taking advantage of the large number of distressed properties currently available.

So why the sudden, so drastic surge in sales? There are a few reasons:

A lot of people who were previously priced out of the housing market can finally buy
With interest rates under 5%, a buyer’s purchasing power is at its best in more than three decades
After months of increasing or stable inventory, we are finally starting to see the numbers fall
Increased consumer confidence (of late) based on the new administration
We’re seeing a lot more investors coming into the market in addition to first time buyers. Consider the fact that this week alone, one Gilroy Agent represented 10 properties that went into contract. Almost all were investors and the properties were condos in the under $100,000 price range.

So is it too early to call it a trend? Probably. In all honestly, we still have a lot of distressed properties to move through before we can begin to see prices stabilize. At least for the foreseeable future, buyers will probably have the edge but with an 84.9 percent increase in sales year over year and inventories on the decline, we’re finally moving in the right direction. The key to all of this: buyers are ready to buy when they perceive a good value. Until then, they wait.

Now let’s take a look at this week in real estate:

East Bay—Our Castro Valley office reports multiple offers still seem to be the trend for REOs and offers are being accepted over asking. One Agent reports that her recent offer on an REO property in Hayward was rejected, with the winning bid accepted at approximately 12% over asking. In an interested trend, especially in Castro Valley which was one of the hardest hit by REOs, Agents are reporting that there seems to be less REO inventory available. Is it possible this market is going to be one of the first to rise from the REO short fall? Danville reports almost all of our sales are bank owned. Open houses are well attended and with the media talking about REOs, buyers are looking for bank owned bargains. Walnut Creek is feeling the same effects with 90% of its sales being REOs or short sales. On the contrary, Oakland reports it needs listings. Great listings in this market are getting multiple offers. A new Montclair listing on the market (listed at $678,000) had its first open on Sunday and had 200 groups through. We had requests for 11 disclosure packets.
Monterey County—While the market on the Monterey Peninsula is a spotty one, Agents are writing lots of offers. Buyers are being tough and we have put 43 properties into escrow since the first of the year. An interesting fact, Carmel has had eight properties listed over $2 million go into escrow in January.
North Bay—Greenbrae reports that sales all over central Marin are weak, though new homes that appear to be priced well are coming on the market. San Rafael notes that many of the condos listed under $200,000 in San Rafael are seeing multiple offers and are selling over asking. Petaluma notes that inventory is building in all price ranges, especially in the $600,000 plus range. We’re seeing multiple offers in the under $500,000 range. All but one of our open escrows for this week were multiple offers. Santa Rosa also reports some good news noting that a new Agent helped an REO that is old to the market and had 38 groups through. A veteran Agent helped a similar property and picked up a cash buyer looking to buy three properties in the next 60 days!
Peninsula—Burlingame notes that after last weekend’s very busy open houses, buyers seem very enthusiastic. We are seeing some very attractive properties in the $800,000 range come on the market which should present opportunity to those buyers who have been sitting on the fence. Half Moon Bay notes that several offers are being negotiated and there were six new properties listed that are neither short sales nor REOs. One well-priced REO received at least four offers so buyers are ready to buy when they perceive good value. Palo Alto notes that open house activity has been slow (about 50% of the norm). There does, however, seem to be a bit of momentum in the entry level properties.
San Francisco—The Lombard office reports that January deals remain dominated by REOs, mostly under $650,000 but one at $1.6 million. The primary market challenges: financing fall-outs and buyer fence-sitting. Our Noriega office reports that sales exploded last week with 10 ratified offers. It has been busy on floor and via online inquiries so it appears that sales are following. City inventory remains at six month lows which is creating bigger demand for available listings. One example, as shared by our Market Street office is that one client lost out on three properties due to multiple offers. Our hope is that this is an indication that more offers are starting to be written and accepted.
Santa Cruz County—We have had two large sales over $3 million close within the last two weeks. There are still not many sales in the county over the $1 million mark. It is a combination of lack of buyers and lending issues. In the regular market, inventory remains about the same although certain areas of the county—like the west side—have seen significant decreases. Open house attendance is up and there is activity with first time buyers and investors.
Silicon Valley—Activity definitely seems to be picking up. Our Los Altos First Street office reports that buyers are attending open houses in good numbers, mostly in the lower price ranges. Some price adjustments of 10% create offers. Our San Jose Main office disagrees noting that while open houses are busy with traffic, it isn’t translating into sales. The office reports that many buyers are still sitting on the fence waiting for prices to drop further. Lower priced properties (between $250,000-$550,000) seem to be receiving the most activity.
South County—The Hollister office reports that list prices continue to decline and cash offers are on the rise. Morgan Hill reports that this week, one Agent put 10 properties into contract. They were all in the Gilroy area and most were under $100,000 condos. The Agent represented several investors who mostly offered cash for the properties.

The bottom line is that while sales are on the rise, we still have many distressed sales that must work their way through the system. With Wednesday’s controversial passing of the stimulus package (with a near party-line vote), we can only hope that the administration’s plan—in what we know is unchartered territory for our country—is successful. The administration needs to move fast to stimulate lending (and spending) in order to set the foundation for an economic recovery

Posted by: John at February 1, 2009 10:41 PM

Yup, if you slash it, they will come.

Prices have gone down so much in some areas that a lot of buyers have been re-priced in. What was impossible yesterday is today a reality, thanks to LOWER PRICES. This is the only thing that will lead to recovery.

But not that fast on the longer term prospects. This is not the early 90s recession.

Wait for that supply of buyers being depleted through the combined effect of buyer saturation (current buyers all purchased distressed property) and economical hardship (future potential buyers). Plus people asking wish prices will still have difficulty buying when the only buyers are bargain hunters.

I wouldn't count on a long term price rebound. More like a Dead Cat Bounce leading to a few years of moderate decrease until affordability reaches more of the population as it should. Hey, if 70% of Americans are currently homeowners, this means that 70% of the people could afford a place where they live at some point in their lives. This is where the affordability index should settle, not at 20 or 30 or even 40%.

Posted by: 150 DOM at February 2, 2009 7:39 AM

I wouldn't count on a long term price rebound. More like a Dead Cat Bounce leading to a few years of moderate decrease


Hmmm. "Moderate decrease," huh? From this point in time, 5 or 10%, maybe 20% off desirable neighborhoods? And your metric is 100 to 150?

Why are you here again?

Posted by: anon at February 2, 2009 8:35 AM

"Macy’s Inc. will lay off about 1,400 positions at its Macy’s West headquarters in San Francisco."
http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2009/02/02/daily13.html

Posted by: Michael at February 2, 2009 4:29 PM

Your blog is very informative, I have learned so much from it. It is like daily newspaper :). Added to fav’s..

Deirdre G

Posted by: Real estate Philippines at April 18, 2010 11:03 PM

With the market declining 2% per month, a better strategy than buying a fixer and spending 6 months fixing it up is to just rent for 6 months to a year for half the price of buying, and then buy a completely remodeled home for the same price as a fixer 6 months prior, and save yourself all of the trouble.

How did that work out, then?

Posted by: anonn at April 19, 2010 9:54 AM

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