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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (127794)	6/7/2008 2:10:53 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 306849

there have been declines in all but the really best zipcodes (like Palo Alto, no declines at all). But even then it is relative. The last house I helped somebody buy was in December 2006- she paid $455 per sq ft for this place in a desirable part of San Jose. Within 6 mos houses like that were selling for 900K vs the 810K she paid. Now, they have fallen back but the median is still $485/sq ft for that zipcode now. The decline of 1.9% is year over year with last year being a strong year here. My guess is even Palo Alto has declines off the absolute peak soon. Even so, I can't think of too many better places to put declining dollars than RE here- you have to buy something vs watch your money dwindle away. I'm a little more comfortable with RE vs oil contracts or gold right now, which are also inflation hedges, since RE has already crashed. Of course for those that think the dollar is going to rebound RE is probably not the place to be.

To: neolib who wrote (127794)	6/7/2008 3:46:12 PM
From: John Vosilla	Read Replies (2) \| Respond to of 306849

'People were begging $900K for 1200sqft flat roofers 12-18 months ago, and $800K now.' So what do these gems rent for today? An idea what the gross rent multiplier would have been in the mid 90's or what the multiplier to median household income was? That will tell you if these houses are slightly overvalued or destined to crash hard. Sounds like you need a lot of debasing, $5k/month rent, $300k+ household income plus ability to finance jumbo loans with good rates in this environment to make it work. This is stark contrast to parts of FL where you can pick up homes of that size that were worth $225k+ in 2005 for a mere $60-70k off MLS now which is close to what has also happened in Sacramento and Stockton a mere 80 miles from SV..