20 Jun 2006

SF Real Estate Prices Provoke Rebellion

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The dismal quality (“Little boxes made of ticky-tacky”) and mind-boggling prices of San Francisco area housing are famous. “They took the Earthly Paradise, and built New Jersey,” one appalled visitor recently remarked.

Ordinary people are completely priced out of this market, and the Sunday Chronicle reports the situation has inspired the traditional local activist response: Start a Web-Site!

Phil Zarboulas is mad as hell about Bay Area housing prices.

And he doesn’t want you to take it anymore.

What started as an open letter of frustration about the region’s exorbitant home values was reborn last month as www.boycotthousing.com, a Web site that urges people to stop buying Bay Area real estate, report overpriced properties and spread the word about cracked foundations, leaky roofs and rundown surroundings.

A software entrepreneur who was outbid several times during his two-year plus home search, Zarboulas admits he wants to hasten a slowdown in the market and thereby help regular folks (and himself) onto the home-ownership bandwagon.

Through the site — which seems a natural fit in the technology/real estate/advocacy-obsessed Bay Area — Zarboulas also hopes to educate overextended homeowners about the possible disadvantages of tapping equity that may not be real.

“There’s no fundamental reason why house prices are this high — it’s just a mentality,” Zarboulas, 40, said during a wide-ranging interview at a coffee shop in San Francisco. “We want to change that mentality.”

In a housing-strapped region with a population of nearly 7 million and growing, economists doubt Zarboulas’ site will have a measurable effect — not to mention the difficulty of organizing any kind of boycott on something as fragmented as a market with tens of thousands of housing sales each year.

But if even a relatively small slice of those sales are affected by his grassroots effort, Zarboulas is convinced a sense of reason could return to a market gone haywire.

Since its introduction in mid-May, almost 24,000 have visited the site and nearly 1,000 have signed up to voluntarily avoid purchasing a home in the Bay Area for some period, ranging from three months to more than a year.

Obviously, starting web-sites, signing petitions, even linking arms and singing Kumbaya, is not going to bring down Bay area home prices.

What would is what the Bay Area moonbat population would never consider for a New York minute: reducing the San Bruno Mountain-sized pile of building regulations, and opening up some of vast reservoir of safely squirreled-away “open space” where no one is permitted to build.

Unfortunately, the drastic shortage drives prices of existing homes into the stratosphere (Fido’s doghouse would go for $500K if it were on the Peninsula), and creates a gloating constituency of existing homeowners. “I’m on board, Captain, pull the ladder up,” is the real motto of the Golden State.

The SF Peninsula is not an enormously large place, but three preservation organizations alone have taken 125,000 acres, 200 square miles, of land out of circulation.

Peninsula Open Space Trust 55,000 acres

Midpeninsula Regional Open Space District 50,000 acres

Peninsula Watershed 23,000 acres

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One Feedback on "SF Real Estate Prices Provoke Rebellion"

crosspatch

I live in the Bay Area, the Southern part in Santa Clara County. The neighborhood where I live was constructed around 1960 and is mostly 3 bedroom, 2 bath ranch houses typical of the period. The odd thing is that these 40+ year old, postwar baby-boom single-story ranch homes that originally sold for $35K and sit on less than 1/4 acre each can’t be touched for less than (sit down) $1 million. The *median* home price in the county is well over $600,000 and two years ago the price in my neighborhood was around $800,000. Again, this is for a 40 year old development tract home, nothing special at all.

Most of the homes on my street that are not owned by long-time owners are owned by an investor in Taiwan who rents them out. There is absolutely no way for 90% of the people in the region to own a home in my neighborhood. It is just plain stupid. And lately with so many people buying homes with “interest only” short-term adjustable mortgages, rising interest rates are going to force many homes onto the market when the terms on this loans expire and it comes time to refinance.

Inventory is already starting to grow. It is REALLY going to suck around here in another 5 years or so when the baby boomers begin to reach 65 and hope to cash in on their home investment by putting their houses up for sale.

The back side of the baby boom related building spree is going to be the baby boom related selling spree when they cash in for retirement. I certainly wouldn’t be wanting to buy a home in that market right now.



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