Real Estate Update – 7/11/08 Update
Dublin saw a slight 3% decrease in the price of the average home sold this past week (compared to last week). This is partially attributable to the sale of a below market rate (BMR) unit at the Elan community. Dublin had 8 homes sold this past week – 2 new homes (1 at Elan and 1 at The Willows) and 6 existing homes sold.
With the news today about Fannie Mae and Freddie Mac , Dublin homeowners and home buyers might be feeling a bit queasy about the current real estate market. However, during these times of uncertainty in the real estate market, it’s important to keep everything in perspective. This article by the Moxley Team makes a great case for the long-term view.
9:35 PM on July 11th, 2008
$30,000,000 in 40 years? That’s the funniest thing I’ve ever heard. Real estate agents have never been known for their math skills (or spelling, or grammar, or writing, or pretty much anything except socializing), so who can blame them. That $30M figure is so ridiculous I won’t even bother analyzing it, but give me a break. Yes, hold your house for the long term, but please don’t think your house will be worth that much in 40 years. 140 years maybe. I wonder what all these agents have planned when the Hayward fault explodes, houses come crumbling down, and home values take 10+ years to recover?
5:00 PM on July 12th, 2008
Hi Anonymous,
Percentage difference from $25,000 to $850,000 is 3,300%. I applied the same percentage gain from $850,000 to find X and it was just under $30,000,000. While $30,000,000 is high, it does represent an accurate percentage increase from 1965. Do I think a track home in Pleasanton will be worth $30,000,000 in 40 years, possibly, homes did increase 3,300% once, and they could do it again. I apologize if the history is offensive, but I was just writing on something I found to be interesting and equated it to today’s numbers and what it could look like if values continued like they have for the last 40 years.
11:42 AM on July 13th, 2008
That analysis is completely misleading and irresponsible. It’s typical real estate agent manipulation of numbers without taking into effect a zillion other factors. 40 years ago, virtually anyone with a job could buy a home, and there was tons of room for prices to soar, plenty of land available, and a very low supply of homes compared to the amount of land available. The factors in play today are nearly the complete opposite, but admitting that would scare away those potential buyers of yours who are sitting and waiting for the housing market to collapse further, which it will. This is not a knock on you or the Moxley team, but your industry is filled with a whole lot of people without scruples, and as the collapse worsens, a lot of them will have to do what everyone else has to do: get a job. As more and more people realize that the “work” agents do is laughable, and that they’re far better off using services like Redfin or Valley Crossroads Realty (or home swapping), things don’t look good for real estate agents.
I’m not trying to bring negativity to this blog or bash agents. I’m trying to paint a real picture for the working folks and not let them be fooled by ridiculous notions that their homes will be worth $30 million. I also want people to know that they can save a ton of money by not using agents; we bought and sold two homes without the help of agents, and it saved us a lot of money and heartache. It also gave us satisfaction that we did it ourselves, and it was so easy.
I have several real estate agents who are family members, and some of them are good people. But by and large, the field is crawling with vultures (as evidenced by how they are all flocking to sell foreclosed homes at the greedy expense of people down on their luck), and my advice to them is to start taking some night classes, because the end is near.
12:03 PM on July 13th, 2008
Hey Tyler, I like the logic you used by isolating data without applying rhyme or reason to them. Here’s another example Moxley Math:
The median sale price for 2007 in Dublin was negative 9.6%. Figure that same level of depreciation for 40 years, and in 2048 the average sale price will be $166,000.
Nice!
6:01 PM on July 13th, 2008
Valid points, 40 years ago times were very different and the next 40 years will be completely different from today. The more land available the less a home is worth because of the vast amount of new construction (Central Valley). Scarcity is #1 in home values as well as location, example being San Francisco values. I do not think everyone is scared of the market because everyone buys homes for different reasons and real estate should always be vied as a long term investment. I agree 100% with the unethical people in the industry and all industries have them. Many people sold real estate because of the idea of quick money. Our family has been in real estate for 4 generations and I believe our core values are greatly different from the majority or those currently in. I also agree with the idea that many people do next to nothing when selling real estate and I believe there is a difference between them and us and that is one of the reasons we have the blog so we provide information to people freely. Yes, there are many resources available to people looking to buy and sell a home and I encourage people to investigate those and determine the level of service and knowledge they are looking for. The goal of our blog is to provide information and I posted something I found to be interesting within a very small segment of the Pleasanton real estate market. Will all homes increase 3,300%, absolutely not. I do believe there will be homes close to this level given time, location, scarcity and overall desirability of that home. To say the real estate market will continue to decrease for 40 years is not possible. Everyone needs to live somewhere and the Bay Area will continue to be a strong real estate market with more land restrictions, increased birth rate and mass immigration from foreign countries.