| | | |  | 談南灣區房市近期略況，信用緊縮－>房價下降->消費緊縮->高科技企業前景不妙->可能的經濟危機和裁員潮。
In the past few months, I went to many open houses and watched around 100 houses, followed their prices changes from the owner's past original purchase price, asking price, reduced price, finanal transaction price.
The houses I looked at are those in the average areas (excluding good school districts such as Cupertino, Saratoga, palo Alto, also excluding bad areas such as east San Jose, east palo alto..etc).
All the transaction prices are lower than the initial asking prices.
Some people who bought their house in summer 2006 now have to ask for 100k lower than their purchase price to sell the house. For example, one house bought at 865k in summer 2006 put on the market 3 months ago, reduced to 750k, and now asking for 734,950, this house, zillow estimate is 882k now. Obviouly, the owner bought it at the peak, and now either due to ARM (but my question is why it is so short, just in one year?)or loss of job , has to sell it quickly at a much lower price.
One house, zillow estimate it at $980k, is put on market for 850k, and now, reduced to 820k. I checked the sale history, it seems the owner bought it long time ago at a very low price. I asked my agent why the owner want to sell, he said it might be this owner applied for home euqity line of credit, and used up all the money, so he has to quickly sell the house to get the cash to pay back before the house price declines more.
I also went to see those short sale houses, most of them are bought between 2005 to 2006,the peak of housing craze in the bay area, now asking fro 50k ->100k lower. I asked the agent, why they have to short sell for so low, the agent said, most of these people paid zero down, used the house as the collatoral, with the help from some appraisal companies and thanks to the loose credit requirement at that time, exaggerated the house price and borrowed money from banks, so basically, they didn't have money and savings or any real assets and still got money from the stupid banks for at least 200k-300k, then, they spend the money for luxury stuff to enjoy life first and don't think about tomorrow ( you know some whites, and most of the mexicans...寅吃卯糧, this is so different from Chinese, the majority of Chinese people won't spend money that doesn't belong to them, they will try to save every penny to pay for the house first , From this point, I think housing in China won't crash as seriously as in USA) . These people now owe banks money and can't pay back, so they just put short sell to get rid of the debt and file bankrupcy, the only thing they suffer is bad credit, after 7 years, 又是一條好漢。So, it seems the root is in the CREDIT SYSTEM of USA, which has loophosles and allows people to lie and make mistakes.
So, I guess, due to the housing craze and boom in the past, many people must have used their houses to get a lot of money from banks, with ample amount of money, they must have spent a lot in the consumer market, and then supported those corporations including hi-tech companies. Now, in the downward housing market, with tightened credit, the money flowing in the consummer market will shrink a lot and affect the economy. As a vicious cycle, the prospects of companies are gloomy, just as we can see from the quarterly release from those high-tech companies in the past 3 weeks, most of them described a not so good prospects, which may result in recession and layoffs, again, it will drive the housing prices lower.
Last, I'd like to talk about the housing craze from 2005 to 2006 in the bay area. Most houses in the south bay almost doubled their price from Jan 2005 to Dec. 2005. In a crazy market, thanks to the loose credit requirement and low interest at that time (Green Span really dug the tomb) where everybody believes that the house price will go up forever with a fast pace, they will just bid the house at any high price for the sake of getting the house no matter what, they think as long as I get the house, 我就會賺。Also, those real estate agents were trying their best to 鼓動
people to buy and flip the houses,depicting a wonderful 賺錢前景 for them. They even made fake documents and helped those buyers. My agent told me that he once helped a buyer who had low bank balances by lending the buyer $400k so the buyer could qualify for a loan.
Now, the high-tech companies are doing ok still in the bay area, specifically Cisco,the biggest employer in the bay area,the housing and apartments markets are largely supported by CISCO employees. Their stock price went down after their quarterly release. what if the economy goes down in the near future....I don't know, but from the stock market in the past few weeks, most of my co-workers feel the prospect is not rosy...
If the housing price go down continuously,I guess, the supporting point will be somewhere a little bit above a line you draw to connect the initial very first house price, the price in 2000, 2001, 2003, and Jan. 2005 in the Zillow chart.
Disclaimer: my discussion doesn't cover the very good areas and very bad areas. (excluding good school districts such as Cupertino, Saratoga, palo Alto, also excluding bad areas such as east San Jose, east palo alto..etc).
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(302 bytes) (464 reads) 11/18/07 
(39 bytes) (240 reads) 11/18/07 
