Spleng's Q&A

Nice,  now we know who to see when buying in Phoenix and Elkton.

"Really?"There is no doubt.  As recently as 2000 2x2 1000 sq ft condos were going for well under 200k."So you think it will be full of crack dealers soon?"Who said "soon" and "full of"?  You did not I.The de-gentrifiation process will proceed slowly just like the gentrification that occurred during our debt fueled bubble era.  The crime rate will go up as it does."East of Shattuck, though, is WAY better than West, and it is more like "on" Ashby than South of it...."LOL how far East is it again?

"(I'll guess zero sum appreciation/depreciation after 5 years --"This is a wildly optimistic guess.  That neighborhood is ok.  It has good points (being fairly near campus) though on the south side and south of Ashby it is not really desirable.  Also long term this area will return to high crime status.  But hey you will be close to a fine hospital.  =}

"Berkeley sort of like Davis or San Francisco has sort of a permanent renter class so to speak."But there are also many homeowners.  Many of which used kookoo loans during those wide eyed bubblish years to "own" houses in Berkeley they thought would make them rich RICH I TELL YOU.Now they are slowly rolling over, at all income levels.  Some very nice houses, in very nice neighborhoods are being foreclosed on."I don't know if that will adjust completely to the 3x income level for purchase."In the nice areas I completely agree, that's why I say there will be a premium above X3."I'm hoping for maybe another 10-12%"Good news, your wish will be granted and more!  I think X2 this loss in the very nicest areas are yet come before this is through.In the least desirable areas I dare not guess.  Remember many parts of Berkeley to the south and near the freeway were not always so pleasantly gentrified.  In the gloomy times of the 70's and early 80' these were dangerous places.  Get ready for all that gentrification to reverse in the coming decade.

"when I went to berkeley, brand new condos on the little hill off the freeway in solano were selling for $80k."Amen to that.  Also, As recently as the mid 90s you could get a 3 bedroom house in the hills for under 300K.  I kid you not.

"Can dual income professional/academic households here afford the 500K condo? Of course"I should add that whether the dual income professional/academic households can afford to lose 60% on their purchase over the next several years is another matter entirely. :)

"but isn't it also a little idealistic to imagine that the median income vs. median price will actually come in line with the rest of the country?"Not in line with the whole country, but Berkeley income to price. But you are correct about it being more expensive, just like SF is more expensive then Oakland which is more expensive then Richmond etc... that's why I say their will be a premium above the generality of X3 income.Berkeley has a very wide income spread.  Can dual income professional/academic households here afford the 500K condo? Of course, but they are not likely the ones wanting to buy it.  More likely its some poor sod making around the household median here (50K - 60K) and about to plunk down 9X - 10X income. Oh the humanity!In my opinion the 490K condo, needs to fall another 60% or so to make sense here, depending on the specifics, how many bedrooms where is it in the city etc...  Can you provide that info?

I am on the ground here."Is a condo that went for $700K in 2006 a good deal at $490K in April 2009? "No. Just look at rent vs own costs, still completely out of whack in Berkeley (don't forget to factor in the simply loony prop. taxes here).Check median income to median price, the disconnect from reality is striking.Last year at this time hardly any foreclosures/short sales, now they are coming on strong.You must have patience here.  Prices will decline in Berkeley until the fundamentals (+ a small premium) rule once more.2012 is looking good.

1995

"But you won't know that prices have stabilized until it has already happened."How have we failed you Spencer, how?[inappropriate photo, removed by moderator]