Wednesday, October 19, 2016

Bay Area rental market cools

Bay Area rental market is really hot right now—but not in the way you might think.

Twitter - down 75% from Jan 2014
Go Pro - down 83% from Oct 2014
Fitbit - down 71% from Jul 2015
FireEye - down 86% from Feb 2014
Barracuda - down 48% from Apr 2015
Zynga - down 81% from Mar 2012
Rocket Fuel - down 96% from Jan 2014
Box - down 38% from Jan 2015

I am curious to see what will happen when this tech bubble bursts.

Over the past couple of years there has been a massive building of new apartment complexes. When the bubble bursts, these places are going to have to drop prices to keep full, and the older crappier apartments will have to drop rents even more. Some of the owners of these new complexes won't be able to cover their debt service with declining rents and will have to sell or to foreclosed on at a loss and the new owner will have less invested so will be able to support a viable business.

However, many of the older complexes may find they simply can't charge enough rent to cover expenses when the supply far outstrips the demand. These places may effectively shut down -- perhaps to be torn down eventually and, years later, be replaced during the next boom by new high end complexes. If this happens, it will at least improve the quality of the rental housing stock in the area so that's a bright side. The reduction in traffic will be nice also!

Monday, October 03, 2016

Bay Area’s most congested commute

Plan to buy a new house in Bay Area? Do not Check the list of Bay Area’s 10 most congested freeways according to Metropolitan Transportation Commission.


1. San Francisco/Bay Bridge, PM eastbound
(from 101/80 to Treasure Island)

2. East Bay/Bay Bridge/S.F., all day westbound
(from Highway 4 in Contra Costa County to 101 in San Francisco)

3. Interstates 680/280, AM southbound/northbound, Santa Clara County
(from South Jackson Avenue in San Jose to Foothill Expressway)

4. Highway 101, PM southbound, Santa Clara County
(from North Fair Oaks Avenue to Oakland Road)

5. Interstate 80, PM eastbound, Alameda County
(from West Grand Avenue to Gilman Street)

6. Interstate 880, AM southbound, Alameda/Santa Clara counties
(from Highway 238 to Highway 237)

7. Interstate 680, PM northbound, Alameda County
(from Mission Boulevard to Calaveras Road)

8. Highway 101, AM northbound, Santa Clara County
(from Silver Creek Valley Road to North Fair Oaks Avenue)

9. Interstate 880, PM northbound, Alameda County
(from Mowry Avenue to A Street)

10. Highway 101, PM northbound, San Mateo County
(from Woodside Road to Hillsdale Avenue)

Source: Metropolitan Transportation Commission

As obvious from this report current roads administration have no idea how to organize and optimize traffic and can only issue helpless comments. Companies like Facebook and Google with vast experience in networks organization and administration may be able to design and implement drastic improvements needed before San Francisco traffic network will collapse.

The cities like San Jose approve residential without enough business to sustain the population. Take for example Cottle Transit Village development right at SR-85 on the former Hitachi land. The development added at least 3000 single unit homes. We'll assume (unreasonably) for a minute that only half of those homes are single income households and the other half sits at home all day. That adds working 4500 adults living in that area. how many jobs do you think the business side of that development added. So where do you think those 4500 adults are headed every morning for work? I'm gonna guess one of two places. Either NB on 101, or NB on 85. Cottle road is virtually maxed out now and the new living units, plus Costco, will add more traffic. Why didn’t San Jose widen the access to Blossom Hill Road and the Highway 101 onramps to two lanes?

Saturday, October 01, 2016

Changing Boundaries of Mountain View School District

The current Mountain View Whisman School District boundaries in Mountain View send too many students to Bubb and Huff Elementary, and don't include the new school expected to open at Slater Elementary.

Mountain View Whisman School District boundaries

Until you move to Mountain View, it never dawned on you how important it was to have a home near or within the boundaries of a great school. You, by almost pure luck, could be fortunate to have your children attend Huff Elementary School. It could be a daunting task of driving the kids to school every morning and picking them up from one end of town to the other, fighting traffic, bicyclists, beating red lights, learning the crosswalk count-down trick between street, etc. The drive could be a slight inconvenience, but it is better to go to the best school in Mountain View.

Some residents think that he entire district map should be arranged by distance to home and if that factor requires another school to be built because there are too many kids for the school's capacity, then do so. It will make it easier for the kids to walk or ride their bikes and peace of mind for parents that their neighborhood school is nearby.

Wednesday, August 10, 2016

Class action lawsuit filed against Millennium Tower and Transbay

On behalf of all of the homeowners at the Millennium Tower, San Francisco’s own 'leaning tower', a class action lawsuit was filed today. The lawsuit is aimed at the Transbay Joint Powers Authority and Millennium Partners since both sides have denied any responsibility for the structure’s now-infamous tilting and sinking.

In part, the litigation reads:

The Millennium Towers in San Francisco is built on landfill. It is the heaviest concrete building built in this seismic zone and, unlike other neighboring buildings, it is not anchored into the bedrock below. It has been reported that the building was expected to settle evenly to the depth of approximately 6 inches over its lifetime, but has now settled 12 – 16 inches and is leaning 15 inches at its top to the northwest. We are informed that some owners are reporting problems with uneven floors, difficulty opening and closing doors, windows, and cabinets, and that some interior wall cracks have been observed. To date, none of the potentially responsible parties have accepted any responsibility for this problem nor have they offered any assurance that this condition will not continue to deteriorate.

I think Salesforce should join the suit as the building is going to fall on them. Today I passed by and looked at the sidewalk. It is really really bad - broken and patched repeatedly. They have even installed a broad expansion joint because they obviously cannot keep up with the rapid deformation. The lobby is obviously way below grade. The marble panels on the outside are completely unaligned. I suspect that the windows start popping out soon.

Tuesday, August 09, 2016

Millennium Tower - San Francisco Housing Bubble

Millennium Tower in San Francisco is sinking. The building has no visible damage, but cracks and some water intrusion have appeared in the underground garage. The fact that this building was not anchored in bed rock is impossible to believe. The phrase 'soil liquefaction' comes immediately to mind. Good luck to the unfortunate residents. The developers built an extra concrete heavy building on mud fill and only anchored a 645 ft tall building 80 ft down into mud fill. I am no structural expert but this sounds very scary and hopefully we would not see the literal San Francisco Housing Bubble crash when the building crash down and hit other San Francisco hi-rises near causing a giant domino effect in SOMA.

Millennium Tower - San Francisco

What I wonder about is just how this building would react in a six-seven magnitude earthquake, which is certainly possible. Would it stand or really tilt to the point of tipping over? And how did this design ever get approved? Seems like there are a lot more questions than answers - probably keep half the lawyers busy for the next several years.