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Last night, I rented the classic Alfred Hitchcock film "Vertigo." This was my first time seeing "Vertigo", and I thoroughly enjoyed it. The best part of the film is inclusion of dozens of famous locations in the San Francisco Bay Area. But I was most surprised to see the story end in San Juan Bautista, the town where I went to elementary school. San Juan Bautista is a very small town located between Gilroy and Hollister. But even more amazing was the footage of the main characters driving through a grove of eucalyptus trees, popularly referred to as the "Avenue of the Trees" (Google Maps), located on Highway 101 only a couple of miles from my family's home in Aromas. Very few people have heard of Aromas, even among those living in Monterey County; so, it's wonderful to know that Hitchcock chose to feature this relatively unknown area in his film. Consider that the film was made before Highway 101 existed. San Juan Bautista was reached by traveling on the two-lane State Route 82. The eucalyptus trees give the impression of driving through a tunnel - perpetually dark, eerie, and are in strong contrast to the barren, rolling hills that pervade the area. I completely understand why Hitchcock chose to include them in the film.

An inaccuracy in the route traveled is that the grove doesn't lie on the route from San Francisco to San Juan Bautista; the grove lies about 1 mile beyond the Highway 156 cut-off for San Juan Bautista and Hollister. The grove lies on the Highway 101 route to Monterey or Salinas in the South.

Posted by Scott at 1:09 PM | Permalink

Natalie & I made an important & difficult decision this week: to not buy a house for at least a year. This came after saving diligently for over a year so that we would have enough money for at least a 10% down-payment on a home. This is non-trivial task in the Bay Area, where the median prices hover around $600,000-$800,000, depending on the neighborhood.

Our decision came after having made an offer on a home in the Glenview neighborhood of Oakland. The home was priced at $575,000. It featured two bedrooms, a garage, a nice little back-yard, and was in a good school district. We offered $605,000, or slightly more than 5% of the asking price. Thinking we had a solid offer, we sat back and waiting to hear from the sellers. The conclusion was, as you might imagine, that our offer was rejected. Not only that, ours was the lowest offer, and the winning offer was for a price of more than $100,000 over asking price. It's impossible for me to reason why someone would pay such a huge sum of money for shelter.

We're now in the process of looking to rent a 2 bedroom house in the same neighborhood for roughly half the price of a mortgage required to own. We figure we can continue to save the money left over after paying for rent, while keeping our savings liquid and safe from the volatility of the housing market. We also are free from the worries of home repair & seismic strengthening, which is a persistent issue among the 80 year-old homes in our Oakland neighborhood.

Any time I need some encouragement in my decision to rent, I look at the blog on Patrick.net. The moderator includes many arguments for why renting makes better sense in over-inflated markets like California. The blog also includes links to current articles about the housing & credit crises. I think that the condition of credit in the U.S. is very poor because the housing bubble has made it easy for people to become over-extended and short on cash. The savings rate in the U.S. is one of lowest among all industrialized nations. We are very proficient at personal spending, which leaves little money left over for investment and entrepreneurial endeavors. My outlook on the financial future of the U.S. is bleak, though I'm not ready to suggest people start buying gold.

Posted by Scott at 11:24 AM | Permalink