LeBron James, the twenty something multi-millionaire pro basketball player, is building a home in the suburbs of Cleveland… a 35,000 square foot house on 5.6 acres. It will contain, among other things, a theatre, bowling alley, casino, and barber shop.

The Cleveland Cavaliers All-Star and Akron native, whose stated goal is to be the world’s first billionaire athlete, razed the house to clear the way for the new one.

A first-floor master suite, which includes a two-story walk-in closet, will be about 40 feet wide and 56 feet long — bigger than half the houses in Bath Township.

The house has a dining hall, roughly 27 feet by 27 feet, a “great room” at 34 feet by 37 feet and a bigger, two-story “grand room,” according to the Akron Beacon Journal, which reported on the blueprints.

The “family foyer” off the six-car garage near the elevator will be dwarfed by a “grand foyer” inside the front entrance with a sweeping, divided staircase leading to four second-story bedrooms. An outer wall will feature a limestone sculpture — a bas-relief of LeBron’s head, wearing his trademark headband.

Good thing he didn’t overbuild for the neighborhood.

Courtesy Yahoo News.

Water officials report that the water content for the Sierra snowpack was well below normal, coming in at levels not seen since the last drought year of 1990. The water content came in at less than 50% of normal. Fortunately, the reservoir levels are full thanks to a very wet winter last year.

Blame the California High, Gehrke said. That is, the ridge of high pressure off the California coast which mostly kept storms out of the Sierra during March.

“What keeps this year from being completely gloomy is our reservoir storage is above normal,” he said. “Last year was extremely wet.”

The condition of the Sierra snowpack is approaching that of the extreme drought years of 1976-77 and 1987-1992, Gehrke said. “One dry year is no big deal. But stringing them together, that can be bad,” he said.

In Oakland, East Bay Municipal Utilities District spokesman Charles Hardy said the reservoir situation remains good. The district supplies water to 1.3 million people in Alameda and Contra Costa counties.

“We had more water last year than we could store. That’s the good news,” Hardy said. “Right now, we need seven inches of rain before the dry season begins to go into next year with reservoirs full and our guys say we’ll probably get that.”

If the rain doesn’t come, plans are in the works to possibly ask customers for moderate conservation methods, perhaps a 15 percent cutback in normal water use, Hardy said. That would mean steps like cutting back on landscape watering and watering at night instead of in the day.

Contra Costa Water District is also in good shape. Spokesperson Patty Friesen said the district’s Los Vaqueros reservoir was at 96 percent of capacity.

Sometimes you wonder how we will provide water for the thousands of new homes being planned for the Tri-Valley and Central Valley. Thank god for reservoirs.

Courtesy of the Oakland Tribune.

A look around the Tri-Valley resale market in February shows continued early spring strength. Market activity heated up in January and February, and overall sales in Livermore, Dublin, San Ramon and Danville were strong.

In Livermore, inventory slid somewhat lower than January, ending the month at 230 single family homes for sale. This was down substantially from the peak of 443 available homes in late summer of 2006. Sales were also somewhat lower in February. (click on graph to enlarge)

In Dublin, Inventory and pending sales both declined slightly in February. Resale single family home inventory was at 87 at the end of February, down slightly from th end of January (94 homes), and down significantly from the peak of 158 in June of 2006. Pending sales in the month of February were also down after a very steady pace from last summer through January.

In San Ramon, inventory of available single family homes trended down in February, ending the month at 164, slightly less than December and January, and significantly down from the peak of 320 available homes at the end of September. Pending sales were up from January, although somewhat below the levels of summer of 2006.

In Danville, inventory and pending sales both trended up at the end of February. Single family home inventory ended February at 130, up slightly from January but well below the peak in September of 2006. Pending sales were up nicely from January.

Early indications show continued strength in March. We’ll know better in a couple of weeks.

The Federal Reserve Chairman Bernanke says the recent mortgage market troubles should not effect the economy as a whole, and remains confident that the economy is strong and growing at a manageable rate. His comments were cautiously optimistic as he testified before Congress.

“At this juncture … the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained,” Bernanke said in prepared testimony to Congress’ Joint Economic Committee.

It marked Bernanke’s most extensive discussion yet of the mounting problems in the risky mortgage market. Those troubles raise “some additional questions about the housing sector,” which has been mired in a deep slump for more than a year, Bernanke said.

Fallout in the risky mortgage market is clobbering some lenders and homeowners and has stoked concerns on Wall Street, Capitol Hill and elsewhere.

So-called “subprime” lenders who make home loans to people with blemished credit histories or low incomes have been battered. Weak home prices and rising interest rates have made it increasingly difficult for borrowers to keep up with their payments. Delinquencies and foreclosures in the subprime mortgage market are soaring.

“Although the turmoil in the subprime mortgage market has created financial problems for many individuals and families, the implications of these developments for the housing market as a whole are less clear,” Bernanke said.

The crumbling housing market has been a major factor behind the slowdown in the U.S. economy. Bernanke said the “near-term prospects for the housing market remain uncertain.”

Even so, Bernanke stuck with the Federal Reserve’s assessment that the economy is likely to grow at a moderate pace over the coming quarters. He also repeated the Fed’s belief that inflation also should ease in the months ahead.

That would certainly be good news.

Courtesy Yahoo News.

Consumer confidence weakened in March amid concern about rising gasoline prices and the turmoil in the financial markets due to the subprime lender troubles. Analysts expected a reading of 108, with the actual index coming in at 107.

“Seven-month highs in gasoline prices, stock market volatility and the ongoing subprime debacle were the likely factors behind the weaker reading,” said Ron Simpson, director of currency research at Action Economics in Tampa, Florida.

U.S. stocks extended losses (^SPX - news) after the report raised doubts about future consumer spending and the dollar slipped against the euro .

Slightly higher consumer concerns about inflation, though, nudged benchmark government bond prices lower .

“We have energy pressures. Over time that is still the one thing that has been a challenge to keeping inflation low. Also it’s not unusual when the economy slows for inflation to lag behind that,” said Peter Kretzmer, senior economist at Banc of America Securities in New York.

Also, Durable goods were up 2.5% in February, although (stop me if you have heard this before) analysts were expecting a higher increase after a large drop in January (which helped trigger the stock market drop on February 27th).

Courtesy of Yahoo News.

The U.S. Census Bureau reported that national new home sales in February were down over 18% from last February, and down almost 4% from January. Obviously, the struggles for new home builders are continuing, and new home sales will certainly be impacted by the tighter lender underwriting requirements as a result of the subprime lender meltdown.

Meanwhile, Lennar, one of the nation’s largest builders, reported a 73% decline in first quarter profits, and a 14% decline in revenue over last quarter. And these results reflect activity before the subprime lender crisis. They are revising their outlook for 2007.

“While some markets are performing better than others, the typically stronger spring selling season has not yet materialized,” said Stuart Miller, Lennar’s president and chief executive. “These soft market conditions have been exacerbated by the well-publicized problems in the subprime lending market.”

In January, Miller laid out a yearly earnings goal of $3.69 a share in hopes that the job market would stay strong, the economy would continue to be healthy and the new-home market would demonstrate “traditional, seasonal improvement.”

“Given the state of the market, we do not expect to achieve our previously stated 2007 earnings goal, and we are not comfortable providing a new earnings goal at this time,” Miller said.

New home orders were down 27% year-over-year, to 7,132. Lennar said its cancellation rate was 29%.

The sharp drop in orders was more than expected despite higher incentives, and the company may not have seen the worst of troubles stemming from the tough lending environment, Banc of America Securities analyst Daniel Oppenheim said in a research note.

“Our sense is that the tougher lending environment would have only started at the end of the quarter, so that the impact will be more significant next quarter,” the research note said.

Locally in Pleasanton and the Tri-Valley, builders are still offering incentives on much of their product to help spur sales. No one is quite sure to what extent the subprime lender crisis, and the resulting tightening of mortgage underwriting guidelines, is going to impact the market.

Courtesy of USA today.

The National Association of Realtors released their February statistics on the resale housing market, and it showed a sharp 3.9% increase over January, surprising some analysts. January showed a sharp increase over December, and many analysts expected resale sales to drop off a bit in February. This certainly mirrors what has been happening in the Pleasanton and Tri-Valley real estate markets, where early spring activity has been robust, especially in the lower price ranges.

Statistics released for February by Dataquick showed that sales activity dropped for the 25th consecutive month in the Bay Area. Contra Costa County sales dropped nearly 20% from last February, which is a new 10 year low. The median home price in February also declined in Contra Costa County by 5%. Alameda County sales were up 3.7%, and the median home price was up slightly.

So what is going on here? This is a classic “dalmation” market, which is spotty. Some parts of the Bay Area, primarily the penninsula and the Tri-Valley area, are showing a robust early spring. In Pleasanton, for example, closed sales are up nearly 50% from last February, and so far in March they are showing no signs of letting up. But in the secondary markets of Eastern Contra Costa County, Solano County, and the Central Valley, it is a very soft market, with an abundance of inventory and lackluster sales activity. It can even be a different market for neighborhoods within a city, where some neighborhoods are hot with multiple offers, and other neighborhoods are sluggish. The lesson here is not to draw too many conclusions from aggregate data such as the dataquick report. What you are experiencing in your particular city, or particular neighborhood, could be much different.

Lastly, a word about Median Sales Price. I have written on this topic before, but just to reiterate. The Median Sales Price tells you what the median price for closed sales was for that period of time. It is not a substitute for price trends unless it is viewed over a long period of time. And it requires a large sample to have any significant relevance statistically. There are other factors which influence median home price. Somtimes certain segments of the market heat up or cool down. If there is a surge of activity in the $1 million to $2 million price segment, and slower activity in the low end, you would likely see the median home price increase. One month last year the median home price in Pleasanton increased from $800,000 to $905,000, yet home prices were soft to declining at the time. Obviously, the average home in Pleasanton at that time did not go up over $100,000. So take aggregate statistics with a grain of salt. If you really want to know what is going on, ask your neighborhood real estate professional (emphasis added).

Courtesy of the Contra Costa Times.

The Contra Costa Times is reporting that Contra Costa County is studying a proposal to erect a concrete median on 5.5 miles of Vasco Road between Livermore and Brentwood. This is clearly one of the most dangerous roads in the East Bay, with accidents and fatalities unfortunately much too common. The proposed cost is approximately $15 million. To run the median the whole 11 mile portion in Contra Costa County would cost approximately $95 million.

But as is often the case, one solution creates other problems. In order to install the median, the county would have to do away with the passing lane. This may have the effect of increasing speeding/reckless driving once motorists get past the barrier, as impatient drivers stuck behind slow moving cars or trucks could be even more aggressive. And it would make it impossible for emergency helicopters to land should there be an accident. It is also more difficult to see around corners with a median, which might increase the odds of rear end accidents if traffic is stopped around a bend in the road.

And of course the biggest barrier of all (no pun intended) is where to get the money for this. It always comes down to the money…

I’m tired of talking about bubbles, and sub-primes, and interest rates. The fact is we live in one of the most desirable areas in the country, and sometimes I find myself in awe of what a great area this is, and how lucky I am to live in Pleasanton.

I love living here….

It was 85 degrees here today, and all the fruit trees are blooming. The hills are all emerald green, and spring is in full force. It had that kind of Friday, “nothing is too serious because the weekend is coming, and can you believe how nice it is?” feel to it. So I got home, and our kids were all spoken for (friends house, plans with friends, etc). So I grabbed my wife and said “let’s go downtown and eat”

I love living here…

So downtown we went. By now it is early evening, and downtown is bustling. People everywhere, restaurants full, people browsing through the art gallery. Oh yeah, it is 70+ degrees out… perfect weather. So we had dinner at Pastas Cafe, one of my favorites. I had the pan seared Sea Bass, and my wife had Parmesan crusted sole. It was awesome, especially with the B R Cohen cabernet. The restaurant was vibrant and full, but casual. Lots of conversation, a few laughs, and a lot of energy. Great meal….

I love living here….

So after dinner, we decide to walk along Main St a bit, and stroll over to Gourmet Works for some after dinner chocolate (the best chocolate dipped strawberries ever). Couples strolling hand in hand, families with kids everywhere, gorgeous weather… life is good. Then we stroll down to the corner where there is a Tully’s coffee and a bunch of outside seating. I get my Chai Soy Latte, and we sit out on a table and watch all the people and cars go by. There are a few classic cars that rumble by, as well as 5 or 6 Harleys parked with riders interacting with eachother. Kids are thick here, because there is a Cold Stone ice cream store, and people are all over it. We just sit and chat, and watch the people walk by (of course, I ran into like 23 people I know). Gotta kick out of the little kids, and all of their antics as a result of being all cranked up on sugar. It really doesn’t get much better than this.

I love living here…

Tomorrow is going to be just as nice. Might go by the farmer’s market in the morning… fruits & vegetables, flowers, baked goods, roast chicken, kettle corn, live music, and the humane society “adopt a pet” station. Another great chance to just stroll around and take in that small town atmosphere. Yeah, houses here are expensive, and we have traffic and hard water and wacky politicians. But when we have days like this, it reminds me of one thing. Homes here cost so much because it is worth it to live here. It does not get any simpler than that, and as far as Pleasanton, it does not get any better than that.