Help me understand california life?? (San Diego, San Jose: real estate, apartment, condo)

[techy2468]

i am curious to know how people can afford to spend so much for housing?? in california....

i am from bangalore, india.....i wanted to help my parents buy a house....but the prices have gone so high that it almost looks like california........i am trying to figure out whether i shall ask my parents to move to another city or what??

eg: Average household income(guesstimate) of bangalore: $6k
minimum price of house: 2 bedroom apartment, 800 sq foot, $45k
rental for same property: $150
interest rate: 12%

thats almost 8 times a household income....

reason for this boom is that every indian in the world with some spare money is investing in bangalore properties....prices have gone up 4 times in the last 5 years....


i think california has seen similar trend....i want to understand why people living in california will not move out to other places........ its almost like californians spend 50% of their income on housing....and atleast 2 hours on commute......is this true??

[Sassberto]

Originally Posted by techy2468

i am curious to know how people can afford to spend so much for housing?? in california....

Well, think about it this way:

Husband & wife each earning 65k = 130k/yr

130k x 4 = 520k

net income on 130k is about 8k/mo after taxes

Mortgage on 520k after 20% down is about 2750

8000/2750 = 29%

So, either you make a lot of money, or you rent.

[WINNIEK]

[quote=techy2468;150315]i am curious to know how people can afford to spend so much for housing?? in california....

To be honest we can't.That is why if you did not buy at least 4 yours ago it many are struggleing to pay their mortgage.Yea there are lot of fancy mortgages out there.You might end up losing in the end ,but hey you owned a house for a few years.

[techy2468]

how many families make 130k/yr??
median income says something else:
http://www.city-data.com/states/California-Income.html
**California had a per capita personal income (PCPI) of $32,655
**in 2000, the median household income was $46,802 compared to the national average of $42,148


SF:
http://www.city-data.com/city/San-Fr...alifornia.html

Median household income: $55,221 (year 2000)
Median house value: $396,400 (year 2000)


this is old data but i am sure income has not gone up more than 20% and house cost must have gone up like 60%


i have heard that its hard to find even a 2 bedroom apartment for less than $500k within 20-25 miles of jobs.....around most big cities in california......is it true???

[speedoflight]

$520k will buy you a VERY beat up house in a low class neighborhood that hopefully you're like the Yankee Workshop guy and know how to literally rebuild that house with a hammer. But even if you could rebuild it, how do you move that thing out from that neighborhood? Even if you could dig it out from the ground, where would you put it? They don't sell that many open residential lots here. In fact, I can't remember seeing any in most of the suburbs. Maybe you can park the house on Ocean Beach and hope the cops don't see it.

Try $800k for a 1200 sq ft mediocre house in a mediocre suburb neighborhood. And 20% cash on $800k is something MOST people don't have. You want nice upscale neighborhood for the same house? Try $1 MM.

Originally Posted by Sassberto

Well, think about it this way:

Husband & wife each earning 65k = 130k/yr

130k x 4 = 520k

net income on 130k is about 8k/mo after taxes

Mortgage on 520k after 20% down is about 2750

8000/2750 = 29%

So, either you make a lot of money, or you rent.

[techy2468]

lets say that majority of people agree that housing in california is unaffordable....which then brings to my question of why do people put up with it, why dont they move to a different place???

in IT/computers (my profession) in Atlanta i can make around 80k......in california i can go upto 100k.....thats just around 25% more in income increase....

but in atlanta i can get a single family house(atleast 3 bedroom) (not a 1000 sf apartment) for around 350k........but even a 1200 sf apartment in california will cost me around $700k ......

[Sassberto]

Originally Posted by speedoflight

$520k will buy you a VERY beat up house in a low class neighborhood that hopefully you're like the Yankee Workshop guy and know how to literally rebuild that house with a hammer.

Nope. I live in San Diego. 520k will get you a smaller, but nice home in a middle class neighborhood, or a very large, brand new tract home in a far-flung exurb. I'm sure you wouldn't want to live in any of them, but not everyone has such exquisite standards as you do.

[techy2468]

San Diego, CA 92113
MLS ID#: 066091366
$180,000 - $265,000
2 Bed, 1.5 Bath
[mod cut - real estate URL]
i hope its not a crime ridden location


but look at this one in san jose????

3033 SPRING GARDEN DR
San Jose, CA 95127
$700,000
2 Bed, 1 Bath
948 Sq. Ft

[Sassberto]

Originally Posted by techy2468

San Diego, CA 92113
MLS ID#: 066091366
$180,000 - $265,000
2 Bed, 1.5 Bath

i hope its not a crime ridden location

92113 is the ghetto. Still, you can get a 900sf condo conversion in a decent area for around 300-350k here. A 1000sf 1940's starter in La Mesa can be found for < 500k as well.

[techy2468]

if we take the average household income to be around 100K.

shouldnt housing start from around 300k for something like 1000sf 2 bedroom unit...

i am still unable to understand who buys those houses for > $500k with average income being around 100K.

is it possible that rich people from all over usa/world started investing....leading to speculative housing market???
(this is what is happening in bangalore, india)