How do average people afford houses in California? (Los Angeles: to rent, insurance)

[shannon94]

Originally Posted by CantWait2Bthere

Sounds like someone is jelous of us homeowners?

You mean jealous? lmao

[JimC]

The majority IMHO do make the long commute. I bought at the right time but even then I was forced 62 miles one way from where I work. All you have to do is look at the freeways to see this is the case.
The median home price can be misleading also. A lot of CA counties are far below the State median.

[whowants2know]

First, please note that I wrote "home-buyers", not "home-owners"; because with the ludicrous inflated housing in CA, the majority are "buying" a house, they do not own it...the lender owns it. And, it is more than likely they will never "own" the house because they plan on trying to sell it within several years to hopefully make enough profit to move up to a higher mortgage.

First-time home buyers in CA who took out their loans within the last, say 10 years, didn't "bust their ass" for years and years in college and jump right into a high paying job and have the 20%+ down payment. First they had their college loans to pay off, plus you don't "jump" right into a high paying job right out of college. And to be able to save enough for that down payment, they either lived with mom and dad, or some other relative, and/or whomever so they could save every cent they made by not paying rent, utilities, etc.

Sure, there were, and are, the ones who were handed the down payment by mom/dad/whomever, but for the most part they would never admit it.

If you're in the movie industry, medical field, legal, drugs (ooops, sorry); or some other highly lucritive endeavor, then you should be able to afford a $5-6,000++++ monthly mortgage payment for the next 30 yrs.

However, if you are like the MAJORITY of wage earners in CA, you are not able to save up the down payment while still being responsible enough to support yourself and your family. It used to be that people could rent until they saved up enough for the dp; but, now the rents are so out of reach that that option is history. And, because some landlords purchased property as a rental only, they have to charge $1,500++ for a 1-bed apt. The greedy landlords who don't need to, still charge that much to pad their wallets.

It is all personal preference, but sadly, both parents work to be able to buy the $400-600k++++ mortgage on a house that in most of America would go for $150k-$200K. But, they had the decision to make as to whether mom or dad should raise their children, or if a daycare person should raise their children. Their choice, their decision, their priorities.

The problem with housing in CA started back in the 70's when the speculators hit the area and found a gold mind. But, they had enough smarts to get out while the gettin' was good. "Greed" drove current home-buyers/home-owners to jump on the bandwagon and the rest is history and speaks for itself.

There are many pluses of living in CA; as there are many pluses of living in any of the other 49 states. As well as there are negatives in all 50 states. Each of us has to decide what we want, and what works best for us. No place is perfect; however, the important thing is that the place we choose is perfect for each of us...it is all relative.

We can debate the issue all night long; and there are no right or wrong answers. We just need to find the right answers for ourselves and our families.

[shannon94]

Right on whowantstoknow!!

[JimC]

First-time home buyers in CA who took out their loans within the last, say 10 years, didn't "bust their ass" for years and years in college and jump right into a high paying job and have the 20%+ down payment. First they had their college loans to pay off, plus you don't "jump" right into a high paying job right out of college. And to be able to save enough for that down payment, they either lived with mom and dad, or some other relative, and/or whomever so they could save every cent they made by not paying rent, utilities, etc.

Wrong. No college here. I work for a railraoad. My wife doesn't work. 6 years ago I paid 131,000 for this place with a 3% down payment. It's currently on the market for 369,000. I do consider myself an average Californian.

Is the market over valued? yes. Is there a correction on the way? I don't know. Have people bought over there heads? Absolutly but it's nobodies fault but there own for not doing there homework. Can a average Californian purchase a home today? I say that depends on a lot of different things. Mainly which area they want to buy in.

To say anyone purchasing there first home in the last 10 years was handed the downpayment is BS

[kansaslady]

Originally Posted by JimC

Wrong. No college here. I work for a railraoad. My wife doesn't work. 6 years ago I paid 131,000 for this place with a 3% down payment. It's currently on the market for 369,000. I do consider myself an average Californian.

Is the market over valued? yes. Is there a correction on the way? I don't know. Have people bought over there heads? Absolutly but it's nobodies fault but there own for not doing there homework. Can a average Californian purchase a home today? I say that depends on a lot of different things. Mainly which area they want to buy in.

To say anyone purchasing there first home in the last 10 years was handed the downpayment is BS

Jim, my husband and I lived in CA for 50 yrs before moving to the Midwest; and whowants2know is absolutely correct in everything he or she wrote. I remember the beginning of the housing boom back around 1973 or 74.

If you'll re-read the post you are criticizing, you will see that the poster did not write that "anyone" who bought a home during the last ten years got the down payment as a gift. The poster was talking about those who wrote about recently graduating and claiming they were able to buy a home as soon as they graduated.

No, you are not an avg Cali, but think about it, your asking price is approximately 180% above what you paid in 2001. Do you honestly believe that salaries have increase 180% in the last six years? Most workers are lucky if they get a 6% increase every year.

I can see where you'd want to get as much as you can for your house, but the huge variance between housing prices and wages is what is driving most of the residents out of state.

[JimC]

Kansalady, you are correct I did misread the post and for that I apologize.
I do have a couple of questions though.

Why am I not a average Californian? Yes my homes value has skyrocketed like everyone else's in the state. I worked all the OT I could get, scrimped and saved for that 3% DP.

Since when has it become mandatory or even wise for a person or couple to buy a home when first getting on thier feet?

I can understand the issue with wages and mortgages but this will self correct. It has to and as a life long resident I think we're starting to see that.

I probably oughta quit now. again my aplogies

[cigarfanatic]

I'm speaking for myself as a young professional, 29 years old with a B.S. degree, married and still hoping for my piece of the American dream:

The truth is any "average" individual fresh out of college trying to start out a life with his/her new career is not going to be able to afford a home in Southern California.

I know so many young professionals who are stuck renting or still living with parents. The only "lucky" ones either had funding from parents, or settled for a tiny condo in a "not-so-good" area. Of course most are still renting...

Let's speak the truth, it is difficult for any young professional to afford a home around here, unless he/she is making six figures but that will still give you a small home in a less desirable area or a small condo in a decent neighborhood. That person will have to drive a little Toyota and have to live on a tight budget too. No fancy dinners and big dates, perhaps cup ramen will do....

I don't think most of us made six figures coming out of college. I got out of college 6 years ago and I am still struggling to transition from my humble little condo to my very first home in a desirable area, not crawled up in some 'ghetto' neighborhood. To some of you I may still be young but with these insane home prices I might have to wait until I am 50 and retired to obtain the home of my dreams in suburbia. Of course my commute will be awful but what can we all do about that?

So to answer the question, average people who are starting out cannot afford the homes here unless they do what some people are doing by merging all their incomes with "7" other people to afford their piece of the American dream. Increasing gas prices don't help either and our wages aren't keeping up with prices of homes, food, gas, entertainment, and now even the bus fares - as I've heard they are hiking up the fares for public transportation.

[kansaslady]

Originally Posted by JimC

Kansalady, you are correct I did misread the post and for that I apologize.
I do have a couple of questions though.

Why am I not a average Californian? Yes my homes value has skyrocketed like everyone else's in the state. I worked all the OT I could get, scrimped and saved for that 3% DP.

Since when has it become mandatory or even wise for a person or couple to buy a home when first getting on thier feet?

I can understand the issue with wages and mortgages but this will self correct. It has to and as a life long resident I think we're starting to see that.

I probably oughta quit now. again my aplogies

Jim...no problem about misreading the prior posting!

I wrote that I don't think you're an avg Cali becuz most in Cali aren't able to purchase a home like you did...well, not within the last ten years as whowants2know wrote. You are one of the fortunate few who is living within his means and is not house-poor. As we know, a lot of the ones who purchased a home many years ago (15+), and those who have retired, have been able to reap a huge profit and moved out of state to buy a home somewhere else cash. So, therefore, you are the minority as far as buying a home. Many are very envious of you.

We are happy where we are now (in KS, about 5 mi SW of Kansas City)...sure we have cold winters, but we've adjusted and we love the four seasons. We appreciate the quality of life, the clean skies, and gorgeous scenery in the "hill country" where we live. And, a home here that sells for $130-180k; would go for $500-600k in Cali. So, like whowants2know wrote, it's all about us finding the place that turned out as perfect as possible for us.

And you are correct, it isn't mandatory for a young couple to start buying a home right away.

I'm not confident that the balance of the housing cost vs wages in Cali will self-correct; I would love to see that happen, but I think the odds of that are slim and none (not for the majority of citizens anyway).

Thanks for your comments! We can all learn from each other.

[Ultrarunner]

My neighbors daughter age 22 and her same age husband bought a nice starter home on their own in November 2006.

She graduated with a BSN (Bachelor of Nursing) and he graduated in Administration of Justice. This young couple, aged 22 had multiple job offers... she from every hospital she applied and he from 3 police local departments.

I think if you have a skill in demand that you can do quite well. The Hospital and Police even offered sign-on bonuses which they put 100% towards their down payment. The Police even offered housing assistance if he would have bought a home in the city that hired him.