This is how I can afford to own a home in L.A. (Los Angeles: foreclosures, HOA)

[BRinSM]

Originally Posted by EscapeCalifornia

The problem with spending a high percentage of your income on a single "luxury" like a house is that you're committed to that payment for a very long time. If there's any interruption in your income, you've got a big problem. If instead you spend less on housing and spend the difference on other luxuries like vacations, hobbies, dining out, trips to Vegas, etc., you can cut those out in a minute should one spouse lose their income.

who's to say that fatman would be spending his saved money on those luxury items you mentioned even if he was still renting and had no intentions of buying a house? your argument is flawed. also, even though you may not like it, the reality is that for a middle class person in CA to own a home they need to shell out more of their monthly income than people in other states. that's just the way it is. not everyone has the option to move to other states either (family, work, friends, etc.), so they make the best with what they have to work with. no one is saying you have to buy a house in CA (if you don't own one already) and I highly doubt anyone is forcing you stay here. If you aren't tied down, you are obviously welcome to leave the golden state at your desire and buy a house somewhere more affordable. If you are tied down, I feel sorry for you because you obviously don't like it here very much.

[Londonteacher]

Good on you for managing to live frugally- people seem to have higher expectations of what is necessary today than in the past.

[Lovehound]

Originally Posted by EscapeCalifornia

The problem with spending a high percentage of your income on a single "luxury" like a house is that you're committed to that payment for a very long time. If there's any interruption in your income, you've got a big problem. If instead you spend less on housing and spend the difference on other luxuries like vacations, hobbies, dining out, trips to Vegas, etc., you can cut those out in a minute should one spouse lose their income.

As far as I recall the average American moves once every 7 years. I'll bet Fatman built up an emergency nest egg to cover contingencies such as becoming unemployed. (That's what I did.) Also, if you spend that income on your house you'll profit from the investment for the rest of your life. Spend it on expensive vacations and dining out and all you'll end up with is a few snazzy pictures, and heartburn.

Originally Posted by Londonteacher

Good on you for managing to live frugally- people seem to have higher expectations of what is necessary today than in the past.

People today--and in the past--seem to have the expectations of spending a bunch of money and running up credit cards buying luxuries, toys, expensive vacations, and then if they hit the jackpot they'll go broke and declare bankruptcy and not have to pay it back.

And even worse, now the nation has caught the disease! Now Uncle Sam is running up his credit cards and spending like a drunken sailor and just hoping his dreamboat comes in. I could be wrong but I have the idea that the majority of people spend their money unwisely and run up their debts and then if calamity strikes they're screwed. I believe people like Fatman and I who live frugally and spend money wisely and get only a very few luxuries are in the minority, the exceptions rather than the rule.

Unfortunately if the country goes bust then Fatman and I are going to be screwed like everybody else, maybe not quite as screwed but screwed none the less. The reason is because those people who run up their debt and spend unwisely are also voters and they've voted their philosophy into office and now their elected officials are mirroring their crazy economic philosophy.

[JohnG72]

Less than $2k income a month for two people.

Major asset is declining in value.

I recall nothing being said about said asset being a "luxury" item.

Home purchase FTW.

[EscapeCalifornia]

Originally Posted by Lovehound

As far as I recall the average American moves once every 7 years. I'll bet Fatman built up an emergency nest egg to cover contingencies such as becoming unemployed. (That's what I did.) Also, if you spend that income on your house you'll profit from the investment for the rest of your life. Spend it on expensive vacations and dining out and all you'll end up with is a few snazzy pictures, and heartburn.

There's also such a thing as being house poor. Been there, done that, didn't enjoy it. As far as profiting from your home, tell that to all the people underwater and throwing good money after bad every month.

[Lovehound]

Originally Posted by EscapeCalifornia

There's also such a thing as being house poor. Been there, done that, didn't enjoy it. As far as profiting from your home, tell that to all the people underwater and throwing good money after bad every month.

All those underwater people made poor purchase decisions. If I were one of them I'd GTF out and let the house sink to the bottom of the lake. But then, I don't make poor purchase decisions.

[EscapeCalifornia]

Originally Posted by Lovehound

All those underwater people made poor purchase decisions. If I were one of them I'd GTF out and let the house sink to the bottom of the lake. But then, I don't make poor purchase decisions.

Ah, yes, everyone gets to choose when they were born and whether their life's need intersect with a real estate bubbles. I know some very educated, very smart people who are either underwater or worse because their time to grow up, buy a house, and have a family happened to occur in the mid 2000's. Then there's the knife catcher who thought there were getting a deal at 20% off, only to see it drop another 20%+.

[fatmancomics]

Originally Posted by JohnG72

Less than $2k income a month for two people.

Major asset is declining in value.

I recall nothing being said about said asset being a "luxury" item.

Home purchase FTW.

What're you adjusting your own math to suit your point? It's not less than 2K a month for the both of us and, in the three years we've lived here we've seen the value of our house increase and decrease at least once each year so there's no telling how things will turn out as far as our home's value once we have to retire. Home prices also vary according to the trends that surround your neighborhood and we are living in a very desirable area since homes are more affordable in my neighborhood than in the nearby, more "affluent" neighborhoods.

Last year three houses went on the market on my street and I was worried about who would buy them since all three homes belonged to retirees. The people who bought and moved into the homes turned out to be middle class working slobs like yours trully who keep their house in great shape and their lawns manicured (they look better than mine since they pay gardners to do it ) and whose kids don't misbehave or graffitti the walls. They are roughly the same age as my wife and I and, if they're anything like my wife and I, they bought their homes for the long haul and not for just 5 years as a "starter home".

As long as my street keeps attracting those type of people, I won't worry. When I see low riders and kids with sagging pants walking through my street and into one of the homes in it, I'll start shopping for a home somewhere else. Again, thanks for your concern.

Originally Posted by Lovehound

All those underwater people made poor purchase decisions. If I were one of them I'd GTF out and let the house sink to the bottom of the lake. But then, I don't make poor purchase decisions.

Originally Posted by EscapeCalifornia

Ah, yes, everyone gets to choose when they were born and whether their life's need intersect with a real estate bubbles. I know some very educated, very smart people who are either underwater or worse because their time to grow up, buy a house, and have a family happened to occur in the mid 2000's. Then there's the knife catcher who thought there were getting a deal at 20% off, only to see it drop another 20%+.

Well, I did say that my wife and were lucky to have gotten the house after the bubble burst but we HAD been looking for quite some time (in fact, part of the reason for moving to Santa Maria was that homes were half the price as they were in L.A. when I first moved out there) and this one just happened to have the floor plan my wife wanted and the room sized I wanted. We paid more than we had planned to pay and we had seen homes in other neighborhoods at comparable prices but they were smaller and more of a risk since those neighborhoods had more homes for sale than our current one does.

Point is that before we got this home we had resigned ourselves to not being able to afford a house since all the ones we liked were over 500K. Like it says on my list, when you can't afford it, you shouldn't get it.

[stan4]

You know, whether or not it's declining in value only matters when it comes to sell. Meanwhile, they gotta pay to live somewhere. At some point, the payments on a house stop...and they can just keep on living there.

While I don't agree that buying is necessarily better than renting (actually, renting is very smart for a lot of people), there is gonna be some $$$ shelled out every month to live. If these people don't want the other luxuries in life, then they're not house poor. You're only 'house poor' if your house payments/maintenance/etc don't allow you to do something else you'd rather do.

[Lovehound]

Originally Posted by EscapeCalifornia

Ah, yes, everyone gets to choose when they were born and whether their life's need intersect with a real estate bubbles. I know some very educated, very smart people who are either underwater or worse because their time to grow up, buy a house, and have a family happened to occur in the mid 2000's. Then there's the knife catcher who thought there were getting a deal at 20% off, only to see it drop another 20%+.

Only a retard would have bought into that market (2003-2007) and it would have taken a psychotic to buy after 2007.

You don't get a free pass because you were young and stupid and pregnant in 2005. Should have rented...