Has anyone decided NOT to buy a house? (neighborhood, schools)

[subPrimeTime]

Originally Posted by nick2006

ask any experienced realtor or longtime LA native and they will tell you its cyclical. the prices storm upward every 13-17 years after a crash. It always happens. The previous crash was due to the subprime debacle. In 1990, it also crashed (not due to subprime lending) and people said prices would never go back up...salaries, etc everything you mention will prevent it... guess what, is stormed up again and hit a peak in 2006. people now project the peak to occur again in 13-17 years from 2006, which would be 2019 - 2023. homes again will be ridiculously overpriced, 30-something idiots will panic again and will buy to ensure their dream doesnt slip away, and it will come crashing down again, just like all the other times in history... do the research

That's fine, history points to what you speak of. But I just wonder if the gap between the wealthy and everyone else has been this wide. The buying power of the middle class continues to get worse. So what you're saying is the middle class will rebound and close the gap?

[drshang]

The difference is in the 1990s California more or less led the country out of recession and this time around they are a huge drag on the economy. Plus that recession was very mild compared to this one and the housing recession still lasted
6 years.

[nick2006]

Originally Posted by subPrimeTime

That's fine, history points to what you speak of. But I just wonder if the gap between the wealthy and everyone else has been this wide. The buying power of the middle class continues to get worse. So what you're saying is the middle class will rebound and close the gap?

i see your point but the gap in and of itself is not a factor, what is a factor is the steady increase in salaries. where i work, every 10 to 12 years, salaries for the same position go up 42-47%. that's just the way it is (i.e inflation) and buying power goes up, and so does everything else including housing. Combine this with a strong economy and consumer confidence, and we have another housing bubble for one reason or the other. It may not be due to subprime lending or banking corruption, but something will trigger it. it always happens like a roller coaster, up and down

[mlb]

Originally Posted by nick2006

where i work, every 10 to 12 years, salaries for the same position go up 42-47%. that's just the way it is (i.e inflation) and buying power goes up, and so does everything else including housing. Combine this with a strong economy and consumer confidence, and we have another housing bubble for one reason or the other. It may not be due to subprime lending or banking corruption, but something will trigger it. it always happens like a roller coaster, up and down

WHOA - what industry to YOU work in?

We've not had raises in 3 years. And the salary ranges have even been lowered since the recession. Starting points are no longer midrange....but entry.

[bigdumbgod]

Originally Posted by mlb

WHOA - what industry to YOU work in?

We've not had raises in 3 years. And the salary ranges have even been lowered since the recession. Starting points are no longer midrange....but entry.

That many of us still have a job, or our companies still exist, is the highlight of our collective working experience these days.

[subPrimeTime]

Originally Posted by bigdumbgod

That many of us still have a job, or our companies still exist, is the highlight of our collective working experience these days.

Exactly, I could care less about raises, and am just happy to have steady employment, and I'm pretty sure I'm the rule not the exception.

[majoun]

Originally Posted by nick2006

ask any experienced realtor or longtime LA native and they will tell you its cyclical. the prices storm upward every 13-17 years after a crash. It always happens. The previous crash was due to the subprime debacle. In 1990, it also crashed (not due to subprime lending) and people said prices would never go back up...

Wasn't aware of the 1990 crash, but there was a big crash after the Rodney King riots in 1992. I can remember my own situation in 1990. I was renting and knew I'd be renting for life, as homeownership was already expensive enough as to be out of the question unless one was living in the boonies or living in the hood (which in 1990 included some areas which aren't considered the hood today ; likewise some areas which are considered the hood today were not back then)

Conditions are different today than in the early '90s - aerospace is dead and the entertainment industry is leaving and shrinking. L.A. also is more overpopulated than in the early '90s due to decades of out of control growth (even though the population in the last few years has been stable). The current economic situation is very different from that in the early '90s - it is the sort of situation that changes history and changes attitudes. It has done to the American dream of homeownership what AIDS did to the American dream of promiscuous sex.

[CA4Now]

Originally Posted by user_id

I'm not talking about Riverside, houses were affordable in LA, etc as well..

Depends on what you call "affordable" 21 years ago. One still had to look fairly far away from L.A. to find anything under $300,000. That meant a down payment of at least $60,000 since lending was much stricter then. And while we were not in a recession at the time, the cost of living and salaries were substantially lower at that time.

[CA4Now]

Originally Posted by majoun

Wasn't aware of the 1990 crash, but there was a big crash after the Rodney King riots in 1992. I can remember my own situation in 1990. I was renting...

During that particular real estate cycle, the residential housing market peaked in late 1989 and started to decline enough that by the mid-90s, many homes were worth less than what they were valued at in 1990. Housing prices didn't start to increase again until 2003-4 or so.

[mlb]

Originally Posted by CA4Now

Depends on what you call "affordable" 21 years ago. One still had to look fairly far away from L.A. to find anything under $300,000. That meant a down payment of at least $60,000 since lending was much stricter then. And while we were not in a recession at the time, the cost of living and salaries were substantially lower at that time.

This. Exactly.

We were living in Chatsworth at the time. Husband was a barber (in his dad's shop for over 13 years) and just graduated with a degree from CSUN in Radio, TV, Film production. Couldn't get hired (other than the no-salary "internship") to save his life.

Despite the fact that some of his clients in the barbershop were studio executives. It didn't matter who you knew..... a half a million other people knew them too.

We had a $20K downpayment - and after seeing how little homes cost in the intermountain west (our first house under 92K) - for waaaaaay more space than in LA... it didn't take much to sell us - even tho it was a leap of faith.

We're an hour's flight from the folks in Woodland Hills if they need us. We don't have helicopters circling our house (as we did in Chatworth) looking for the latest burglar. I'm three miles from work - I don't have to get on a freeway to get there. We actually can - and have survived on one income.

What's not to like?

Oh, and we're surrounded by southern california escapees from Orange County, Thousand Oaks, Oxnard, etc....