Get In While You Can!!! (Norwalk: mobile home, property taxes, living in)

[greggd]

Motoman, Im not arguing with you. I think your info is great for inland communities, renters, & soon to be renters, as I said. My suggestion is that some people need to look beyond a few months, plan both with family issues and financially. I agree many people do not do this and that is why an apartment was born.

Originally Posted by motoman

That figure is based on household incomes. You are trying to get very specific regarding a topic that is only reasonable to talk about in general, unless you are focusing on a very specific area, like Beverly Hills.

I really only watch west los angeles and coastal communities, but the theory of being savy and financially responsible is applicable in any neighborhood.

Originally Posted by motoman

YES, each area is going to vary. But NO, the entire state of California cannot afford to live in a $500,000+ house, as it seems you are suggesting People in California, or LA, do not make much more than the median household income for the entire nation, yet somehow people seem to think a $500,000 house is normal. In other parts of the country, people living in $500,000 houses are considered "rich".

I know my cousin moved here from Chicago to be near the beach. He made about 50 grand out there and is supposedly making 70 here. I dont believe either #. I do know he's about 35 miles from the beach and the port where he works. He's surrounded by immigrants and is unhappy-soon to move back.
Yes thats why everyone in California does not live in malibu and west la and thats why there are Ferraris in the mid west. Whenever I see a 100k+ amg barrelling north on the 405 past moraga, I say, well enjoy the valley pal. I also say cheers to the guy in Texas with the 7500 sq ft home and 200k plus exotic cars in his garage.

Originally Posted by motoman

Those people you mention, the savers, the people that make good incomes, etc., yes they ALL exist. But if you could do a proper survey to determine the number of households that fit those descriptions, you would find relatively few. The general population is not good with managing their finances. Consumers have taken on an additional $5 trillion+ in debt over the past five years or so, yet their household incomes have increased only marginally. That is unsupportable..

I would say quite a few are living in western & southern parts of LA & Orange County, San Diego San Francisco etc. There is alot of money out here. There is also alot of industry that supplies goods and services to the huge population we have. Those people make quite a bit of money and they appear to purchase housing on the west side and coastal areas. Dont worry though, apartments are being built quite rapidly.

Originally Posted by motoman

Regarding first time buyers, how many people in their 20s (the typical first-time buyer age) have saved $100,000+ and make $100,000+ per year? At that age, VERY few. Well, that is the kind of money you need to get into just a starter home in LA. How is it someone making a top 10%-15% household income can only afford a starter home? That isn't supportable either..

A first time buyer should be looking at a condo rather than a home. A home comes after a trade up from a condo and diligent savings. People just dont fall from the sky one day and buy a home. They have to work at it. I cant be of any assistance if some guy marries at 18-22, has 3 kids in 3 years, then wants affordable housing for him and his fat wife.

Originally Posted by motoman

To get specific, the less than 15% number is based on the old affordability measure, with a household buying the median priced house, with 20% down, on a 30-year fixed rate mortgage..

Things change. Look forward more than a few months and be creative. Be a Winner.

Originally Posted by motoman

Because that number wasn't working out so well for the California Association of Realtors, despite the fact that it worked just fine before this bubble, they decided to change it. Now the affordability measure is based on a household buying at 85% of the median (which will get you a small condo), on a 5/1 ARM, putting just 10% down. And the assumption is that a household can spend 40% of their gross income on their mortgage, property taxes, and they may have included insurance in the figure. If you are spending 40% of your income on housing, you can have absolutely no other financial obligations. No car payments, no student loans, no family obligations, no credit card debt, nothing. That isn't realistic in the least. And after changing to this new formula, they still only got the affordability number up to around 20%.

Realtors are car salesman. They are only interested in moving units. They should be considered instruments to fill out paperwork, get keys to homes you want to look at, and make phone calls to coordinate the buyer, mortgage co, and escrow. They should also be paid well, since they put up with the general public and have to sit in empty houses and act nice to people.

If you spend 40% of your income and are allowed no other expenses, then your saving 60% of your income. You would be considered a trail blazer. Mom and dad must have bought Pip a top of the line huffy. He uses it to this day.

Originally Posted by motoman

So on a BEST case scenario, just 20% of California households can afford to buy the MEDIAN priced house. They absolutely cannot afford anything above that. So if only 20% of households can afford no more than the bottom half of the housing market, who the hell is supporting the top 50%?.

There are people who make money off of the slaving of others. More than you know Neo.
You need to factor in history, family planning, past savings, diligence, etc. If those basic attributes are not within the gray matter, they must rent.....
So be it.

Originally Posted by motoman

Regarding those trading up, that was only possible because they were bought out at a ridiculous price by someone that took out one of these funny mortgages and suddenly they have all of this "equity" in their homes. Were it not for the bubble, that "equity" wouldn't exist. And for most, that equity is going to shrink a good deal before the market finally reaches the bottom.

Look at the opportunity it provided. Life is numbers. Many took the chance and made some money. If you buy a stock at $20 and it goes up to $40, then sell you've made money. If someone buys it at $40, then it shoots up to $70. they made money too. A good investment in the long run will make money. you know the old saying, they dont make land anymore, maybe in Texas they do but not along the pacific ocean.

Originally Posted by motoman

I still go back to a statement I made a few posts back. I think I made it on this forum. What has changed in the past 5 years that made people decide the same homes that existed five years ago are now suddenly worth twice or more what they were worth then? The long-term housing price appreciation is around 5%, because it follows very closely population and income growth. Not 15%. At 5% growth, it takes 14 years for housing prices to double, not 5. Given that, it would not be unrealistic, in an absolutely BEST case scenario, for housing prices to remain flat for the next decade, just so incomes can catch up to current prices and finally make these prices realistic.

Again it will depend on the area, the characteristics and desirability. Im really only watching west la and the coast. Back in the 70s these homes were selling in the 50-60k range. We never saw those #s again.

If renters moved into homes with renter mentality, they will become renters once again. Those that are prepared will be their landlords. Once landlords accumulate enough, they will move away from the renters to nicer parts of town, if not already there, and will pay for it. If your in, your in. Getting there is the part you work on.

Originally Posted by motoman

By the way, to purchase a $1 million house, assuming you have $200,000 in available cash for a down payment (which is aside from any other savings you have, unless you are gambling your retirement on your house price), you would need to earn a minimum of about $210,000 per year to cover that $800,000 mortgage and property taxes. And that assumes you have little to no other financial obligations. Again, not realistic.

If you fell onto earth with $200,000 in your pocket. Yes that is true. What if you owned a condo or a smaller house and stepped up with your savings accumulated over several years. There are $2-300,000 mobile homes in the palisades right now. What if, instead of having a huge student loan, kids lived with their parents or in a modest apt with roomates during college and attended a Cal State school. A part time job to cover the fees?
A set of parents that actually did a little family planning & saved for Pips college.

Originally Posted by motoman

If you are making that kind of money, you are in the top 5% of wage earners in the entire country, not just California.

In that case, I'm going out for drinks tonight.

Cheers and God Bless America.

[Texasturkey]

Originally Posted by Charles

Just for fun, Would you mind giving me an example for a family with a $100K salary, and two kids ages 5 and 8?

Assume you have a 20% down payment. You probably qualify for a 30 year fixed loan around $300K +/- $50K??? Just guessing, but that's probably in the ballpark???
Assume you put in 15% into your 401(k)
Assume you contribute 2 X $5000 to Roth IRAs
Assume you contribute 2 X $2000 to Education IRAs or 529s
Comp and collision for two vehicles.
Homeowners insurance.
Company paid health insurance.
You can work anywhere you want.

Where (city, school district) would you purchase a home in Los Angeles in 2007?

$80,000 Single Family Residence
Estimated monthly payments: $375
2 Bedrooms, 1 Bath
816 Square Feet
Built in 1909
1672 East 76th St.
Los Angeles, CA 90001
Los Angeles Unified School District

Source: www.realtor.com
Edner & Associates Real Estate

[Texasturkey]

Originally Posted by Jakehorror

Hmm, I'm noticing many of you who are fed up with SoCal have children, not everyone, but alot of you. Everyone knows that there are many better places to raise a family then L.A. If family is your priority then there are plenty of midwest states that are cheap to live and have alot of family oriented activities etc. We dont want kids, we want careers, fun and freedom to do what we want when we want. BUT, I respect each persons decision and I totally understand your frustrations in L.A. with kids, it's really not a kid city compared to areas like where I live in Indiana. Sounds like we should trade towns

PS- You can get a loaded home brand new on 5 acres with all the american fixins for about 200K. You also get the neighbors who are always in your business with it.

It's not fun here. LA is mostly bedroom communities, 3d world immigrants, ghettos and urban sprawl. For "fun" people drive to the beach, OC or over to the Westside of LA. They spend most of the time in their cars driving to get there. Traffic, car maintenance and gas ($).

[Texasturkey]

Originally Posted by Texasturkey

$80,000 Single Family Residence
Estimated monthly payments: $375
2 Bedrooms, 1 Bath
816 Square Feet
Built in 1909
1672 East 76th St.
Los Angeles, CA 90001
Los Angeles Unified School District

Source: www.realtor.com
Edner & Associates Real Estate

You can get this home or a slightly newer one in Parkersburg, West Virginia for $16,000.
Estimated monthly payments: $115 .

[EscapeCalifornia]

I wonder how Jack "Real estate can never go down in LA" Sparrow is doing these days.

[Lima_beans]

Personally for my quality of life it makes more sense for me to rent anyways. I want to live close to work, and if my work moves, I want to move. So, renting gives me that freedom.

2 weeks til moving to LA countdown, cant wait =)

[lesallimc]

[quote=Lima_beans;5266029]Personally for my quality of life it makes more sense for me to rent anyways. I want to live close to work, and if my work moves, I want to move. So, renting gives me that freedom.
quote]


Agreed. I will take my 1 mile (soon to be 0.25 mile) "commute" versus life in a car anyday.

Although, I have to say my neighbors here are just as nosey as anywhere else I have ever lived.

[Texasturkey]

Originally Posted by EscapeCalifornia

I wonder how Jack "Real estate can never go down in LA" Sparrow is doing these days.

Real Estate may not be going down in LA. But, you can find a house less than $200,000 if you did deep. Real deep. They are there. It is either an older house in a rough part of LA or a mobile home.

[steel7]

L.A. is just too expensive to live & i would never raise a famiy their.That includes L.A.county as well.Actually....i would never raise a family in ca...period!

[clouded]

HA!! exclusive... move while it's still possible to get here? wow, what quality of life would that lead to and once you're here? It wouldn't be possible to get out of your driveway much less digest the pollution it would create. It's already as such. And what are we, all multi millionaires? What world are you living in and what world do you think the majority of this nation is living in? Hey I'm here and I'm not trying to completely bash LA, I'm more questioning the logic of how exclusive an over populated, badly planned over polluted human footprint that costs a fortune to live in really is??