Keeping Up with the Joneses (Los Angeles, Anaheim: lenders, homes, neighborhoods)

[Charles]

Originally Posted by zantra

You sit on the condo for a few years, then sell and rollover the equity into a SFH with the proceeds.

It will be more than a few years as the most of what is paid on the mortgage at first is interest, not principle.

Also, using appreciation to "move up" cannot work unless:

The person is making more money (can qualify for a bigger loan) OR
Interest rates go down (can borrow more with the same monthly payment) OR
The person comes up with more to put down (for example a gift) OR
The person moves to somewhere with less expensive housing.

The same tide lifts all boats so while the the condo appreciates so does the "moving up" target home. Also, taxes would necessarily be higher on the target home providing less cash flow for mortgage payments.

It's tough to move up.

[SOON2BNSURPRISE]

Interesting post. I missed this one from when I joined CDF last year. I would love to get the OP's thoughts now that the market has gone South. My wife and I were in the same boat over a year ago and bought a home in Arizona that we could afford. Lucky for us it was a newly built home that the builder reduced the price on before we closed on the home. Basically we bought close to the current bottom. I still am working in Ventura, CA at a job that I love. Still have not found a job in Arizona. (Note to self: Never buy a home in an area you don't have a job in.) Now the area I work in is affordable and we are trying to figure out how to purchase a home there now. Homes that a year and a half ago were selling for $600,000 are selling now for $280,000. We have found some 3 bedroom 2 bath fixers in the $180,000 range. This crazy market amazes me at all the deals available now. The neighborhood we want to be in was selling for $1,100,000 and one home in that neighborhood is bank owned and they want $596,000. That is for a 5 bedroom 3.5 bath 3 car garage home on a 12,000 square foot lot, built in 1996 in North Oxnard.

[zantra]

I realize my post may not have taken into account the timing of the OP post, but really.. I see a bunch of people talking about how they can't afford a house and mentioning a luxury car payment in the same post. It's like they are answering thier own question as to why they can't afford a house. $120k would have still bought a condo in 06- it would just take longer for appreciation. However, banking on equity as short term wealth accumulation is a mistake. I wasn't advocating that, only stating that there was a path to home ownership based on the numbers the OP so adamedently argued were not viable.

droves of people ARE exodusing to other states due to affordability. And I will say, I would not personally willingly live in California on the salary of a teacher. But the choices we make dictate the lives we can realistically lead.

Obviously the current market gives much more buying power if you're actually in the market to buy right now. Just make sure the credit's immaculate.

[sunshine18102]

Originally Posted by hllnwlz

:::This is mostly musing, folks. But please feel free to respond to any or all of this. I'm curious to see what other people think/feel about this:::

We have a serious problem on our hands. I'm a teacher, employed in Anaheim, and I make very good money for a twenty-something. Mmy husband and I together make about $120,000 a year. And yet we CAN'T AFFORD A HOUSE.

We aren't in debt. We have two car payments (necessary, since I commute to OC and he commutes to Marina Del Ray from the South Bay), but other than that, our net income could go straight to a mortgage. Last time I checked, the most we could qualify for (without one of those retarded I-have-to-have-this-house-even-though-I-really-can't-afford-it mortgages concocted by lenders who smilingly collect their commissions and then say, "Hey, it was all in print on the contract you signed. Boo-effing-hoo," when the interest rates take a tiny upward hop and the payment leaps $1000 skyward) was $450,000.

Now, I don't know where y'all are looking but there are no houses (except in sketchy neighborhoods) I'd want to raise kids in for that dollar amount available. I imagine there will be at some point in the next few years and maybe that's reason enough to stay. But why would the prices drop significantly when -- as many of you have pointed out -- there are plenty of people here who are dumb enough to pay $600,000 for an ugly 900 sq. ft. two-bedroom condo in Redondo? (Oooh, that rhymed!) Oh, and then pay the $300 association fee that goes with that condo?

So, I'm supposed to raise my two kids and our dog (and my husband) in a condo, with no yard for them to play in and probably not enough room for each of them to have their own bedroom when they reach puberty? If we do somehow miraculously manage to get hold of a house in an okay neighborhood, it will be a major fixer-upper, and I'll have to use all my skills from growing up a contractor's daughter and being a good reader of how-to manuals to piece together a home out of that. In my parent's house, that process has taken 12 years of near-constant renovation.

Ummm... no thanks.

As if the schools we have down here don't suck enough already, what's going to happen when the older teachers who own homes now retire and the newer ones realize that on their salaries, unless they marry extremely wealthy individuals, they will never own a home? If they're smart enough, and if they like snowboarding and mountain-biking (and realize that there's a requisite three-hour drive to get to a mountain through LA traffic) more than they like surfing (like I do), they're getting the hell outta here.


It's either Tahoe or Denver, mes amie. Yes, I'll take a $9000 pay hit, but a 5 bedroom, 3 bath, 2300 square foot house in Denver costs, oh, $275,000. My kids will have grass, and other kids who will play with them in the neighborhood streets, where it will be safe for them to have a game of roller hockey or ride their bikes without fear of being run-down by some poor road-raging schmo who just spent two hours on the freeway trying to get home the 17 miles from Santa Monica to the South Bay.

So guess what that leaves all of the parents that are still here? Junk public schools with dumb "I'm-doing-my-job-and-my-job-only" teachers.

What about new cops?

And firefighters?

What about the architects and the engineers and the interior designers who ONLY make $80,000 (boo-hoo) a year?

What about the nurses?

The General Practitioners?

The accountants?

How the heck are they going to afford to live their lives here?

Bottom line, ladies and gentlemen, I have NO IDEA. If anyone can explain this to me, I'd be glad to hear it.

You may want to move to kissimmee fl. The houses are all on one floor. The sell for 140,000 and look real cute. They have yards but no basements. I do not knew what they are paying school teachers there. It is warm there too. You may want to google jobs and houses. It much be great to get 140,000 a year. Try living on 14,000 a year.

[infousername]

You qualify for a half million dollar home and all you can think about is that you cannot find THAT home here?

Move.

And for some culture, go google "cabrini-green" and read about what kind of conditions SOME people have to live in.

Perhaps you should be thankful (gasp!) that you have the financial means to have two cars, own a home (although perhaps not in southern CA), raise two children, etc. You are INSANELY blessed, yet all I hear in your post are complaints.

Unbelievable.

[Brandon26pdx]

C'mon people, the OP started this thread over 2 years ago. I bet you could find a decent starter house in the LA basin for $450k these days.

[BRinSM]

Originally Posted by Brandon26pdx

C'mon people, the OP started this thread over 2 years ago. I bet you could find a decent starter house in the LA basin for $450k these days.

maybe a condo, but not a house.

[SOON2BNSURPRISE]

As it is an old post things have changed for the better if you are buying. Not sure how much LA is selling for, but someone can buy in Oxnard for way under $450,000.

[Brandon26pdx]

Southland home sales off bottom

The median price paid for a Southland home was $278,000 last month. That was down 2.5 percent from $285,000 for November, and down 34.6 percent from $425,000 for December a year ago. The median reached $505,000 in mid 2007.

Ooof!

[firetraq]

Originally Posted by Pasadenagirl

I'm so glad I"m happy with a simple life: I'm single, don't want kids; happy in my 1 bdrm apt.; could care less about an HD TV ( I have an old one with rabbit ears - - hey, it works!); I drive an old Toyota; don't need fake boobs, mine are fine the way they are!; diamonds aren't my best friends, I have a dog and REAL friends; buy my clothes on Ebay. I define success by the quality of my relationships with those that I care about!
pretty happy in the SGV,
T.

Absolutely true....