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Old 10-21-2008, 04:56 PM
 
830 posts, read 2,860,838 times
Reputation: 387

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Quote:
Originally Posted by streetscenes View Post
Hey Moto, median price in SoCal is now below $325,000. It's at $308,000 per latest dataquick data. Southern California home prices continue to slide - Los Angeles Times

We aren't at the bottom yet but will likely get there alot quicker than 2-3 year time frame your looking at. When we get to the bottom we will likely bounce around there for awhile. Current information is indicating we are near the bottom for the lower end of the market. Median price will come down further but that will be due to the decline in the higher end of the market catching up with the lower end of the market.
Hey streets, thanks for that post. Good info in there.

Jonathan, sorry I got so worked up. Don't take it personally.

And the best quote of all from that article:

Quote:
Falling prices had been making homes more affordable this year. About 15% of Los Angeles-area residents could afford to buy a median-priced house in the second quarter of this year, according to a National Assn. of Home Builders index, up from less than 11% the previous quarter.
Even after the 30%+ drop in prices ONLY 15% OF LOS ANGELES-AREA RESIDENTS COULD AFFORD TO BUY A MEDIAN-PRICED HOUSE!!!!!

If that doesn't indicate to people the insanity of the SoCal real estate market, I just don't know what else can be said.

Nationwide, typically about half of area residents can afford a median priced home. That's 50% nationwide versus 15% locally. Even after adjusting for typically higher price-to-income ratios in SoCal (long-term average is around 5x), these numbers still indicate we have a way to go on the downside.

As someone above said, the higher-end homes haven't fallen as much yet, but they will. "Rich" people aren't immune to law of economics as so many would try and have you believe.
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Old 10-21-2008, 06:22 PM
 
Location: Las Flores, Orange County, CA
26,329 posts, read 93,761,592 times
Reputation: 17831
Guys, I have a question that I asked months ago and still don't really have an answer to. Maybe this thread is a good place to repost it:

Why did Southern California housing prices get so far ballooned compared to the rest of the country? The homes in Denver, Houston, St. Louis etc didnt' ramp up like SoCal's did. The wacky mortgages were available everywhere. The laws governing the mortgage industry were the same everywhere. etc. People had the ability to apply for $400K mortgages on $50K salaries everywhere.
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Old 10-21-2008, 06:23 PM
 
Location: The Miami Of Canada
1,043 posts, read 3,719,266 times
Reputation: 290
Quote:
Originally Posted by motoman View Post
A $325k mortgage is low? On what planet? With that kind of mortgage you have to make a good six-figure income, twice the median income of Southern California. If you're making that kind of money you're in the top 5%-10% of wage earners in the entire country. So what you're saying is that the top 10% of wage earners supports the top 50% of the residential real estate market in SoCal? Really? Ever taken a statistics class? If you had you might be able to make a wild a$$ conclusion that those types of numbers aren't remotely possible.
The one thing I can defend on a $325K mortgage being low is in relation to the other property with the same statistics and in the same location. Location is everything in Real Estate. JonathanLB proved that the properties in his building were selling for $450K, even if that is overpriced to many, which does mean that him buying his condo is a good deal.

On the other hand, it is possible to live in L.A. for much less than having to hold a $350K mortgage. You have to be determined and find ways to make sacrifices. Take on two jobs or ask for overtime, learn to cook, go to resale shops and say "no" to your friends when they want you to go somewhere that involves spending money. :P
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Old 10-21-2008, 06:43 PM
 
1,714 posts, read 6,054,971 times
Reputation: 696
Quote:
Originally Posted by Charles View Post
Guys, I have a question that I asked months ago and still don't really have an answer to. Maybe this thread is a good place to repost it:

Why did Southern California housing prices get so far ballooned compared to the rest of the country? The homes in Denver, Houston, St. Louis etc didnt' ramp up like SoCal's did. The wacky mortgages were available everywhere. The laws governing the mortgage industry were the same everywhere. etc. People had the ability to apply for $400K mortgages on $50K salaries everywhere.
I've been wondering this too, Charles.
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Old 10-21-2008, 06:44 PM
 
Location: Denver, CO
5,610 posts, read 23,310,736 times
Reputation: 5447
Quote:
Originally Posted by ITChick View Post
The one thing I can defend on a $325K mortgage being low is in relation to the other property with the same statistics and in the same location. Location is everything in Real Estate. JonathanLB proved that the properties in his building were selling for $450K, even if that is overpriced to many, which does mean that him buying his condo is a good deal.

On the other hand, it is possible to live in L.A. for much less than having to hold a $350K mortgage. You have to be determined and find ways to make sacrifices. Take on two jobs or ask for overtime, learn to cook, go to resale shops and say "no" to your friends when they want you to go somewhere that involves spending money. :P
There are many different ways to go through life. You can keep beating your head against the wall every day until you eventually go brain dead. Or you can live smart and go through life without slowly killing yourself just to live. What's the point of living a ***tty lifestyle just to say that you live in LA-- if you can't even afford to take advantage of the best LA has to offer?
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Old 10-21-2008, 06:50 PM
 
Location: South Pasadena
689 posts, read 2,582,143 times
Reputation: 560
Quote:
Originally Posted by Charles View Post
Guys, I have a question that I asked months ago and still don't really have an answer to. Maybe this thread is a good place to repost it:

Why did Southern California housing prices get so far ballooned compared to the rest of the country? The homes in Denver, Houston, St. Louis etc didnt' ramp up like SoCal's did. The wacky mortgages were available everywhere. The laws governing the mortgage industry were the same everywhere. etc. People had the ability to apply for $400K mortgages on $50K salaries everywhere.
It has to do with where the prices started. In Denver, Houston, St. Louis, etc. the lower end started around $50,000 to $100,000 but in SoCal lower end was around $150,000 to $200,000. If a $100,000 in St. Louis doubles in value it goes up to $200,000, the $200,000 house in SoCal went to $400,000.
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Old 10-21-2008, 06:52 PM
 
11,715 posts, read 40,451,929 times
Reputation: 7586
Quote:
Originally Posted by Charles View Post
Guys, I have a question that I asked months ago and still don't really have an answer to. Maybe this thread is a good place to repost it:

Why did Southern California housing prices get so far ballooned compared to the rest of the country? The homes in Denver, Houston, St. Louis etc didnt' ramp up like SoCal's did. The wacky mortgages were available everywhere. The laws governing the mortgage industry were the same everywhere. etc. People had the ability to apply for $400K mortgages on $50K salaries everywhere.
I think its the decades old boom/bust cycles in California that fueled the gold rush mentality. There's this urban legend that real estate in California is a sure thing. So if you believe its a sure thing, you'll mortgage yourself up to your eyeballs to get in. If it doesn't work out, you can always sell a couple years down the road (before the interest rate jumps or the interest-only phase expires) and make a nice profit because of the constant appreciation. Lenders bought into this thinking too an were more that willing to lend way too much because, after all, the property would appreciate and that 110% LTV would quickly become a 90% or less.

The problem is, that actually worked for a lot of people. A lot of money was made during the boom. That enticed a new crop of people into the ponzi scheme. Buy now before the prices get out of reach! You'll make a fortune! The thing that made it all possible was the belief that properties would rapidly appreciate in California. Most other states don't have that reputation.
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Old 10-21-2008, 06:53 PM
 
1,714 posts, read 6,054,971 times
Reputation: 696
They didn't double in value, though, in the rest of the country. They just didn't do it. Trust me. I watched my house sit... there... not... appreciating.... for... years, while houses out here bubbled up and up and up.

The really unfair thing about it all is that the housing slump has hit the rest of the country, even though they didn't get the incredible runup. I sold my house just in time...
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Old 10-21-2008, 06:53 PM
 
Location: Las Flores, Orange County, CA
26,329 posts, read 93,761,592 times
Reputation: 17831
Quote:
Originally Posted by streetscenes View Post
It has to do with where the prices started. In Denver, Houston, St. Louis, etc. the lower end started around $50,000 to $100,000 but in SoCal lower end was around $150,000 to $200,000. If a $100,000 in St. Louis doubles in value it goes up to $200,000, the $200,000 house in SoCal went to $400,000.

Yes, I understand that. But don't we all agree that the percentage increase was still much greater in SoCal than elsewhere?

Look at this, look at the slope. These are index (Case Shiller) data, not actual numbers:

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Old 10-21-2008, 06:55 PM
 
1,714 posts, read 6,054,971 times
Reputation: 696
Quote:
Originally Posted by Charles View Post
Yes, I understand that. But don't we all agree that the percentage increase was still much greater in SoCal than elsewhere?

Look at this, look at the slope. These are index (Case Shiller) data, not actual numbers:
Yes, that's exactly what I'm saying...
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