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Unread 01-31-2010, 08:26 AM
 
Location: Moose Jaw, SK, Canada
23 posts, read 28,716 times
Reputation: 10
Quote:
Originally Posted by Brian Shepherd View Post
I just checked out Beaumont on Redfin and CANNOT believe housing prices.

6 bedroom 3500 square foot built in 2006 for $250,000?

Can anyone tell me why?
Quote:
Originally Posted by David Aguilar View Post
Head been in the sand the past year or two?
Considering where I live, and the amount of hours I spend at work.....yes
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Unread 01-31-2010, 03:42 PM
 
Location: Arvada, CO
8,060 posts, read 10,039,647 times
Reputation: 5551
Quote:
Originally Posted by Brian Shepherd View Post
Considering where I live, and the amount of hours I spend at work.....yes
Well, I suppose I hadn't noticed that you live in Saskatchewan.

There was this thing called the housing bubble, which hit Southern California (and many other parts of the country).

My (IMO) summary goes like this:

-After September 11, people began to fear that they wouldn't be able to live their dreams (one of which includes owning a home), which resulted in a massive hysteria towards buying a home, at any cost (apparently).

-Banks started offering shady home loans such as "interest-only", "ARMs", "no money down", and other "creative financing" products, which consumers snatched up, even if their incomes didn't match up with the home's price (banks would pay....er receive money for that later ).

-In places like Southern California where build-able land is in short supply, homes closer to job-centers rose in value (to insane highs) while suburban, exurban, and rural areas saw unprecedented growth (and also had insane run-ups in home values), with people commuting outrageous distances from home to work.

-Eventually, the payments would adjust to outrageous levels on these loans (the sell at the beginning of the bubble was "you could just refinance because your home will continue appreciating", which turned out to not be true), couple that with job losses, wage cuts, and an all-around bad economy, and you get to where we are today, and suddenly the idea of owning (and paying for) an overvalued, giant cracker-box 60 miles (up to 2 hours) from work doesn't sound too appetizing. Foreclosures ensued, and entire neighborhoods (and credit scores) have been left decimated.

-Now, we've begun to see an adjustment back to what home values should be. In many places close to job-centers, the prices are still inflated, while suburban areas like the Inland Empire and High Desert have had prices fall back to earth (from outer space), which is why you can get a 6 bed for $250K in Beaumont (there are even better deals to be had in the High Desert). You would have to decide if a (likely) long commute would be worth it, as there are few jobs out there.

-The old adage "you get what you pay for" has started ringing a little more true in Southern California. The housing bubble of the 2000s is part of what chased many people out of Southern California (myself included), because (reasonable) middle-class families couldn't afford a middle-class lifestyle. Now would be the time to get back in to Southern California for those families, so long as they were willing to settle on the IE or HD.

-Overall, I'm glad I didn't take part in the hysteria.
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Unread 02-02-2010, 10:25 AM
 
21 posts, read 22,051 times
Reputation: 20
As a long time resident of this, I have a different perspective.

Having lived here for 44 years, I've watched the housing cycles expand and contract. Certainly nothing compares to the recent real estate debacle but, when you look at housing costs in southern California, specifically LA county, Orange county, Riverside county and San Bernardino County, real estate prices in general are lower the farther east you go (with some notable exceptions like Palm Springs). Part of this is because the farther east you go, the more likely you are commuting significant distances. Another reason is that the land was much cheaper than equivalent land to the west when the developers acquired it. Certainly, real estate here, like everywhere soared as people were trying move in and up and lenders greed through caution to the wind. The market has overcorrected down, foreclosures has skyrocketed in the Inland Empire. these and other factors have caused the drop in prices you are seeing.

I would disagree with the generalization that the 6 bedroom house you saw listed is going to be a "cracker box". Many of these homes have features such as copper plumbing, granite counter tops, dual pane windows, cement fiber roofs and high quality applicanes and hvac. It really depends on the builder. Some do quality, some cut corners and do a poor job. You need to do your research on the builder, on the area, factor in your personal needs in a home and community. There are some outstanding opportunities in the marketplace if you shop wisely and do your homework.
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