Is the housing in CA as bad as we hear? (San Jose: sale, foreclosures)

[striker]

Originally Posted by Ownahome

Is it true that house prices are outrageous in California and people are not able to sell or buy?

Yes, for $600,000 you can't buy more than what in Florida is called a "shack" and only in sketchy areas like Milpitas, Redwood City, San Mateo, etc... In any decent area the price goes up more.

[City Boy]

There is a reason why the prices are expensive. YOu can either be happy in a place like Alabama or Texas or enjoy what CA has to offer. It is a trade off. Same with NYC. Why do you think it's so expensive? People want to live here and there.

[SouthBayTodd]

Originally Posted by striker

Yes, for $600,000 you can't buy more than what in Florida is called a "shack" and only in sketchy areas like Milpitas, Redwood City, San Mateo, etc... In any decent area the price goes up more.

those areas are not sketchy? all 3 of those cities are nice

[striker]

Originally Posted by SouthBayTodd

those areas are not sketchy? all 3 of those cities are nice

If you think those are nice towns, then you need to TRAVEL and see for yourself REAL NICE TOWNS like Boca Raton, Delray Beach, Aventura, etc...

[striker]

Originally Posted by City Boy

There is a reason why the prices are expensive. YOu can either be happy in a place like Alabama or Texas or enjoy what CA has to offer. It is a trade off. Same with NYC. Why do you think it's so expensive? People want to live here and there.

Ok for San Diego, and few other places, but San Jose being expensive is truly unjustifiable. It's on the same level of Houston for how much it sucks.

[City Boy]

Originally Posted by striker

Ok for San Diego, and few other places, but San Jose being expensive is truly unjustifiable. It's on the same level of Houston for how much it sucks.

I agree San Jose is terrible. I hate it.

[gizmo980]

Originally Posted by Need_affordable_home

Wow do those people take out creative financing? Youd need to be rich to buy a $2.5m house even on creative financing and you can kiss it bye bye when it gets foreclosed.

Why are you assuming they aren't wealthy? Obviously nobody would get a $2.5M house unless they had the dough, which MANY people around here do... you're forgetting the industries & job market here, which allow a high standard of living for lots of people. No need to give details on my family's financial situation, but let's just say there is NO chance of foreclosure.

I would not buy a $900k house unless I was making at least $250k a year and I had at least a million in funds to pay the expenses. I would have to win about 20 million in the lottery then ill end up with about 6.7m after lump sum and taxes, give my family some money and keep like 5 to 6 million for myself and ill probably feel more comfortable spending $250k to $500k on a house while putting the rest of my 5 million into funds which appreciate much better than real estate(the bubble is over) and when I have like 15 million in funds then ill buy a million dollar mansion.

That all sounds nice, but it's just not reality for everyone... many people are what we call "house poor", simply because they have no other choice. Not everyone makes $250K+, so they do what has to be done. I don't know the details on my friend's recent purchase, but I'm sure they'll do just fine. That house will only increase in value, so eventually they should be able to sell & move up.

Oh, and a million dollars won't get you a mansion around here!

[Need_affordable_home]

Originally Posted by gizmo980

Why are you assuming they aren't wealthy? Obviously nobody would get a $2.5M house unless they had the dough, which MANY people around here do... you're forgetting the industries & job market here, which allow a high standard of living for lots of people. No need to give details on my family's financial situation, but let's just say there is NO chance of foreclosure.



That all sounds nice, but it's just not reality for everyone... many people are what we call "house poor", simply because they have no other choice. Not everyone makes $250K+, so they do what has to be done. I don't know the details on my friend's recent purchase, but I'm sure they'll do just fine. That house will only increase in value, so eventually they should be able to sell & move up.

Oh, and a million dollars won't get you a mansion around here!

I know I wouldnt be able to afford a $2.5m house unless I won the lottery a few times! How rich are those people? 10 million? 20? 50? 100? You need to be "worth" much more than what your spending on a house if you dont wanna go broke. I have heard many stories of lottery winners going broke because they spent a large percentage of their winnings on a house among other things.

$120k household salary......interest only mortgage......900k house? Do they plan on "flipping" the house in a few years, pay back the mortgage and pocket the profit? How much are houses like those types appreciating? Maybe the market in their city is still robust unlike here in south FL where this guy spent $440k and no one will pay the $350k asking price. The realtor and my dad believe he was a "speculator" looking for a quick, easy flip. If he cant sell the house, he might just walk away and the bank will foreclose it.

Is renting not an option? Usually rent is a bad financial deal but when the rent vs. buy cost has such a disparity, rent may be the logical choice. If you run out of money, you can simply walk away after the lease expires. I read a story of a guy whos renting a $1.5m house for $4000 a month. A fixed 30 year mortgage would cost $7500/month after the 20% downpayment of $300k which would be an additional loss of capital gains as his $300k is doing great in funds/stocks Not to mention the property taxes and insurance. I think he mentioned he makes a whopping $150k(doctor?) plus plenty from his capital gains and he says no way is he gonna spend 10x his salary on a house and that renting was hands down much cheaper, even the loss of "equity" didnt matter as his capital gains were doing better anyway. Scary to think how much of a loss the landlord is taking by renting the $1.5m house that he cant sell and would rather not let sit empty(even bigger loss then)

Makes me wonder maybe I should rent a nice big house or even mansion if I won the lottery and put the rest into capital gains. I certainly wont get a mansion for a million or even three mil. in California. The guy's 1.5m house that hes renting is your typical single family house, nothing special really. Bigger than average but nowhere near huge.

Could I rent a 3 million house in CA for say $10k a month? Thats $120k a year. Meanwhile the 3 million from the lottery, 2.88 million remains to go into stocks with a 10% appreciation. Therefore I would have 3,168,000 after a year. Spend another $125k rent(he increased the rent) and 3,043,000 remains which becomes 3,347,300! Now if I were to take a mortgage at $15k a month, thats $180k a year. Property taxes, insurance, HOA, repairs, etc would cost another $90k a year. $2.73 million remains which becomes 3,003,000. Spend another $285k(hoa, insurance, taxes go up) 2.718m left which becomes 2,989,800. Repeat for many years and I will eventrually go broke. I didnt even factor in costs like food, utilities, gas and entertainment like shopping and parks. I figure ill run out of the $3m lotto winnings in about 20 years that way. Renting, ill save enough to make the money last the rest of my life and still have money when I die. Alternatively I could buy a cheap house costing $300k, probably even $500k and easily have enough money to last me the rest of my life. Like the math?

[pragmachi]

Hello all,

This is a great forum, and I find it really informative, thanks to all. My family (including my wife and 6 month old son) will be moving soon from NY to Northern Cali. I would be working in Palo Alto (stanford) and my wife has to commute to UCSF hospital and briefly (about 3 months out of the year) to Oakland (children's hospital). What do you recommend for a place to live given we both will be commuting keeping in mind the traffic patterns (towards SF vs towards palo alto) which is also safe. Thanks a million for your input, this would be of great help.

[AK123]

Originally Posted by striker

Ok for San Diego, and few other places, but San Jose being expensive is truly unjustifiable. It's on the same level of Houston for how much it sucks.

You can't compare Houston with San Jose or even say it sucks, especially since you've never lived in Houston. Houston's the nation's 4th largest city and blows San Jose away with the amount of big city amenities it has.