Foreclosures up 30% in North Dallas - why in DFW?

[rotorholic]

Originally Posted by DWong

Inland empire, Sac or fresno area right?

Anything coastal or that just wasn't recently built is still very pricy. $450k 2 years ago would be considered cheap then. Most homes in the better, older areas are $700k+ now doing 550k range.

700k at the peak to 550k today I doubt that, Inland empire is 25 miles east of downtown los angeles, good luck on your droping prices out in norcal

[usc619]

Originally Posted by lh_newbie

$200K home in Dallas, 0% down, 6% mortgage for 30 years = $1199/mo P&I + $375/mo taxes (@2.25% of sale price) + $75/mo insurance. Total monthly cost = $1649

$400K home in CA, 0% down, 6% mortgage for 30 years = $2398/mo P&I + $333mo taxes (@1% of sale price) + $75/mo insurance (don't have a clue what insurance is in CA). Total Monthly cost = $2802.

You really need to do some math before making outrageous and incorrect statements like this.

Don't know where you got the 2.25 from, but the avg. is about 3.5 hear in Houston(maybe it could be because we have a lot of MUD dist.)

$583 a month is what you would be paying in Houston, also I think you went a little on the high side of CA insurance.

Sorry I didn't realize you would get your panties in such a bunch LOL

[lh_newbie]

Originally Posted by usc619

Don't know where you got the 2.25 from, but the avg. is about 3.5 hear in Houston(maybe it could be because we have a lot of MUD dist.)

$583 a month is what you would be paying in Houston, also I think you went a little on the high side of CA insurance.

Sorry I didn't realize you would get your panties in such a bunch LOL

I got 2.25% from my tax bill here in Dallas. Wow - 3.5% in Houston? Holy smokes!

It's not getting my panties in a bunch (and who says I even wear undies at all - lol) - I just like real data not sensational statements. It's the engineer in me.

[usc619]

I should have rephrase my comment a little better, but the point I'm trying to make is when you add all of the cost of owning a home in Dallas/Houston/Austin, it's just as expensive as CA.

High Taxes
Low paying jobs
High utilities bills
High home Insurance

makes a 200k home in Texas more like owning a 400k home in CA.

btw; have you ever owned a home in CA?, have you ever lived in CA?

[lh_newbie]

No, I haven't owned or lived in CA. But I work with a bunch of people that currently live in CA. You forgot to mention income taxes, cause the 9+% income taxes more than make up for the items you mentioned. Incidentally, I have a home on the tax roles at $300K and I average less than $200/month total for my energy (gas + electric). My company MAY give me a raise to move to California - and even at a 15% raise, the cost of living there is still higher. I have indeed looked at the option and evaluated the costs. It would cost more to live in California, even if I lived in a home 1/2 the size my current one - all costs included.

[yjc281]

Originally Posted by usc619

High Taxes
Low paying jobs
High utilities bills
High home Insurance

makes a 200k home in Texas more like owning a 400k home in CA.

btw; have you ever owned a home in CA?, have you ever lived in CA?

You sound very bitter. I lived in CA, AZ, PA and TX. In fact I have the highest income/living costs ratio while living in TX compare to those 3 states. Also the overall tax burden in TX is also the lowest among the 4 states. Utility bills in terms of rates are not that much different. The total amount for utility costs cannot be compared because it varies greatly from one house to another.
I paid about the same amount for homeowner's insurance in Phoenix,AZ and in Dallas. You could be right about Houston. But Dallas is hugely different from Houston. I don't know about Austin but I suspect it is also very different from Houston.

[DWong]

Originally Posted by lh_newbie

No, I haven't owned or lived in CA. But I work with a bunch of people that currently live in CA. You forgot to mention income taxes, cause the 9+% income taxes more than make up for the items you mentioned. Incidentally, I have a home on the tax roles at $300K and I average less than $200/month total for my energy (gas + electric). My company MAY give me a raise to move to California - and even at a 15% raise, the cost of living there is still higher. I have indeed looked at the option and evaluated the costs. It would cost more to live in California, even if I lived in a home 1/2 the size my current one - all costs included.

Thing to remember, in CA you are getting a bit more outside of the "job".
The MOST things to do and see... vactioning is right in your back yard.
It is a luxury though to live in a nice area w/ good schools.

OUr summer is slammed with TX visitors and it's something that really only happens out here. They love it and we enjoy their company. I love visting TX (best BBQ), but just doesn't have the lifestyle that for me.

The price of a similiar neighborhood from DFW to Metro CA is about 4:1
So a job in DFW that pays 75k isn't going to pay you 300k here ... unfortantely is not quite fair here....

[ufcrules1]

Originally Posted by lh_newbie

The issue of foreclosures doesn't have as much to do with house prices dropping as much as it does with people buying more home than they can afford with little to no money down and having to use ARMs to qualify for the loan to begin with. Prior to the change in rules, in order to qualify for a loan, the person qualifying only had to qualify for the loan based on the initial interest rate. For example, to qualify for a 0% down, $200K loan at 6% fixed rate which would be $1199.10/month, you would have to earn $52K/year. People, regardless of where they lived, were able to instead go with an ARM that had, as an example, a teaser rate of 3.9% for the first 3 to 5 years. Under the old guidelines, banks then only required folks to qualify under that teaser rate (and they didn't care if you would be over your head after that time, cause most of the time they sold your mortgage anyhow, so it wasn't a risk to them). $200K at 3.9% would now bring your initial payments down to $934.34/month - so you'd only have to earn $40K/year. Once your teaser rate is over - and many ARMs can adjust at 2% per year, you'd jump to 5.9% in year 4 ($1186.27/month) and possibly 7.9% in year 5 ($1453.61/mo) while your still only making $40K/year. As you can probably imagine - earning before tax $3333/month and having to write a mortgage check for $1453 (plus property taxes and insurance) forces people into foreclosure if they can't sell the home. So it's sort of a 1-2 punch. People/banks got into mortgages they really couldn't afford after the teaser rate was over, then the lowering price (or even flat prices due to 6% selling fees) due to zero down forces folks to NOT be able to sell the home. The only option is foreclosure then.

So shame on banks for allowing people into mortgages the folks really couldn't afford; shame on people for not understanding finances; shame on the investment community for buying these mortgage securities without really understanding the risk; shame on the fed for allowing such loose lending standards. There is plenty of blame to go around. Hopefully this explanation shines a little light on why the issue is not tied only to one area.

People wanted (and were allowed) to get into more home than they could really afford. To compound the issue - energy prices have gone up, so folks buying more home (and presumably larger homes) than they should had to heat, cool and furnish these homes they couldn't afford to begin with.

I, for one, am and have been, a very big fan of people putting down a MINIMUM of 10% on a home. If you can't save 10%, then you've proven you are unable to save and therefore the investment community should not take the risk on you. Instead of PMI - if you put 0% down - I could see the mortgage being written in a fashion that bumps up your mortgae payment by 10-20% (making qualifying harder), then taking a portion of that money for PMI and another portion and putting it into a savings type account until such a point that the mortgagee COULD have 20% equity in their home with that money, at which point, it would be applied to their principal balance. It's just a passing thought, but an interesting one (to me at least). As you can probably tell, I am a very fiscally conservative type.

Brian

Brian,
Nice post. You are 100% right too. I could not have said that any better than you do but agree with you word for word.

[lh_newbie]

Originally Posted by DWong

Thing to remember, in CA you are getting a bit more outside of the "job".
The MOST things to do and see... vactioning is right in your back yard.
It is a luxury though to live in a nice area w/ good schools.

OUr summer is slammed with TX visitors and it's something that really only happens out here. They love it and we enjoy their company. I love visting TX (best BBQ), but just doesn't have the lifestyle that for me.

The price of a similiar neighborhood from DFW to Metro CA is about 4:1
So a job in DFW that pays 75k isn't going to pay you 300k here ... unfortantely is not quite fair here....

There are certainly more options of outdoor type activities in areas of California - being a couple hours from skiing, white water for kayaking/rafting, wine country and the ocean. One cannot argue with that. And you are absolutely right, each area offers different lifestyles. It is most definitely a personal choice. These items are all subjective and may or may not be applicable to each individual.

That's why I focus so much on the indisputable raw data of income, housing costs, taxes, etc. These things are quantifiable. This data, taken alone, clearly favors DFW. The other items are personal in nature and rank higher or lower on the priority pole based on each person - and for that matter - the current stage of life each person is at - as that preference can change over time.

Brian

[ufcrules1]

Originally Posted by usc619

I should have rephrase my comment a little better, but the point I'm trying to make is when you add all of the cost of owning a home in Dallas/Houston/Austin, it's just as expensive as CA.

High Taxes
Low paying jobs
High utilities bills
High home Insurance

makes a 200k home in Texas more like owning a 400k home in CA.

btw; have you ever owned a home in CA?, have you ever lived in CA?

Yeah, you left out no state income taxes. My wife and I paid 15k in state and local income taxes last year + another 6k in property taxes. My property taxes here for a MUCH nicer home at a MUCH lower price is 8k. So I pay 2k higher in property taxes here but we still save 13k! Not to mention how low our mortgage payment is.

Also, utilities are no higher here than Maryland. My electricity and gas average 215 a month here. Thats nothing!

Also, I and my wife make the same money here as we did in Maryland. She actually makes 6k more per year. Sure, on average the jobs pay more there but they have decent paying jobs here. Not as high as CA of course but then again your home here cost 2 or 3 times less!

High home insurance? Nope. Same as MD if not less. Can't be far off from California either. 350k house is approx $1100.00 per year. $92.00 per month. How much lower can it be?

Also, a 400k home in any decent area of CA is a shack. A 200k home in the Dallas area could be all brick 2500sqft and in a very nice neighborhood.

California's advantages would be beautiful weather year round and beautiful beaches. Those are 2 huge advantages but I would take "quality of life" over those any day. I'm not tied down to a huge mortgage.