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Read this in my newspaper this morning, found it interesting, thought you might too.
[CENTER] BOOM TO BUST?
Relax, housing 'correction' is no cataclysm
By NICOLAS P. RETSINAS
September 26, 2006[/CENTER]
Moderator cut: Copyright material. If you want to read go to http://www.scrippsnews.com/node/13818
I agree with some of the article. Again, the people who bought in the last few years and took out "equity" to finance a lifestyle they otherwise couldn't afford, are the ones in trouble. Mostly in areas like California, Florida, Arizona where the run up has skyrocketed. Homes have never appreciated this fast, and they were never meant to be used as ATM's. I'm guessing alot of people in California wouldn't have paid 500k for a crap house if they didn't think it was going to appreciate another 20% and they'd sell for a profit. That's what they been told...."oh prices will never go down" "supply and demand" and blah blah blah!!..........well those days are over.
Read this in my newspaper this morning, found it interesting, thought you might too.
Great article! I do want to add that speculation is partly to blame and with speculators and realtors no longer considering real estate a worthy investment, demand has dropped over 50%! Prices will correct and may be significent in very overheated markets like south Florida, I am witnessing this!
As for the poor people, there are mobile homes for them as well as 1 bedroom apartment rentals. Actually, some middle class have bought mobile homes but may "upgrade" to a house once prices drop and they can afford one.
Quote:
Originally Posted by shannon94
I agree with some of the article. Again, the people who bought in the last few years and took out "equity" to finance a lifestyle they otherwise couldn't afford, are the ones in trouble. Mostly in areas like California, Florida, Arizona where the run up has skyrocketed. Homes have never appreciated this fast, and they were never meant to be used as ATM's. I'm guessing alot of people in California wouldn't have paid 500k for a crap house if they didn't think it was going to appreciate another 20% and they'd sell for a profit. That's what they been told...."oh prices will never go down" "supply and demand" and blah blah blah!!..........well those days are over.
I am predicting a drop down to $140 a square foot for south Florida and around $350 a square foot for south California and select other parts. People will buy even in California, just not at todays prices, maybe unless they are rich and can get one of those $2 million upscale houses! Those "shacks" probably will drop down to $250k to $400k depending on size and how "nice" they are. Expensive but affordable for dual income thanks to the much higher paying jobs in California(same job pays far more than elsewhere)
Great article! I do want to add that speculation is partly to blame and with speculators and realtors no longer considering real estate a worthy investment, demand has dropped over 50%! Prices will correct and may be significent in very overheated markets like south Florida, I am witnessing this!
As for the poor people, there are mobile homes for them as well as 1 bedroom apartment rentals. Actually, some middle class have bought mobile homes but may "upgrade" to a house once prices drop and they can afford one.
I am predicting a drop down to $140 a square foot for south Florida and around $350 a square foot for south California and select other parts. People will buy even in California, just not at todays prices, maybe unless they are rich and can get one of those $2 million upscale houses! Those "shacks" probably will drop down to $250k to $400k depending on size and how "nice" they are. Expensive but affordable for dual income thanks to the much higher paying jobs in California(same job pays far more than elsewhere)
Actually California jobs do not pay that much more. Sure there may be some sectors, but my husband and I both make more in Texas than we did in Cali. It's definately not enough to sustain the housing market out there that's for sure!! Keep in mind also ....these dual income families have dual gas bills and alot have childcare. There goes the extra money!! I predict after a couple years more like 200 Sq ft for Cali. (if that). I guess we will see.
Actually California jobs do not pay that much more. Sure there may be some sectors, but my husband and I both make more in Texas than we did in Cali. It's definately not enough to sustain the housing market out there that's for sure!! Keep in mind also ....these dual income families have dual gas bills and alot have childcare. There goes the extra money!! I predict after a couple years more like 200 Sq ft for Cali. (if that). I guess we will see.
Cali will never be $200 a square feet unless some major disaster or depression occurs. I say it might go down to $350 a square foot. South Florida may go down to $140 a square foot, possibly even less if the hurricanes dont show mercy. You were way underpaid in Cali, sorry to say. I know people who get almost double for the same jobs in Cali compared to Florida or elsewhere. 6 figure household incomes are the norm in Cali. Here, its about 55k median income, in Cali, median is almost 100k! Even my dad was offered more money in Cali but decided to settle down in Florida despite making less because of much cheaper houses. He has since retired. The economy and jobs are far better in Cali, thats why houses cost triple(dad's experience) over there. There are no hurricanes, earthquakes happen once in decades, property taxes are lower, homeowner insurance is lower, theres alot of attractions. Cali has always been the *most* expensive place other than Hawaii and NYC.
Even with dual gas bills and two mouths to feed, each person can set aside money. One person couldnt do it alone, but two can.
You were way underpaid in Cali, sorry to say. I know people who get almost double for the same jobs in Cali compared to Florida or elsewhere. 6 figure household incomes are the norm in Cali. Here, its about 55k median income, in Cali, median is almost 100k!
Uh, not even! Our median household income in this area is $35,000 as of 2000. Its not much better now and you're looking at $300,000 for a not so great house. From looking at other states and jobs, we have found several that pay a lot more than what is paid here. Even in SoCal a lot of people (I'd guess the majority!) do not make $100,000 or more a year.
Uh, not even! Our median household income in this area is $35,000 as of 2000. Its not much better now and you're looking at $300,000 for a not so great house. From looking at other states and jobs, we have found several that pay a lot more than what is paid here. Even in SoCal a lot of people (I'd guess the majority!) do not make $100,000 or more a year.
You're right StampinTami. Most Californians earn far less than $100,000. The average income in Malibu is $100,000, and that's one of the most exclusive areas of California. You'd have to select certain areas of southern CA. to hit that figure and then I think Marin County in parts. Very few people earn that much as a household.
Cali will never be $200 a square feet unless some major disaster or depression occurs. I say it might go down to $350 a square foot. South Florida may go down to $140 a square foot, possibly even less if the hurricanes dont show mercy. You were way underpaid in Cali, sorry to say. I know people who get almost double for the same jobs in Cali compared to Florida or elsewhere. 6 figure household incomes are the norm in Cali. Here, its about 55k median income, in Cali, median is almost 100k! Even my dad was offered more money in Cali but decided to settle down in Florida despite making less because of much cheaper houses. He has since retired. The economy and jobs are far better in Cali, thats why houses cost triple(dad's experience) over there. There are no hurricanes, earthquakes happen once in decades, property taxes are lower, homeowner insurance is lower, theres alot of attractions. Cali has always been the *most* expensive place other than Hawaii and NYC.
Even with dual gas bills and two mouths to feed, each person can set aside money. One person couldnt do it alone, but two can.
No offense, but you have no idea what you are talking about regarding California. I lived in California all my life until moving to Texas 7 years ago. Houses were affordable until they started to climb at the end of 99. There's only one reason these home prices have tripled and I'm not even going to repeat myself again on what that is!! lol
California has always been more expensive than say.....Wyoming, Texas, Montana etc......very true, but these prices are not keeping up with incomes anymore. It's not about desirability.
Just curious.....what field do your friends work in that they get paid "double" compared to other parts of the country?
Also...when I said childcare...I didn't mean feeding them...I meant paying for daycare while both parents are chasing the buck to survive in Cali.
Uh, not even! Our median household income in this area is $35,000 as of 2000. Its not much better now and you're looking at $300,000 for a not so great house. From looking at other states and jobs, we have found several that pay a lot more than what is paid here. Even in SoCal a lot of people (I'd guess the majority!) do not make $100,000 or more a year.
Then something is seriously wrong. Here, the household income is $55k and that isnt even close enough to own the american dream. People with this kind of income share a rented apartment with family or roomates or they buy a mobile house. In fact this guy who makes $65k a year and his wife probably makes $30k they rent a 3 bedroom apartment because they cant afford anything else and having 5 children to feed means every dollar saved matters.
The median income per person in SoCal is $60k a year from what I read. Here in SoFla its under $30k a year unless you include those working 50-60 hours a week to make $35k a year. I guess it depends on the job. Skilled jobs are in high demand in Cali and pay very well. This guy who makes $65k a year is a computer engineer and IT. He was offered $110k in Cali for the same job! His wife told me skilled jobs like those pay almost double in Cali!
I think I will take the word of someone I know in person. As for a $300k house, sure if you want a 1 bedroom shack. Starter homes are over half million.
Quote:
Originally Posted by MoMark
You're right StampinTami. Most Californians earn far less than $100,000. The average income in Malibu is $100,000, and that's one of the most exclusive areas of California. You'd have to select certain areas of southern CA. to hit that figure and then I think Marin County in parts. Very few people earn that much as a household.
If the median person salary is $60k and both wife and husband earn that, they bring $120k to their household. The reason median household is a little under $100k is sometimes only the breadwinner works or the other person works a lower paying part time job. You wont be able to afford any house nor condo on less than $100k household in Cali anyway.
Quote:
Originally Posted by shannon94
No offense, but you have no idea what you are talking about regarding California. I lived in California all my life until moving to Texas 7 years ago. Houses were affordable until they started to climb at the end of 99. There's only one reason these home prices have tripled and I'm not even going to repeat myself again on what that is!! lol
California has always been more expensive than say.....Wyoming, Texas, Montana etc......very true, but these prices are not keeping up with incomes anymore. It's not about desirability.
Just curious.....what field do your friends work in that they get paid "double" compared to other parts of the country?
Also...when I said childcare...I didn't mean feeding them...I meant paying for daycare while both parents are chasing the buck to survive in Cali.
Just ask my dad. He wanted to settle down in SoCali back in 1980 and back then, houses cost $250k! So I respectfully disagree about them being "affordable" and dad had a PHD and a high paying job offer he had to decline! He settled down in SoFla and got a 3/2 house for $67k. Compare $67k vs. $250k and that was back in 1980! Now house prices are so high in most metro cities that people are moving out in droves. Even SoFla is unaffordable to all but the wealthy. Texas is very affordable, you can get a 2 bedroom house there for $50k! If that is too much, there are 2 bedroom condos for $30k!
Teachers here make $40k if they are lucky. My mom teaches in a private school and made $32k last year. She would make around $60k in California. Some teachers are making as much as $100k in California but you start at about $65k.
Just about any job pays far more in California. This guy's wife I know in person said her husband makes $65k working as an IT and was offered $110k in Cali. This is the main reason why houses cost alot more in California and that California has some of the highest prices in the nation.
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I predict after a couple years more like 200 Sq ft for Cali. (if that). I guess we will see.
