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Old 01-13-2012, 10:27 AM
 
25,739 posts, read 26,296,989 times
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Quote:
Originally Posted by JohnG72 View Post

At $350K, a 30 year mortgage with a 4.5% interest rate and 3.5% down FHA backed loan, your monthly mortgage payment is $1700...very likely cheaper than renting the same home.
^^ Yupper.
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Old 01-13-2012, 12:49 PM
 
362 posts, read 723,491 times
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Part of the problem is that even the cost conservative (smart) way of thinking of no more than 3X gross income is based on the assumption that one will maintain their current earning level...

And this is no longer the case given the economy's state of UE and pay reduction / lessened hours, etc.

Sadly.

It's compounded further, here specifically, in that, maybe you do find a new job but it's 40 miles away, and now your commute is 2 hours.

Now, more than ever, it seems maintaining flexibility is of utmost criticality.
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Old 01-13-2012, 01:11 PM
 
Location: Los Angeles, CA
1,045 posts, read 1,680,316 times
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Quote:
Originally Posted by JohnG72 View Post
The market is being gamed right now. Its your choice if you want to play the game. It means 30 years of debt slavery IMO. In fact, buying absolutely makes no sense in the most "in demand" areas in LA such as on the westside(especially Santa Monica) and South Pasadena, where renting is often half the cost of buying.

.
Can you explain what you mean the market is being gamed right now?

Is this in reference to what you said earlier in the thread about agents intentionally putting "list price" for short sales very high....only to steer them to friends, family, or people that will give them a kick back?
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Old 01-13-2012, 01:14 PM
 
362 posts, read 723,491 times
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Quote:
Originally Posted by SalParadise View Post
Can you explain what you mean the market is being gamed right now?

Is this in reference to what you said earlier in the thread about agents intentionally putting "list price" for short sales very high....only to steer them to friends, family, or people that will give them a kick back?
May also be referring to the slow-drip being applied to foreclosures, messing with the supply-demand curve.
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Old 01-13-2012, 01:36 PM
 
4,262 posts, read 9,012,391 times
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Quote:
Originally Posted by Troof View Post
May also be referring to the slow-drip being applied to foreclosures, messing with the supply-demand curve.
Yup...banks have little incentive to release inventory(thereby decreasing prices) when the fed hands them money. Add in shady realtors/ investors.

Then mix in borderline retarded 3.5% down FHA backef loans which are propping up investor fixed/flipped prices in places like Burbank and Highland park, and you see that real estate in LA County is anything but a free market.
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Old 01-13-2012, 02:07 PM
 
362 posts, read 723,491 times
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Quote:
Originally Posted by JohnG72 View Post
Yup...banks have little incentive to release inventory(thereby decreasing prices) when the fed hands them money. Add in shady realtors/ investors.

Then mix in borderline retarded 3.5% down FHA backef loans which are propping up investor fixed/flipped prices in places like Burbank and Highland park, and you see that real estate in LA County is anything but a free market.
I was just talking to someone regarding the flipping in HP nowadays... crazy. Some developer is doing cookie cutter flips and seems to be having some success.
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Old 01-13-2012, 03:33 PM
 
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Ah because that's a very very interesting situation right there. What's going on is basically no one buying there actually has cash to put down. So they HAVE to buy a turnkey home....

So only via FHA loans with 3.5% down can they even think about buying.

What that indicates is that either prices must fall substantially so that people can afford to put 20% down AND have enough left over for cosmetic repairs, or wages must rise enough to meet prices.
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Old 01-13-2012, 03:38 PM
 
Location: Los Angeles, CA
1,045 posts, read 1,680,316 times
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Dean Baker, an economist, who called the housing bubble as far back as 2002, had this to say about the for sale housing market in LA and San Francisco, in November 2011:

"Inflation-adjusted prices in San Francisco are still more than 30 percent higher than their mid-90s level, while prices in Los Angeles are more than 50 percent higher. By comparison, the real increase in rents since the mid-90s in these two cities has been 12 and 14 percent, respectively. This suggests that there is room for substantial further declines in house prices in these markets."

House Prices Fall Slightly in September | Housing Market Monitor
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Old 01-13-2012, 04:29 PM
 
Location: My Own Private Island
258 posts, read 543,195 times
Reputation: 263
Since my days living in the Valley, 1990s ... Had friends in rent control apartments Westside L.A. ... Very nice areas of Santa Monica. Back then, they were 40+, w/decent incomes and a good economy under Clinton. Fast forward, now and those same people are 50+, & 60 years old. No savings, and maybe a job loss. Residents of Kalifornia have no sen$e. No business sense at all. Those who chose to bail out after the L.A. Riots / Northridge Quake, today those folks are doing good, from what I know. Of course they are not living the West Coast Lifestyle or High on the hog. But most are content in Tuscon, Santa Fe, Denver, Texas and Florida.

I feel sorry for Kalifornians.

If you're unable to quit your job or walk away from your business, then you're a modern day slave to the U.S. Dollar.
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Old 01-13-2012, 04:53 PM
 
4,262 posts, read 9,012,391 times
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Quote:
Originally Posted by Mr.Kurtz View Post
Since my days living in the Valley, 1990s ... Had friends in rent control apartments Westside L.A. ... Very nice areas of Santa Monica. Back then, they were 40+, w/decent incomes and a good economy under Clinton. Fast forward, now and those same people are 50+, & 60 years old. No savings, and maybe a job loss. Residents of Kalifornia have no sen$e. No business sense at all. Those who chose to bail out after the L.A. Riots / Northridge Quake, today those folks are doing good, from what I know. Of course they are not living the West Coast Lifestyle or High on the hog. But most are content in Tuscon, Santa Fe, Denver, Texas and Florida.

I feel sorry for Kalifornians.

If you're unable to quit your job or walk away from your business, then you're a modern day slave to the U.S. Dollar.
Lol.

I live in one of the best locations in the world. I've got clean safe streets, tons of pretty girls around, outstanding restaurants, entertainment, and nightlife, all within a 10 minute walk of my front door. I have a sexy car that i rarely drive during the week, 80 degree temperatures in January, beach within a 30 minute drive, snow within an hour.

All this and I still have a retirement, a 457 plan, and I manage to save $1000 each month. And I don't even make six figures.

Don't know why you'd feel sorry for me.
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