How do people afford to buy a house here?

[harhar]

I just looked at Bellevue on redfin...plenty of homes. Plenty of nice homes.

If you save your 200k and buy a 1m house, you won't need PMI since that's 20%, there are also 10/10/80 loans that would eliminate PMI as well.

Same goes for LA.

If you're debt adverse then live in an apartment for 10 years on your eventual 450k then buy a house cash. Although that might not be the most prudent move.

(You could take advantage of these low rates and live in a house. You can then make prepayments to pay off that mortgage although you'd probably be better off investing that extra money)

Seriously though even if you made 450k you'd be able to both pay off your student debt and have 360k saved within 5 years. And lucky for you I don't see the market going up drastically especially if interest rates go up.

[adr3naline]

Originally Posted by SageCats

Many people with that salary don't want to put down only 10%. Besides, coming up with $100K+ is difficult. Also, with a 1.2M home with a 10% down payment, you are financing 1.1M, which will cost roughly $5k / month. That's a lot to pay for a mortgage.
Also, a 1.2M house will net you a 4 bedroom, 2 bathroom home in the east bay. Forget about Mountain View, Palo Alto, etc.

Not sure if I catch your point. $5k/mo mortgage is quite manageable if you're making $14k/mo in take-home pay, and the mortgage is only reduced if the down payment is over 10%. Also, this is the Los Angeles forum not the Bay Area so the guy could get slightly more for his money. Not much, but more

Originally Posted by cAlifornia213

10% down will require pmi. Plus I'm debt averse, so iI'd rather not have a 30 year loan.

10% was exhilaration for effect. At $350k/yr, only a fool would put down 10%.

Originally Posted by thelopez2

Read his other post, he is shopping for a 800k-1.2M home in Washington, he just came here to troll or hes saying that a 1.2M home in LA still sucks.

Go figure. Well, I hope I helped educate other $350k/yr+ City-Data posters with little financial discipline.

[ryanms3030]

I have a coworker that just bought a $500k fixer upper in Ojai to commute to Glendale everyday. I work with others that commute from Oxnard and Palmdale so they can own a house. And I rent a 2 bed apt for $1800 and rent keeps skyrocketing around here so I'm almost thinking I need to buy a place that's 90 minutes away before I get priced out of that and priced out of the local rental market

[diamondguy]

Originally Posted by harhar

This is where the system is screwed up. Investors have really done a number on the state of housing in CA. Flipping isn't inherently bad, but people jumping on the investing bandwagon, in an already crowded market is.

why is it the investors fault? why not blame the govt for the low interest rates? or the banks for originating the mortgages on overvalued properties? People are jumping on a bandwagon because the oppertunity presents itself even in crowded market.

Originally Posted by harhar

I'd propose eliminating investors by making them live in the home for x amount of years.

that sounds very extreme. Why not just limit the amount of houses a single individual can own?

Originally Posted by harhar

Second eliminate the all cash requirement of Auctions and allow only those with preapproved mortgages access to these houses. Then streamline the mortgage process and require that the buyer upgrade the home with an included 203k type loan.

the houses selling at auction are in dilapidated condition. Because of the condition, its a cash only sale as it does not qualify for a conventional mortgage. The second thing is, preapproval is not a guarantee to actually obtain a mortgage. cash buyers would still be favored because of their ability to close immediately. 203k loan were not created for run down properties, it would be exceedingly impossible for a lender to control its risk when there are so many factors involved with houses in this condition.

Originally Posted by harhar

You would have the best of all worlds; by eliminating the flipper, you can have a house bought for way under market value, it would be rehabbed to the buyer's specs AND it would be worth more after that, WITHOUT the price being inflated. Hence bringing a truer market value to the table.

the 'flippers' you describe are mostly professional contractors who are buying work for themselves. instead of waiting around to get hired for a job, theyre buying a house and remodeling it. Its very easy to get in over your head with a remodel if you dont know what to look for when youre buying. even inspectors who are familiar with costs can easily underestimate a job

Originally Posted by harhar

The goal would be to allow the middle class to purchase homes more quickly, while at the same time give the buyer exactly what they want, which would hopefully lead to less flight and more community involvement.

lets realistically look at the housing stock, how many of these 'fixer' houses come on the market? not that many, not enough for this to somehow magically be a solution for all the housing problems.

Originally Posted by harhar

But first we'd have to change our thinking and empower buyers with the right tools to show them: "oh hey, there are things like 203k loans that could be used to fix up a house." But right now a lot of people who may be on the cusp never get those chances because the better deals are scooped up quick.

203k loans are great for buyers who want to buy a house and remodel the kitchen and bathrooms. if a house doesnt qualify for a conventional mortgage and its cash only, that means it has some major issues.

If a house is outdated and qualifies for a 203k loan, then its not really a true 'fixer'. outdated houses that need new paint, a kitchen remodel, energy efficient windows and new flooring are selling for market price