First Time Homebuyers -The Next Housing Bubble? (foreclosures, investment, insurance)

[AlexTx]

I don't see how they are able to afford the monthly payments. But maybe, as a hair dresser, she doesn't report a lot of her income.

Still, it doesn't add up.

[plaidmom]

My favorite part is that she is already gushing about "updating".

So they are debt from the wedding and just took on a huge-mongous mortgage...but of course the most important thing is to replace the wallpaper and lighting fixtures.

This is couple is great too:

What I bought with my $8,000 tax credit - Alex Bauer (6) - CNNMoney.com

The rate goes to 4.5% the second year and caps after that at 5.5%, about $1,900 monthly, which we should be able to swing as our earnings go up.

Ohhhh man. Plus they are using the tax credit as their down payment.

Holy moly!

Thanks for posting this OP.

[kinkytoes]

I actually liked the couple you posted, Plaidmom, but Maybe I was just REELING from the 750K couple, so I had lowered my standards. ;0)

[Mill Creek Mom]

Bump that. Why not just move somewhere else? One can operate a crane and do hair anywhere in the 50 states where cost of living is a heck of a lot cheaper...that's just insane.

[Mill Creek Mom]

Originally Posted by cleanhouse

750K for a 3bd 1600 sqft house-- WOW.

Where I am 4 bdroom 3 bath 3200 sq ft with pool for less then half that.

I sold my 4 BR/3 BA + office + bonus 3200 sq ft home for the whopping price of $229k, and it was only 7 years old. Less than a THIRD of what that couple paid for 1600 sq ft. I'm sure there are very decent places that are even cheaper as far as real estate goes....

[PokerMunkee]

I call BS. Just because it's on the Internet doesn't mean it's true.

[cpg35223]

Originally Posted by rubber_factory

#1, they still are high in many places. High, as in, not in line with local incomes, not in line with local rents, and MUCH higher than they used to be.

#2, Don't we still have the GSE's gobbling up mortgages in the secondary market? And doesn't FHA insure over 50% of new loans?

#3 I heard it described thusly: Builders are like sharks, they must keep moving or they'll die. Right now they are still building in my area, despite 10 months of inventory, because 2009 homes are so much cheaper to build than 2006-2008 homes.

All good points. However, this is how I would reply to that.

#1. Some markets have a way to drop still. Particularly California. In other markets, there has been a leveling off of prices.

#2. The activity hasn't been nearly as pronounced. And the FHA has tightened the screws to an incredible level. I mean, you can still get a 100% FHA on farmland, but that's about it.

#3. A few builders putting up homes isn't the same thing as the frantic activity that characterized building over the previous 8 years. Again, to put up multiple homes you have to have a lender willing to spot you the cash. Those just aren't around anymore.

[jaindow]

Originally Posted by Mill Creek Mom

Bump that. Why not just move somewhere else? One can operate a crane and do hair anywhere in the 50 states where cost of living is a heck of a lot cheaper...that's just insane.

Nearly all my relatives live in California. Number 1 reason no one is moving is because they are surrounded by 2nd - 3rd- and 4th generation family. No one wants to leave their family. Some of the older ones have owned their houses since the 70's and earlier and not only own the house outright, but pay low property taxes thanks to prop 13. It's the younger ones that seem to suffer the most with making ends meet. Also, the younger ones have been born and raised there. To them, these prices are "normal." When my cousin saw what he and his wife could own in my state for 500K, he couldn't believe it. Not only that, it didn't even occur to him that if he moved to my state that he and his wife could and should look in the ~240K range since that is approximately 3x their income. No matter what their income, it's "normal" to them to need a minimum of half million for a house.

[girlbuffalo1]

it also doesn't talk about what type of money they are putting down. My husband (while making $8 an hour) was able to put $30k down on a $100k house. Also sometime people have inheritances etc...

[noexcuseforignorance]

I sold my 4 BR/3 BA + office + bonus 3200 sq ft home for the whopping price of $229k, and it was only 7 years old. Less than a THIRD of what that couple paid for 1600 sq ft. I'm sure there are very decent places that are even cheaper as far as real estate goes....

California is one of the most amazing places on the planet. You have mountains, desert, beautiful coasts, trees, excellent job opportunities, sunshine, culture, history, etc, etc. There's a reason why so many people live there. People want to go there. It drives the cost of housing way up.

There are plenty of places in this country where people don't really want to live and land and houses are cheap. I'm not sure why anyone who reads a newspaper would be surprised at any of this.

You all need to step back and realize the other side. The first time home buyer who is buying a $500k small house that needs work gets the same $8k stimulus as someone in a state where houses cost $80k. You don't hear many people in expensive housing states complaining about this though.