Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Let me in on what has happened in the Los Angeles market.
I make ~90K a year. I am single, have no dependants,
I could not afford a house in Los Angeles County(SFV, rest of the basin.....Lancaster, Palmdale, and Santa Clarita are prohibitively far from work) until about 2 years ago, and that would have been a SFR in the ghetto.
I could have bought a condo if I REALLY stretched myself or bought a conversion in a very old building. I was willing to do neither.
I should note that when I say I could not afford, I am refering to a 30yr mortgage. I could not save enough during that time to put 20% down on a $500K place. I considered and discarded the notion of a 5 year ARM, mostly because I couldn't be sure my income would increase enough in 5 years to cover the higher payment.
I make double the median household income for LA County, yet I could not buy a home even in the ghetto until recently.
Recently, the following blue collar communities have homes in the $240-270K range....2.5-3x my income. I can now afford a home. Note that I'm by no means poor, and MANY people would consider these undesireable areas to live in:
Covina
Arleta
Van Nuys
Lake Balboa
Long Beach
North Hollywood
Reseda
There are others, but thats where I have looked.
What will make me happy is when I can reasonably afford to buy in a middle class neighborhood with my middle class income and 20% down payment. I'd be VERY happy if Burbank and Glendale returned to 2000 pricing. I could then afford a very modest house(say 1400 sq ft 3 bd, 1 bath house, built in the 50's). But I don't expect that to happen and I'd settle for North Hollywood south of Oxnard, Valley Glen, Atwater Village, etc. But for that to happen, prices still need to drop another 20-30% or so. as prices in those areas are $320-400k for that sort of home.
So I ask you, are you certain that home prices aren't still out of whack? Again keep in mind I make double the area's household income, AND I have relatively few expenses.
Quote:
Originally Posted by fairmarketvalue
Whoa, you ARE angry.....Sorry. Honestly, I had no idea. And I, like many in this nation, are up for ideas, so can you tell me how it might work to just let the "universe sort 'em out"? And how those "smart people" will create a true recovery to stabilize the system? I want to know, so I can get on that board. Do you think they will be naming a CEO to run things?
As to housing, what will make all happy? To see homes of all sizes, any location, go for "affordable" pricing? Seriously, should we just start knocking down those homes of lesser quality and location, since we can now hope that the only thing to fix this is to bring the nicer homes down to "starter home" prices so everyone can afford to buy again? And it doesn't matter that all those in the lower, starter home price bracket see their values go all the way down to $0 (after all, price drops should be price drops, no matter what-right?). Their loan isn't as important as the upper bracket. After all, I"m sure their 100k home means nothing in comparison to the 1mil home, that you should now afford for 250k.
Seriously, I am envisioning this in my mind as I type. If that's the case, would then all the folks who have been wanting to buy, but haven't because they can't "afford" what they want, then finally go to their local lender and meet those so-called delusional sellers at the closing table, where they will BOTH bring money to the table to close the transaction and help them "stabilize" the housing market? A big free-for-all, ya, that seems like a good idea! Just think of all those jobs we'll create, when the bulldozers start clearing the way. But then again, who will "cut the checks" for the bulldozer employee? Ever see the movie "Wall-e"? I can just see it now!
I thought it kooky, then.
It makes more sense, now.
It certainly would cost less than what they're doing now.
In some cases, it would improve neighborhood curb appeal as well. One thing I sensed in my own home search-- people who like smaller older homes don't want to live next door to McMansions. And vice versa.
And what other solution is there to the glut of new 5 bedroom, 5 bathroom homes that are sitting empty? Do you think the abutters want to live next door to group homes? Because that's the only suitable use for them. Bulldoze, bulldoze, bulldoze.
And I, like many in this nation, are up for ideas, so can you tell me how it might work to just let the "universe sort 'em out"? And how those "smart people" will create a true recovery to stabilize the system? I want to know, so I can get on that board.
Oh gawd. What a week.
First, you agreed with some of my points ( different topic/thread) and here I am agreeing with this. What's the world coming to?
It certainly would cost less than what they're doing now.
In some cases, it would improve neighborhood curb appeal as well. One thing I sensed in my own home search-- people who like smaller older homes don't want to live next door to McMansions. And vice versa.
And what other solution is there to the glut of new 5 bedroom, 5 bathroom homes that are sitting empty? Do you think the abutters want to live next door to group homes? Because that's the only suitable use for them. Bulldoze, bulldoze, bulldoze.
They'd be doing everyone a favor.
If I recall, I think Cramer was talking about Stockton, Ca. the so-called foreclosure capital of America, where almost every home in some unfinished sub divisions, was/is in foreclosure.
If only we would have let the system work how it was supposed to, flushed the trash and losers.
Quote:
**** 'EM ALL, AND LET GOD, SATAN, OR THE UNIVERSE SORT 'EM OUT. There would and will be plenty of smart people to rebuild, fix things, make the necessary improvements to the system at all points to create a true recovery, to stabilize the system correctly, to lend money soundly and use capital wisely to create wealth.
I'm sure the Universe will sort everything out and all the people who lost their homes due to unemployment, underemployment, the recession - will be so happy to hear the 'System', being run of course by selected 'smart people' is going to make everything better Think I'll read 1984 again.
I make double the median household income for LA County, yet I could not buy a home even in the ghetto until recently.
Thank you John, for the thought provoking post.
Sounds like the only way to have gotten into your market was speculating with an ARM/Balloon. Either you speculate your income will increase sufficiently or more likely that home values would continue to increase at double digit compounded rates, forever. You realized that neither scenario was likely to happen.
When the only choice of location is the ghetto for someone with 2X the local median income says all that can be said about your local market. All markets are fueled from the bottom -up. Someone has to be ready, willing and able to enter the market and pay enough to create a gain for the seller to move up the housing rung. Once prices escalated to the point that prevented the majority, including those willing to speculate, the game was over.
I think things will turn out just fine, for you, in the long rung.
First, you agreed with some of my points ( different topic/thread) and here I am agreeing with this. What's the world coming to?
Indeed! Nice to know it doesn't always have to be so tense. A little light heartedness is what we all need, I think. Have a great day.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Think I'll read 1984 again.
