Bailout $$ is less likely to help CA Home Mortgages... - San Francisco - Oakland - California - Page 2 - City-Data Forum

Ultrarunner · 02-20-2009, 12:27 AM

Quote:

Originally Posted by bayarea-girl

Ultrarunner, you really think that this is the beginning of more bail-outs to come? I gosh I hope not. Homes falling and rising is not new to CA, this has happened before. People need to just ride this out and buy what they can afford. I didn't know people actually picked banks.

Clongirl, I am so feeling what you are saying and can totally relate. For the life of me I couldn't understand how things were going up so quickly and how people were over bidding like crazy. Even people that I knew who bought a home early, then bought expensive cars and took fabulous vacations, I thought how could they be doing this (until I realized they were taking it out of their homes). Most of the homes that I saw that were over $500K+ when things were "booming" were crap rehabs and were lucky to be over 1000/sq ft. (in any other state those homes wouldn't have gone for more than $50K, if that).

I'll be so happy when things come down to reality.

Other industries are watching and waiting on the sidelines... there are significant financial problems in Health Care... Hospitals are shutting down ER services...

Commercial Real Estate is in line for the next bubble with a lot of high profile retail just hanging on.

Auto/Manufacturing is in the midst of putting together a bail-out...

Don't forget the entire Alternative Energy Industry is lobbying for Subsidies.

Banks in Oakland and SF were the subject of protests under the Community Investment Act... It became serious business for banks to prove they were in compliance... some banks left the Oakland market altogether.

City Boy · 02-20-2009, 08:57 AM

I did not buy to flip. I honestly did not think it would get this bad any time soon. I also did not over spend. My condo was 399k and most places older in the area were going for that much, I bought a new construction. I couldn't find anything in the bay area for under 400k unless it was falling to pieces. I thought it was a good time to buy.

Most people with homes end up refinancing so to say it's our fault for buying a house is crazy. I never thought i'd see home prices drop this low out here ever. Luckily I qualify for this new home plan Obama is working on since my house is under 417k and worth much less than what I paid. I hope to save a nice amount from this rather than continue to over pay the bank I have the loan from.

clongirl · 02-20-2009, 09:26 AM

I used to be an avid reader of patrick.net. I always did, and still believe that houses MUST come down to the median salary for the area. If you make say, 70k a year, then the house that you are trying to purchase should only be going for around 210k. That's pretty much the size of it... anyone that bought a house for more than 3 times their income overpaid and shouldn't have believed the agents/parents/brokers that you could afford it. Now what fool would go into a Bentley dealership, let the dealer convince you that you deserve the Bentley and tell you you're wealthy enough to afford it? It was never brain science.

I remember when my Fedex delivery guy was trying to convince my husband and I that buying property in Florida was making him a rich man..That's when you KNOW there's a problem with this scenario!

City Boy · 02-20-2009, 10:39 AM

Quote:

Originally Posted by clongirl

I used to be an avid reader of patrick.net. I always did, and still believe that houses MUST come down to the median salary for the area. If you make say, 70k a year, then the house that you are trying to purchase should only be going for around 210k. That's pretty much the size of it... anyone that bought a house for more than 3 times their income overpaid and shouldn't have believed the agents/parents/brokers that you could afford it. Now what fool would go into a Bentley dealership, let the dealer convince you that you deserve the Bentley and tell you you're wealthy enough to afford it? It was never brain science.

I remember when my Fedex delivery guy was trying to convince my husband and I that buying property in Florida was making him a rich man..That's when you KNOW there's a problem with this scenario!

If houses in the bay area were always relative to salary then the Bay Area would look like Tokyo.

Taboo2 · 02-20-2009, 10:58 AM

I agree with this. I think that irresponsible buyers should not get a bail out. I understand the prices fell and now the house isn't what they thought it was worth, but the bank still paid that previous lucky buyer the full amount when you bought their house. We chose to wait (4 years now) to buy a house because we heard the bubble would pop and just were biding our time until it did. I am not a risk taker.

Aren't the ones in foreclosure the people who did not account for their ARM to go up and bought more house than they could afford? They got used to the intial payment and didn't bother to think about how they would pay once it adjusted.

Quote:

Originally Posted by clongirl

but it kinda pi**es me off that people that bought anything during the "bubble" years around here are getting help now.

Ultrarunner · 02-20-2009, 12:12 PM

Quote:

Originally Posted by clongirl

I used to be an avid reader of patrick.net. I always did, and still believe that houses MUST come down to the median salary for the area. If you make say, 70k a year, then the house that you are trying to purchase should only be going for around 210k. That's pretty much the size of it... anyone that bought a house for more than 3 times their income overpaid and shouldn't have believed the agents/parents/brokers that you could afford it. Now what fool would go into a Bentley dealership, let the dealer convince you that you deserve the Bentley and tell you you're wealthy enough to afford it? It was never brain science.

I remember when my Fedex delivery guy was trying to convince my husband and I that buying property in Florida was making him a rich man..That's when you KNOW there's a problem with this scenario!

I was always running up against the 3 x income rule... even recently with Wells Fargo and Chase...

The way around it is to increase your down payment or pay cash...

bayarea-girl · 02-20-2009, 01:23 PM

To add, some peoples theories and what some people tried to convince me of was that the reason why they were buying such expensive homes and why they were in so much debt was because the housing trend would never allow them to buy a home. They never saw themselves paying off their homes, they said that was the old way of doing things. My attorney was happy when I bought my first home as he was making is final payment on his home and I remember him telling me that all of his friends thought he was crazy for paying off his home.