Is the american dream gone in CA?

[dr_girlfriend]

I've thought so for a very long time, and now this backs me up.

http://cnn.netscape.cnn.com/ns/news...8/0150997428.htm&ewp=ewp_news_0705calif_homes


You know you have to earn over 110,000 a year to afford to buy a house here?? And not like a really nice fancy house either, just a basic house.
I kick myself for not buying back in 99-00, my house would have been worth double.

And of those 16%, probably only 10% can truly afford a home, still having income for anything else.

 

[Fishyfanatic]

How much of that 16% do you think are celebrities?

 

[BrianNY]

It's exactly the same in NY. I think we may even be a bit worse because the property taxes here are among the steepest in the country. Some of the major employers on Long Island are relocating to places like PA because they can't attract new employees and pay them enough to afford the housing here.

IMO it doesn't take a genius to see that whatever economic growth we've had since the dot com failures has the sword of Damacles overhead. And what growth is that anyway? Higher insurance costs and higher medical costs constitute economic growth . The nations industrial base is in shambles. The auto makers, once the main stay of manufacturing, can hardly turn a profit. We are exporting our high tech jobs over sees, and buying most of our consumer goods from China. I don't think it boads well for the future at all.

 

[Jchillin]

Totally agree. Does anyone remember the term "blue-collar"? Along with the exportation of the hi-tech jobs were the manufacturing jobs that made the country great. These jobs are all but gone. Most of the countries imports are for finished goods.

 

[talloulou]

The economy in California is crazy. I have alot of family in San Diego. Getting into a home is extremely difficult there. However if you can do it your home's value is likely to go up by ridiculous amounts each year. You should see all the homes that are over 500, 000 that are small with small yards. It's crazy when you compare it to somewhere like here in Lacey, WA where you can get so much bang for your buck.

 

[dogspot]

The dream is not gone in California, in fact, I think its stronger than ever... The economy is strong is so cal. I bought a house last year, and I make no where near $110,000. The same models in my complex are selling for $80,000 more than I bought it for. My housing payments are cheaper than my rent was, and I have a 30 year fixed loan. I have past employers that are begging me to come back, because they can't find enough employees to fill positions.

There may be a so-called "housing bubble". If there is, it doesn't concern me. I will own this house for years and years. Big enough to raise a family in. And I can outlast any price fluctuations in house values because I am in it for the very longterm. It's my home, not an investment.

 

[Meredith]

My grandmother lives in CA still, and she has her house on the market. I can tell you there is NO way my husband and I could ever buy a house down there. The prices are crazy. My grandma was shocked when she was looking up here at houses that were 200-250,000. She couldn't believe how cheap they were. And although you do get more bang for the buck, prices here are not all that great. We were looking to buy just two years ago, and the homes we could have bought then are way out of our price range now.

 

[penpitt]

Here in Phoenix things are going crazy as well. My wife and I bought our house 3 years ago for $130,000. Its a 20 year old house so not brand new. One down the street that is the same floor plan just sold for $190,000. Elsewhere, especially in the newer subdivisions, homes that sold for $150,000 a few years ago are now asking $300,000+. It's ridiculous. If my wife and I were to try to buy today we couldn't even afford the house we have now

 

[talloulou]

Well since I currently own my own home I say let prices inflate......I hope they go up and up and up.

However I do feel for the younger people who are trying to break in to home ownership.

 

[QTOFFER]

My parents' Levitt house on Long Island sold for $9,500 when it was built in 1949. They bought it from the original owners in 1959 for about $15,000. Today, I've seen similar houses selling for $350,000! In other parts of LI, a very modest home costs 400,000 and up. I don't see myself buying a home any time soon unless I win the lottery or inherit a boatload of cash.

On the other hand, most experts agree that the housing market in many US metropolitan areas is long overdue for a correction. Profit-greedy banks have been overextending mortgage credit to people with borderline credit for years. People with adjustable rate mortgages will be in for the shock of their lives when interest rates start moving back to their historic average levels. As a result, I expect to see home prices drop, followed by an unprecedented rash of foreclosures, followed by further drops in prices as the market is flooded with relatively cheap real estate.

Till then, I'll be trying to amass as much downpayment as I can.

 

[talloulou]

Well, they have been saying for years that California's real estate is due for a correction but the prices keep rising and rising....

 

[penpitt]

Another type of loan that is becoming popular is the interest-only loans. My wife has a coworker who sold their house for $180,000 which is a small house here now and bought a $350,000 house further out. She and her husband bought it with an interest only loan so their payments are about what they were on the other house. Of course they are not paying 1 cent toward the principal and in 5 years when they have to refinance the interest rates will probably be higher. And of course if the market falls they will have to refinance a house for more then it is worth, depending on of course how much they put down on the new house.
So they could be gambling with their house and betting on a low interest rate and good appreciation on their house in 5 years. If it backfires they could lose everything. But of course the banks don't care. For the most part its a win-win situation for them either way

 

[aquanaut]

I live just 25 miles south of Boston Ma. The housing market in the metropolitan Boston area is just nuts. We bought our house 7 years ago for 140,000 now its worth over 340,000 and thats being conservative. I would'nt want to be young looking to buy a house today.Condos are big up here but there not cheap any more either.

 

[dogspot]

I'm what you call an eternal optimist... I don't buy into the whole housing market collapse debate that experts have been raging for about the last 3 years. I was talked out of my buying the house next door to my folks about 2 years ago for $390K because of the so called housing bubble... That house just sold this week for $790K... If you can afford a house, you should do it. A house should be longterm. 15 years down the line, that house will have appreciated in value. Lock in a low rate on a 30 year fixed... ARM's are just stupid. Mortgage agents are looking to get a commission anyway they can. Bottom line, everyone is in this life for themselves... It's not selfish, it's just the way things are... I'm as bad as they are... I want to make a buck here and there also.

I hated dealing with landlords... Since I've bought my house a year ago, I've loved it. 200 times better than renting, and listening to someone rant and rave about you ruining "their" house.... Well then, Why did they rent it to me? dummies....

 

[Fishyfanatic]

I am actually in the market right now for a house. We were leaning towards just renting for the next 5 or 6 years, but if you think about the price of a mortgage payment and then the price of a rent payment, we are paying more in rent than my parents are on their house. And our place is 1/4 the size of their house.

I went house hunting last week and found a cute "LITTLE" place. Roughly about 1200 square feet. They wanted $180,000 for it! 8O My brother bought a house last year that is roughly 2,000 square feet for about $80,000 and it's even brick and needs less work. The house I was looking at needed a new roof and some work on the cracked basement.

The cost of houses is really increasing around here and property taxes are just outrageous. From what I heard from the county commissioner is that the chairman wants to increase property taxes to keep the people of STL out of the small towns. Yeah, but then that keeps people that grew up here out of town too. We live in a small town, but the citizens of St. Louis are starting to spread out into the burbs. And I'm talking 45 minutes away. That is also making it more difficult to find an affordable house. It seems like the ones that are on the market in our area are the big expensive houses. You know the type, 6 bedrooms, 4 bathrooms, 3 car garage, 3800 square feet. Even the small houses that could have sold for $60,000 10 years ago are now being sold for $120,000.

 

[quarryshark]

Another type of loan that is becoming popular is the interest-only loans

Thats nuts. Its like gambling with what can be the safest, best investment in someones life. They bank executive are laughing all the way to the bank (pun intended).
I personally hate interest. We double up our principle payment every month that we can. Its amazing how many years you can knock off a mortgage even by send as little as a $100 extra principle each month.

 

[dr_girlfriend]

well dogspot, thats great for you and everyone else that ALREADY owns a home and has big cash to put down. I have no where near 40-80 thousand bucks to put down on a house, because if I didn;t you know what my payment would be? Over $3,000 a month.
And thats NOT including insurance and taxes. I don't know about most of you, but do you earn over 5-6000 a month? Most people I know dont. Job market out here sucks, especially in the tech market unless you have 20 years experience in every sector of tech with a masters. 1 person is getting hired to the job of what 5 would have done 10 years ago.
Even houses built out in the sticks are over 300,000 now. Its not just in major metro areas. A house in the hood here goes for about 300,000-400,000. Again, that is in the HOOD. Bars on the windows hood, gangbanger hood. The housing market here is so over inflated, its rediculous.
Then they wonder why people want ot leave CA? Gee, no jobs, unaffordable housing, horrible workers comp laws and rates....why would anyone want to leave??? I have lived here my whole life, and I wont leave ONLY because my family is here. But if things keep getting worse (which all signs point to yes), we may have to leave.
I can get a house in Las Vegas for 250,000 that would go for 400,000 here. Its crazy. Just since I got married 6 1/2 years ago houses have more than doubled almost to tripled in price. For first time buyers, its almost impossible. I really dont know how people are making their house payments. 8O
I better start looking into those trailer parks....

 

[dr_girlfriend]

To give you an example of housing craziness and yuppie invasions, my grandmothers house which was the first one built in their track back in 64 I think, they paid about 20,000. Now keep in mind how old these houses are, most need alot of work. Theyre only around 1700-2000sq feet. Yards are decent size. But not mansions or luxurious.
An almost identicle house on her street sold for 1.2 million dollars.
1.2!!!!!!!!!!!!
Last year a house next door to her sold for 775,000. And it has a smaller yard than hers. Now it would probably sell for 1 million. I told her to cash out some of her equity! Good lord, hit the lottery!

 

[dogspot]

I had no where near that kind of a down payment, My wife and I fought tooth and nail to muster up about a 3% down payment.... Around $12K... Took me years to get that much. Lots of sacked lunches, and baloni sandwiches for dinner.

I don't know how it is in Northern Cal... But here in southern cal, the job market is on fire... And that's why the housing market is also on a tear.... People are moving where the jobs are.

Vegas is cheap because you get what you pay for... 115+ degree temps in the summer. I have a buddy that lives in vegas, his electric bill averages about $200+ per month because of the AC. If you get a job in Vegas, somehow or another it will be tied to gambling... It's the base of the whole economy. Without it, Vegas wouldn't be there.

My folks bought their house in '71 for $27,000... As I mentioned earlier, the house next door sold for $790,000 just last week.