Dr Housing Bubble 08/13/14

[Crewleader]

Feudal America creating an army of renters: A larger percentage of household income is going to rents and the CPI is once again missing the housing boom.

The housing market without a doubt is slowing down and it should be clear that the “hot” summer selling season is simply not going to materialize. Even in house horny Southern California, sales are down 12 percent year-over-year and the median price actually fell in July from June. Typically, the sunny California sun fries the portion of the brain looking at math during the summer but something else is going on. People also conveniently forget that 7,000,000 foreclosures have occurred since the housing bust hit with 1,000,000 happening here in the “never a bad time to buy” California market. We recently discussed the incredibly hot rental market in the state. It seems that rents are having a good run over the last year as more Americans welcome their new feudal landlords from Wall Street. In fact, we now have the highest percentage of households renting in 20 years. If we look at the data, what we find is that housing is simply consuming a larger portion of income for households. It is amazing how many people in California have absolutely no comprehensive plan for retirement. They are willing to leverage every penny into housing but ignore other important areas like building a balanced portfolio. Taco Tuesday baby boomers sit in million dollar crap shacks welcoming their student debt laden children back home while they feast on Purina Dog Chow. It is pretty clear what is going on right now: more of your income is being consumed by housing.

The conveyor belt to rental nation is moving efficiently

http://www.doctorhousingbubble.com/feudal-america-rental-economy-rental-nation/

[Demeter]

1. the California bubbly is finally going flat

The drought is being felt on a visceral level, finally.

[Crewleader]

2. It began in California the bubble prices

Last edited Thu Aug 14, 2014, 09:18 PM - Edit history (1)

and it looks like where it's going flat indeed.

[dixiegrrrrl]

3. Here's a real Cal. story for ya.

There is a Mobile Home community on the side of San Bruno Mountain, just above the east side Colma cemetery,
the area is officially in Daly City, a stone's throw from SF line.
Many of the mobile homes date back to late 1970's. They have been long since paid for.
When the owner sells, moves, or dies, the older homes are hauled out and taken to the Central Valley where they are used as housing for farmworkers. By that point they need a lot of repair.
But many are still in the community, the refuge of retired or close to retired people.
Who pay 1,000 to 1300.00 a MONTH rent on the trailer space.
Does NOT include utilities.
A trailer space that is less than 30 feet from the next door trailer. They are stuffed like sardines.

And that rent goes up 50-75 bucks a year.

Brand new mobile homes are brought in and sold for 260 K.
so one has mortgage to pay to the seller
plus 1,000 month rent to Mobile home park.

That park is considered a bargain by most house hunters.

Edited to add: the park is under the SF airport landing/takeoff flight pattern. Jets come screaming in a low levels day and night.

[Crewleader]

4. It's unbelievable the prices on a mobile home in California.

Here in Florida they are more affordable but I would never want to buy one, just wouldn't feel safe enough with the hurricanes and tornadoes that do happen from time to time. It's hard to believe 10 years ago this month we had three hurricanes swept through Central Florida. Charlie, Frances and Jeanne....there was alot of mobile homes destroyed.

Thanks for the Cal. story dixiegrrrl, the price tag there is over the top and to add not much comfort living by a airport with Jets flying above....who could sleep.