Some 86 pct of Californians can't afford a home

[UpInArms]

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-13T005859Z_01_N12352649_RTRIDST_0_PROPERTY-HOUSING.XML

LOS ANGELES, Jan 12 (Reuters) - The number of California households able to afford a median-priced home with traditional financing has returned to a record low 14 percent and will probably sink lower next month, a realtors association said on Thursday.

The 14 percent low was hit in May 1989 and again last August, said Robert Kleinhenz, an economist at the California Association of Realtors, which issued a monthly report. The calculations assumed a 20 percent down payment and an average effective mortgage interest rate of 6.26 percent.

"In 2006 we'll probably surpass (November's figure), we'll fall below the record low that we matched this time around," said Kleinhenz, calling it a "grim picture" for California home buyers.

A California family would need a total income of at least $133,390 in order to purchase a median-priced home of $548,400, the report found. Last November, a median-priced home was $471,980.

...more...

[longship]

1. The houses in my neighborhood are $350K

I can't afford to buy in my own neighborhood.

It's pretty bad. We did a refi last year and our house was appraised at $225K. Now, it would be every penny of 350, or more.

When the housing bubble bursts there are going to be millions who will be losing the houses they thought they were buying when the banks do margin calls.

[smoogatz]

60. Margin calls on mortgages?

I'm pretty sure there's no such thing. No, people will simply pay and pay and pay those $500k mortgages for houses that are now worth $250k, or they'll declare bankruptcy and bail on house and mortgage, leaving the banks holding the bag--which could be a disaster for the banking system. Folks with variable rate mortgages will face foreclosure if interest rates increase dramatically, outstripping their earnings, which they will if the national debt contimues to multiply--which it is. But none of it's going to happen next week, or even next year, most likely.

[longship]

77. Explanation.

When the value of the house is half the amount of the mortgage, what do you think that the bank is going to do? They are going to probably call in the note. That's what I meant about calling the margin.

That's what happened in the late 20's when housing values collapsed.

[LostinVA]

78. I don't think they can legally do that, because of what

happened in the 20's.

[longship]

84. I hope not.

However, a collapse in the housing market would have significant impact in other areas. It's likely that millions of people being upside down on their mortgages will result in many people unable to make their payments.
Lenders may have little choice but to call-in delinquent loans on the least provocation. What would the result of that be? I can't think that it would be a pretty sight.

[Robeysays]

90. google:

hoovervilles... that's what happens when housing collapses

[smoogatz]

94. Doesn't make sense.

Why would the bank rather seize and re-sell a property at a fraction of the value of the original mortgage, if the homeowner was still making payments on the old, higher value? As long as they were getting their money, why would they screw with that? My understanding is that the 25% unemployment rate during the depression, along with catastrophic loss of capital and deflation were what led to all those foreclosures. Am I wrong?

[Clara T]

2. That is just staggering n/t

[KansDem]

97. self delete

wrong post

[LibDemAlways]

3. Here's what $515K buys in my area of

Southern Calif. these days. Even if they could afford it, is that anyone's idea of a half million dollar home? It's just ridiculous.

http://realtor.com/FindHome/HomeListing.asp?snum=2&locallnk=yes&frm=byzip&mnbed=0&mnbath=0&mnprice=500000&mxprice=550000&js=off&pgnum=1&fid=so&mnsqft=&mls=xmls&areaid=91360&typ=1%2C+2%2C+4&poe=realtor&zp=91360&sbint=&vtsort=&sid=05F91E2D6B69C&snumxlid=1053882276&lnksrc=00002

[napi21]

8. Boy, your Governor would HATE ME!

There's NO WAY in the world I'd pay that much for the house in your example! That house is worth MAYBE $85,000 tops!

I don't care what kind of a job I had or how much I was making, I'D MOVE!!!!!

[LibDemAlways]

12. It must be just awful for people who

are transferred out here because of their employment. Can you imagine selling a beautiful home in the midwest or south and being told upon arrival in CA that house in the photo is what's in your half million price range? People end up getting interest only loans to get into nicer houses that they absolutely can't afford in the 700 and 800K bracket. And those aren't great houses, either, They are slightly larger 30-year-old tract houses that mostly need work.

It's also created a situation where people can't cash in their equity and move up in the same area because the property taxes on an $800K house would kill them.

All in all the market out here is long overdue for a correction.

[napi21]

17. WHY in the world are people paying these prices?

I had the opportunity to visit California twice. Both were business trips when I had to testify in court for our company.

The first time was Laguna Hills. I went to Laguna Beach, and it was beautiful!!!! I can't say I was thrilled with the houses on a hillside, but the area was very nice.

The second time was to Pasadena. Ooooh, I could sure live there! Beautiful palm tree lined streets, nice houses, great weather. What more could I ask for?

I think California has a great climate, everyone I met there was wonderful, and the traffic isn't really much worse than other cities I've been to.

NONE of that matters! I would NEVER pay $500,000+ for a 1,000+ Sq Ft house! I don't care if a whole damn island came with it!!!!

Why do people pay these prices????????

[melody]

26. Many of us sold existing houses for exorbitant prices

And for some of us, it's the home state we love (I was born here forty-some years ago)... and the state is majority blue, too.

[Miss Chybil]

103. Real estate - they don't make it any more. That's why. nt

[American liberal]

108. I suspect it's simple supply and demand...

There's a town just north of Chicago I love called Evanston: towering oaks and maples, historical homes, lakefront--but home prices and property taxes are way out of my reach on my modest single female income. When I drive through Evanston (and some of the other nicer suburbs) I often wonder to myself--who can afford these condos and homes?! A decent 2-bedroom condo in a nice area of town starts at about $350K. Low-end homes (similar to what you posted) start at about $300K, but I'd venture to guess the average Evanston home starts at about $600-$800K. Considering the median income in the Chicago area is about $41,000, again, I ask, who the hell can afford Evanston?!

[Wise Doubter]

41. I don't care what kind of a job I had or how much I was making, I'D MOVE!!

I am !!

[tledford]

63. In Greensboro, NC, that house would be $160K. n/t

[LostinVA]

80. I have a house 300 sq ft bigger, much, much nicer

on a small wooded lot that cost only a little more than 1/5 of that... and I live in what's considered the most expensive area in VA outside of NOVA. Man!

[Matariki]

87. yeah, and that's what californians are doing - moving.

to washington. and it's driving up the housing rates here - they think $400k for a 800sf house is a BARGAIN.

blah.

pretty soon all housing will be owned by about 10 people and we'll all be serfs.

[KansDem]

96. "...and we'll all be serfs"

It's the beginning of the American archipelago: an economic gulag. The "government" won't round up undesirables and ship them off to a camp. Instead, we'll be so financially unstable that we'll be working shit jobs and living in shit housing. Like company stores of yesteryear, corporations will tap into the financial destitute with offers of (low-paying) jobs and a place to live (dumps). Sort of like those industrial/business parks except with "corporate housing."

Meanwhile the rich and wealthy will live far away behind gated communities.

[Clara T]

19. You cannot underestimate the value of those exterior features

• Exterior features: Curbs, Fencing-block, Patio-slab, Sidewalks, Sprinklers-Front, Street Lights, Streets/Public, Sewer-in Street, Utilities/220 Electric, Water/Public Utility

[LibDemAlways]

64. I know.... quite a stretch on the

part of the realtor - grasping desperately to fill up space instead of admitting: Exterior Features...None.

This place, though, is in an area of older homes that are being torn down by developers with new McMansions springing up. Some builder will end up paying in the 4's for it, tear it to the ground, and build as big a house as possible (no yard) on the lot. He'll then resell it for over a million. There are no other buyers for that house.

[barb162]

27. that looks like a $100,000 fixer-upper

[currents]

31. I'm in Thousand Oaks Too, this shit's insane here

$500k for a trailer POS.

[doubleplusgood]

66. my old TO home: $700K

or so, based on what I can tell from real estate ads for similar homes. And my old home was a cheesy, cracked-slab, asbestos-laden-popcorn-on-the-ceiling, tarpaper-and-rock-on-the-roof thing built in 1961 with tiny bedrooms & bathrooms just a few blocks from a noisy freeway. I couldn't afford to move back there (from Portland, OR) if I wanted to.

[Lorien]

33. $520,000 in Orlando:

http://www.floridamoves.com/property/propertydetails.aspx?pool=0&mls=&thumbs=1&sort1=listprice&lux=0&sort2ord=A&PType=SFAM&vt=0&wf=0&MinBed=3&sqft=0&MaxPrice=530000&CityIDList=c4893&sort1ord=D&sort2=city&Zip=&Street=&MinPrice=475000&rpp=10&nc=0&nl=0&mp=0&cc=0&PropSearch=0&CountyIDList=370&MinBath=2&page=3&propertyguid=866765c1-c66d-4e96-b59d-880daf18443c

Or in MY neighborhood; http://www.floridamoves.com/property/propertydetails.aspx?pool=0&mls=&thumbs=1&sort1=listprice&lux=0&sort2ord=A&PType=SFAM&vt=0&wf=0&MinBed=3&sqft=0&MaxPrice=530000&CityIDList=c4893&sort1ord=D&sort2=city&Zip=&Street=&MinPrice=475000&rpp=10&nc=0&nl=0&mp=0&cc=0&PropSearch=0&CountyIDList=370&MinBath=2&page=2&propertyguid=dd1e043f-a201-46a4-96c9-fc3c13ebd2bc

[Wise Doubter]

39. is this worth $700,000

http://www.realtor.com/FindHome/HomeListing.asp?snum=4&locallnk=yes&frm=bymap&mnbed=3&mnbath=2&mnprice=0&mxprice=99999999&js=off&pgnum=1&fid=so&mnsqft=&mls=xmls&areaid=82489&typ=1%2C+2%2C+4&poe=realtor&ct=Arcadia&st=CA&sbint=2&presort=sbint&sid=05F94999512AC&snumxlid=1052700985&lnksrc=00001




For a 50 year old house !!! I think not !

[LibDemAlways]

42. No. What's evident, though, is that

home prices have nothing to do with the value of the house in California. It's all in the land. It's as though these older homes are being offered only to wealthy investors who can afford to tear them down and build a mansion on the property to be resold for millions. The little guy has been frozen out.

[Castilleja]

106. Good lord! That is unspeakable

The first home would go for about 50,000, 60,000 max. in my city. The second pic I would guess at 60,000 here. I cannot imagine looking at real estate prices like that!

[NMDemDist2]

47. 1000 sf! good grief

I paid 50K for my 1000 sf house in Sacramento in 1993

it was a fixer upper for sure, but still....

[Kaylee]

49. Now that is just wrong....

515K for that!!!

[smoogatz]

61. Here in West Central Wisconsin, you could buy almost any house in town

for $550k--including historic Victorian mansions, riverfront properties, you name it. We paid $148k for our 3bdr, 2ba home (two car detached garage, finished basement, upstairs screen porch, nice big kitchen) two years ago. Our assessment has since skyrocketed--to $160k.

[TX-RAT]

62. That would be 18 to 20 thousand here.

My business partner just sold his mother-inlaws house.
6800 sq-ft
5 bedroom, 5 bath
in-door pool and sauna
4 car garage with 3 car carport.
238,000 dollars.

[oneoftheboys]

67. If that's 515k...

I'm packing my bags.

Perhaps the headline should read "86% of Californians living like refugees."

[da_chimperor]

89. Prepare to gasp . . . nearly $700,000 for a 1 bedroom 58 year old shack

http://www.realtor.com/FindHome/HomeListing.asp?snum=3&locallnk=yes&frm=bymap&mnbed=0&mnbath=0&mnprice=0&mxprice=99999999&js=off&pgnum=1&fid=so&mnsqft=&mls=xmls&areaid=32585&typ=1%2C+2%2C+4&poe=realtor&ct=Capitola&st=CA&sbint=2&presort=sbint&sid=05F9F4D173F7C&snumxlid=1053841007&lnksrc=00002

And it has awesome vinyl floors! :eyes:

[Robeysays]

91. 684 square feet... WTF?!?!?!?!?!!?!?!?!?!

my old tree house is bigger than that.

[da_chimperor]

92. It's Santa Cruz county, 3rd most expensive county in CA

All the value is in the lot. Anyone buying it would bulldoze the house and put up a small but nice 2-storey home and sell it for $1.5 million or more.

Edit to add: It's in Capitola, which is a fantastic place to live (thus even more expensive) . . . if you can afford a house. The place is less than 1/4 mile away from the Capitola pier, making it even more valuable. Damn.

[KansDem]

98. Yeah, but the towel in photo #6 might come with the sale price...

That would add some value!

[American liberal]

109. what's under the slab?! GOLD?! *sheesh*

[American liberal]

107. wow! that is unbelievable! n/t

[cindyw]

4. my neighbors house just went for 950,000 in ca town

I live in the "affordable" part of our city. 3 bedroom old 70's house. single story 2 car garage homes. nothing fancy about these homes.

[young_at_heart]

5. The stress level in Calif must be very high these days

We had a huge house payment and a tiny house. I remember being stuck in horrific traffic jams....I sure don't miss that!

[Cronus Protagonist]

6. That's why I rent

I have no way to get into real estate here at all.

Educate a Freeper Today!
Buttons, Stickers and Fridge Magnets made in America for brainy people
http://brainbuttons.com/home.asp?stashid=13

[Maat]

7. 4 years ago ... I sold a custom Hubby and I had built to get near my ...

kid's school in the Temecula Valley. I walked in and offered the lady $360K, and she took it for a semi-custom. Bumped the contingent buyer. It was just empty lots everywhere. Now, there's a home or a store or a restaurant on every parcel of land. What used to take 5 minutes to negotiate, in terms of travel time, now takes 20 minutes. It's crazy.

4 years later, it has DOUBLED in value. That's how crazy it is up here - the San Diegans are coming up and buying everything in sight ... because they can still drive to work from here (we're about 1 to 1-1/2 hours north - inland).

The only reason I could afford that home is because we had bought our first townhome in Ontario, CA in 1986, and traded up ever since.

The cheapest home around here is going for over $200,000, and that would probably be a mobil or a townhome on the older side.

My younger sis and her hubby ... I don't know how they are going to buy their first home.

Now, my house IS new, and it is ridiculously large (4,700 sq. feet), but it is on a small lot. We were able to use solar power to run the pool setup.

So, you do get a semi-decent value out here.

[serryjw]

13. My first condo in 1980 was in Ontario

It was $85K and had LEASED land( just like in Palm Springs)..how much is it going for NOW?

[Maat]

15. I'll bet 3X that.

What's your guess?

[serryjw]

24. I was just looking and

Yes, it is about $300k for 1200 sq feet Now admittedly it was a great quadrennium. I had my own backyard and garage...BUT $300k!! is ridiculous. There is no way I could afford that now.

[Maat]

25. Ah, California real estate!

:)

[pinto]

9. in my (CA) county it's more than that...."grim picture" is apt. We are

losing teachers, firemen, policemen, administrators, many non-service related small businessmen and just about any and all blue collar job classifications you can name for a predominately two tiered society here - relatively well off state/county employees & very well off retirees or cash outs from LA...and a minimum/low wage service sector.

One local town had a well recommended choice for a public sector job turn the offer down, point blank, because his family couldn't afford to live here.

The absentee ownership of property has increased dramatically - folks renting second homes - bought as personal retirement homes - as vacation rentals or subsidizing their kids' college stay here with a house for the kids and an investment. Kind of bizarre.

There seems little political will to reign in the obvious trend. It's spoken about everywhere, but everyone seems willing to line up at the trough of real estate bonanza...

(ed to make sense with the OP)

[bluestateguy]

10. Burst, bubble, BURST!!

All the corporate media types talk like the real estate bubble is a good thing.

I want that bubble to burst like bubble gum.

[Journeyman]

11. Why are you hoping for economic hard times? . . .

What purpose does it serve for you to wish ill-favor for your neighbors? What delight do you find in other people's misery? And do you have a personal economy -- separate from the one the rest labor within -- to buffer you from the onslaught?

It is one thing to see the corporate world as a parasite upon society and to desire changes for it. But what sort of Democrat are you to find delight in the misfortunes of the least among us?

[democracyindanger]

23. Landowners are the least among us?

I get your point, but come on...describing real estate owners in California in a thread about how much real estate is worth in California as the 'least among us'...

[Journeyman]

28. When the economy falters -- no matter what the reason. . .

no matter how -- it is the least among us who are hit hardest first and suffer longest. The homeowners, the stock holders, the hoarders of gold -- all suffer to varying degrees when their particular "bubble" bursts, but the poor and uneducated, the unskilled and unconnected, suffer even when the going is good. How much greater will their suffering be in the midst of calamity?

Mark Twain's admonition in The War Prayer that every supplication to God has more than one side is an equally valid observation for those who wish indeterminate ill to any group of people, no matter the reason, no matter the "justice" of the call.

[democracyindanger]

30. If and when the bubble bursts

those without will still be without. It's those with that will suffer the most.

Me? I'm hoping for a big shaker. Nothing deadly. Just enough to scare people into moving by the SUV load into the suburbs.

[Journeyman]

34. Remember the Rose Bowl game in '82 or so (I think that was the year)?. . .

there was a 2 point nothing earthquake in the second quarter and all the announcers could do for the rest of the game was talk about the quake and how close they'd come to death. I figure that kept 2 to 10 million from moving West anytime soon.

Since then, I'm a strong advocate of at least once a year, during the Rose Bowl Game or even during the parade, the cameraman needs to just shake the lens -- not much, a couple of quick nods and maybe a shimmy or three. The announcer then says, "Woah, Dan -- did you feel that? Musta been a magnitude 5 or 6. Hope no one got caught in the tunnels coming into the stadium."

I figure that'd be enough to keep the State close to even in population for at least the first two or four months of each year.

[democracyindanger]

35. That. Is. Freaking. Brilliant.

I'm gonna steal it and use. Hilarious.

[cascadiance]

73. Aren't you thinking of the World Series game in '89

That was when Loma Prieta struck, and it was when it was a "Bay Series" between the A's and the Giants. I wasn't watching TV at the time and didn't have electricity for a few days after that, so I guess I don't have much "memory" of that game though! :)

[Journeyman]

83. No. People died in Loma Prieta . . .

and though it accomplished the same (if not more) in keeping people away from California, as an example for a joke its too sorrowful and quite inappropriate. The slight quake during the Rose Bowl, however, did occur (much earlier in the '80s), and has always struck me as a humorous way to keep people away both because of the over-reaction from the announcers that day, as well as the quake's relative harmlessness. As you are aware, quakes that register in the 2s and 3s rarely cause damage -- I liken them to large trucks passing by, when attempting to describe them to friends back East ("Wow! I just heard you guys had a 2.4 earthquake in someplace called 29 Palms -- is everyone okay?").

[customerserviceguy]

72. May I point out

what P. T. Barnum is reported to have said, that you cannot cheat an honest man?

The people buying on speculation, in other words, that there is one more fool out there stupider than they are, deserve what is coming to them. They overbid, overpaid, whatever, because they thought they could make a buck off some other person without earning it.

The real estate market, like the stock market, is where rich people make money off of poor and middle class people who they can trick into buying crap without something substantial behind it. If people would get off of their "something for nothing" attitudes (which the rich want them to have), they wouldn't overpay for a home, a stock, or anything else.

[Le Taz Hot]

54. And for many

that land is the only thing we have and IS our retirement. Most of us got into our homes before the housing boom here. I got into mine at the end of 1999 and paid under $100,000. It's worth almost 3 times that now which is good as that re-fi last year is the ONLY thing that saved us from losing everything we had when my husband lost his job in May (still out of work). The "least among us" used to be solidly middle class. Now,it's the only thing keeping us from slipping into abject poverty.

[CornField]

14. Come to Iowa... or, better yet, go to Oklahoma

We always welcome liberals (and others who want to get along) in Iowa, but I think Oklahoma could use the folks more. (Not to mention that you can buy a freakin' mansion for $400K in Oklahoma.

[OKNancy]

70. That's the truth

That house listed in post #3 would be about 50,000 to 60,000 here in Oklahoma.

[Zambero]

16. This doesn't make a whole lot of sense

A scenario where only 14% of potential California home buyers can afford to pay the going real estate list prices implies that for every 6 sellers there's only one potential buyer. That alone would generate a very stagnant market, immediate property devaluation, and a "correction" manifested by drastically reduced prices so that market supply and demand are brought into balance. This hasn't happened just yet, so I'm a bit suspicious about how correct these figures might be.

[tinrobot]

20. Not everyone owns.

100% of Califonians don't buy the place where they live. Many people rent. Some bought before the market went up or inherited family property and thus have equity, so they don't need to be in the top 14% of wage earners to buy a place.

[JVS]

51. Yeah, but with prices at such a premium, rents must be huge too

[Zynx]

85. Rents are actually not *that* bad.

You can get a very nice place in downtown LA for $1500-2000 a month. My brother is an aspiring screenwriter who has been trying to figure out how to live out there, so there are a lot of LA rent materials around the house.

It's expensive, but it's nowhere near the broken scale of owning something out there.

[Bridget Burke]

53. Just because you can't afford a house doesn't mean you don't have a "home"

Owning real estate is a fine investment, but renters are not exactly living under bridges.

---A Houston Renter

[Zambero]

81. Still way out of whack

Recent data suggests that 60-65% of the housing market is in mortgages (as opposed to rents). So it still doesn't add up that home sale prices for a given state remain sky high if only 14% of the population can afford the mortgage. That figure would point the way to a mega bubble burst already occurring. The only other plausible explanation is that most CA real estate listings are now staying on the market unsold for an indefinite period of time. And this almost never happens because asking prices are generally set (or even adjusted downward) to facilitate a "quick" sale within a month or two.

[Gormy Cuss]

52. Two things to consider.

First, affordability is still pegged to a 20% downpayment --rarely the amount on the table for first time buyers in much of the country these days.

Second, the affordability percentage assumes everyone is entering the market as a first time buyer. One can have a fairly modest income but have substantial equity in the current owned property and by transferring that equity to a new property, the affordability has been met, and that's why home sales continue at a good pace.

The affordability index is a standard measure used to assess the market and the low percentage of households meeting the affordability threshold is bad news.

[tinrobot]

18. 1989 was a peak year, if I recall...

I bought my Los Angeles house in '97 for about 15% less than the previous owners paid in '89. My agent told me that '89 was a peak year, and the '94 quake really killed the market for a few years.

Maybe the cycle is turning... who knows, maybe we need another quake to drop prices.

[madrchsod]

21. here`s what 350 buys a 100 miles west of chicago

http://www.saukvalleyrealestate.com/detail.php?id=0002471&pt=9000
RE/MAX Sauk Valley

[AngryAmish]

57. I used to have a girlfriend in Sterling

[Godspeed_Democrats]

58. Here's what you can get in Southern Georgia on the coast

$350k-$400k


http://www.realtor.com/FindHome/HomeListing.asp?snum=32&locallnk=yes&frm=bymap&mnbed=0&mnbath=0&mnprice=350000&mxprice=400000&js=off&pgnum=4&fid=so&mnsqft=&mls=xmls&areaid=29144&typ=1%2C+2%2C+4&poe=realtor&ct=Brunswick&st=GA&sbint=2&presort=sbint&sid=05F9A231C01DC&snumxlid=1053967126&lnksrc=00002

[Shine]

22. I live in CA and all I can say is: thank gawd we bought when we did

10 yrs ago....cuz there's NO WAY we'd be able to buy anything nowadays. It's completely insane.

Santa Cruz county, where I live, is particularly nuts.

I give thanks everyday we've been able to own our home....well, the bank owns it, but you get the general idea.

heheh.

:hi:

[fooj]

44. Hiya neighbor!

Peace.:hi:

[Shine]

68. Hey there, fooj!

I'm in Scotts Valley, where are you? Are you in SC County?

Peace to you, too, friend!
:hi:

[fooj]

79. La Selva Beach Liberal!

Peace.

[Shine]

88. Right on!

howdy, neighbor!
:hi:

[Le Taz Hot]

55. I saw a recent bumper sticker

about your area. It said: "Keep Santa Cruz wierd." LOVED it!

LTH
Fresno:hi:

[Shine]

69. Yeah, that's us.

we're a bunch o' freaks, LOL!

Greetings to you, this fine day, Le Taz Hot!!
:hi:

[da_chimperor]

93. Check out the link I posted above, a 1 bedroom shack in Capitola.

Ouch.

[Shine]

102. Ouch, indeed.

Howdy, neighbor!
:hi:

[barb162]

29. relatives often end up helping out or people can't buy

[cosmicone]

32. There are two reasons for the runaway prices

One is obviously supply and demand.

The second is Greenspan kept the interest rates low artificially to cover up Chimpanomics' blunders. Then the banks got creative and offered negatively amortized 1% mortgages coupled with double-decker mortgages (80% first, 15% second) so people could buy with as little as 5% down.

So a million dollar house needs a down payment of only $50,000 and has a total monthly payment of about $2300 for first and $1100 for second = $3400 a month. This brings the million dollar home within reach of someone making say $85,000 a year.

People being optimists, they don't think what will happen when the interest rates go up and the initial low rate for 3 years ends.

This same phenomenon made people refinance and spend the extra cash which has kept chimpanomics going.

Sadly, when the bubble bursts, it will burst very very hard. Very few are alive who remember the 30's but a worse scenario is not impossible. Unfortunately, a democratic president elected in 2008 will be blamed for it and the freepers will have fond memories of how good it was during the chimp-reign.

[Yavin4]

65. DING!! DING!! EVERYONE PLEASE READ cosmicone's POST!!!

NAIL ON HEAD!!!

Without cheap debt, Bush would have lost big time in 2004, Diebold or no Diebold.

[cascadiance]

74. That and this being one of the few tax breaks left to the middle class

'er ... make that upper middle class now... Home loan mortgage deduction is also fuel for this fire. If the Rethugs go through with trying to lower the cap on house values for home mortgage deduction, that just might cause a crash here. For a while they were thinking of lowering the cap to something like $350K. Think that's been "quieted" quite a bit since then though.

[hogwyld]

76. What do the thugs care

That's plenty of cap for the nice, friendly, red states. Who cares about the home prices in those evil, commie, blue states like Kalifornia, New York, etc. Screw the librul bastards.

[cascadiance]

82. Oh, I'm sure it's in their plans at some point...

But not before the 2006 election. They need to find ways to siphon off the money they get back from removing this deduction for their own nefarious purposes, and they want to have more of a stranglehold over their burgeoning dictatorship so that they are more insulated from voter reaction when they go through with this.

[0rganism]

36. What's the national average?

Whenever I see an article with a headline like this, I gets to wondering if this is maybe not so different from anywhere else. Also, 20% down is pretty steep; my wife & I bought into our first house with 3% down, IIRC, and given the real estate boom, it was very much worth it in the long run.

Paying rent when you could be paying mortgage instead is like flushing money down the toilet.

[cliss]

37. Wait a minute.....

there's something wrong with this statistic. If 86% of all Californians can't afford to buy a home, where are they living?


And who are the other 14 that CAN afford to buy a house? Who is living in the rest of these houses? Or are they jammed in, like 5 families per house?

[Le Taz Hot]

56. The key word here is "buy" a home (now).

The rest are in homes bought while prices were still affordable.

[Wise Doubter]

38. Can this be topped?

Developers just bought and tore down a two house lot, and put up two rows of 5 ea., 2 story houses(apprx 1800 sqft).
You could lean over and touch your neighbors house.(practically)


They are priced at $635,000 , plus a$135.00 mo. HOA fee.


:rofl: HOA ??!! You would be living in a driveway !!! :wow:

[Wise Doubter]

40. check these

http://www.realtor.com/FindHome/HomeListings.asp?locallnk=yes&frm=bymap&mnbed=3&mnbath=2&mnprice=0&mxprice=99999999&js=off&pgnum=1&lnksrc=&fid=so&mnsqft=&mls=xmls&areaid=82489&typ=1%2C+2%2C+4&poe=realtor&ct=Arcadia&st=CA&sbint=2&presort=sbint

[Raine]

43. Close to one Million is what homes in my neighborhood

are going for. My parents paid 12,000 for this California tract Ranch style house back in the 1950s and it's mine now. It's just an ordinary house but since it's walking distance (if you can walk a mile) from the beach so I guess that's reason it's worth so much. :shrug:

[yorkiemommie1]

100. that's the only way my daughter will be able to afford a house

is to inherit this one from us.

( 50s tract house close to beach ) many original owners in the area.

she can't even work much because a driver in a truck hit her car nearly head on.

[mtnester]

45. Insane...and bound to burst

here is what you can live in around my area....so it gets a little cool in the winter...BUT, yesterday it was about 60 degrees here...just about what it was in many parts of CA

http://www.kingthompson.com/property/propertydetail.aspx?property=5224b13d-8b1a-4653-b339-5f191cb27906

Or, if you want a farm (and YES, it is one of the nicest ones in my neck of the woods, just like the advert says)
http://www.kingthompson.com/property/propertydetail.aspx?property=3387f4d4-8553-40b1-b01c-fdf802dc3c34

[The Backlash Cometh]

46. What a beautiful state it is.

I can imagine it's going to get even more popular the redder the other states become.

[0007]

48. My son and daughter in-law moved to Oregon to buy a home.

Real Estate on the coast is out of sight for most folks.

[Jose Diablo]

50. I imagine tent cities will spring-up under the bridges

There will always be a need for people to mow lawns, clean swimming pools and other low pay work. The 'compassionate' conservatives probably have plans to 'care' for societies less well endowed workers.

Look how the wealthy Californians cared for those poor displaced souls from Oklahoma during the dust bowl in the 30's. Gave them jobs picking fruit, even providing food and shelter right out there by the fields and made it convenient to pay for that food and shelter by just deducting it directly from the workers pay. Sort of like the coal mining companies did in Kentucky and West Virginia.

You can even see this 'compassion' today just across the border in Mexico. The American companies built plants just across the borders then paid the Mexicans a whopping $2/hour and also built apartments very close to these industrial complexes to house the workers. I've seen it but I don't know how much they charge the workers to live in the apartments and the conditions within the shelter complexes.

All this was part of that NAFTA deal back in the 90's. What's that guys name, the presidente of Mexico before Fox, he set all this up for his people. What a kind compassionate man he must have been. See how free trade is so good for the workers?

Yep, these guys just keep looking out for our well being. Is anybody else feeling the love they have for us?

[OKthatsIT]

59. bad credit blocks renters from finding an apt

I have watched this in the Boston area. Where are poor folk going? Just as Michael Moore explained to US about Detroit's housing and labor woes, the poor is forced to move away from the big cities and commute. Moving away to towns usually 60 miles away, following the commuter rails or paying outrageous costs for car maintenance and fuel. Then add child care...or work 2-3 jobs to keep a roof over your heads, leaving the older children at home to watch themselves. Kids get into trouble, form gangs only when parents are less involved in their lives...and blaming the parents just isnt fair.

Homelessness. Its going to get real bad. Its bad now, but the media has chosen to ignore it. Bush would rather stigmatize the poor, complain that crime is on the rise. Of course, Bush & Co. have much at stake in the prison industry...I should say, much at stock.

[MountainLaurel]

75. Meanwhile

The price of housing in those towns 60 miles away skyrockets because of the influx of people and development, so those who have been living and working there for lower pay cannot afford to buy either. This is what's happening in the eastern panhandle of WV, where housing prices have more than doubled in the past five years. My friend had to get a teaching job in the nearby suburbs of VA because she couldn't afford to buy a house at her WV salary, and was getting sick of renting at age 34.

[zann725]

71. Yes, prices are expensive here. But Foreclosures are WAY up, & bids down.

...and properties sitting far longer (see recent threads here with statistics.) Things in CA real estate market (at least since June 2005) have changed substantially. Foreclosures up 15%, sales down 20%; bids and "sale waiting time" also much longer, and lower.

And people MOST OFTEN end up buying "above" their income ratio to do so...EVEN OUTSIDE California. Unfortunately, that's reality. And most get by, and make ends meet somehow...

The ones who don't, as recent figures show (in a recession and large national job joss)...go into foreclosure.

I've talked to several realtors here, who confirm the "bubble." And recent newspaper articles, contradict this one. My guess is this one's trying to stop the market-drop panic.

[lucca]

86. I live in northern California, and

my home (small, 1200 sq ft), is now worth about $725,000,(we have lived here 20 yrs).
...And I live in a flood zone!

You don't get much for your money.
It's sad for someone starting out, and trying to buy their first home.

[American liberal]

110. article in local (Chicago) paper recently stated

that most people who have owned their homes in this area for at least 10 years could not afford to buy the same home today. pretty scary out there...

[Vinca]

95. Thank you for this thread.

I have a 200+ year old house on 5 acres on a beautiful hilltop in New Hampshire. We've been working on rehabilitating it ourselves - replacing windows, the roof, plumbing, etc. - for about 8 years. I sometimes get discouraged because it never seems I'll get to the painting and decorating part of the project. I pledge never to bitch again. I especially can't believe that house that's no bigger than a potting shed for $700,000. Holey, moley! And you have fires and earthquakes to boot.

[HockeyMom]

99. New York - can't afford to RENT

Forget the $400,000+ for a 3 bedroom to buy, try close to $1,000 a month for a STUDIO to RENT. This is Long Island, not Manhattan. Want to pay close to $3,000 for a 1 bedroom there? WHO?????

[RedRocco]

101. just move to SC

heres what $22k cash got us last year



1016sq ft on a half acre

[greblc]

104. A friend from Long Beach told me he was selling his home because

He couldn't afford it with all of his other living expenses.

[hatrack]

105. Here's what $250K gets you in Kansas City - 1800 square feet, 3 BR . . .

Slate floors, fireplace, great neighborhood. Traffic's not bad, either.

No Gropinator, but you would be stuck with Blunt the Lesser for governor.

http://www.reeceandnichols.com/Consumer/Listing/ListingDetail.aspx?Search=3770bea1-ae87-4b04-9e56-37a9a24cf7d5&Listing=8589789&IRPAgentID=&Image=1&First=1&Last=6&pagesize=10&SearchType=map&ListingDistrictTypeID=&FirstLetter=&Sort=6&Cookies=

[StellaBlue]

111. and this is the greatest country in the world?