[Illah]

Yeah it's definetely a bubble in most major metros. Kinda sucks because I'm just starting to be ready to buy and like you said, I'm feeling priced out! Part of me wants to just go for it, get a loan that allows interest-only payments, and flip the property in a year, but this bubble has been growing for a while so I worry that I may get stuck when it pops! One of my friends has been flipping here in the Bay for a couple years and brings in INSANE amounts of cash, like $65K a quarter, just on refinancing, equity and reselling. He's not even 30 yet.

--Illah

 

[CRESCENDOPOWER]

Quote:

Originally Posted by socrates63 I'm astounded by where people get their money to buy $600,000+ houses.

20% down $120,000
$480,000 principal
$2877.84 a month for 30 years at 6%

 

[Edwood]

Yeah, tell me about it.

Home costs vs. income is waaaaaay out of whack in Southern California.

I couldn't buy a "real" home, so I sucked it up and bought a small 1 bedroom condo.

All the problems of living in an apt, but with the advantages of "rent" control.

I guess buying a condo first then moving up to a full fledged house later is a good intermediate step, as I get to learn about all the wonderful world of homonership. Taxes, insurance, taxes, mortgages, and taxes.

-Ed

 

[Edwood]

Quote:

Originally Posted by CRESCENDOPOWER 20% down $120,000 $480,000 principal $2877.84 a month for 30 years at 6%

Very very conservative. (I did pretty much the same thing, only much smaller property.)

I still can't believe how many people have financed with zero down, and with an interest only ARM, even 3 year ARM's. What, that is insane.

-Ed

 

[mrarroyo]

Miami Beach is not diferent, it is actually insane. I live in an older building (circa 1966). A 1 bedroom condo of 850 sqft sells for +/-$350,000 or $410 per sqft. A new building it is closer to $625 to $750 per sqft.

Lucky for me I bought it in 1991 for $56,000. However it is very hard to move because the property taxes in a new condo would be 2% of the selling price instead of $1,300 a year I pay now.

 

[utep10]

Quote:

Originally Posted by Oski Here's an interesting article on this very topic: http://www.washingtonmonthly.com/fea...ace-wells.html In California, a middle-class family with two earners each making $50,000 a year now owns, on average, an $830,000 home. In the late 80s, the last time these eight states saw price-to-income ratios this high, the real estate market collapsed. The scary thing is that article is from April 2004, housing prices have gone up by probably 30% in NYC and California since.

For our family in Silicon Valley, the ratio is around 6 to 1 and was even better in 97' when we bought the house (3.5 to 1). My ignorant advice

to anyone is to get into the market somehow, and doesn't have to be in your market. Maybe I've been lucky, but I bought my first place (condo) in 87' right before the "collasped", but if you think long term, you should come out ahead.

btw. that collasped in the late 80s was about 20% , and I still have the condo and we are way ahead now.

 

[1911]

basically the question in these hot markets is to make more money or take a risk or wait it out. the local paper said that 20% of homes in redding were bought by bay/outside investors...that really f**ks up the market for locals excuse my french. i feel bad because i dont wish harm on anyone but the market is slowing down and i am like good...get out! just like tech stocks when the people stop treating real estate like a casino/gambling i think things will be better off. california is crazy.....i am from the east and californians are greedy in a different way than east coasters....but who can blame them? everyone is just trying to get ahead for themselves and their families while adding fuel to the impeding inferno.

that said, i have ahouse for sale in philly in 2 years if anyone is interested

 

[max-9]

My home I bought 10 yrs ago was equal to 1 1/2yrs my gross salary , now is worth 5yrs my gross salary...property taxes have tripled....and people buy homes the day they get listed , where do they get the $$ ....welcome to Nassau County New York.

 

[1911]

Quote:

Originally Posted by 1911 basically the question in these hot markets is to make more money or take a risk or wait it out. the local paper said that 20% of homes in redding were bought by bay/outside investors...that really f**ks up the market for locals excuse my french. i feel bad because i dont wish harm on anyone but the market is slowing down and i am like good...get out! just like tech stocks when the people stop treating real estate like a casino/gambling i think things will be better off. california is crazy.....i am from the east and californians are greedy in a different way than east coasters....but who can blame them? everyone is just trying to get ahead for themselves and their families while adding fuel to the impeding inferno. that said, i have ahouse for sale in philly in 2 years if anyone is interested

edited

 

[Edwood]

Quote:

Originally Posted by wakeride74 Example: This home (which I would buy in a second if I lived there) is $329k and over 3500sq ft. In a decent area here this would be pushing 1.5-2 million without breaking a sweat... minus the bad furniture of course (btw I'm a sucker for the Spanish styles )

Where in the world is this house?

-Ed

 

[1911]

texas..and on top of that no state income tax....sheesh

 

[Alexhifi]

I live in the DC area, so this all is very relevant to me. I sold my townhouse in June as I predicted something bad was coming. I sold for OVER twice what I bought it for in less then a week. I am now on a 12 month lease in Old Town Alexandria (south of DC) and love it! I'm 100% sure I would have gotten $50K or more less if I sold later and had the headache of showing the place.

All I have to do now is wait for prices to drop about 20-50% and buy back in. I'm watching home prices fall $20-$100K and hope the trend continues (and is not just a seasonal thing). The condo market...ouch...brutal competition between investors now trying to get out.

Some dude had the nerve to try and sell a TOTALLY run down (historic) "2" BR for $515,000 in Old Town. GF went to see it, said she wasn't even sure it was safe to live in it - was maybe 800-900 sq ft. LOL...

I say wait it out...don't over extend yourself with some silly ARM or IO loan! Or, as others have mentioned, buy a little further out and commute. The tax savings will WAY outdo any fuel costs...

-Alex

 

[wakeride74]

Quote:

Originally Posted by Edwood Where in the world is this house? -Ed

San Antonio, TX... lotta bang for your buck there! I'll be nice and not show you the dump you'd get in my neighborhood for twice that.

1911 - The market is starting to flatten out a bit but real estate is almost a no lose investment in CA. For people like my wife and I that are recently married and want to buy a home and have a family here it's still a pretty dim picture unless you have some family help or healthy savings for a good chunk down. We'd like to try and get into something in about 2 years in which time we'll be wiping out the last of our debt (school, credit cards, etc.) leaving only a vehicle so we'll see what the market is like at that time and asses staying or moving.

 

[1911]

yeah wake,
what can u do? california is beautiful and fun to live in despite all the hassles. other than people i dont really miss the east coast at all....2 years is a pretty good time frame to see how things shake out. my feeling is that if the stock market takes off again then boing...that is where all the money will start to go once again..

 

[gshan]

I've been disturbed by the thought that most of my friends will probably be forced to live outside hometown sf because the market is getting ridiculous with no end in sight.

Even if there is some sort of bust or recession as some say, it still won't make a damn difference cause the pricetag will only soar with continued demand. Same thing with gas. It might get $0.20 cheaper all of a sudden, but people forget it might have been a whole dollar cheaper just a few months ago.