The McCmansions are relatively cheap to build compared to the value of the soil in which they are being built. A 6,000 square foot lot where I live is selling for 300,000 grand- Do you know many professions including medicine that can afford a mortgage of 600,000 dollars if they have to purchase the investment without the help of mommy and daddy- which I suspect is how many of the flamers on this board "earned" the houses that they live.
So what we have is a large mass of the population that managed to trade up before the bubble or who have lived here for many years. The new flux of professionals can not afford to buy- without some creativity and will.
That's a cheap and unnecessary shot. Who the hell do you think you are, drawing unwarranted conclusions about how people here earned their living? I'd venture most of the successful posters here did it on their own; guilt ridden liberals are usually the ones who haven't earned their money.
I am sooooo glad I live in fly-over country when I hear figures like this.
I live in a 50's ranch neighborhood that has a new development going up across the street. The land alone (half acre lots) is going for $90,000. That is UNHEARD of in these parts.
Six years ago I bought a nice 3 bedroom ranch and 3/4 acre corner lot for $140,000.
Not exactly. The area where I live has undergone a few years of unprecedented property appreciation. Some 2500sf homes which sold for $70K 20 years ago are now selling for $450K. That's a house that's probably been paid off, so the sale price is pure profit (no tax if held for more than 2 years).
Combine that with the fact that the seller is probably someone in their late 40s to early 50s (their prime earning years) with a good income and has been investing for 15 or 20 years.
That makes a $700 to $800K house within reach of some who makes less than a doctor's income.
To whom? Apparently somebody could afford them.
and buying/speculating on houses N. of Ventura and the Grapevine for cash.
Good for them. Now the prices of their new houses will either go up or down. If they go up, that means the demand for them has gone up (i.e., people are buying them). If the prices go down, it means that housing is becoming more affordable.
Do you know many professions including medicine that can afford a mortgage of 600,000 dollars if they have to purchase the investment without the help of mommy and daddy-
That's calculable. A 600,000 mortgage at 5% for 30 years would have a mortgage payment of $3220.93 per month. The threshold for "affordable" housing is canonically given as a mortgage payment that is less than a third of your gross income. So the threshold in this case is $116,000 per year. Yes, there are a lot of professions where one could technically afford this mortgage.
which I suspect is how many of the flamers on this board "earned" the houses that they live.
If people have such resources available, then they can afford more, as far as the market is concerned. The market doesn't know or care who "earned" their houses, any more than it knows who "deserves" to make $116,000 per year.
Price of oil goes up, people scream.
Price of insurance goes up, people scream.
Price of electricity goes up. people scream.
Price of coffee goes up, people scream.
Price of medical care goes up, people scream.
Taxes go up, people scream.
Price of almost anything goes up, and people scream.
Yet real estate skyrockets, and people just shrug.