Has the bubble burst?

News and Review ^ | Sep 21 06 | Sasha Abramsky

[RockinRight]

Where do you live?

[RockinRight]

You know what though? In Sacramento, that is about the cheapest one could buy a home. A house in the ghetto is $255k.

Hence my "so MOVE out of CA" comment earlier.

[goldstategop]

We're talking about a middle class home in a decent neighborhood - not a dump in South Central or a stick in the middle of a nowhere. And yeah, a home costs more in California that most people will make in a lifetime.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus

[jetson]

Who are some of these people who on this site? Yes I think alot of people have been manipulated by Realtors and lending institutions in Calif. It used to be where your financial situation had to fit a cetain formula to qualify for a loan. Between sleazy Realtors and money hungry lenders they are handing loans out to anybody. Realtors suck alot of Mexicans into these home loans as well as wannabee get rich quick types telling them they will clean up. A Mexican bought a 1400 sq ft house across from me with a $ 4,500.00 interest only loan payment a month. He makes $ 48,000.00 dollars a year. How the hell does one qualify for a loan like that without some sleazy s**t going on. He told me he is in deep doo doo as housing prices drop. I don't see how these lenders are letting people walk out their doors after making loans like that. Ultimately the lenders eat it as foreclosures take place.

[Toddsterpatriot]

Gold, to infinity and beyond!!

[Toddsterpatriot]

Prime Rate - the Fed-set rate we all know and love.

The Fed sets the Fed Funds Rate, banks set the Prime Rate.

[goldstategop]

You can rent. If that's all you can afford, pay to stay in someone else's place. Just remember you're making them rich and never building up equity and true wealth. When you turn 62, if you own a home, you can use the built up equity to give you enough to live on til you die. If you rent, better have retirement money socked away or count on what Social Security gives you. A home can be the difference between enjoying life or just getting by. There may be circumstances where it makes sense to rent. For most Americans though, home ownership is the key to a better life for themselves and their families.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus

[dinodino]

They could drive cheap used cars and dispense with the car payments. The people in the article chose to be broke.

[goldstategop]

The median income for one person in California is $40,000. A couple will have $80,000 so they can barely afford that half million dollar dream home. But if interest rates rise or one of the wage earners loses their job or becomes too sick to work, that spells trouble. Most of us are one step away from bankruptcy in that kind of situation.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus

[RockinRight]

Couple examples of real estate in different parts of the country. Same typical 1200 - 1500 square foot, 3 bedroom ranch (one story) home:

Copley, Ohio, near Akron, for $139,900

East Palo Alto, CA for a whopping $605,000 for this piece of crap...

Fairfax, VA, for $449,000

Plano, TX, Dallas Suburb, for $90,900

And finally...for $275,000 in Scottsdale, AZ (Phoenix Suburb)

[RockinRight]

See post 250.

[Theo]

The man in trouble is an idiot. An ARM when rates were so low? Idiot. He's failed his family.

[GodGunsGuts]

It's only a matter of time before this is an almost daily occurrence again...but at a much faster rate of appreciations. The gold bull has made fools out of your crowd for the last five years, and it will continue to make fools out of you in the years to come. So by all means, keep putting your foot in it.


http://www.kitco.com/images/live/gold.gif

[RockinRight]

The taxes on them. I'm just making the point on how the IRS is an enemy within our borders...a consumption tax would avoid this issue entirely. However, this isn't the thread for that.

[RockinRight]

Even a dump in South Central is a quarter million...

[RockinRight]

Technically right, but prime follows the Fed Funds Rate.

[RockinRight]

They might well owe more than the cars are worth...or since they're strapped, have no cash to buy a clunker with if they could sell the other cars.

[VegasCowboy]

Thirty years ago CEOs of top corporations earned about 40 times the salary of their low level employees. Now they earn 400 to 1,000 times as much. Somehow I don't think their abilities are ten times what they were 30 years ago.

Most of the increase is a change in the way execs are paid (i.e., stock-based compensation). Executives are given ownership in their companies so their comp is tied to the company's performance. I really don't understand how this impacts the middle class negatively.

[goldstategop]

If they were going to stay there the rest of the lives go fixed rate! An ARM is appropriate if you figure on moving every five to seven years like a lot of people do. Then it makes no sense to pay down to the principal on a place you'll never live in long enough to enjoy it.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus

[Theo]

That is a very good point.