Posted on 02/27/2008 1:04:29 PM PST by slackattack19
In some regions of California, we’d have to see housing prices decline by 50% to reach a level of 2.8X household gross incomes.
I agree with your BS flag. Too many people simply haven’t crunched the numbers and they’re deluding themselves here. The housing run-up was fueled by rampant speculation and easy credit, and the easy credit is going away. It won’t be coming back.
It would need to drop much more than that just to get back to a normal growth amount, all the speculation and bad paper added fake value!
That statement had liberal arts degree written all over it. :^)
“”” PS - what are historical norms?
1. 100 x monthly rent = cost of the house
2. 2.5-3.0 x yearly gross income = cost of the house
3. 40% (MAX) monthly take home pay should equal cost of monthly carrying costs of the house (PI, taxes, utilities, upkeep)”””
It’s never the price you pay, its the deal you make. You have to factor in the carrying cost. A 5% loan on 500k for the homeowner is pretty much the same as 10% loan on 250K.
Prices have not gone crazy if the homeowner is looking to how much do I pay per month? IMHO
I am not an optimist on the economy or housing market But the potential disaster of huge price drops seem a little overstated to me.
That was the rule of thumb for lenders for many, many years, and if they had followed it, this bubble would never had happened. Actually a 2.7 with a twenty year mortgage will save a buyer tons of money.
***House inventory is the same situation as a car lot. I quit reading there.***
Yep, you can’t call in a massive truck and have all the unsold houses hauled to a used-house lot.
Way to think things through, Sherlock. Sue everyone and make it go away, Mommy.
This guy’s a card carrying moron. -mks
NEVER BEEN CHEAPER? Who does he think he's kidding? Housing has NEVER been less affordable. Not only are houses still too high, but far less people can qualify for a loan today.
Ignoramus. He defines the term.
In Mira Mesa and Chula Vista in San Diego county, we're seeing multiple offers on many properties.
Sales are down in Calif on average, but the body seems to be twitching a little.
#1 seems very much more conservative when compared to #2 and #3.
Really, really, silly. You can get the house they had for that mortgage for a very reasonable amt in most places in the country. You are either very ignorant or purposefully ignoring the difference in the size of homes and amenities from then and now.
Big problems. 1) Never heard of a place that you could rent for 2,400 per month that would sell for only 300,000. 2) You don’t consider tax benefits.
Maybe the author needs to see this:
http://www.housingtracker.net/affordability/?sort=price-income&;
A hint at where we are going is in the above.
And if you think some markets are “local”, there are interesting trends here:
http://seekingalpha.com/article/66215-case-shiller-steepest-price-decline-on-record?source=d_email
Discussion of price without considering size and other factors is idiotic
Hmmm Seldom? myself and many local friends must be extremely lucky or just dang good at rental evaluation.
We don't buy a rental unless it is a moneymaker from the gitgo.
The only time we even consider "break-even" properties is if they happen to be located in areas set for large growth.
The key to rental property investing is "buying right", not "buying fast" or "buying many" like these Real estate get-rich hucksters try to sell you on.
Mr. SHARK
You can live in the Land of OZ, but do the math, we are in a housing crisis!!!!
Mason Dixon
PS We haven’t even got to the Baby Boomers housing bubble
yet!!!!!
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