How ridiculous are home prices in Southern Cal??? LOOK

[MistriBuck]

Unlike New York were the prices are also crazy, jobs in san diego do not pay that much.

i meant to make that point, if you answer phones in columbus and make $9 an hour you'll probably make $10 an hour out here.........i think the major difference is the entreprenurial(?) opportunity out here, and the opportunities in general........there are just more opportunities to make good money because there is so much business, but standard jobs do not pay more........for example general contractors, dry-wall contractors, etc. can all make great money because of all the new homes being built

as far as how we got from compton to San Diego, i'm somewhat familiar with San Diego, and i just put the Compton house up because it is known as the quintessential ghetto

 

[MililaniBuckeye]

MyDixieWreck, MistriBuck: Housing prices in Hawaii are extremely cyclic. In the mid/late '80s, houses about doubled in price, only to have about 20-30% deflation in the early '90s as people dumped them to make money. Prices rose again in the mid-'90s just prior to Hong Kong being returned to China (shit load of Chinese here), although not by much, and then tapered off again in the late '90s as hundreds of new homes flooded the market. I literally got my house at the bottom of the price cycle. I'm looking at my house being worth near $500,000 in 2-3 years, which would mean my house doubled in 7-8 years.

 

[stxbuck]

Fuck all that. I'm glad to be living in Kettering, Ohio, Red State USA. I'm sorry, but I fail to see the allure of living in a place where the house in that picture cost $315,000, as opposed to living in a perfectly normal metropolitan area where said house would go for $120,000-if the inside was nice enough and the 2 car garage was for real. Smog, gangbangers, traffic, a Democrat controlled state legislature- I'll stay here in dayton and be glad-I like a change of seasons anyway.

 

[scooter1369]

haha, that shack is probably about right in Monterey

Mili, that is pretty consistent with where I live in Temecula, something like that would be close in price, slightly cheaper..........in this area prices have literally tripled in the last 5-7 years, when i moved out here 5 years ago, i could have (and should have) bought a house for around $150K, now those same houses are going for $350-$400K..........there are no signs of it slowing down, with the constant influx and those selling their more expensive homes to move out to the cheaper areas and continually driving prices up

Dude, you're in Temecula. That is pretty much the middle of nowhere. At least it was 10 years ago. When I lived in Fallbrook, Escondido was "going into town". Pretty sad huh? Oceanside is a shithole, just like Jacksonville, NC. Or any city next to a Marine Corps base. San Clemente was nicer, but still not ideal, with the "tits of the world" nuclear reactor right there on the beach.

 

[MistriBuck]

bro has it been 10 years since you been out here? you would shit your pants if you saw temecula, between temecula and murrieta there are over 150K people, and you wouldn't believe the homes that are out here now...........everybody has brought their money from SD and Orange Cty. out here.............it's grown so much out here, houses out in Wildomar, Menifee, Elsinore, even Hemet are in the $300-$400K range on average...........it did use to be considered middle of nowhere, but not anymore, not to mention it really very beautiful out here, i take it for granted with the rolling foothills and wineries, etc..........i'm talking like way out in the desert when i say that

that's definitely awesome equity on that house Mili, i'm no real estate market expert, but i can't imagine it really depreciating much out here because of the constant influx, maybe plateuing, but i don't know about depreciation..........although i could be wrong?! i'm just speculating

 

[DEBuckeye]

It never ceases to amaze me what houses sell for in California. Somebody told me once that they knew of people out there (in major cities- LA, etc) making $35-40,000 per year that were basically homeless. That's f-ed up.

Here in Delaware, not exactly the hotbed of activity, we've been seeing major growth and lots of new construction. The area I live in has become pretty desireable, and the houses are selling at pretty good prices. I bought my house 3 1/2 years ago (about 2000 sq/ft, 4 bdrm, 2 1/2 bath, 2 car gar, basement, pretty big yard) and I could sell it now for almost 30% more than I paid.

I'm giving some serious thought to moving to Columbus soon, and I'm hoping that I can turn this inflated housing market into a pretty nice place in a more reasonably priced market.

 

[BrutusBobcat]

Yeah, I used to live in San Diego and then later on in Newport Beach. People there must be leveraged out of their minds to get into houses. At one point, I was making $12k a MONTH and still couldn't afford to buy anything in a "decent" neighborhood. Where those people get the money to pay their mortgages is beyond me. It's not as if the rest of the cost of living out there is cheap, either. Prices on everything from gas to groceries is higher, not to mention taxes.

Turn around and come back to Ohio, and my dad bought 100 acres in Athens County for $250k, with a very nice brick house (circa 1948, around 1400sf), 2 gar garage and a pair of barns. I don't care how much the Cali types babble about how beautiful their postage stamp sized house by the beach is, when you have 100 rolling, wooded acres to roam around on, you have more value. Heck, if you need some warm weather, take a vacation. :p

 

[MyDixieWrecked]

There was a great thread on the bucknuts open board about a year ago started by NewYorkBuck, that convinced me to do some research on real estate. I was consider buying a place, but it just didn’t make sense to take on a mortgage that was two to three times what my rent was.

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My conclusion is that in areas like <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" /><st1:State w:st="on">California</st1:State>, <st1:State w:st="on"><ST1:pNew York </ST1:p</st1:State>and DC are always going to have housing prices out of wack, sometimes as much as ten times a person’s pre-tax income. So you can’t really compare different areas.

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More importantly, individual decisions to buy are based on their short term ability to make their payments. Buyers are asking what will my initial monthly payments be and what is the maximum I can afford each month. Everyone is aware the interest rates are historically low and anyone that has purchased recently is aware of ARMs and interest only morgages. At worst this is going to be a receipt for disaster, but most likely it is going to drastically hurt the appreciating many buyers are counting on as rates increase back to historical averages. On top of that every Joe Sixpack has as financial plan to buy houses and renting them out, thus pushing the demand curve outward and increasing the price.

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Think about what is going to happen when these 5 year ARMs start to run out for these buyers that use every free cent just to pay their interest only mortgage. For example I have a good friend that just purchased a 1 bedroom condo inside the beltway for over $350K she has a 5 year interest only ARM and pays about $1400 a month (half her take home). Let’s say in 5 years interest rates will be up 4%, she will be paying an additional $800 more a month, which will be 78.5% of her take home. And she will still just be paying the interest on her condo. The only equity she will have is the appreciation on her condo if there is any.

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Because many will see their mortgage payments drastically increase (if interest rates see an increase to historical averages) some will have to sell, thus pushing the supply curve outward, decreasing the price. In addition because interest rates are going to be higher potential buyers will not be able to afford these ridiculously high prices so to sell you will have to lower your price.

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Real Estate is very local and individual, but for me I am waiting to buy, I am afraid a lot of people will find themselves in trouble if they are planning on getting appreciation and we may even see depreciation. I plan on position myself to gain from their loss.

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