Hey, I hope for a crash, I know interest only is insane. That way I can feel that I'm not getting ripped off on buying a new house.
I still doubt there will be a crash, I do anticipate the market leveling off where we don't have people overbidding by $50k and where a 2 bedroom condo is not going for $500k.
I dunno - he had to move due to a job change. He managed to ride it out past the worst of it, but still lost quite a bit.
That's the problem - if you can risde it out long term, you'll likely come out ahead. But in the mean time, your house owns you instead of vice-versa.
Wondering that myself... $350K in the early 90's in Los Angeles? Should be close to a million by now.
I don't know if it is the mortgage prices alone on houses that are going to kill everyone, it is the mortgage plus the credit card debt and car loan debt they continue to run up while still buying these expensive houses that will be the cause of the flattening/crash. The trend of people getting deeper into credit card debt worries me as much as the rising home prices. What does it say about your financial status if you must charge everything in order to make the mortgage payment?
That's a such a hindsighted thinking. If it crashes that means jobs are leaving California.. at that point, count your blessings that your job isn't one of them that are leaving California.
Vic
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- Jun 12, 2001
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Because interest rates have been mostly stable since 2002 while home values have gone up far faster than the rate of inflation or wage increases. The end result is that families grossing $4k/mo. (which is Sac average btw) cannot afford $3k/mo. house payments (which is a house payment on a $400k house with little down). It's that simple. Those people who have already bought in, own homes, and have equity, will be able to continue swapping homes with their neighbors at increasing prices, but first-time homebuyers will eventually be priced out at this rate, no matter how many stated income interest-only 40 year loans lenders invent. When that happens, especially if it coincides with a jump in interest rates, the inflated CA housing market will crash.
edit: couple other things.
- The last time the CA housing market crashed was just 13-14 years ago. A sudden loss of defense jobs caused a hot housing market to cool roughly 25% in 2 years.
- There are 2 key rules to any equity market. The first is that "If equities always go up, no one makes any money," which basically means that you cannot buy low and sell high if prices are always high. The second is that as soon as people start saying "There is no top to this market" is right when the bottom drops out.
Whatever goes up must come down?
It's kind of good for us ... we want to move to a bigger house in the same city, but the way the prices are right now, it's like a reverse bell curve, where the prices are highest for the smallest and largest homes (meaning that a small house would probably sell for 10% more than it should, and same thing with the large houses)
We live in a modestly sized house ...
And 2400sqft for $1.4million is just way too much
It's kind of good for us ... we want to move to a bigger house in the same city, but the way the prices are right now, it's like a reverse bell curve, where the prices are highest for the smallest and largest homes (meaning that a small house would probably sell for 10% more than it should, and same thing with the large houses)
We live in a modestly sized house ...
And 2400sqft for $1.4million is just way too much
The market here isn't too bad. Prices are just a little inflated.
I know a lot of people who are moving OUT of the state cuz of the price, but also know many younger people moving INTO the state and chances are they will start families, etc. etc. so I think it's pretty balanced right now.
I know a lot of people who are moving OUT of the state cuz of the price, but also know many younger people moving INTO the state and chances are they will start families, etc. etc. so I think it's pretty balanced right now.
I just puked in my mouth.
At least in Chicago you can still get a house like that for $350,00-500,000
There's been some discussion about this on fatwallet here: Text
There's also something fairly recent here.
Housing markets "can" crash, it's not like they're invincible. Just look at what happened in Japan. I don't think there will be a big crash, but people with overextended credit are going to be hurting with rising interest rates.
There's also something fairly recent here.
Housing markets "can" crash, it's not like they're invincible. Just look at what happened in Japan. I don't think there will be a big crash, but people with overextended credit are going to be hurting with rising interest rates.
Vic
Elite Member
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Huh? My mother-in-law's in Loomis, which she bought in '97 for $120k, is worth almost $500k today. 1600 sq ft of 3 bed 2 bath '70s ranch on a 1/4-acre lot. That's an appreciation rate of almost 40% per year, roughly 16 times the rate of inflation.
That's not "a little inflated", that's scorching hot.
It's one of the very few things I think the government should stick their nose into, these no principle, variable rate loans are a severe threat to the financial markets.
I had no idea 61% of the loans in cali were these stupid things.
her209
No Lifer
- Oct 11, 2000
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Its the only way Joe Blow can make the payments.Originally posted by: rahvin
It's one of the very few things I think the government should stick their nose into, these no principle, variable rate loans are a severe threat to the financial markets.
May 22, 2005
AP - The overnight California housing market crash has been traced back to a question posted to an online tech forum just two days ago...
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