patrick.net

Call it Crazy,
I think that AF talked about house prices should be at 1974 levels.
If one carries the latest C/S points level back in time they hit around 1974.I carry the points back to ~1893.

Damn me,I've been talking about offering 10% of list.If one uses the 1893 point,then I'm one of the idiots that would overpay.LOL

Call it Crazy says

Heraclitusstudent says

Young people are not living with their parents because they like it.

They're living with their parents because:

They are carrying large student loans.

Their credit scores suck because they don't pay their bills on time.

They have no money saved for a down payment.

They have a crappy work and employment history which keeps them from getting approved for a mortgage.

They don't have the income to afford a mortgage

The current 6 months supply of houses or lack of inventory isn't the reason why they are living with mom....

The lack inventory also cause rents to be higher than normal.
They can't buy. They can't rent. Better stay in that high-school room.

Call it Crazy says

The only thing that made housing unaffordable are "payments".

Your presumption is it's all leverage but this is not that simple.

Free market works: given a supply of labor with stagnant wages that can build houses, and if there was no other restrictions, higher prices would just lead to more construction, at prices relatively aligned with labor wages. I.e. this would automatically realign prices with wages level.

This is in essence what happened in 2007 with the bust in the US: a lot of construction happened and prices fell.

This is not happening now. Housing went up faster than wages. This has to be because supply is constrained in some ways.

And this is consistent also with the fact that rents went up.

Heraclitusstudent says

If anything, it's tough to get a loan these days

I don't believe it is. 30 yrs ago you couldn't get a loan without 20% down. Today you can get FHA loans with 3.5% down. Loans get all sorts of subsidies, government guaranties, etc...

30 years ago, you could save up for 2.5 years and buy the house outright with dad's salary while mom stayed home and raised the kids.

3.5% down, get's you the opportunity to pay $400 a month for the priveledge.

So let's do the math.

The house is a shithole, 3/2 that costs $500k.

Since you can't afford the $100k downpayment, you must pay $400 a month PMI to put $20k down.

Now you have a $500k loan (instead of a $400k loan). You also pay $400 more, so it's actually the monthly payment of a $600k loan.

That's how 'easy' it is to get a loan.

donjumpsuit says

30 years ago, you could save up for 2.5 years and buy the house outright with dad's salary while mom stayed home and raised the kids.

Where was that??

tatupu70 says

donjumpsuit says

30 years ago, you could save up for 2.5 years and buy the house outright with dad's salary while mom stayed home and raised the kids.

Where was that??

Most of the US including Los Angeles suburbs like Burbank and Culver City.

I actually addressed this very issue on other real estate forums when people started denying what homes actually cost in LA in the mid to late 90's. Things like a house in West LA going for under $200K in 1997 and not being an exception. Houses in Burbank at $200-250k as recently as 2001. There are sales histories to back this up as well. So say an engineer made $90k a year at that time...not an uncommon salary in the El Segundo aerospace companies....it would be very easy for him to support a family on one income AND buy a house in the area, while of course living frugally. In fact, even the DP would not be out of reach due to the lower nominal cost. Likewise condos went in the low hundreds, not out of reach for people like postmen, teachers, etc.

It used to be very easy to search histories on Redfin by simply clicking on random homes in post war neighborhoods, but for some reason many of those histories are no longer there.

tatupu70 says

Where was that??

My parents bought their house in 1974 for $10k

My neighbor bought his house in 1970 for $25k.

He said he made $400 a week at the GM plant (not Tesla) in Fremont.

He said the government gave him an interest free loan (Veteran) for ~$18k.

donjumpsuit says

tatupu70 says

Where was that??

My parents bought their house in 1974 for $10k

My neighbor bought his house in 1970 for $25k.

He said he made $400 a week at the GM plant (not Tesla) in Fremont.

He said the government gave him an interest free loan (Veteran) for ~$18k.

I realize that's 40 years ago, but my neighbor was a union guy putting together cars.

My father was a mechanic, and my mom was a housewife.

I live in the bay area now. I make 92% more than all other Americans and I have no chance.

None at all.

donjumpsuit says

He said he made $400 a week at the GM plant (not Tesla) in Fremont.

He must have a bad memory. Everything I can find shows autoworkers making about $4/hour or $160/week in 1970. That's before OT obviously, but nowhere near $400.

http://www.detroityes.com/mb/showthread.php?14529-automotive-wage-history

donjumpsuit says

I realize that's 40 years ago, but my neighbor was a union guy putting together cars.

And it's also fiction.

Call it Crazy says

Prices have always been aligned with wages...

donjumpsuit says

He said he made $400 a week at the GM plant (not Tesla) in Fremont.

In 1974? I don't believe it. I've heard more like $250/week for 1975, so either he worked a lot of overtime or just doesn't remember correctly.

donjumpsuit says

30 years ago, you could save up for 2.5 years and buy the house outright with dad's salary while mom stayed home and raised the kids.

This original claim sounds very questionable to me. 2.5 years sounds very fast if we're really talking about savings.

Call it Crazy says

If you're buying with a mortgage, which is what the majority of people do, the price you pay is directly tied to what your income allows..

Assume for a minute you can produce new widgets at will for $250K.
Explain why financing and "what your income allows" can drive the price of an existing widget to $500K.

Financing is a necessary condition for prices being where they are. It is not a sufficient condition.

Call it Crazy says

Heraclitusstudent says

This is in essence what happened in 2007 with the bust in the US: a lot of construction happened and prices fell.

No, the bust happened because many people got mortgages and HELOCs that they couldn't afford

Yes and also because there was a slight bit of overbuilding around that time.
Some people who bought should never have bought and their houses should never have been built.

Heraclitusstudent says

Assume for a minute you can produce new widgets at will for $250K.

Because you can't produce them "at will". Sure--you can build a lot of houses. But you can't build them where people want to live.

Call it Crazy says

Heraclitusstudent says

Assume for a minute you can produce new widgets at will for $250K.


Explain why financing and "what your income allows" can drive the price of an existing widget to $500K.

Call it Crazy says

No, the bust happened because many people got mortgages and HELOCs that they couldn't afford and there was a lot of game playing by mortgage companies...

You haven't explained why financing alone can raise the price of a readily available commodity.

Heraclitusstudent says

geography is BS: as an example you can take a map of the SF peninsula and find lots of places that could be built and aren't.

It's not really BS. There may be some areas that are buildable, but people bid up prices on specific neighborhoods or cities because supply is limited.

tatupu70 says

Because you can't produce them "at will".

We could build them in large quantity.
Though obviously we aren't.

tatupu70 says

It's not really BS. There may be some areas that are buildable, but people bid up prices on specific neighborhoods or cities because supply is limited.

Other people would buy in more affordable neighborhood - if they were built at all.

Is it me or does the image (#4) highlights exaclty why you should be buying land in San Francisco, penninsula. It is literally, Ocean, seaside, mountain range, a teeny valley that is 3-7 miles wide and then the bay.

based on the image, I would buy in the south side of SFO, say San Bruno.

Compared that to say Fresno, Sacramento, Denver or even Dallas.

25% price drop from last; 45 percent drop from peak:

http://www.zillow.com/homedetails/26804-120th-Ave-SE-Kent-WA-98030/48829249_zpid/

Heraclitusstudent says

And yeah it's really precious to grow flowers in an area of ultra high real estate prices. We really MUST keep that. I wonder why Manhattan doesn't have it.

It's called Central Park.

tatupu70 says

It's called Central Park.

Central Park is a park not a farm.

Our beloved Ducky said: Nearly all the neighbors I knew growing up are still living there. They will not give up their quiet estate properties until they are pried from their cold dead hands. Literally.
LaMorInda (emphasis on MorInda) inventory is up over 50% year to year. Admittedly, coming off all time lows, but at least some folks are getting out while the gettin 's good.

EBGuy says

LaMorInda (emphasis on MorInda) inventory is up over 50% year to year.

To be fair, he may be talking about only The Bluffs, and not Moraga overall.

tatupu70 says

He must have a bad memory.

Guys,
He has a horrible memory. We have been over this before. He said he made $4k a month.
I believe the home price in 1970 and the VA loan.

donjumpsuit says

He has a horrible memory. We have been over this before. He said he made $4k a month.

I know we've been over this before which is why I'm surprised you used that example again. Why keep repeating something you know is incorrect?

Heraclitusstudent says

Second, the ecological (not geographical) argument is a pathetic thin veil hiding the most self-serving NIMBY mentality not to mention the ruthless willingness to extort new comers.

The desire of building of massive amount of homes in the bay, wetland, golf courses, hillside is an IMBY mentalality not to mention ruthless willigness to screw current residents who value the bay, parks, hills and wetlands.

That's BS. I showed we could build more if we wanted to, without destroying the environment or filling the bay, but we won't because of NIMBY mentality. NIMBY is the only reason we are not building more in the BA.

You are arguing for the sake of arguing and not adding more to what was already discussed.

SFace says

The desire of building of massive amount of homes in the bay, wetland, golf courses, hillside is an IMBY mentalality not to mention ruthless willigness to screw current residents who value the bay, parks, hills and wetlands.

Replicate the above for each location worldwide, in the face of a growing population, and what you are saying is essentially: "I have mine, screw the next generation".

I'll gladly take this:

over this:

btw, other pics of these towering buildings are interesting, too:
http://www.npr.org/blogs/krulwich/2013/04/08/176565424/the-big-squeeze-can-cities-save-the-earth

Well having Sawnee blood is not the same as being raised on the res and leaving, while maintaining a permanent residence. Do you have a DoIB card? I just love all those stories about grandma's high cheek bones. Real Indians laugh and laugh at those.

JH says

I'll gladly take this:

Well then move out of first tier global metropolis.
Or don't have kids.

They don't disagree with you; they just laugh at your ignorance about what a "real" ndn has to put up with. I include myself as one of those white people with native ancestry. I took all sorts of native american lit and history courses, attended pow wows and went to the Indian center once a week for years. I realized none of that comes close to giving me an understanding of what the lives of real, cultural and/or rez natives are like. That's all. Now, I'm going to go see if the house on Carey Drive closed yet.