patrick.net

Typical Bay Area income is 200K …. I believe this people can afford a house

And typical person make 160K huff bong so much typical person think average wage in BA 200K. Typical person be so very wrong not funny.

Face Reality,

Ok, so your plumber and contractor are pulling in some big bucks --good for them. You must move in very exclusive circles. And??

The point I (and many others) have repeatedly tried to make is, (a) $100K is well above average --even for the Bay area and (b) if you "can't" make it on that, you're priorities are seriously screwed up.

For the record, I am 100% supporting a wife, with baby on the way, for slightly LESS than $100K (*gasp*), though I have excellent healthcare benefits at my current job.

@Need 2 Leave CA,

Thanks for the props!

Housing is the main source of financial stress in the Bay Area.

Housing the the main source of slef-inflicted financial stress in the Bay Area. Housing in the Bay Area is rather affordable unless one tries to chase it as an asset when it is extremely overvalued.

The thing to remeber too is that 5 years ago (at least in Sac) you could buy a house on the median income. Now you can’t. You will never convince me that is normal or ok.

You can still "buy" the highly creative payment structure of a house on the median income. ;)

I tried to post the links, but got put in moderation.

SQT, I checked for any greyed out comments from you (the "awaiting moderation" link never works for me) but didn't find any. What was the timestamp on your post?

Housing in the Bay Area is rather affordable unless one tries to chase it as an asset when it is extremely overvalued.

Exactly --why "buy" when you can rent the same house for 50-60% less and bank/invest the difference. Again, that irritating common sense driving my decision making. Life would be SOO much easier if I could just drink the condoflip Koolaid and join the lemmings. What the hell's wrong with me??

My plumber certainly makes more than $100K (and so does the contractor who painted the outside of my house, but the way).

Yes but self-employment = no benefits. After you factor-in health-care and insurance the net is qute a bit less. Also, business is highly cyclical. If they are not making at least this much during the height of this bubble I would feel sorry for them. :)

I didn’t make comments until recently. I hope mine have some value.

Need 2 Leave CA, of course your comments have value. :)

Life would be SOO much easier if I could just drink the condoflip Koolaid and join the lemmings. What the hell’s wrong with me??

That koolaid is probably laced with arsenic.

I don’t know, do plumbers fall into this category?

I don't know either... perhaps those new construction $hitboxes have crappy toilets that clog all the time. This would be a New Economy for the plumbers. :)

Need 2 Leave,

Thanks --this will be our first. Don't care if it's a boy or girl as long as long as it doesn't turn out to be (in Surfer-X parlance) "spawn of Satan". I am determined NOT to raise an uber-materialistic, self-absorbed, consumption-gorged mall rat if it kills me.

I think many housing bulls are underestimating the speculative nature of the boom because:

1) they somehow do not know many speculators
2) they do not want to admit any facts that would suggest a severe housing correction

(not accusing anyone)

Or the Koolaid could also be laced with Potassium Cyanide, like the Jim Jones Guyana temple many years ago.

Better yet, the koolaid contains fugu (puffer fish) prepared by an unlicensed chef. The poison in this fish is 1250 times more potent than cyanide. ;)

If you can survive over-enthusiastic grandparents who buy everything in sight, then you’ll stand a chance.

The grandparents aren't what worry me, SQT --it's Uncle Bull$hitter!! :lol:

Then half of Mexico, India, China, and every other friggin’ third-worlder moved and have have been busily doing their best to remodel the place like their own beloved home, I have literally, not figuratively, woken up, opened my door, and been greeted by a Chinese mother and her 9 year old son, son with pants around ankles taking a nice piss right in front of my place.

I think it has more to do with class than race. I guess this is one major problem in Californian apartment living. Apartment renters as a group is not a particularly "classy" one. It may help if you live in a "Yuppie" building, but you will have to deal with another type of attitude.

Hmmm... $120K for a Gen-Xer (who lacked the educational grants, easy money, cheap housing & other Boomer perks) sounds pretty good compared to most Americans:

http://money.cnn.com/2005/12/16/pf/savings_study/
Almost 60 percent of American adults do not have an individual retirement account or own any investment product such as stocks or bonds, according to a study published Friday.

Have you tried to figure out how much it would cost you to send the kids to college?

College can be "self-financed". ;) There are many scholarships and jobs available for students. However, do not expect to be able to graduate in 4 years.

How about retirement (especially if you don’t even own a house)?

In the long run we are all dead. :)

Retirement depends more on rate-of-return than contribution. Investment is the key. Saving alone is not enough especially if you anticipate high level of inflation.

Homeownership, at this point in time, turns you into a survivalist.

Only if you do survive. :)

Well, you have to admit that it’s hard to catch this asset when it’s not “overvalued”. When was the last time it was “rather affordable”?

It was affordable back in 1999-2000, even during the height of the tech bubble. I remember the equivalent cap-rates of condos were much better than long term bond yield.

owner is in the RE biz, rents out room for literal same price as a commercial apt complex. these people are high if they think they will get these prices.

Need-based pricing.

There’s nothing special about my plumber and contractor. Try asking the ones you use one day how much they make. You might be surprised.

I have a friend who used to do some contracting work. He said it is not as lucrative as it looks. He is not doing that any more because it does not worth it.

Those that understand interest, earn it. THose that don’t, pay it.

This says it all.

Those that understand interest, earn it. Those that don’t, pay it. That sums up our homedebtor sheeple.

Well said. This should be tattooed on the forehead of every sub-prime homedebtor who ends up turning in the keys to the bank (or REIT, Mutual fund, Chinese bank, whatever).

What??? You must be kidding. The housing market here was absolutely nuts at the height of the tech bubble. You had to bake a cake and grovel on the ground for a seller to even spit in your direction. People were bidding up prices like crazy. Yes, prices are even higher now, but they were very high back then as well.

Not really. Condos that could be rented for $2000 a month were usually under $450k. That translates to a P/E of less than 20. Not cheap. But acceptable.

Not really. Condos that could be rented for $2000 a month were usually under $450k. That translates to a P/E of less than 20. Not cheap. But acceptable.

Condos that can be rented for $2000 a month nowadays are usually above $750k.

Yes, prices are even higher now, but they were very high back then as well.

Not even close, Face. The median CA home price back in 1999 was $217,510, or roughly 4-5X median household incomes. In October 2005 (latest figures) it's $538,770, or more than 11X median incomes.

CAR historic stats 1968-2004:
http://www.realestateabc.com/graphs/calmedian.htm

CAR stats today:
http://www.car.org/index.php?id=MzE3ODY=

Look at the hospital situation and you will really see where this is a big problem on people that are not here legally. They all go to the emergency room for a routine cold. Many hospitals have closed emergency rooms because of this.

The society has become too tolerant on illegal immigration. For instance, anyone who knowingly hires illegal aliens should face jail time.

Interest is your companion every moment of every day. It never goes on vacation. It never gets sick. It works 24 hrs a day, 7 days a week, year in and year out. It will choke out those can can not get out from under its indebtedness.

Make sure you look at real interest (net interest after inflation) though.

Wow can't keep up w/this blog especially working 14 hrs/day so I can get it all back in one lump sum known as holiday shutdown...LOL working all this overtime is like a forced savings of vacation time...sort of like traditional POV of home mortgage payment. LOL how's that for housing tie in.

Anyways I glimpsed, w/out reading much at all, that HARM's pregnant...CONGRATULATIONS on the expectation of your mini-bubblehead!

I don't mind discussing race as long as there's a point with evidence to back it up, but I really don't want this thread to go off on yet another racial tangent. Look back on how unhelpful/unwelcome the Hun/Nazi thing was.

Let's just say that California (and the rest of the country) has a piss-poor immigration system. This system isn't likely to change soon for a variety of reasons (mostly entrenched economic interests) and that this is contributing to many of this state's ills and school/hospital overcrowding. Aside from that, who cares what race you are if you're willing to assimilate, respect this country's laws and become an American citizen?

Illegal immigrants are literally everywhere you go. they are out in the open doing gardening. they work at major fast food chains.

They are building Walmarts....

Oh, and BTW, "respect this country’s laws" automatically excludes illegal aliens.

Thanks, SJ Jim --I'll pass that along to Mrs. HARM :-)

I certainly thought prices were going to go down much more when the gold rush ended.

Ask Greenspam.

I don’t think this should affect your calculation of the affordability of buying a home.

I thought we were talking about housing as an asset. ;)

BA RE was somewhat expensive at height of dotcom, yes, due to stock options, etc....
And on top of it, interest rates were higher, decreasing affordability.
Rents were also nasty...which skewed the rent/buy ratio a bit.

All in all, it's difficult to compare. But it is certainly fact that 2000-2002/3 saw phenomenal RE appreciation...and 2003-05 saw insane RE appreciation. However the (primarily) falling interest rate environment served to cushion the affordability drop...and falling rents helped exagerate the buy/rent ratio. Glad that's all cleared up now. ;)

Sorry, Face, but I don't have 1999 BA housing stats on tap at the moment. (Anyone, anyone...?)

Nonetheless, the $62/71K median household/family incomes (http://www.bayareacensus.ca.gov/bayarea.htm) from 1999 lead me to guess that the BA price:incomes ratio in the BA was roughly in line with the rest of the state: 4-5X.

The 12% is what the stock market has returned going back about 70 to 100 years. That is compounded, including the times that it has gone up and down. That is why it is for long term investments.

The fallacy: there are not many 70-100 year old stocks. Hence one would have had to actively manage their portfolio to obtain such a return...which means market timing plays a role in that return.

Not knocking the stock market...just puting some perspective (from someone who got a bit dot.bombed way back when :) )

OH MY GOD:

Average NY salary: $45K.
Average NY transit worker bus driver salary: $61K.

On the count of three now:
1...2...3: "WTF!"