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What it boils down to is still the job market. Almost all the professional couples I know who got into a home in the last few years locked in fixed rates, so higher rates won't affect them. However, since they are so stretched financially, they are living from paycheck to paycheck with little cushion saved up. Most of their savings from previous years went straight to the dp.
If one of them get laid off and can't find a comparable job within 3-4 months, these prime areas will really start to crumble. But as long as the job market is holding up, no worries so far.
OMG SP, they would have ridiculed anyone who dared throw that number out there last year.
Michelle Mangione knows. She and her husband, Jeff Haag, are living in a home in Fallbrook, Calif., that she bought from the owner about three years ago, just before it went into foreclosure. Having paid about $680,000, she estimates she saved about $200,000
ARE THEY ON CRACK? Have any of you been to Fallbrook? $680 is not a bargain there. You can get very good homes in prime N Co San Diego for that much.
I'm telling you, what I am seeing in NM is a preview of what is coming. Entire towns boarded up, $900/acre signs and flyers. This is an area that should have been insulated.
$900/acre signs
Condos in SF are still being sold for that much per square foot. :(
$900/acre, hmmm, sounds like my dream price.
I will be perfectly happy with $90K a flat acre in the western foothills. I just don't think the market will crash this much.
years locked in fixed rates, so higher rates won’t affect them.
There is a danger when the owners think this way. In the big picture, it's not the rate you are paying that matters, it's the rate a future buyer will pay that matters to the seller. I would much rather buy a house at a low price and extremely high rate than buy at a very expensive price with the guise that the rate is low and my payment is the same. Those realtors who actually tell people that should put in blocks in the town square and made a spectacle.
No, I doubt 900/acre in prime SF or SD but I haven't heard of land that cheap ever. This isn't crappy land either, these are ranches near Soccoro, and on the outskirts of Roswell which I think is going to be up and coming in the future. Even if I were wrong, how badly can you get hurt paying $900/acre? I might buy some just to play the resell with owner financing at 12% game.
I will be perfectly happy with $90K a flat acre in the western foothills. I just don’t think the market will crash this much.
I am perfectly happy with $90K a flat 1/4 acre in a safe neighborhood with utility hookups.
You know what kids do for fun? We talked to this young girl in a store who told us the main passtime apart from getting high is rabbit whacking.
A bunch of kids ride in a pickup truck with baseball bats, and one with a flashlight. When the see a rabbit the jump out, surround it, and whack it.
Well, if one is buying a home for occupation, and he can afford to ride it out, then rate fluctuations doesn't matter that much, because throughout 30 years, you will see rates going up and down. You are assuming that these buyers will have to move, what if they choose to stick it out in the BA?
It is hard to time your purchase. Of course buying from any time 2004-now is just dumb, but buying in 1999? 2001? Hard to say, because after all, housing is a consumption need. After all, there is always a premium of ownership to renting, just that the premium has gotten entirely out of whack in the last few years.
For those people who have enough cushion to ride it out after locking down a good rate, even though they didn't buy their home at the best possible price, it is still a viable decision. You can't hold out for the best possible price for everything in life, sometimes it is a compromise.
There's worse things than septic tanks but who wants to live on top or next to their own feces?
A bunch of kids ride in a pickup truck with baseball bats, and one with a flashlight. When the see a rabbit the jump out, surround it, and whack it
Yuck.
I am pro-hunting meat-eater. But killing rabbits with baseball bats is just too cruel. Are they at least going to eat the rabbit?
Normally in the long term you could ride out overpaying, but when you overpay by 200%, that is many years of hating life to enjoy that premium.
You can’t hold out for the best possible price for everything in life, sometimes it is a compromise.
Of course.
Normally in the long term you could ride out overpaying, but when you overpay by 200%, that is many years of hating life to enjoy that premium.
Human mind is a powerful entity. Homeowners will invent mind games to delude themselves into pure bliss.
There is also some realtwhore in the article who says “now is a good time to buyâ€. In Detroit, no less.
To be honest... buying in Detroit right now wouldn't suck, assuming you wanted to live there. The houses can be had for 20k.
I went to a Top 25 ranked high school in the East Coast. I’m simply shocked and appalled at what they consider to be schools here.
Yeah, California used to have good schools, but that was before Prop 13 gutted the tax support for them. Not very surprisingly, if you are not willing to invest money in something, it eventually falls apart.
I think California should have fully-taxed Casinos. Gambling can fund many things.
Back to the topic, a 750K run-down SFH with a decent lot (1/4 acre in the burb) is infinitely better than a brand new townhome. It is all about the land.
Condo is just the worst, the $400 monthly condo fee is not tax deductible, and shoots up faster than inflation.
Of course, the best is just $750K multi-acre dirt in a prime location with no structure on it. But the market may not value it this way, although I personally find much more comfort with dirt than any structure.
To be honest… buying in Detroit right now wouldn’t suck, assuming you wanted to live there. The houses can be had for 20k.
They must be making plenty of land out there...
Last week, I ran into a friend I worked with twenty years ago at a senior center. Lately, he's been working on emergency preparedness--helping Seattle retrofit its homes, businesses, and schools to withstand major earthquakes. Supported by the Federal Emergency Management Agency's $25-million Project Impact, my friend has been developing and promoting inexpensive solutions, and training homeowners, builders and contractors.
"What a great program," I said, "because sooner or later, the big one's going to hit!" Unfortunately, a few days after our conversation, President Bush targeted Project Impact to be eliminated -- to help him give $70 billion in tax cuts to the richest 1% of Americans.
Later that same day -- Wednesday -- a major earthquake hit Seattle. My cat fled, an instant before, and stayed hidden beneath the couch for the afternoon. I grabbed my swaying computer and pushed back sliding file drawers. Pictures fell off bookshelves, shattering their glass. But otherwise my family was completely unharmed. And the city as a whole emerged relatively unscathed. We saved priceless lives and untold dollars in part because this was a deep quake, less damaging than "the big one" still possible, but also because Seattle has been steadily retrofitting vulnerable buildings, bridges, and highways through public programs like Project Impact.
The earthquake -- and Bush's same-day proposed elimination of the very program that helped us prepare for it -- underscores the folly of believing Margaret Thatcher's pronouncement that "There is no such thing as society -- there are only individual families." Invest in our infrastructure, and it will stay mostly solid, even while the ground shakes, rattles, and rolls beneath it. Invest in all our children, and they'll grow up healthy and strong. Invest in our communities, and ordinary citizens will feel hopeful.
It's nice that President Bush sends Seattle his prayers. But hard commitment goes further than easy compassion, not only for "the big ones" still looming, but also for the largely invisible disasters that so many of our citizens face day after day.
There's worse things than septic tanks
You probably have to be Australian to appreciate why I'm :D :D.
Rabbit whacking with standard baseball bats sounds like a waste of energy. The kids need to drive enough 8" nails through the bat so that one hit = kill.
Ummm, for the horrified fluffy-bunny lovers out there, please be aware that where I live rabbits are a devastatingly destructive rural scourge. No mechanism for killing them is considered too extreme. (Well, we'd draw the line at nukes but we've certainly used WMD in the form of biological warfare against them [twice].)
the NM kids are doing a public service, give them some community service credit hours
Can they hunt down some deer too?
We need to make rabbit whacking and deer killing fun for all suburban kids.
Then maybe go after the rabid squirrels.
Malcolm Says:
> You know what kids do for fun? We talked to this
> young girl in a store who told us the main pastime
> apart from getting high is rabbit whacking.
> A bunch of kids ride in a pickup truck with baseball
> bats, and one with a flashlight. When the see a
> rabbit the jump out, surround it, and whack it.
The kids on Kauai get high and go “pig stickingâ€â€¦ A bunch of kids go out with dogs who find a pig then the kids run up with a big knife and “stick itâ€â€¦
Just another couple reasons why parents pay so much to live in the Bay Area and even more to send their kids to SF and Peninsula High Schools like UHS and CSUS (where there is a good chance that packs of kids don’t run around stoned killing small animals)…
There's nothing wrong with killing an environmentally destructive pest. It's far more useful than playing Grand Theft Auto.
Ms. Lisa Says:
> The story of how a Bad Appraiser makes a
> Good Appraiser look stupid:
It is really a story about how a Bad Appraiser will help a Realtor and Mortgage Broker get paid.
> Immediately suspicious when an appraiser is
> said to “know the areaâ€,
Come on, all appraisers “know the area†it’s not like they typically fly them in from India…
> Of course I showed this to the appraiser friend,
> who pulls out the comps that are on the exact
> same street, closer in square footage, and similar
> in condition. Those range from $775K to $790K.
Residential appraisal is a big joke today since they only look at “what comps sell for†so if three crack smoking idiots buy condos in your complex with neg am IO loans for $250K more than you paid the “value†of all the condos goes up by $250K (the actual appraisers are even a bigger joke since most will do anything to get some of the shrinking business)…
Ms. Lisa,
Sad, truly sad. The difference in commission would be what, 3 grand? Not that it's totally insignificant but you have to suspect that this "dog and pony show" is done more to create the impression in buyer's minds that there really ARE multiple bid situations=hot market! Thanks for sharing that revealing story.
We had a septic system for about 10 years. I had to replace a section of drain pipe (in January) and was not having any fun. However the total cost was about 50 bucks and I had the tank pumped out twice to the tune of $150 each time. So the total cost (after original system was installed) was about $3 a month.
However if you have septic, chances are you're on a well also. Those can be major dollars! In truth the costs for a well/septic sys. are about the same as city sewer/city water. (That's how they know they can keep raising the fees!) I'd have to say our well water was better tasting but by the end of summer you couldn't do a load of clothes, shower, cook and flush all at the same time. Again, a wash.
kurt,
Can we do that in an environmentally sensitive way?
(I don't want to eradicate all deer, or all rabbits, or all humans, just restore the environment to some sustainable balance?
The kids on Kauai get high and go “pig stickingâ€â€¦ A bunch of kids go out with dogs who find a pig then the kids run up with a big knife and “stick itâ€â€¦
I think that is a little different because that is somewhat of a tradition, and the pig is a feast. At least there everyone surfs. There is a lot of idleness but that is a cultural judgement. I actually love the Polynesian culture. Maui is a great place. NM on the other hand has no such culture, just for fun I asked this girl if she had ever ice skated, skiied snow or ice the answer being no to everything someone in CA would take for granted. Wabbit whackin' no that's a new one for me, maybe she thought I was deprived for not having ever done that.
SP -
Its rocky at best! A year ago everyone was praising AMD, but today AMD is going into restructuring (Layoffs, office closures). Already happened to HP, Seagate, Intel and spreading with the downturn. No! 2007 to 2008 will not be that bright. I expect earnings for Q1 to be lower.
astrid,
It's not that humans can't be more responsible. We certainly can! It's just that when you're at the top of the food chain you get to determine which species are "pesky".
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Now that the subprime storm is making landfall, we should forecast the damages it is about the cause.
In the Bay Area, what is considered subprime?
Is a brand-new, 750K townhouse susceptible to this first wave of credit contraction? How about a 700K, circa 1950 spec house?
Or is subprime more defined in terms of location? Which county should be worried? Will the gentrification of East Palo Alto and East San Jose continue?
Peter P