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The Galindo Mystery


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2007 Mar 8, 9:14am   21,714 views  221 comments

by HARM   ➕follow (0)   💰tip   ignore  

Most of the posts here tend to pretty much revolve around posting housing/economic news stats, debunking REIC propaganda, ranting about the NAR/Fed, sharing stories, parodying ignorant FBs, etc. This time, I have a genuine mystery for you to help solve.

A recent San Francisco Chronicle article, "ECONOMIC DEEP FREEZE
January cold spell inflicts hardship on the state's citrus workers" contained the following excerpt:

Ruben Galindo, 44, Castanon's neighbor and a LoBue worker for 15 years, said, "Whatever little savings that we have, we are just not spending any. We are saving our pennies and nickels just to get us through the year.''

Galindo, with a wife and three kids, also has a mortgage and thinks he can handle two months of unemployment, but no more than that. He bought his house in Lindsay in 1995 and has thought about moving to El Paso, Texas, where housing costs are lower.

"But when prices of homes here go down, I won't be able to sell,'' Galindo said. "And they're already starting to come down.''

Ok, now here are the facts:

  • Galindo bought his house in 1995, so that's 12 years of (presumably continuous) mortgage payments, at a much, much lower cost-basis than today
  • Galindo was a LoBue worker for (again, presumably continuous) 15 years

    • Yet...

  • Galindo has very little savings, in fact no more than two month's worth
  • Galindo cannot afford to sell if/when house prices here come down

    • I really need your help here, because I just can't seem to reconcile the first two statements with the last two. From 1995 to 2007, house prices throughout virtually every part of California have at least tripled. So, even assuming Mr. Galindo took out an interest-only loan back in 1995 (not likely, as they were very rare back then), he must have at least 66.67% equity in his home by now, right? And if he has been more-or-less continuously employed since 1992 (with a very, very low housing cost basis), then how could he have almost zero savings? Even with the wife + 3 kids and assuming his job is of the low-skill/low-pay fruit-picking variety, and that his wife never works, this all seems somewhat hard to understand.

    Has Mr. Galindo cash-out refinanced his house each year since 1995 and used the money to take his family on annual round-the-world luxury cruises? Has his family dined exclusively on Chateaubriand, Maine lobster, pâté de foie gras, Italian black truffles, Kobe beef and Dom Perignon for the last 12 years? Is he single-handedly putting "Kitty", "Amber" and "Bambi" at the local gentleman's club through college?

    Unfortunately, this mystery is beyond my limited amateur-sleuth abilities to solve. Please help me out here.
    Thanks,
    HARM

    #housing

    « First        Comments 220 - 221 of 221        Search these comments

    220   Peter P   2007 Mar 12, 2:33am  

    Unless the statement is “I am part of an original crowd.”

    That is an such a non-statement. :)

    221   Malcolm   2007 Mar 12, 11:54pm  

    'Too many people are driving Lexus for it to be a “statement”. '

    A Prius makes a more noticeable statement than a Lexus.
    People driving around in overpriced American luxury SUVs like Hummers, and Yukons now look like utter morons. Especially when you know that they used a HELOC to buy it. Ha ha ha ha ha.

    « First        Comments 220 - 221 of 221        Search these comments

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