Posted on 09/25/2006 8:41:42 AM PDT by GodGunsGuts
But they aren't-
Average household income in LA is $35000. Average house is $470,000. It just doesn't add up.
Historically, that has been true, but in the last 10 years or so it has fallen out of balance.
You still pay much more in total taxes and home cost than Texans do.
How about this math:
House bought in San Diego in 1996 - $145,000
Winter Coat - $0
Gas Bill - $0
Snow Shovel - $0
Proposition 13 property tax protection - $priceless
House in Cali - $145,000
If you buy in California at the bottom of the real estate cycle, you will profit. If you buy now at the peak, you will be sorry. I bought at the bottom when people told me not to buy. (the Cold War is over, San Diego will lose its Navy bases etc etc etc... housing will collapse . . .)
It will never drop that low in Cali.
I should say "drop that low this time."
Depends where you buy in California. Certainly you won't find that price in San Diego, but check out Imperial County or the High Desert Counties near Baker or Victorville. I wouldn't live there because it is hot and dry like Claude, Taxus (where my RV got a flat tire one year. I ran into a local Taxan homeowner in the public library complaining out loud to the librarian about his property taxes going up)- but the property taxes are fixed unlike Taxus.
It all depends if you wait for the real estate cycle to hit bottom - my guess is that California prices will go down in 2007 or 2008.
You might want to read the following for the bigger picture. I think what we are experiencing is a massive credit bubble. Real estate is just one of the major symptoms. The following requires some attention and focus to get through it, but I think you will find that it was well worth your time once you're finished. If you do choose to read it, I'd appreciate your comments--GGG:
http://www.findarticles.com/p/articles/mi_m2633/is_3_18/ai_n6276704
Well, I'm not planning to move to Cali.
Besides, in my line of work, if prices drop that low, I probably won't have a job. Not in Cali anyway. And if I do, my income will drop proportionately...
The author of that piece, Doug Noland, operates the Prudent Bear fund. He's a goldbug of the highest caliber, and operates a financial services business entirely predicated on convincing you how bad things are.
As the saying goes, he's predicted 10 of the last zero great depressions.
Well put.
It's easy to see why GarrulousGoldGroupie would want to conceal that fact.
How do they qualify for mortgages then?
He is quite open about his bear posture. Still, I think FReepers are perfectly capable of reading different perspectives and deciding for themselves. Stating that Noland works for PBF by no means invalidates his argument. It's something to keep in mind while reading the article, and to help guide one's search for alternative/competing perspectives.
No Income Verification loans in many cases.
That, and many lenders will allow a total debt to income ratio of 55% nowadays...off the GROSS income. In other words, total monthly debt payments divided by income.
Petronski: You said you hope there is another depression so you can profit from the misery of others. More than once you have said this.
dalereed: Sure do, just biding my time.
insane
Many people barely bring home 55% of their income.
If you don't mind my asking, how long have you been in the business?
Unfortunately, quite true.
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