Real Estate Bubble - Page 2

PrincessPerky · #21 (**permalink**) 09-06-2005, 05:52 AM

See where my mother and ILs live 120 is NOT what they would expect, Mom is looking at moving closer to us (or her other kid) and is certain she will be able to find a cheaper house that size. I don't want to bust her err bubble, but it ain't happening if you want to avoid drug dealing neighbors.

Less of course the real estate drops dramaticaly and fast, but since I still owe most of the loan on this house I hope that doesn't happen anytime soon!

jmjj215 · #22 (**permalink**) 09-06-2005, 07:47 AM

Your boss expects house downsizing to afford gas? That seems a bit of a stretch to me. Wouldn't people (couldn't people) cut elsewhere first (drive more efficient vehicle, car pool, etc.)

BAGAGT1 · #23 (**permalink**) 09-06-2005, 09:55 AM

Quote:

Originally Posted by jmjj215

Your boss expects house downsizing to afford gas? That seems a bit of a stretch to me. Wouldn't people (couldn't people) cut elsewhere first (drive more efficient vehicle, car pool, etc.)

Ummm I was thinking natural gas for heating, I could be wrong though.

cercis · #24 (**permalink**) 09-06-2005, 05:02 PM

No, he meant gasoline. We live in the subtropics, not a whole lot of need for heat here (thank goodness).

I guess he figures there will be a lot of "sale or be foreclosed out" situations (and honestly, I think he's right). There is little to no opportunity for carpooling here. There is no one large employers. Most employees in places live in different parts of the area. And the places that hire are not that close to each other. There is no public transportation (not "no usable transportation" no transportation at all).

They can't really drive a more efficient vehicle since they don't have the funds to buy a more efficient vehicle. Most of them are still paying on their current vehicle and probably owe more than it is worth.

I don't know what they'll do. Hope they have enough equity to pay a deposit on a smaller place? Move in with family, etc. I live in an area where you are more likely to see extended families in the same house, so I guess that will be an option.

PrincessPerky · #25 (**permalink**) 09-07-2005, 05:13 AM

Carpooling or public transit is not really an option here either, the only bus line nearby is on a road 4 miles out, that would run to 3 miles away from DHs work, so 7 miles of walking, since work is only a little over 10 away I don't think it would help much!

Carpooling is another iffy thing, most of his coworkers do not start at the same time and anyway they would have to go 15 minutes out of their way for DH to get them. (or worse for DH to go get them)

BAGAGT1 · #26 (**permalink**) 09-07-2005, 09:48 PM

I would think there are other areas to cut back on before someone would seriously consider downsizing their home because of gasoline prices. Perhaps if the price of gas rose to $10 a gallon, but then chances are there would be a lot of unemployed people and that would be the reason for more home forclosures.

jmjj215 · #27 (**permalink**) 09-08-2005, 07:44 AM

Those were my thoughts also Bagagt1.

cercis · #28 (**permalink**) 09-08-2005, 04:42 PM

I think, though, that a lot of people have already cut way back just to buy these homes in the first place. I know of at least 2 homes that the people pay 60% of their gross pay for the mortgage (I have no idea what they bring home, just their gross pay).

These are people that are already stretched too thin.

I think this is absolutely the bank's fault. Not that long ago you couldn't get a loan for more than 30% of your gross pay or 40% of your bring home pay. It's just immoral to have made loans this large. It's not like people can go out and get a second job either.

meaghanchan · #29 (**permalink**) 09-08-2005, 04:51 PM

I don't think you can only blame the banks. They certainly should not be giving out loans people can't afford, but consumers, too, need to be careful, and need to do some basic math and see if they can afford the loan they're taking out. I think people are trusting banks too much to tell them what they can or can't afford.

jmjj215 · #30 (**permalink**) 09-09-2005, 11:52 AM

Quote:

I think people are trusting banks too much to tell them what they can or can't afford.

I agree. "Borrower Beware" should be above every entrance to every bank to remind the consumers of this.

byusteeler · #31 (**permalink**) 09-13-2005, 09:56 AM

I have seen and heard a lot of differing theories on the "housing bubble" Some believe it will not burst but may have small leaks here and there. All I know is that when I see the prices of the houses in Southern California I find it amazing that there are enough people that make enough money to afford these houses. I know that in my circle of friends and aquaintences half a million plus for a home is way beyond our means. (In southern California half a million seems to be on the low side and you don't get much house for it.) I had a friend at work(single) showing me the house she was building in Carona, CA. The house is priced at over $800,000. I was like "Do we work for the same company, our pay is the same, (actually I make a little more that she does per hour, but she works more hours than I do) Long story short. She is buying it with her parents and her sister and brother- in- law. I am no expert but I don't see how these prices can be maintained. I think eventually you are going to run out of people who can afford them. In my city however housing has grown at a reasonable metered pace of about 5-10% a year over the past 5 years I don't think this could be considered a bubble however since the beginning of 2005 there seems to be a huge increase. My neighbor started building a home in May, Moved in the 1st part of August, the base price of the house was $179,000. Now the same house base price is $238,000. I am not a math whiz either but I think that is about a 30% increase in around 5 months. (Oh, if you were wondering, I live in Utah. The California information comes because I workout of Southern California.)

Russell · #32 (**permalink**) 10-20-2005, 08:59 AM

Looks like the prices in CA are finally coming down.

Mercury News reported that the housing prices in Santa Clara declined 5% last month. Personally, I now see more houses in my area for under $600k now than there were 3 months ago. Finally, there are a few (tiny, 1050 sq-ft) houses in our area that we can sort of afford by scraping together the funds for the monthly mortgage.

So are we finally seeing the downward trend ? or is it just a change due to the xmas season ? What do you guys think ? I'm sitting on the fence about purchasing a house.

jmjj215 · #33 (**permalink**) 10-21-2005, 10:45 AM

Could be due to xmas since housing slows then. For those looking to buy - hopefully it's the start of a downward trend back to affordability. For those who just bought last month - hopefully it's not.