On the affordability topic, do many of you still see people spending and living like its 2004?
I’m still shocked by how many people I know who think putting as little down as possible and buying a house where their total monthly payments make them house poor is still ok. Taking on “more” credit card debt to furnish their homes, eat out, take vacations, etc. On top of which, people think having 3-6 months of savings is good enough. If you’re buying a 750k house for instance, its not like you can just get a job temping and cover your mortgage so I’m a bit surprised at how optimistic people feel that if they lose their job, they can just get another one.
I’ve had people look at me like I’m insane when I tell them a 1 year savings cushion is what I believe everyone should have.
Also way too many people telling me what a great time it is to buy a house. I’ve been looking in Mission Hills, Hillcrest, University Heights and North Park ( areas hugging the park), and these homes are listed for quite a bit above what was paid for them in 2003-2005. I ask them what homes they are seeing in these neighborhoods that are such a steal and that shuts them up pretty quickly.
What is everyone else seeing out there? I’m afraid I don’t see major behavior modification amongst my social circle and frankly am shocked.
Its this mentality that I still think fuels the knife catching.
