Bubble bust and changing landscape

[ocean]

Numbers don’t lie!The south bay had the biggest increase in sales last month in all of the county.Big ###’s,house are selling like hotcakes down here.True the prices are down,but,some people think at these prices the houses are deals.Personnally,I think prices will drop further,but I have been wrong before.

[Eugene]

Any chance you could pull the numbers by month over the past 12 months or since Jan 2007 for 92127?

I can’t pull detailed numbers. I see a total of 173 houses or condos going back to bank in all of 92127 since Jan 2007.

coming to the realization that it may not be worth it to spend that much more to live in 4S.

That much more than where?

Breaking out my trusty calculator:

520K mortgage at 6.25% (you can get 6.00% without points, but let’s be conservative)
Interest $2708
Principal $493
Insurance $50
Property tax $921 (tax rate 1.7% including Mello Roos)
HOA say $100
—
total housing $4272/month. And only $2800-2900 of that is “effective rent”, the rest is tax deduction and principal payments.

At some point the house will start to appreciate with inflation. Normal monthly appreciation of a 650K house is around $1600/month.

130K income is take-home pay around $9000 after social security, medicare, etc. (married, 2 dependents). You have almost 5 grand per month left on food, utilities, clothing, entertainment. Not too shabby. Besides, incomes tend to rise and housing payments are fixed for 30 years.

Maybe I’m too conservative, but I think housing costs should be no more than 30% of one’s NET income, after taxes;

Some people are willing to make sacrifices to put their children into best schools. You’d never commit to spending more than 30% of net income, but many people would.

[Eugene]

Any chance you could pull the numbers by month over the past 12 months or since Jan 2007 for 92127?

I can’t pull detailed numbers. I see a total of 173 houses or condos going back to bank in all of 92127 since Jan 2007.

coming to the realization that it may not be worth it to spend that much more to live in 4S.

That much more than where?

Breaking out my trusty calculator:

520K mortgage at 6.25% (you can get 6.00% without points, but let’s be conservative)
Interest $2708
Principal $493
Insurance $50
Property tax $921 (tax rate 1.7% including Mello Roos)
HOA say $100
—
total housing $4272/month. And only $2800-2900 of that is “effective rent”, the rest is tax deduction and principal payments.

At some point the house will start to appreciate with inflation. Normal monthly appreciation of a 650K house is around $1600/month.

130K income is take-home pay around $9000 after social security, medicare, etc. (married, 2 dependents). You have almost 5 grand per month left on food, utilities, clothing, entertainment. Not too shabby. Besides, incomes tend to rise and housing payments are fixed for 30 years.

Maybe I’m too conservative, but I think housing costs should be no more than 30% of one’s NET income, after taxes;

Some people are willing to make sacrifices to put their children into best schools. You’d never commit to spending more than 30% of net income, but many people would.

[Eugene]

Any chance you could pull the numbers by month over the past 12 months or since Jan 2007 for 92127?

I can’t pull detailed numbers. I see a total of 173 houses or condos going back to bank in all of 92127 since Jan 2007.

coming to the realization that it may not be worth it to spend that much more to live in 4S.

That much more than where?

Breaking out my trusty calculator:

520K mortgage at 6.25% (you can get 6.00% without points, but let’s be conservative)
Interest $2708
Principal $493
Insurance $50
Property tax $921 (tax rate 1.7% including Mello Roos)
HOA say $100
—
total housing $4272/month. And only $2800-2900 of that is “effective rent”, the rest is tax deduction and principal payments.

At some point the house will start to appreciate with inflation. Normal monthly appreciation of a 650K house is around $1600/month.

130K income is take-home pay around $9000 after social security, medicare, etc. (married, 2 dependents). You have almost 5 grand per month left on food, utilities, clothing, entertainment. Not too shabby. Besides, incomes tend to rise and housing payments are fixed for 30 years.

Maybe I’m too conservative, but I think housing costs should be no more than 30% of one’s NET income, after taxes;

Some people are willing to make sacrifices to put their children into best schools. You’d never commit to spending more than 30% of net income, but many people would.

[Eugene]

Any chance you could pull the numbers by month over the past 12 months or since Jan 2007 for 92127?

I can’t pull detailed numbers. I see a total of 173 houses or condos going back to bank in all of 92127 since Jan 2007.

coming to the realization that it may not be worth it to spend that much more to live in 4S.

That much more than where?

Breaking out my trusty calculator:

520K mortgage at 6.25% (you can get 6.00% without points, but let’s be conservative)
Interest $2708
Principal $493
Insurance $50
Property tax $921 (tax rate 1.7% including Mello Roos)
HOA say $100
—
total housing $4272/month. And only $2800-2900 of that is “effective rent”, the rest is tax deduction and principal payments.

At some point the house will start to appreciate with inflation. Normal monthly appreciation of a 650K house is around $1600/month.

130K income is take-home pay around $9000 after social security, medicare, etc. (married, 2 dependents). You have almost 5 grand per month left on food, utilities, clothing, entertainment. Not too shabby. Besides, incomes tend to rise and housing payments are fixed for 30 years.

Maybe I’m too conservative, but I think housing costs should be no more than 30% of one’s NET income, after taxes;

Some people are willing to make sacrifices to put their children into best schools. You’d never commit to spending more than 30% of net income, but many people would.

[Eugene]

Any chance you could pull the numbers by month over the past 12 months or since Jan 2007 for 92127?

I can’t pull detailed numbers. I see a total of 173 houses or condos going back to bank in all of 92127 since Jan 2007.

coming to the realization that it may not be worth it to spend that much more to live in 4S.

That much more than where?

Breaking out my trusty calculator:

520K mortgage at 6.25% (you can get 6.00% without points, but let’s be conservative)
Interest $2708
Principal $493
Insurance $50
Property tax $921 (tax rate 1.7% including Mello Roos)
HOA say $100
—
total housing $4272/month. And only $2800-2900 of that is “effective rent”, the rest is tax deduction and principal payments.

At some point the house will start to appreciate with inflation. Normal monthly appreciation of a 650K house is around $1600/month.

130K income is take-home pay around $9000 after social security, medicare, etc. (married, 2 dependents). You have almost 5 grand per month left on food, utilities, clothing, entertainment. Not too shabby. Besides, incomes tend to rise and housing payments are fixed for 30 years.

Maybe I’m too conservative, but I think housing costs should be no more than 30% of one’s NET income, after taxes;

Some people are willing to make sacrifices to put their children into best schools. You’d never commit to spending more than 30% of net income, but many people would.

[LA_Renter]

Well its good to see so many of these young parents with such high confidence in their income prospects. I agree with many of the points that peterb makes about recessions and unemployment. IMO that will be the last shoe that will drop in this debacle. If you are independently wealthy then you will be pretty safe weathering this housing market. If you are a young family dependent on income from a business large or small I suggest you sit down and think this thing through. The crux of the debate about this housing correction/crash seems to have found its way to the desirable areas of California with good schools. We are getting to the nuts and bolts of how the upper middle class will be impacted in this. I grew up in a WASPY upper middle class household so I understand some of the assumptions about life one can make coming from this background. In light of the current set of circumstances that we find ourselves it is my opinion that some of these assumptions may (in many cases already have) prove financially devastating. Basically that assumption is that “nothing really bad can happen to me”, a belief that we are entitled to a certain standard of living that in many cases we have known all of our lives.

Now sit back and try to grasp the magnitude of what we are witnessing right now. This is beyond a housing debate. We are witnessing basically what amounts to the collapse of the western financial credit structure as we know it. The only reference point we have to such an event is the financial turmoil of the Great Depression. Now this event could….bear with me….this event could impact you. If you are dependent on a business for income as many of these people including myself that are competing for these homes and lifestyle are, whether you like it or not you are at risk of getting swept up in the inevitable economic carnage that has yet to show its true impact. The final chapter of this housing bubble may just be the worst. Just my two cents.

[LA_Renter]

Well its good to see so many of these young parents with such high confidence in their income prospects. I agree with many of the points that peterb makes about recessions and unemployment. IMO that will be the last shoe that will drop in this debacle. If you are independently wealthy then you will be pretty safe weathering this housing market. If you are a young family dependent on income from a business large or small I suggest you sit down and think this thing through. The crux of the debate about this housing correction/crash seems to have found its way to the desirable areas of California with good schools. We are getting to the nuts and bolts of how the upper middle class will be impacted in this. I grew up in a WASPY upper middle class household so I understand some of the assumptions about life one can make coming from this background. In light of the current set of circumstances that we find ourselves it is my opinion that some of these assumptions may (in many cases already have) prove financially devastating. Basically that assumption is that “nothing really bad can happen to me”, a belief that we are entitled to a certain standard of living that in many cases we have known all of our lives.

Now sit back and try to grasp the magnitude of what we are witnessing right now. This is beyond a housing debate. We are witnessing basically what amounts to the collapse of the western financial credit structure as we know it. The only reference point we have to such an event is the financial turmoil of the Great Depression. Now this event could….bear with me….this event could impact you. If you are dependent on a business for income as many of these people including myself that are competing for these homes and lifestyle are, whether you like it or not you are at risk of getting swept up in the inevitable economic carnage that has yet to show its true impact. The final chapter of this housing bubble may just be the worst. Just my two cents.

[LA_Renter]

Well its good to see so many of these young parents with such high confidence in their income prospects. I agree with many of the points that peterb makes about recessions and unemployment. IMO that will be the last shoe that will drop in this debacle. If you are independently wealthy then you will be pretty safe weathering this housing market. If you are a young family dependent on income from a business large or small I suggest you sit down and think this thing through. The crux of the debate about this housing correction/crash seems to have found its way to the desirable areas of California with good schools. We are getting to the nuts and bolts of how the upper middle class will be impacted in this. I grew up in a WASPY upper middle class household so I understand some of the assumptions about life one can make coming from this background. In light of the current set of circumstances that we find ourselves it is my opinion that some of these assumptions may (in many cases already have) prove financially devastating. Basically that assumption is that “nothing really bad can happen to me”, a belief that we are entitled to a certain standard of living that in many cases we have known all of our lives.

Now sit back and try to grasp the magnitude of what we are witnessing right now. This is beyond a housing debate. We are witnessing basically what amounts to the collapse of the western financial credit structure as we know it. The only reference point we have to such an event is the financial turmoil of the Great Depression. Now this event could….bear with me….this event could impact you. If you are dependent on a business for income as many of these people including myself that are competing for these homes and lifestyle are, whether you like it or not you are at risk of getting swept up in the inevitable economic carnage that has yet to show its true impact. The final chapter of this housing bubble may just be the worst. Just my two cents.

[LA_Renter]

Well its good to see so many of these young parents with such high confidence in their income prospects. I agree with many of the points that peterb makes about recessions and unemployment. IMO that will be the last shoe that will drop in this debacle. If you are independently wealthy then you will be pretty safe weathering this housing market. If you are a young family dependent on income from a business large or small I suggest you sit down and think this thing through. The crux of the debate about this housing correction/crash seems to have found its way to the desirable areas of California with good schools. We are getting to the nuts and bolts of how the upper middle class will be impacted in this. I grew up in a WASPY upper middle class household so I understand some of the assumptions about life one can make coming from this background. In light of the current set of circumstances that we find ourselves it is my opinion that some of these assumptions may (in many cases already have) prove financially devastating. Basically that assumption is that “nothing really bad can happen to me”, a belief that we are entitled to a certain standard of living that in many cases we have known all of our lives.

Now sit back and try to grasp the magnitude of what we are witnessing right now. This is beyond a housing debate. We are witnessing basically what amounts to the collapse of the western financial credit structure as we know it. The only reference point we have to such an event is the financial turmoil of the Great Depression. Now this event could….bear with me….this event could impact you. If you are dependent on a business for income as many of these people including myself that are competing for these homes and lifestyle are, whether you like it or not you are at risk of getting swept up in the inevitable economic carnage that has yet to show its true impact. The final chapter of this housing bubble may just be the worst. Just my two cents.

[LA_Renter]

Well its good to see so many of these young parents with such high confidence in their income prospects. I agree with many of the points that peterb makes about recessions and unemployment. IMO that will be the last shoe that will drop in this debacle. If you are independently wealthy then you will be pretty safe weathering this housing market. If you are a young family dependent on income from a business large or small I suggest you sit down and think this thing through. The crux of the debate about this housing correction/crash seems to have found its way to the desirable areas of California with good schools. We are getting to the nuts and bolts of how the upper middle class will be impacted in this. I grew up in a WASPY upper middle class household so I understand some of the assumptions about life one can make coming from this background. In light of the current set of circumstances that we find ourselves it is my opinion that some of these assumptions may (in many cases already have) prove financially devastating. Basically that assumption is that “nothing really bad can happen to me”, a belief that we are entitled to a certain standard of living that in many cases we have known all of our lives.

Now sit back and try to grasp the magnitude of what we are witnessing right now. This is beyond a housing debate. We are witnessing basically what amounts to the collapse of the western financial credit structure as we know it. The only reference point we have to such an event is the financial turmoil of the Great Depression. Now this event could….bear with me….this event could impact you. If you are dependent on a business for income as many of these people including myself that are competing for these homes and lifestyle are, whether you like it or not you are at risk of getting swept up in the inevitable economic carnage that has yet to show its true impact. The final chapter of this housing bubble may just be the worst. Just my two cents.

[peterb]

Let me put this in the plainist english I know: The crap starting to hit the fan right now has real legs!! The most I’ve ever seen in 50 years! Making assumptions based on anything besides the Great Depression is foolish at this time.

If you’re really worried about your kids school and location, rent in the hood you like and/or send you kid to a private school. This way your not locking yourself into a deal that could easily sink you financially.

RE markets move pretty slowly, so you dont have to worry about missing the upswing when it finally happens.

I dont know any other way to put it that’s more straight forward. Most of the assumptions I see written in this site are based on fairly light recessionary events of the last 40 years. This one looks a lot different. Be careful out there. Avoid illiquid assets until some better news arrives. I’ve never seen this kind of carnage and it looks to continue through the end of the year, if not longer.

I’m not being an “Alarmist”. I dont know what’s gonna happen, no one does. But it does not look good in any way, shape or form. So why get into long term debt right now??? Take a breath. Watch the show, it’s a rare one.

[peterb]

Let me put this in the plainist english I know: The crap starting to hit the fan right now has real legs!! The most I’ve ever seen in 50 years! Making assumptions based on anything besides the Great Depression is foolish at this time.

If you’re really worried about your kids school and location, rent in the hood you like and/or send you kid to a private school. This way your not locking yourself into a deal that could easily sink you financially.

RE markets move pretty slowly, so you dont have to worry about missing the upswing when it finally happens.

I dont know any other way to put it that’s more straight forward. Most of the assumptions I see written in this site are based on fairly light recessionary events of the last 40 years. This one looks a lot different. Be careful out there. Avoid illiquid assets until some better news arrives. I’ve never seen this kind of carnage and it looks to continue through the end of the year, if not longer.

I’m not being an “Alarmist”. I dont know what’s gonna happen, no one does. But it does not look good in any way, shape or form. So why get into long term debt right now??? Take a breath. Watch the show, it’s a rare one.

[peterb]

Let me put this in the plainist english I know: The crap starting to hit the fan right now has real legs!! The most I’ve ever seen in 50 years! Making assumptions based on anything besides the Great Depression is foolish at this time.

If you’re really worried about your kids school and location, rent in the hood you like and/or send you kid to a private school. This way your not locking yourself into a deal that could easily sink you financially.

RE markets move pretty slowly, so you dont have to worry about missing the upswing when it finally happens.

I dont know any other way to put it that’s more straight forward. Most of the assumptions I see written in this site are based on fairly light recessionary events of the last 40 years. This one looks a lot different. Be careful out there. Avoid illiquid assets until some better news arrives. I’ve never seen this kind of carnage and it looks to continue through the end of the year, if not longer.

I’m not being an “Alarmist”. I dont know what’s gonna happen, no one does. But it does not look good in any way, shape or form. So why get into long term debt right now??? Take a breath. Watch the show, it’s a rare one.

[peterb]

Let me put this in the plainist english I know: The crap starting to hit the fan right now has real legs!! The most I’ve ever seen in 50 years! Making assumptions based on anything besides the Great Depression is foolish at this time.

If you’re really worried about your kids school and location, rent in the hood you like and/or send you kid to a private school. This way your not locking yourself into a deal that could easily sink you financially.

RE markets move pretty slowly, so you dont have to worry about missing the upswing when it finally happens.

I dont know any other way to put it that’s more straight forward. Most of the assumptions I see written in this site are based on fairly light recessionary events of the last 40 years. This one looks a lot different. Be careful out there. Avoid illiquid assets until some better news arrives. I’ve never seen this kind of carnage and it looks to continue through the end of the year, if not longer.

I’m not being an “Alarmist”. I dont know what’s gonna happen, no one does. But it does not look good in any way, shape or form. So why get into long term debt right now??? Take a breath. Watch the show, it’s a rare one.

[Author]

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