Menu

Home › Forums › Housing › UT Article: More First Time Homebuyers

Viewing 20 reply threads
  • Author
    Posts
    • February 19, 2008 at 12:52 PM #11861
      JC
      Participant

      http://www.signonsandiego.com/news/business/20080219-1118-ca-californiahomes.html

      I’m sure there are even more issues with this article, but here are a few questions I have.

      1) Is it just me or is their idea of affordability completely out of whack. Quick rough calc – approx. 3k per month housing costs (not factoring in electric, water, etc.)/ take home pay (assuming no responsible stuff like 401k contribution) = 4.6k. So, monthly payment is approx. 65% of their net payment.

      2) So, now more people hit a higher salary level. So, what? Are these the people that already own homes? For the ones that don’t, how many have the 10% or 20% available?

    • February 19, 2008 at 1:14 PM #155629
      davelj
      Participant

      From the article:

      “Buyers needed to earn $82,200 to afford financing $411,170, the price the trade association estimated for an entry-level home during the quarter.”

      OK, I realize that southern California is “different” from the mid-sized east coast city that I grew up in, but this seems ridiculous. I don’t even have to run the numbers.

      Where I grew up, someone making $82K wouldn’t even dream of paying more than $225K (and I’m being aggressive) for a home. It shows you just how screwed up things are out here. What can I do but laugh?

      • February 19, 2008 at 1:31 PM #155644
        Anonymous
        Guest

        no, thats pretty much dead on. you can afford, about at the most, about 5x your income. I went with about 4x my income, but I guess I like to do other stuff than just sit in my home and think how much I’m spending on a hut.

        I think its funny how 411k is an “entry level home”. Not many people come out of college making 80k+, and 411k in SD is a townhome/condo generally. Also, the assumption of 10% down and using an ARM… didn’t they used to use 20% down and a 30 year? no wonder why we’re where we are now.

      • February 19, 2008 at 1:31 PM #155926
        Anonymous
        Guest

        no, thats pretty much dead on. you can afford, about at the most, about 5x your income. I went with about 4x my income, but I guess I like to do other stuff than just sit in my home and think how much I’m spending on a hut.

        I think its funny how 411k is an “entry level home”. Not many people come out of college making 80k+, and 411k in SD is a townhome/condo generally. Also, the assumption of 10% down and using an ARM… didn’t they used to use 20% down and a 30 year? no wonder why we’re where we are now.

      • February 19, 2008 at 1:31 PM #155928
        Anonymous
        Guest

        no, thats pretty much dead on. you can afford, about at the most, about 5x your income. I went with about 4x my income, but I guess I like to do other stuff than just sit in my home and think how much I’m spending on a hut.

        I think its funny how 411k is an “entry level home”. Not many people come out of college making 80k+, and 411k in SD is a townhome/condo generally. Also, the assumption of 10% down and using an ARM… didn’t they used to use 20% down and a 30 year? no wonder why we’re where we are now.

      • February 19, 2008 at 1:31 PM #155946
        Anonymous
        Guest

        no, thats pretty much dead on. you can afford, about at the most, about 5x your income. I went with about 4x my income, but I guess I like to do other stuff than just sit in my home and think how much I’m spending on a hut.

        I think its funny how 411k is an “entry level home”. Not many people come out of college making 80k+, and 411k in SD is a townhome/condo generally. Also, the assumption of 10% down and using an ARM… didn’t they used to use 20% down and a 30 year? no wonder why we’re where we are now.

      • February 19, 2008 at 1:31 PM #156023
        Anonymous
        Guest

        no, thats pretty much dead on. you can afford, about at the most, about 5x your income. I went with about 4x my income, but I guess I like to do other stuff than just sit in my home and think how much I’m spending on a hut.

        I think its funny how 411k is an “entry level home”. Not many people come out of college making 80k+, and 411k in SD is a townhome/condo generally. Also, the assumption of 10% down and using an ARM… didn’t they used to use 20% down and a 30 year? no wonder why we’re where we are now.

    • February 19, 2008 at 1:14 PM #155911
      davelj
      Participant

      From the article:

      “Buyers needed to earn $82,200 to afford financing $411,170, the price the trade association estimated for an entry-level home during the quarter.”

      OK, I realize that southern California is “different” from the mid-sized east coast city that I grew up in, but this seems ridiculous. I don’t even have to run the numbers.

      Where I grew up, someone making $82K wouldn’t even dream of paying more than $225K (and I’m being aggressive) for a home. It shows you just how screwed up things are out here. What can I do but laugh?

    • February 19, 2008 at 1:14 PM #155913
      davelj
      Participant

      From the article:

      “Buyers needed to earn $82,200 to afford financing $411,170, the price the trade association estimated for an entry-level home during the quarter.”

      OK, I realize that southern California is “different” from the mid-sized east coast city that I grew up in, but this seems ridiculous. I don’t even have to run the numbers.

      Where I grew up, someone making $82K wouldn’t even dream of paying more than $225K (and I’m being aggressive) for a home. It shows you just how screwed up things are out here. What can I do but laugh?

    • February 19, 2008 at 1:14 PM #155932
      davelj
      Participant

      From the article:

      “Buyers needed to earn $82,200 to afford financing $411,170, the price the trade association estimated for an entry-level home during the quarter.”

      OK, I realize that southern California is “different” from the mid-sized east coast city that I grew up in, but this seems ridiculous. I don’t even have to run the numbers.

      Where I grew up, someone making $82K wouldn’t even dream of paying more than $225K (and I’m being aggressive) for a home. It shows you just how screwed up things are out here. What can I do but laugh?

    • February 19, 2008 at 1:14 PM #156008
      davelj
      Participant

      From the article:

      “Buyers needed to earn $82,200 to afford financing $411,170, the price the trade association estimated for an entry-level home during the quarter.”

      OK, I realize that southern California is “different” from the mid-sized east coast city that I grew up in, but this seems ridiculous. I don’t even have to run the numbers.

      Where I grew up, someone making $82K wouldn’t even dream of paying more than $225K (and I’m being aggressive) for a home. It shows you just how screwed up things are out here. What can I do but laugh?

    • February 19, 2008 at 1:36 PM #155659
      Eugene
      Participant

      “Is it just me or is their idea of affordability completely out of whack. Quick rough calc – approx. 3k per month housing costs (not factoring in electric, water, etc.)/ take home pay (assuming no responsible stuff like 401k contribution) = 4.6k.”

      monthly payment is $2269, property tax is roughly cancelled by mtg deduction. Married couple earning 82k will be paying at MOST 15k in all taxes combined (federal+state+ss+medicare) so their take home pay would be somewhere in 5.5-6k range.

    • February 19, 2008 at 1:36 PM #155941
      Eugene
      Participant

      “Is it just me or is their idea of affordability completely out of whack. Quick rough calc – approx. 3k per month housing costs (not factoring in electric, water, etc.)/ take home pay (assuming no responsible stuff like 401k contribution) = 4.6k.”

      monthly payment is $2269, property tax is roughly cancelled by mtg deduction. Married couple earning 82k will be paying at MOST 15k in all taxes combined (federal+state+ss+medicare) so their take home pay would be somewhere in 5.5-6k range.

    • February 19, 2008 at 1:36 PM #155944
      Eugene
      Participant

      “Is it just me or is their idea of affordability completely out of whack. Quick rough calc – approx. 3k per month housing costs (not factoring in electric, water, etc.)/ take home pay (assuming no responsible stuff like 401k contribution) = 4.6k.”

      monthly payment is $2269, property tax is roughly cancelled by mtg deduction. Married couple earning 82k will be paying at MOST 15k in all taxes combined (federal+state+ss+medicare) so their take home pay would be somewhere in 5.5-6k range.

    • February 19, 2008 at 1:36 PM #155963
      Eugene
      Participant

      “Is it just me or is their idea of affordability completely out of whack. Quick rough calc – approx. 3k per month housing costs (not factoring in electric, water, etc.)/ take home pay (assuming no responsible stuff like 401k contribution) = 4.6k.”

      monthly payment is $2269, property tax is roughly cancelled by mtg deduction. Married couple earning 82k will be paying at MOST 15k in all taxes combined (federal+state+ss+medicare) so their take home pay would be somewhere in 5.5-6k range.

    • February 19, 2008 at 1:36 PM #156038
      Eugene
      Participant

      “Is it just me or is their idea of affordability completely out of whack. Quick rough calc – approx. 3k per month housing costs (not factoring in electric, water, etc.)/ take home pay (assuming no responsible stuff like 401k contribution) = 4.6k.”

      monthly payment is $2269, property tax is roughly cancelled by mtg deduction. Married couple earning 82k will be paying at MOST 15k in all taxes combined (federal+state+ss+medicare) so their take home pay would be somewhere in 5.5-6k range.

    • February 19, 2008 at 1:40 PM #155664
      jpinpb
      Participant

      I saw the headline and didn’t even bother to read it. The headline was enough for me to laugh. Almost every single credible economist out there is pretty much saying the real estate market will suck for at least another year. Anyone that held out this long would be quite foolish to run out and buy now. I look at houses out there for sale w/owners who are maxed out and can’t reduce that will be bank owned by year end. The more inventory, the lower the price. Why overextend yourself now, knowing if you buy, you will lose equity upon signing docs.

      • February 19, 2008 at 1:54 PM #155679
        Portlock
        Participant

        It’s articles like these from CAR or NAR that make me distrust realtors.

        I’m not convinced their fiduciary responsibility will be true to me…

        However there is plenty of data showing greedy realtors contributed greatly to the price run up (see ocrenters website http://bubbletracking.blogspot.com)

      • February 19, 2008 at 1:54 PM #155962
        Portlock
        Participant

        It’s articles like these from CAR or NAR that make me distrust realtors.

        I’m not convinced their fiduciary responsibility will be true to me…

        However there is plenty of data showing greedy realtors contributed greatly to the price run up (see ocrenters website http://bubbletracking.blogspot.com)

      • February 19, 2008 at 1:54 PM #155964
        Portlock
        Participant

        It’s articles like these from CAR or NAR that make me distrust realtors.

        I’m not convinced their fiduciary responsibility will be true to me…

        However there is plenty of data showing greedy realtors contributed greatly to the price run up (see ocrenters website http://bubbletracking.blogspot.com)

      • February 19, 2008 at 1:54 PM #155981
        Portlock
        Participant

        It’s articles like these from CAR or NAR that make me distrust realtors.

        I’m not convinced their fiduciary responsibility will be true to me…

        However there is plenty of data showing greedy realtors contributed greatly to the price run up (see ocrenters website http://bubbletracking.blogspot.com)

      • February 19, 2008 at 1:54 PM #156058
        Portlock
        Participant

        It’s articles like these from CAR or NAR that make me distrust realtors.

        I’m not convinced their fiduciary responsibility will be true to me…

        However there is plenty of data showing greedy realtors contributed greatly to the price run up (see ocrenters website http://bubbletracking.blogspot.com)

      • February 19, 2008 at 2:16 PM #155684
        (former)FormerSanDiegan
        Participant

        I saw the headline and didn’t even bother to read it. The headline was enough for me to laugh.
        To me the headline states the obvious. Prices were lower in the last quarter of 2007, compared to 2006. Furthermore interest rates were lower. Therefore, housing is more affordable than the previous year. I don’t see why this is controversial. This is what we have all been observing here. The article does not say that it won’t get more affordable in the future. Regardless of the flawed metric being used, homes are getting more affordable. Isn’t this what we expect ?

        • February 19, 2008 at 2:18 PM #155689
          jpinpb
          Participant

          It’s so affordable now. Quick. Everyone run out and buy b/c they’re not making land anymore and this will really be your last chance to buy.

        • February 19, 2008 at 2:27 PM #155694
          CogSciGuy
          Participant

          “Everyone run out and buy b/c they’re not making land anymore”

          Actually, the earth is still geologically active, volcanoes still do erupt and create new islands. “They” are still making land, in fact.

          Maybe that’d be a more fun way to object to that reason to buy.

        • February 19, 2008 at 2:54 PM #155714
          Eugene
          Participant

          Actually, the earth is still geologically active, volcanoes still do erupt and create new islands. “They” are still making land, in fact.

          Just imagine a volcano erupting in the downtown area and creating a new island there.

        • February 19, 2008 at 3:36 PM #155734
          JC
          Participant

          Just to be clear, I wasn’t quibbling about whether homes are more affordable now. I had issues with what they considered to be affordable with the annual income noted in the article.

          By the way, my “flawed” calc was due to the fact that I used a traditional 30 year mortgage calc with 10% down.

          It’s just my opiniont, but I think telling people that this is affordable is pretty terrible. It does not seem to take normal expenses or any of the fun financial suprises that people have into account.

          It seems ridiculous to most of us on this board, but there are a lot of people that trust realtors to help them understand what they can afford. Of course, I guess that is pretty apparent these days….

        • February 19, 2008 at 4:16 PM #155789
          davelj
          Participant

          Assuming 20% down you end up with a $330K mortgage (on a $410K home) and a monthly payment (including taxes and insurance) of about $2,500 (at 6.375%). A couple earning $82,000/year is going to pay about $17,000 in taxes, including SS, medicare, etc. (using my handy California tax calculator, and including the mortgage interest deduction), which leaves about $5,400/month in net after-tax income. So that $2,500 payment is 46% of the couple’s monthly after-tax income. And this is considered “affordable”? There was a time, not so long ago (like prior to 2000…) when it was frowned upon when a mortgage (etc.) payment was going to be greater than 35% of take home pay. My how far we’ve come…

          (At current interest rates, a median price of about $300K yields a mortgage payment equal to 35% of after-tax income – at $82K pre-tax – assuming a 20% down payment and the current 30-year mortgage rate of 6.375%.)

        • February 19, 2008 at 4:22 PM #155799
          Eugene
          Participant

          I think there is a Volcano starting where they have been having all those earthquakes in Baja (next to the border) last two weeks or so.

          So there’s going to be an island there soon?

        • February 19, 2008 at 4:42 PM #155814
          Nor-LA-SD-guy
          Participant

          “So there’s going to be an island there soon?”

          An Island ?? OK sure..

          Maybe a big hill,

          Could be a View involved as well.

        • February 19, 2008 at 4:57 PM #155824
          JC
          Participant

          I swear I am not math challenged. My numbers are different because the calculator I use includes estimates for taxes, etc. http://www.insidermortgage.com/articles.html?TargetPage=calculators.asp

          I guess I am just conservative. I like to look at total monthly costs and round up.

          Either way you slice it, it is still a large portion of your income to commit to housing.

        • February 19, 2008 at 5:49 PM #155865
          temeculaguy
          Participant

          I agree with sdrealtor 3x income is the high water mark, 2x income for the loan is ideal, there is a lot more things in life that require money depending on your situation you may want to have less house and more disposable income.

        • February 19, 2008 at 7:58 PM #155910
          (former)FormerSanDiegan
          Participant

          I agree 3x your income may be too high for many, depending on your circumstances and other debts. For example, a young professional or newly minted medical doctor may have a significant chunk of debt in terms of student loans. Young parents may be saddled with alot of expenses related to raising small children, etc. Likewise if you have significantly higher income/assets later in life you may be able to handle more housing debt relative to your income.
          For first-time buyers I would assume most could handle somewhere in the range of 38-38% of their income towards the combination of debt and housing PITI.

        • February 19, 2008 at 8:46 PM #155950
          jpinpb
          Participant

          Re: Calculations

          Where are you purchasing these homes and coming up w/these calculations?

          If you purchase a condo, please don’t forget to include the HOAs, some are quite pricey.

          If you are purchasing in a semi-new or new neighborhood, don’t forget to add in the calculation the Mello Rouse.

        • February 19, 2008 at 9:36 PM #156025
          equalizer
          Participant

          If everyone went with < 3X income, half the sales from this century wouldn't have happened!

          Most calculators allow a total debt-to-income ratio of no more than 36 percent. And home payment to-income ratio of 28% for our conservative estimate, and 33 percent for the aggressive one. In CA, 40% and 50% ratios were routinely used and that's what helped cause home prices to double from 2001 to 2005, not the common notion that QCOM employees were completely responsible for jump.

        • February 19, 2008 at 9:36 PM #156307
          equalizer
          Participant

          If everyone went with < 3X income, half the sales from this century wouldn't have happened!

          Most calculators allow a total debt-to-income ratio of no more than 36 percent. And home payment to-income ratio of 28% for our conservative estimate, and 33 percent for the aggressive one. In CA, 40% and 50% ratios were routinely used and that's what helped cause home prices to double from 2001 to 2005, not the common notion that QCOM employees were completely responsible for jump.

        • February 19, 2008 at 9:36 PM #156311
          equalizer
          Participant

          If everyone went with < 3X income, half the sales from this century wouldn't have happened!

          Most calculators allow a total debt-to-income ratio of no more than 36 percent. And home payment to-income ratio of 28% for our conservative estimate, and 33 percent for the aggressive one. In CA, 40% and 50% ratios were routinely used and that's what helped cause home prices to double from 2001 to 2005, not the common notion that QCOM employees were completely responsible for jump.

        • February 19, 2008 at 9:36 PM #156330
          equalizer
          Participant

          If everyone went with < 3X income, half the sales from this century wouldn't have happened!

          Most calculators allow a total debt-to-income ratio of no more than 36 percent. And home payment to-income ratio of 28% for our conservative estimate, and 33 percent for the aggressive one. In CA, 40% and 50% ratios were routinely used and that's what helped cause home prices to double from 2001 to 2005, not the common notion that QCOM employees were completely responsible for jump.

        • February 19, 2008 at 9:36 PM #156405
          equalizer
          Participant

          If everyone went with < 3X income, half the sales from this century wouldn't have happened!

          Most calculators allow a total debt-to-income ratio of no more than 36 percent. And home payment to-income ratio of 28% for our conservative estimate, and 33 percent for the aggressive one. In CA, 40% and 50% ratios were routinely used and that's what helped cause home prices to double from 2001 to 2005, not the common notion that QCOM employees were completely responsible for jump.

        • February 19, 2008 at 8:46 PM #156233
          jpinpb
          Participant

          Re: Calculations

          Where are you purchasing these homes and coming up w/these calculations?

          If you purchase a condo, please don’t forget to include the HOAs, some are quite pricey.

          If you are purchasing in a semi-new or new neighborhood, don’t forget to add in the calculation the Mello Rouse.

        • February 19, 2008 at 8:46 PM #156237
          jpinpb
          Participant

          Re: Calculations

          Where are you purchasing these homes and coming up w/these calculations?

          If you purchase a condo, please don’t forget to include the HOAs, some are quite pricey.

          If you are purchasing in a semi-new or new neighborhood, don’t forget to add in the calculation the Mello Rouse.

        • February 19, 2008 at 8:46 PM #156253
          jpinpb
          Participant

          Re: Calculations

          Where are you purchasing these homes and coming up w/these calculations?

          If you purchase a condo, please don’t forget to include the HOAs, some are quite pricey.

          If you are purchasing in a semi-new or new neighborhood, don’t forget to add in the calculation the Mello Rouse.

        • February 19, 2008 at 8:46 PM #156328
          jpinpb
          Participant

          Re: Calculations

          Where are you purchasing these homes and coming up w/these calculations?

          If you purchase a condo, please don’t forget to include the HOAs, some are quite pricey.

          If you are purchasing in a semi-new or new neighborhood, don’t forget to add in the calculation the Mello Rouse.

        • February 19, 2008 at 7:58 PM #156195
          (former)FormerSanDiegan
          Participant

          I agree 3x your income may be too high for many, depending on your circumstances and other debts. For example, a young professional or newly minted medical doctor may have a significant chunk of debt in terms of student loans. Young parents may be saddled with alot of expenses related to raising small children, etc. Likewise if you have significantly higher income/assets later in life you may be able to handle more housing debt relative to your income.
          For first-time buyers I would assume most could handle somewhere in the range of 38-38% of their income towards the combination of debt and housing PITI.

        • February 19, 2008 at 7:58 PM #156196
          (former)FormerSanDiegan
          Participant

          I agree 3x your income may be too high for many, depending on your circumstances and other debts. For example, a young professional or newly minted medical doctor may have a significant chunk of debt in terms of student loans. Young parents may be saddled with alot of expenses related to raising small children, etc. Likewise if you have significantly higher income/assets later in life you may be able to handle more housing debt relative to your income.
          For first-time buyers I would assume most could handle somewhere in the range of 38-38% of their income towards the combination of debt and housing PITI.

        • February 19, 2008 at 7:58 PM #156215
          (former)FormerSanDiegan
          Participant

          I agree 3x your income may be too high for many, depending on your circumstances and other debts. For example, a young professional or newly minted medical doctor may have a significant chunk of debt in terms of student loans. Young parents may be saddled with alot of expenses related to raising small children, etc. Likewise if you have significantly higher income/assets later in life you may be able to handle more housing debt relative to your income.
          For first-time buyers I would assume most could handle somewhere in the range of 38-38% of their income towards the combination of debt and housing PITI.

        • February 19, 2008 at 7:58 PM #156287
          (former)FormerSanDiegan
          Participant

          I agree 3x your income may be too high for many, depending on your circumstances and other debts. For example, a young professional or newly minted medical doctor may have a significant chunk of debt in terms of student loans. Young parents may be saddled with alot of expenses related to raising small children, etc. Likewise if you have significantly higher income/assets later in life you may be able to handle more housing debt relative to your income.
          For first-time buyers I would assume most could handle somewhere in the range of 38-38% of their income towards the combination of debt and housing PITI.

        • February 19, 2008 at 5:49 PM #156150
          temeculaguy
          Participant

          I agree with sdrealtor 3x income is the high water mark, 2x income for the loan is ideal, there is a lot more things in life that require money depending on your situation you may want to have less house and more disposable income.

        • February 19, 2008 at 5:49 PM #156152
          temeculaguy
          Participant

          I agree with sdrealtor 3x income is the high water mark, 2x income for the loan is ideal, there is a lot more things in life that require money depending on your situation you may want to have less house and more disposable income.

        • February 19, 2008 at 5:49 PM #156170
          temeculaguy
          Participant

          I agree with sdrealtor 3x income is the high water mark, 2x income for the loan is ideal, there is a lot more things in life that require money depending on your situation you may want to have less house and more disposable income.

        • February 19, 2008 at 5:49 PM #156245
          temeculaguy
          Participant

          I agree with sdrealtor 3x income is the high water mark, 2x income for the loan is ideal, there is a lot more things in life that require money depending on your situation you may want to have less house and more disposable income.

        • February 19, 2008 at 4:57 PM #156110
          JC
          Participant

          I swear I am not math challenged. My numbers are different because the calculator I use includes estimates for taxes, etc. http://www.insidermortgage.com/articles.html?TargetPage=calculators.asp

          I guess I am just conservative. I like to look at total monthly costs and round up.

          Either way you slice it, it is still a large portion of your income to commit to housing.

        • February 19, 2008 at 4:57 PM #156113
          JC
          Participant

          I swear I am not math challenged. My numbers are different because the calculator I use includes estimates for taxes, etc. http://www.insidermortgage.com/articles.html?TargetPage=calculators.asp

          I guess I am just conservative. I like to look at total monthly costs and round up.

          Either way you slice it, it is still a large portion of your income to commit to housing.

        • February 19, 2008 at 4:57 PM #156127
          JC
          Participant

          I swear I am not math challenged. My numbers are different because the calculator I use includes estimates for taxes, etc. http://www.insidermortgage.com/articles.html?TargetPage=calculators.asp

          I guess I am just conservative. I like to look at total monthly costs and round up.

          Either way you slice it, it is still a large portion of your income to commit to housing.

        • February 19, 2008 at 4:57 PM #156203
          JC
          Participant

          I swear I am not math challenged. My numbers are different because the calculator I use includes estimates for taxes, etc. http://www.insidermortgage.com/articles.html?TargetPage=calculators.asp

          I guess I am just conservative. I like to look at total monthly costs and round up.

          Either way you slice it, it is still a large portion of your income to commit to housing.

        • February 19, 2008 at 4:42 PM #156099
          Nor-LA-SD-guy
          Participant

          “So there’s going to be an island there soon?”

          An Island ?? OK sure..

          Maybe a big hill,

          Could be a View involved as well.

        • February 19, 2008 at 4:42 PM #156102
          Nor-LA-SD-guy
          Participant

          “So there’s going to be an island there soon?”

          An Island ?? OK sure..

          Maybe a big hill,

          Could be a View involved as well.

        • February 19, 2008 at 4:42 PM #156119
          Nor-LA-SD-guy
          Participant

          “So there’s going to be an island there soon?”

          An Island ?? OK sure..

          Maybe a big hill,

          Could be a View involved as well.

        • February 19, 2008 at 4:42 PM #156193
          Nor-LA-SD-guy
          Participant

          “So there’s going to be an island there soon?”

          An Island ?? OK sure..

          Maybe a big hill,

          Could be a View involved as well.

        • February 19, 2008 at 4:22 PM #156081
          Eugene
          Participant

          I think there is a Volcano starting where they have been having all those earthquakes in Baja (next to the border) last two weeks or so.

          So there’s going to be an island there soon?

        • February 19, 2008 at 4:22 PM #156089
          Eugene
          Participant

          I think there is a Volcano starting where they have been having all those earthquakes in Baja (next to the border) last two weeks or so.

          So there’s going to be an island there soon?

        • February 19, 2008 at 4:22 PM #156105
          Eugene
          Participant

          I think there is a Volcano starting where they have been having all those earthquakes in Baja (next to the border) last two weeks or so.

          So there’s going to be an island there soon?

        • February 19, 2008 at 4:22 PM #156178
          Eugene
          Participant

          I think there is a Volcano starting where they have been having all those earthquakes in Baja (next to the border) last two weeks or so.

          So there’s going to be an island there soon?

        • February 19, 2008 at 4:16 PM #156071
          davelj
          Participant

          Assuming 20% down you end up with a $330K mortgage (on a $410K home) and a monthly payment (including taxes and insurance) of about $2,500 (at 6.375%). A couple earning $82,000/year is going to pay about $17,000 in taxes, including SS, medicare, etc. (using my handy California tax calculator, and including the mortgage interest deduction), which leaves about $5,400/month in net after-tax income. So that $2,500 payment is 46% of the couple’s monthly after-tax income. And this is considered “affordable”? There was a time, not so long ago (like prior to 2000…) when it was frowned upon when a mortgage (etc.) payment was going to be greater than 35% of take home pay. My how far we’ve come…

          (At current interest rates, a median price of about $300K yields a mortgage payment equal to 35% of after-tax income – at $82K pre-tax – assuming a 20% down payment and the current 30-year mortgage rate of 6.375%.)

        • February 19, 2008 at 4:16 PM #156079
          davelj
          Participant

          Assuming 20% down you end up with a $330K mortgage (on a $410K home) and a monthly payment (including taxes and insurance) of about $2,500 (at 6.375%). A couple earning $82,000/year is going to pay about $17,000 in taxes, including SS, medicare, etc. (using my handy California tax calculator, and including the mortgage interest deduction), which leaves about $5,400/month in net after-tax income. So that $2,500 payment is 46% of the couple’s monthly after-tax income. And this is considered “affordable”? There was a time, not so long ago (like prior to 2000…) when it was frowned upon when a mortgage (etc.) payment was going to be greater than 35% of take home pay. My how far we’ve come…

          (At current interest rates, a median price of about $300K yields a mortgage payment equal to 35% of after-tax income – at $82K pre-tax – assuming a 20% down payment and the current 30-year mortgage rate of 6.375%.)

        • February 19, 2008 at 4:16 PM #156091
          davelj
          Participant

          Assuming 20% down you end up with a $330K mortgage (on a $410K home) and a monthly payment (including taxes and insurance) of about $2,500 (at 6.375%). A couple earning $82,000/year is going to pay about $17,000 in taxes, including SS, medicare, etc. (using my handy California tax calculator, and including the mortgage interest deduction), which leaves about $5,400/month in net after-tax income. So that $2,500 payment is 46% of the couple’s monthly after-tax income. And this is considered “affordable”? There was a time, not so long ago (like prior to 2000…) when it was frowned upon when a mortgage (etc.) payment was going to be greater than 35% of take home pay. My how far we’ve come…

          (At current interest rates, a median price of about $300K yields a mortgage payment equal to 35% of after-tax income – at $82K pre-tax – assuming a 20% down payment and the current 30-year mortgage rate of 6.375%.)

        • February 19, 2008 at 4:16 PM #156168
          davelj
          Participant

          Assuming 20% down you end up with a $330K mortgage (on a $410K home) and a monthly payment (including taxes and insurance) of about $2,500 (at 6.375%). A couple earning $82,000/year is going to pay about $17,000 in taxes, including SS, medicare, etc. (using my handy California tax calculator, and including the mortgage interest deduction), which leaves about $5,400/month in net after-tax income. So that $2,500 payment is 46% of the couple’s monthly after-tax income. And this is considered “affordable”? There was a time, not so long ago (like prior to 2000…) when it was frowned upon when a mortgage (etc.) payment was going to be greater than 35% of take home pay. My how far we’ve come…

          (At current interest rates, a median price of about $300K yields a mortgage payment equal to 35% of after-tax income – at $82K pre-tax – assuming a 20% down payment and the current 30-year mortgage rate of 6.375%.)

        • February 19, 2008 at 3:36 PM #156016
          JC
          Participant

          Just to be clear, I wasn’t quibbling about whether homes are more affordable now. I had issues with what they considered to be affordable with the annual income noted in the article.

          By the way, my “flawed” calc was due to the fact that I used a traditional 30 year mortgage calc with 10% down.

          It’s just my opiniont, but I think telling people that this is affordable is pretty terrible. It does not seem to take normal expenses or any of the fun financial suprises that people have into account.

          It seems ridiculous to most of us on this board, but there are a lot of people that trust realtors to help them understand what they can afford. Of course, I guess that is pretty apparent these days….

        • February 19, 2008 at 3:36 PM #156024
          JC
          Participant

          Just to be clear, I wasn’t quibbling about whether homes are more affordable now. I had issues with what they considered to be affordable with the annual income noted in the article.

          By the way, my “flawed” calc was due to the fact that I used a traditional 30 year mortgage calc with 10% down.

          It’s just my opiniont, but I think telling people that this is affordable is pretty terrible. It does not seem to take normal expenses or any of the fun financial suprises that people have into account.

          It seems ridiculous to most of us on this board, but there are a lot of people that trust realtors to help them understand what they can afford. Of course, I guess that is pretty apparent these days….

        • February 19, 2008 at 3:36 PM #156037
          JC
          Participant

          Just to be clear, I wasn’t quibbling about whether homes are more affordable now. I had issues with what they considered to be affordable with the annual income noted in the article.

          By the way, my “flawed” calc was due to the fact that I used a traditional 30 year mortgage calc with 10% down.

          It’s just my opiniont, but I think telling people that this is affordable is pretty terrible. It does not seem to take normal expenses or any of the fun financial suprises that people have into account.

          It seems ridiculous to most of us on this board, but there are a lot of people that trust realtors to help them understand what they can afford. Of course, I guess that is pretty apparent these days….

        • February 19, 2008 at 3:36 PM #156111
          JC
          Participant

          Just to be clear, I wasn’t quibbling about whether homes are more affordable now. I had issues with what they considered to be affordable with the annual income noted in the article.

          By the way, my “flawed” calc was due to the fact that I used a traditional 30 year mortgage calc with 10% down.

          It’s just my opiniont, but I think telling people that this is affordable is pretty terrible. It does not seem to take normal expenses or any of the fun financial suprises that people have into account.

          It seems ridiculous to most of us on this board, but there are a lot of people that trust realtors to help them understand what they can afford. Of course, I guess that is pretty apparent these days….

        • February 19, 2008 at 4:02 PM #155754
          Nor-LA-SD-guy
          Participant

          I think there is a Volcano starting where they have been having all those earthquakes in Baja (next to the border) last two weeks or so.

        • February 19, 2008 at 4:02 PM #156036
          Nor-LA-SD-guy
          Participant

          I think there is a Volcano starting where they have been having all those earthquakes in Baja (next to the border) last two weeks or so.

        • February 19, 2008 at 4:02 PM #156044
          Nor-LA-SD-guy
          Participant

          I think there is a Volcano starting where they have been having all those earthquakes in Baja (next to the border) last two weeks or so.

        • February 19, 2008 at 4:02 PM #156057
          Nor-LA-SD-guy
          Participant

          I think there is a Volcano starting where they have been having all those earthquakes in Baja (next to the border) last two weeks or so.

        • February 19, 2008 at 4:02 PM #156135
          Nor-LA-SD-guy
          Participant

          I think there is a Volcano starting where they have been having all those earthquakes in Baja (next to the border) last two weeks or so.

        • February 19, 2008 at 2:54 PM #155996
          Eugene
          Participant

          Actually, the earth is still geologically active, volcanoes still do erupt and create new islands. “They” are still making land, in fact.

          Just imagine a volcano erupting in the downtown area and creating a new island there.

        • February 19, 2008 at 2:54 PM #156004
          Eugene
          Participant

          Actually, the earth is still geologically active, volcanoes still do erupt and create new islands. “They” are still making land, in fact.

          Just imagine a volcano erupting in the downtown area and creating a new island there.

        • February 19, 2008 at 2:54 PM #156018
          Eugene
          Participant

          Actually, the earth is still geologically active, volcanoes still do erupt and create new islands. “They” are still making land, in fact.

          Just imagine a volcano erupting in the downtown area and creating a new island there.

        • February 19, 2008 at 2:54 PM #156093
          Eugene
          Participant

          Actually, the earth is still geologically active, volcanoes still do erupt and create new islands. “They” are still making land, in fact.

          Just imagine a volcano erupting in the downtown area and creating a new island there.

        • February 19, 2008 at 2:27 PM #155976
          CogSciGuy
          Participant

          “Everyone run out and buy b/c they’re not making land anymore”

          Actually, the earth is still geologically active, volcanoes still do erupt and create new islands. “They” are still making land, in fact.

          Maybe that’d be a more fun way to object to that reason to buy.

        • February 19, 2008 at 2:27 PM #155984
          CogSciGuy
          Participant

          “Everyone run out and buy b/c they’re not making land anymore”

          Actually, the earth is still geologically active, volcanoes still do erupt and create new islands. “They” are still making land, in fact.

          Maybe that’d be a more fun way to object to that reason to buy.

        • February 19, 2008 at 2:27 PM #155997
          CogSciGuy
          Participant

          “Everyone run out and buy b/c they’re not making land anymore”

          Actually, the earth is still geologically active, volcanoes still do erupt and create new islands. “They” are still making land, in fact.

          Maybe that’d be a more fun way to object to that reason to buy.

        • February 19, 2008 at 2:27 PM #156073
          CogSciGuy
          Participant

          “Everyone run out and buy b/c they’re not making land anymore”

          Actually, the earth is still geologically active, volcanoes still do erupt and create new islands. “They” are still making land, in fact.

          Maybe that’d be a more fun way to object to that reason to buy.

        • February 19, 2008 at 2:34 PM #155704
          (former)FormerSanDiegan
          Participant

          It’s so affordable now. Quick. Everyone run out and buy b/c they’re not making land anymore and this will really be your last chance to buy.

          Funny, when I read the article I didn’t get any of these messages from it. By any metric homes are more affordable by the mere fact that prices have dropped by 20% or more in some cases.

        • February 19, 2008 at 2:34 PM #155986
          (former)FormerSanDiegan
          Participant

          It’s so affordable now. Quick. Everyone run out and buy b/c they’re not making land anymore and this will really be your last chance to buy.

          Funny, when I read the article I didn’t get any of these messages from it. By any metric homes are more affordable by the mere fact that prices have dropped by 20% or more in some cases.

        • February 19, 2008 at 2:34 PM #155994
          (former)FormerSanDiegan
          Participant

          It’s so affordable now. Quick. Everyone run out and buy b/c they’re not making land anymore and this will really be your last chance to buy.

          Funny, when I read the article I didn’t get any of these messages from it. By any metric homes are more affordable by the mere fact that prices have dropped by 20% or more in some cases.

        • February 19, 2008 at 2:34 PM #156007
          (former)FormerSanDiegan
          Participant

          It’s so affordable now. Quick. Everyone run out and buy b/c they’re not making land anymore and this will really be your last chance to buy.

          Funny, when I read the article I didn’t get any of these messages from it. By any metric homes are more affordable by the mere fact that prices have dropped by 20% or more in some cases.

        • February 19, 2008 at 2:34 PM #156083
          (former)FormerSanDiegan
          Participant

          It’s so affordable now. Quick. Everyone run out and buy b/c they’re not making land anymore and this will really be your last chance to buy.

          Funny, when I read the article I didn’t get any of these messages from it. By any metric homes are more affordable by the mere fact that prices have dropped by 20% or more in some cases.

        • February 19, 2008 at 2:18 PM #155972
          jpinpb
          Participant

          It’s so affordable now. Quick. Everyone run out and buy b/c they’re not making land anymore and this will really be your last chance to buy.

        • February 19, 2008 at 2:18 PM #155974
          jpinpb
          Participant

          It’s so affordable now. Quick. Everyone run out and buy b/c they’re not making land anymore and this will really be your last chance to buy.

        • February 19, 2008 at 2:18 PM #155979
          jpinpb
          Participant

          It’s so affordable now. Quick. Everyone run out and buy b/c they’re not making land anymore and this will really be your last chance to buy.

        • February 19, 2008 at 2:18 PM #155992
          jpinpb
          Participant

          It’s so affordable now. Quick. Everyone run out and buy b/c they’re not making land anymore and this will really be your last chance to buy.

        • February 19, 2008 at 2:18 PM #156068
          jpinpb
          Participant

          It’s so affordable now. Quick. Everyone run out and buy b/c they’re not making land anymore and this will really be your last chance to buy.

      • February 19, 2008 at 2:16 PM #155967
        (former)FormerSanDiegan
        Participant

        I saw the headline and didn’t even bother to read it. The headline was enough for me to laugh.
        To me the headline states the obvious. Prices were lower in the last quarter of 2007, compared to 2006. Furthermore interest rates were lower. Therefore, housing is more affordable than the previous year. I don’t see why this is controversial. This is what we have all been observing here. The article does not say that it won’t get more affordable in the future. Regardless of the flawed metric being used, homes are getting more affordable. Isn’t this what we expect ?

      • February 19, 2008 at 2:16 PM #155969
        (former)FormerSanDiegan
        Participant

        I saw the headline and didn’t even bother to read it. The headline was enough for me to laugh.
        To me the headline states the obvious. Prices were lower in the last quarter of 2007, compared to 2006. Furthermore interest rates were lower. Therefore, housing is more affordable than the previous year. I don’t see why this is controversial. This is what we have all been observing here. The article does not say that it won’t get more affordable in the future. Regardless of the flawed metric being used, homes are getting more affordable. Isn’t this what we expect ?

      • February 19, 2008 at 2:16 PM #155987
        (former)FormerSanDiegan
        Participant

        I saw the headline and didn’t even bother to read it. The headline was enough for me to laugh.
        To me the headline states the obvious. Prices were lower in the last quarter of 2007, compared to 2006. Furthermore interest rates were lower. Therefore, housing is more affordable than the previous year. I don’t see why this is controversial. This is what we have all been observing here. The article does not say that it won’t get more affordable in the future. Regardless of the flawed metric being used, homes are getting more affordable. Isn’t this what we expect ?

      • February 19, 2008 at 2:16 PM #156063
        (former)FormerSanDiegan
        Participant

        I saw the headline and didn’t even bother to read it. The headline was enough for me to laugh.
        To me the headline states the obvious. Prices were lower in the last quarter of 2007, compared to 2006. Furthermore interest rates were lower. Therefore, housing is more affordable than the previous year. I don’t see why this is controversial. This is what we have all been observing here. The article does not say that it won’t get more affordable in the future. Regardless of the flawed metric being used, homes are getting more affordable. Isn’t this what we expect ?

    • February 19, 2008 at 1:40 PM #155947
      jpinpb
      Participant

      I saw the headline and didn’t even bother to read it. The headline was enough for me to laugh. Almost every single credible economist out there is pretty much saying the real estate market will suck for at least another year. Anyone that held out this long would be quite foolish to run out and buy now. I look at houses out there for sale w/owners who are maxed out and can’t reduce that will be bank owned by year end. The more inventory, the lower the price. Why overextend yourself now, knowing if you buy, you will lose equity upon signing docs.

    • February 19, 2008 at 1:40 PM #155949
      jpinpb
      Participant

      I saw the headline and didn’t even bother to read it. The headline was enough for me to laugh. Almost every single credible economist out there is pretty much saying the real estate market will suck for at least another year. Anyone that held out this long would be quite foolish to run out and buy now. I look at houses out there for sale w/owners who are maxed out and can’t reduce that will be bank owned by year end. The more inventory, the lower the price. Why overextend yourself now, knowing if you buy, you will lose equity upon signing docs.

    • February 19, 2008 at 1:40 PM #155968
      jpinpb
      Participant

      I saw the headline and didn’t even bother to read it. The headline was enough for me to laugh. Almost every single credible economist out there is pretty much saying the real estate market will suck for at least another year. Anyone that held out this long would be quite foolish to run out and buy now. I look at houses out there for sale w/owners who are maxed out and can’t reduce that will be bank owned by year end. The more inventory, the lower the price. Why overextend yourself now, knowing if you buy, you will lose equity upon signing docs.

    • February 19, 2008 at 1:40 PM #156043
      jpinpb
      Participant

      I saw the headline and didn’t even bother to read it. The headline was enough for me to laugh. Almost every single credible economist out there is pretty much saying the real estate market will suck for at least another year. Anyone that held out this long would be quite foolish to run out and buy now. I look at houses out there for sale w/owners who are maxed out and can’t reduce that will be bank owned by year end. The more inventory, the lower the price. Why overextend yourself now, knowing if you buy, you will lose equity upon signing docs.

    • February 19, 2008 at 4:01 PM #155749
      DWCAP
      Participant

      “Funny, when I read the article I didn’t get any of these messages from it. By any metric homes are more affordable by the mere fact that prices have dropped by 20% or more in some cases.”

      I got that pro-spin message. It is one of those support articles that they will then cite in an oped piece or someother RE promo as evidence to buy now.
      There is a positive tone to this piece because they word it as 33% of households can afford an entry level house, and then cite the improvement over last year. Anyone could turn it around and give it a negative tone, saying 67% of household in CA CANT afford an entry level house, even if 80% couldnt last year. Id like to see that come out the the CAR mouthpiece some month (and not have it liked to a plea for a Gov bailout).

      BTW, does this take into account all CA housholds? I mean, my parents could afford an entry level home in CA today, they could afford 5,(infact they own 4, plus the very non entry level house they live in) not that they are in the market.

      How is it a healthy market or an improving market when the only people who could play are the ones who dont want to?

      • February 19, 2008 at 4:03 PM #155759
        sdrealtor
        Participant

        4X HH Income? Personally I wouldnt go above 3X but I guess I’m just a conservative SOB.

      • February 19, 2008 at 4:03 PM #156041
        sdrealtor
        Participant

        4X HH Income? Personally I wouldnt go above 3X but I guess I’m just a conservative SOB.

      • February 19, 2008 at 4:03 PM #156049
        sdrealtor
        Participant

        4X HH Income? Personally I wouldnt go above 3X but I guess I’m just a conservative SOB.

      • February 19, 2008 at 4:03 PM #156061
        sdrealtor
        Participant

        4X HH Income? Personally I wouldnt go above 3X but I guess I’m just a conservative SOB.

      • February 19, 2008 at 4:03 PM #156140
        sdrealtor
        Participant

        4X HH Income? Personally I wouldnt go above 3X but I guess I’m just a conservative SOB.

    • February 19, 2008 at 4:01 PM #156031
      DWCAP
      Participant

      “Funny, when I read the article I didn’t get any of these messages from it. By any metric homes are more affordable by the mere fact that prices have dropped by 20% or more in some cases.”

      I got that pro-spin message. It is one of those support articles that they will then cite in an oped piece or someother RE promo as evidence to buy now.
      There is a positive tone to this piece because they word it as 33% of households can afford an entry level house, and then cite the improvement over last year. Anyone could turn it around and give it a negative tone, saying 67% of household in CA CANT afford an entry level house, even if 80% couldnt last year. Id like to see that come out the the CAR mouthpiece some month (and not have it liked to a plea for a Gov bailout).

      BTW, does this take into account all CA housholds? I mean, my parents could afford an entry level home in CA today, they could afford 5,(infact they own 4, plus the very non entry level house they live in) not that they are in the market.

      How is it a healthy market or an improving market when the only people who could play are the ones who dont want to?

    • February 19, 2008 at 4:01 PM #156039
      DWCAP
      Participant

      “Funny, when I read the article I didn’t get any of these messages from it. By any metric homes are more affordable by the mere fact that prices have dropped by 20% or more in some cases.”

      I got that pro-spin message. It is one of those support articles that they will then cite in an oped piece or someother RE promo as evidence to buy now.
      There is a positive tone to this piece because they word it as 33% of households can afford an entry level house, and then cite the improvement over last year. Anyone could turn it around and give it a negative tone, saying 67% of household in CA CANT afford an entry level house, even if 80% couldnt last year. Id like to see that come out the the CAR mouthpiece some month (and not have it liked to a plea for a Gov bailout).

      BTW, does this take into account all CA housholds? I mean, my parents could afford an entry level home in CA today, they could afford 5,(infact they own 4, plus the very non entry level house they live in) not that they are in the market.

      How is it a healthy market or an improving market when the only people who could play are the ones who dont want to?

    • February 19, 2008 at 4:01 PM #156052
      DWCAP
      Participant

      “Funny, when I read the article I didn’t get any of these messages from it. By any metric homes are more affordable by the mere fact that prices have dropped by 20% or more in some cases.”

      I got that pro-spin message. It is one of those support articles that they will then cite in an oped piece or someother RE promo as evidence to buy now.
      There is a positive tone to this piece because they word it as 33% of households can afford an entry level house, and then cite the improvement over last year. Anyone could turn it around and give it a negative tone, saying 67% of household in CA CANT afford an entry level house, even if 80% couldnt last year. Id like to see that come out the the CAR mouthpiece some month (and not have it liked to a plea for a Gov bailout).

      BTW, does this take into account all CA housholds? I mean, my parents could afford an entry level home in CA today, they could afford 5,(infact they own 4, plus the very non entry level house they live in) not that they are in the market.

      How is it a healthy market or an improving market when the only people who could play are the ones who dont want to?

    • February 19, 2008 at 4:01 PM #156130
      DWCAP
      Participant

      “Funny, when I read the article I didn’t get any of these messages from it. By any metric homes are more affordable by the mere fact that prices have dropped by 20% or more in some cases.”

      I got that pro-spin message. It is one of those support articles that they will then cite in an oped piece or someother RE promo as evidence to buy now.
      There is a positive tone to this piece because they word it as 33% of households can afford an entry level house, and then cite the improvement over last year. Anyone could turn it around and give it a negative tone, saying 67% of household in CA CANT afford an entry level house, even if 80% couldnt last year. Id like to see that come out the the CAR mouthpiece some month (and not have it liked to a plea for a Gov bailout).

      BTW, does this take into account all CA housholds? I mean, my parents could afford an entry level home in CA today, they could afford 5,(infact they own 4, plus the very non entry level house they live in) not that they are in the market.

      How is it a healthy market or an improving market when the only people who could play are the ones who dont want to?

  • Author
    Posts
Viewing 20 reply threads
  • You must be logged in to reply to this topic.