Posted by Rich-CA on May 08, 2008 at 11:39:31:
In Reply to: California Dreaming posted by Kenneth Hocking on May 07, 2008 at 21:44:50:
In my own neighborhood the gap between rents and payments on a 30 year mortgage (assuming zero down) WERE between 40-50%, meaning the monthly costs were less than half if you just rented the house. These are now more equal with rents in my neighborhood rising to the $2400 - $2700 per month level, which will cover a 30 year mortgage at 10% down plus taxes and insurance (heck, I pay $2800 per month on a 7 year mortgage with 75% down but including taxes and insurance). $600 per month less is nowhere near enough to cause me to move. Especially when my mortgage falls to zero in 5 more years. I originally moved to CA from New England specially based on two criteria. (1) average temperatures in December through March, (2) distance from the ocean. Now with global cooling taking away much of my beloved warm weather, I am looking elsewhere (last July the temps rarely broke 70 degrees whereas in 1996 we were getting 114 degree temps in the same month). The average temps have been dropping as well to the point where we're just a handful of degrees above snow.
In any case, I bring this up because the criteria for a Primary residence is different than for an investment.
Oh, and as to incomes. I worked in the high tech field for two decades before I "retired". These days software development pays around $100-125k and most couples I know have two of those incomes. Those getting $80k are few and tend to be technological dinosaurs or they're kids with no real job experience in the field. Salaries pushing $200k are not as rare as one might think. And the job market is so tight I'm still getting calls from headhunters even though I have been out of the system since 2002.
As I said before, using the statewide median income for determining affordability makes no sense because CA is in reality several distinct and largely separate markets. That is not just on the cost of housing side, its also on the income side.
That said, even with my own city limits, I recently saw a SFR 2/1 listed for $89k. That same area was over $200k just 2 years ago. But that area is a "bring your flak vest and uzzi" type area. It IS good to see the gap between the better areas and the war zones widening because it makes these areas much more affordable. Perhaps my cleaning lady can buy her own house instead of living with her aunt and cousins in one house (there are 4 families in there). Its better than my plumber who has to drive an hour for most of his service calls because he has to live out in "RE price free fall" country.
- Florida is warmer steve 13:45:13 05/08/08 (9)
- Property tax wildly out of control Rich-CA 08:45:52 05/09/08 (8)
- Rednecks Texans Predjudice is not NICE Kenneth Hocking 10:26:43 05/09/08 (7)
- Sorry Rich-CA 13:56:17 05/09/08 (3)
- About diversity and food, not RE (OT) matx 22:16:09 05/09/08 (2)
- Re: About diversity and food, not RE (OT) Rich-CA 11:36:17 05/10/08 (1)
- Very interesing posts... Bill H 11:39:32 05/14/08 (0)
- Hey what did I miss? IB (NJ) 11:07:26 05/09/08 (2)
- Jersey customer service Ben (NJ) 05:53:03 05/10/08 (1)
- Damm! Unreal indeed....(nt) IB (NJ) 13:05:31 05/10/08 (0)
- FANTASTIC EXAMPLE Kenneth Hocking 12:10:14 05/08/08 (3)
- Further refinement of data Rich-CA 09:03:57 05/09/08 (2)
- 289,000 for a 2/1 WOW CHEAP! Kenneth Hocking 10:11:38 05/09/08 (1)
- I have an even lower price Rich-CA 13:29:22 05/09/08 (0)