MikeLA

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    • Wed Apr 2nd 14:23 PM | Rating: 0 0
      Commented on:
      How Far Will House Prices Fall? Implications From the Latest WSJ Survey
      Stanley, rents must be higher than mortgage payments, you apparently have never been a landlord. There is 1. mortgage payment 2. PMI (maybe) 3. insurance 4. real estate taxes 5. HOA (most likely) 6. maintenance 7. profit
      So you covered one out of 7. No one in his/her right mind would buy now for investing. Where I live (south OC), prices currently asked would have to come down 65% (YES THIS IS NOT A JOKE) for rent to break even with cost of carrying.
      This is why a 'buying a real estate for cash flow' is non existent in Orange County at the moment.
      Amazingly enough, this 65% fall is close enough to Income/Price ratio (which is about 55% drop here). I would say prices have to come down about 60% in the OC for market to move again.
      I don't know about the rest of the country, I suspect it's not nearly as harsh as it is here.
      In my neighborhood, I've seen a nice 2/2 with hardwood throughout, built loft and new everything go for 550K 2 years a go and now it goes for 350K. Still no buyers. I suspect that it will go down to under 200K before it moves.
      Even some people who I consider 'crazy spenders' (and who accidentally are getting married now, so they are in 'emotional spending spree with optimistic outlook' kind of mood), have canceled their home purchases. In both cases, because they have no money for a meager 5-10% downpayment.
      Not a scientific approach I know, but I know that I have the cash to buy but I think I would have to high on something to buy now. I would lose good chunk of it.
      View article »
    • Fri Mar 28th 15:44 PM | Rating: 0 0
      Commented on:
      U.S. Housing: The Big Picture by the Numbers
      The income projection is most troublesome. I just got my annual raise of meager 2% yesterday. Inflation according to the US is 4.5%, but in reality higher still. If gas, food etc go up, I can't really allocate house payments to match. And also consider that compound interest (after tax write-off) makes every 1$ in house price increase really $2.2.

      I think we keep deluding ourselves with these 'historical' facts, when in fact this nation is getting poorer and things are getting worse.

      Somebody in power should start heeding reality or reality will deals with them (and with all of all)

      And I make well over 100K. Living in SoCAL though, it means nothing and I am buckling under financial stress.
      View article »
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