housing crash

The FDIC did a study on housing buddles and crashes. In general, most bubbles are followed by a period of price stagnation for a few years.
 
Los Angeles housing is crazy

I arrived in Los Angeles in 2002 with $1000 to my name

By then the housing boom was already picking up steam....

As I earned more and more income, up went the housing prices

It's gotten to the point that in 2004 I earned $250k, and I still don't feel like I can "afford" something in a nice neighborhood

its such a ripoff, I actually refuse to buy anything

I rent a nice house in West La for $2250 per month, I think rent control prevents increases of more than 3% per annum

If I bought what I am renting, just my property taxes would be about $1200 per month ?!?!?!?!?!

so basically what I am saying is that unless housing prices come down,I guess i will be renting for a long long long time

And yes I would really like to own a house that I live in.

How high can this thing go? its insane....

I calculated that a house that I would be happy with in my area costs right now about $1 million at least, probably more even

For it to make FINANCIAL sense for me to buy that house, its price would need to be $600k

so a 40% drop needed! (at least) - the odds of that? very very slim

so just call me mr renter forever :-)

lol



here is a decent house down the road from me

http://www.realtor.com/FindHome/Hom...4B25B656026C&snumxlid=1047072939&lnksrc=00002
 
I want to offer a different perspective just to illustrate some issues. I was a homeowner in Columbus, OH from 2000 to 2002. We sold our house so we could relocate and I could start my business. We moved back to Columbus in 2003 and decided to rent a house instead of buy. Part of that decision was due to financial reasons but part of it was because of what we deemed to be lack of significant price appreciation in markets other than those of the best school districts, of which there are only a few. For example, we live in a trendy area for young professionals but it would not be considered desirable for purposes of schools. Over the past few years, we've not seen meaningful house price increases in this area.

To live in one of the better school districts, we would probably have to pay at least $200,000 for a house that is probably 50-80 years old with about 1500 square feet (this is the low end -- obviously it goes higher). However, our property taxes on that house would probably be in the $5,000-6,000+ range. A nicer house in these areas definitely pushes you into 5 digits in terms of property taxes. Granted, you are able to deduct property taxes but this still seems to be a huge amount. Many of my peers who live in these better school districts pay as much in property taxes in a year as I do in rent.

One of my relatives bought a newly built house in a non-trendy, but relatively nice/safe Columbus suburb about 4-5 years ago for about $150,000 because everyone told her she was throwing her money away on rent. She wanted to sell the house after being there 2 years (due to getting married, etc.) but a real estate agent told her that she could only get about $135,000 if she sold (not including real estate comissisions!) becaues new houses just like it were being built just down the road. Accordingly, she's still living there knowing that she can't sell her home at a profit after 4-5 years.

This just emphasizes the point that you need to be careful buying a home -- don't feel pressure to do so -- especially if buying the home stretches you financially.
 
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