Real Estate market in your area ?

[HTSS_TR]

Looked at the houses sold in Turtle-Rock of Irvine, Southern California in 2010. Few houses were sold for more than asking price, the lowest sold is north of $800k except one at $770k, the highest was $2.8 mil. Some houses were sold within 45 days on the listing. On average most houses were sold within 3 months on the listing. What stand out was no house in this area was a forced sale by the bank.

Looks like the real estate in this particular community is stable, probably because of the excellent public schools, from kindergarten to high school.

 

[addyguy]

Ottawa, Canada has always been very stable, and very strong - govt. town.

 

[xxch4osxx]

I don't understand how people can afford a house for $800,000 What average working joe can afford that?

 

[Tempest]

Irvine is a fairly wealthy area set in low mountains with lots of green. Nice place to live if it wasn't in California.

 

[JHZR2]

Nothing ever really went down by us. In the deepest slump of the housing bust, the home next to us sold for very close to what we bought ours for two years before (and was smaller/not as nice, IMO). There may have been a bit more inventory, but homes are moving. One that a friend looked into recently just dropped price, but it wasnt in our town, and may have been too much to begin with.

I cant say we were hit by the RE market bust at all. Homes are selling.

 

[JHZR2]

Originally Posted By: xxch4osxx
I don't understand how people can afford a house for $800,000 What average working joe can afford that?


As I understand it, in Japan, parents leave mortgages to their children.

If you buy an $800k home on $150k salary and a 40yr mortgage, and just never pay it off... are you better off than renting? I suppose that is the question.

IMO many never plan on paying off mortgages anyway.

 

[SuperDave456]

Yep, in Japan they have 100 and 150 year mortgages. Multi Generational mortgages.
And they charge/rent by the Square Centimetre.

Kind of incredible stuff.

All the neighbourhoods that had real trouble here were all the new million dollar plus areas. My In-laws have a large house they bought when one of those areas was new and just being built, a bunch of families moved in, the economy crumbled, then they lost the home or just realised that they had to much home and moved out.

I think a lot of people were burned by buying homes they could not afford in the first place. Then many others were burned when the world economy collapsed and their personal business went under.

The home we bought was owned buy a guy who ran a Pool Cleaning business. Once the housing market collapsed he lost it all.
Feel sorry for the guy, but I got a great deal on the house.

Unfortunately I am now in a similar boat.
I survived the first 4 rounds of lay-off's the 5th round got me.

Need to figure out how I am going to go about getting a new job as what I have been doing for the past 4 months isn't working. Might actually go get 3-4 part time jobs.
Although I really don't like the idea of suffering until I find something I like. I don't know if I will be able to find a job that I like and has a decent salary before I am out of $$.

 

[CATERHAM]

Our Federal gov't recently reduced the maximum amortization period from 40yrs to 25yrs or something like that.

I never did understand holding onto a mortgage. Not to brag but I paid mine off 25 years ago when I was still a working salaried stiff. Sure we made sacrifices at the time but it was a priority.

 

[CATERHAM]

Originally Posted By: xxch4osxx
I don't understand how people can afford a house for $800,000 What average working joe can afford that?

It's easy, if both partners are pulling down a combined income of $125,000/yr and I'm not talking professional salaries.

 

[CATERHAM]

Originally Posted By: Tempest
Irvine is a fairly wealthy area set in low mountains with lots of green. Nice place to live if it wasn't in California.

What's wrong with living California?
Is it just the higher State taxes?

 

[ChiTDI]

Originally Posted By: xxch4osxx
I don't understand how people can afford a house for $800,000 What average working joe can afford that?


Any working joe that becomes a believer that he can sell it next year for $900,000.
Hey my neighbor did it, why not me?
Like you, I believe in sense, value and objectivity. Those three go out the window when greed comes into play.

 

[Food Scientist]

Originally Posted By: CATERHAM
Originally Posted By: xxch4osxx
I don't understand how people can afford a house for $800,000 What average working joe can afford that?

It's easy, if both partners are pulling down a combined income of $125,000/yr and I'm not talking professional salaries.


Most professionals will tell you only to buy a house that is no more than 3 times your income. 125*3=$375k. Besides 125k/yr is about 10k/month and the payment is 4k/month at 4.5% interest for 30 years. Then add in taxes and insurance. Not even close to feasible.

 

[The Critic]

Assuming you have a decent job in CA, mid-career, I would expect each person to be making around 100k/yr. Two people, with a household income of a bit over 200k, a 800k mortgage may be do-able.

 

[CATERHAM]

Assuming 25% down, and that $800,000 is not your first purchase.
Financing $600,000 @ 4.5% is 27,000 carrying cost or there abouts.
On a $125,000 income, even after taxes is no problem in my book.

 

[Tempest]

Originally Posted By: CATERHAM
Originally Posted By: Tempest
Irvine is a fairly wealthy area set in low mountains with lots of green. Nice place to live if it wasn't in California.

What's wrong with living California?
Is it just the higher State taxes?

High cost of living. State income tax. Other "P" topic items....

By the way, I grew up there so I know what it's like.

 

[daves87rs]

Going up...houses are going up as much as 50 percent!

Granted, these come from an average price of around 50k...

 

[PandaBear]

800k house is very common here, at least in the NorCal. However, they are not starter home that people live in forever. Many start with a condo that cost 400k and graduate to a townhouse that cost 600k, then move to a house that cost this much.

Some people just have to have a big mortgage so their income don't hit AMT. Most family have 2 or fewer kids and an income of $110k per spouse to afford this. Property tax is only 1.2 or so % due to prop 13 but when you look at the mortgage, and after itemized deduction, federal and state income tax is nothing in comparison.

Why would people pay that much? because even a hood like Oakland would cost 400k. 800k is a recent / new upper middle class neighborhood with good school. 600k is a run down house in good neighborhood, 500k is a town house, 400k is a condo, and nothing is less than 300k usually unless you live 3 hours away from work.

Why people live in California? It is easier to find jobs if you have the skill, and typically you earn 20-40% more than the rest of the nation for the same kind of work.

 

[daves87rs]

Very interesting way to put that....

 

[Cristobal]

Depends on your field. My field more or less evaporated. Most public employees in California make way over that amount, even the lowliest clerk. I cannot say more or this conversation will get too political.

 

[757guy]

Originally Posted By: SVTCobra
Originally Posted By: CATERHAM
Originally Posted By: xxch4osxx
I don't understand how people can afford a house for $800,000 What average working joe can afford that?

It's easy, if both partners are pulling down a combined income of $125,000/yr and I'm not talking professional salaries.


Most professionals will tell you only to buy a house that is no more than 3 times your income. 125*3=$375k. Besides 125k/yr is about 10k/month and the payment is 4k/month at 4.5% interest for 30 years. Then add in taxes and insurance. Not even close to feasible.


I have never heard 3 times annual income limit quoted. Mortgage qualification guidelines specify a mortgage payment should not exceed 28% of gross monthly income and 38% total combined debt (including credit cards, car payments, etc.). For someone who makes $125,000 per year, that would mean a maximum monthly house payment of $2916.00 per month. ($550,000 mortgage at 5% = a monthly payment of $2952.52)

Not what I would do in this market, but using Conventional Mortage underwriting guidlines it would be feasable.

757 Guy