Comments on: 10 Reasons Why Buying a Home in Southern California today is a Mistake. California Housing and Financial Market Analysis produces no Green Shoots.

By: Socal Bubblehead

Socal Bubblehead — Thu, 28 May 2009 04:16:17 +0000

‘but can’t drop too far in areas like Inland Empire.”

HAHAHAHHAA. The birth place of the 40k millionaire, over extended wannaB yuppy douche bag families and the interest only option ARM loan.
You are NAIVE.

By: Gary

Gary — Wed, 20 May 2009 00:33:43 +0000

1) inflation will cause mortgage rates to rise which will cause prices to drop – which will just exasperate the problem.

2) ya right. we can count on the government to get it right

By: ho ho ho

ho ho ho — Tue, 19 May 2009 18:20:32 +0000

Even if this scenario is correct, and assuming all those people underwater will be defaulting in the future, the bottom line is THEY STILL NEED A PLACE TO LIVE. That means they’ll most likely be renting. Well, banks don’t rent out foreclosed properties–they just sit empty. That means houses available for rent become saturated. That will drive rent up first, and when rent goes up, people will buy houses again to flip / rent as investment.

All the facts in the article make great sense, and I think prices will still drop, but can’t drop too far in areas like Inland Empire. Otherwise rent will exceed mortgage.

Call me naive, but if the future of this country really goes to the $hitter, then what does it matter how much money you save in the bank anyway? I’d rather have a house to live in than $1 million worth of toilet paper.

By: Rick

Rick — Wed, 13 May 2009 16:14:19 +0000

We have a bid on a short sale in a nice neighborhood in Burbank.
We bid $450,000 ($12,000 over asking price) of course other people bid even higher but the seller took our offer. We made $175,000 between us last year and are doing OK this year, but her job will end soon (contract work) and I lost my job but am now making my money through self employment and unemployment. Comps in the area recently are going for $560,000. We will be paying about $700 more on the mortgage then we are currently paying for apt. rent. With the tax breaks our payments will be roughly the same as they are now.
Being that this is a low end home (unlike much of what the article is describing) and it is a desirable neighborhood, I wonder…Are we doing the right thing?
Please advise.

By: Gus

Gus — Tue, 12 May 2009 22:38:51 +0000

Inflation will lead to increases in interest rates, which almost always implies lower asset prices — and especially here where asset prices are so firmly tied to interest rates, i.e., affordability. Only wage inflation high enough to offset the adverse impact on affordability caused by increased interest rates would push asset prices nominally higher. Oops, just saw the posts below on this same issue . . . I agree completely.