Comments on: Affordable Housing: Finding Affordable Housing just got Easier in California.

By: LadyCiani

LadyCiani — Wed, 23 Jul 2008 22:16:31 +0000

My husband worked at Countrywide for I think 3 years, first in loan servicing and then as a loan officer. He wasn’t a good loan officer because he couldn’t bring himself to recommend these terrible loans for people who didn’t know what they were getting in to.

The comment about “paying debt with debt” was something he told me came up almost daily while he was in loan servicing. People wanted to pay with credit cards so they could get cash back or reward points from their credit cards. Plus the minor pleasure of “sticking it to the man” and costing the mortgage company 1% or more in credit card fees.

In general, the idea of paying with a credit card has appeal, because of the “free money” angle, but it ONLY works for people who pay off their cards every month. All those other mortgage companies were smart to limit their exposure to risk as much as they did by forbidding payments on credit cards.

Also, my husband predicted the blow up from predatory lending over two years before the huge downturn: http://www.splorp.org/predatorylending-moronsdotorg.php

By: js

js — Fri, 18 Jul 2008 21:44:00 +0000

There’s a happy medium between the two Sean. It’s called renting

By: SEAN

SEAN — Fri, 18 Jul 2008 14:31:16 +0000

Stop taking the short term view, as I said the long view is higher fuel prices. The fact is those who sell us oil are running out of it, or using it for there own countries needs. As less oil ends up on the open market the higher the price becomes. One of the social problems I’ve noticed is the inability for many americans cant think globally. The atitude goes something like this-I demand to the world you MUST sell us oil cheeply or else we will just take it by forse, & now our bluff has been called resulting in an unessessary war. Our VP put it best when he said that “our way of life was non nogociable.” Oh really! Would anybody say that now, with everything that has been happening lately?

We are not there yet, but we are very close to a major inflection point where people will have to make a choice between lower cost housing with expensive commutes or housing cost that are higher with far less commuting costs. Pick your poison.

By: Robert Thompson

Robert Thompson — Fri, 18 Jul 2008 13:18:59 +0000

We’re not anywhere near the bottom, nor are we anywhere near affordability for the average person.
When cops and teachers can buy a house in SOCA(and I’m talking maybe 250K) then the thing has corrected.
It will take a couple more years I believe.

By: Expat

Expat — Fri, 18 Jul 2008 06:45:11 +0000

I suspect we will see a small bounce before markets finally find the bottom. As prices drop and things look cheap compared with 2006, there will be a rush to buy. Once the rare buyers with twenty percent down and solid incomes are gone, then most sellers will have to start dropping prices again. The first price rises will be celebrated nationwide; Lereah will hold a parade in his own honor; Wall Street will rally 1000 points. Then it will all reverse.

I don’t care about demand here or there. Real estate is local, but this market is regional and national right now. The real bottom will come when inventory is back to historical levels, when there are sufficient buyers with twenty percent down (so, basically, RE will never recover..ha ha ha), when Price-Income ratios drop to about 2.5, and when unemployment starts declining again.

As you said, it’s about affordable housing. It is not about “more affordable” (meaning less unaffordable) but plain old affordable. Until we have enough people earning enough money to finance enough homes, the market MUST drop.

I have had running debates about the national median income and whether to use household or individual. My belief is that the long term Price-Income ratio is based on individual income and should be between 2.5 and 3.0 nationally. In higher income areas, the ratio is higher. Consequently with a national median income of $48.5k the national median house price must drop to about $122k from about $196k right now.

I don’t care if houses are bigger, countertops are marble, or everyone gets a pool. It doesn’t matter. If that mattered we would all drive Ferraris whatever our income.

Burn, baby, burn.