Comments on: Real Homes of Genius: The Height of Insanity. Pico Rivera Home Taking Prices Back to 1995.

By: OILWELLDOCTOR

OILWELLDOCTOR — Tue, 28 Oct 2008 07:34:33 +0000

Nice to hear from you Doc. Seems all but those on this post can’t understand why they can’t have something for nothing.
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Teaser rate loans that reset only after considerable appreciation allowing a kick back on the third for a nice trip to the Bahamas or a flat screen TV. Job base is gone too.
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Either presidental candidate making promises they know they can’t keep. Ron Paul is one of the few that speaks openly about our problems and he is considered a nut case.

But then again, why not? See what the bonus money will be for the bankers we bailed out?

By: Jim

Jim — Tue, 28 Oct 2008 00:53:17 +0000

I agree this one’s a dog, but when figuring the attractiveness from an investor’s POV, you have to figure net cash flow, and that means you have to work in the depreciation. Writing down 170.000 over 17 years gives an additional $800+ a month to shelter income.

Keep it real.

By: PSPS

PSPS — Tue, 28 Oct 2008 00:43:28 +0000

Nice to have you back, Doc.

What’s really disturbing to me is McCain’s oft-blurted “idea” to have “the government buy up all these bad mortgages.” I guess this is a new way of buying votes — have taxpayers buy your fradulently-obtained overpriced house for you!

If this house were still occupied, that would mean that its occupants would apparently get to keep it while the taxpayers make a balloon payment on their behalf of $300K.

What’s next? Introducing a new character on the campaign trail: “Joe the Shady Appraiser?”

By: dangermike

dangermike — Tue, 28 Oct 2008 00:04:18 +0000

Hey doc, great article as usual. But as you addressed in the comments of a previous post, the 3x salary rule applies to mortgage value. At this point, getting 0% down is highly unlikely. Even a 10% down could be tough for the kinds of work that would pulling the area wages (manual labor, office drones, etc., with little in the way of advanced skills to maintain a recession-safe position). So if we assume a $40,000 and a 20% down payment, that’s closer to $160,000. But that’s also making the presumptive leap that median wages are fit to buy houses. Pico has a lot of slummy areas pulling those median wages down. It may very well be that poorer areas with a lot of renters (like in the towns surrounding the 22 freeway in OC) might have housing straddling a higher wage percentile than the 50% line. Or so I would expect.
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Well, I suppose those prices might be pulled down farther as people making high enough wages to go somewhere nicer exercise that option. (although that may take a while given the unlikelihood that buyers from the last decade can get out with a substantial loss)

By: CompaJD

CompaJD — Mon, 27 Oct 2008 23:11:02 +0000

I guess the taxpayer will be paying 400K for homes like this one.There is no way in hell the prices for homes like this RHG will appreciate back up to 400K for at least another quarter century when inflation is running rampad. The only way to recover losses on this one is by discovering oil under it.