The assumption would be that you could tear down the old building, build a new one with straight zoning that is much larger, and that the lots price plus the construction costs would produce a reasonable price per square foot.

I basically looked at the 30+ homes for sale similar to mine and priced it 30th. We sold in 20 days - and will be out on Nov. 1. We got a fair price - much more than we paid back in 1999, and will be renting a nice three level –in the city with everything but electric included for about 1000 less per month than it costs to maintain the McMansion we had.

Life is good. AS for the Florida deal—we will be happy renters, I have seen 700K+ homes for rent for under 2K in Naples. I get the math now–thanks, Dr. HB

I posted on my blog about how I was in the market to buy a new house.

Up until that date - I was full-on making offers and everything; I was your typical, dumb-ass, knife-catching, would-be first-time buyer.

Fast forward to last Saturday: I go to a cook-out at a friend’s, and she introduces me to HER friend because she knew I had strong feelings about the housing market. This girl was far from an uninformed idiot: she recently finished a graduate program at one of the country’s premier Journalism schools, got a job in LA (at NPR’s Marketplace, no less) and was curious about buying and the market with all the confusing stuff in the news.

We talked for over an hour and I can tell you, Andre, people ARE NOT HEARING THE NEWS about the dangers of buying in this market.

At the most, they hear – due to the credit crunch, it’s a buyer’s market. Or perhaps until the sub-prime shakeout, you should wait awhile.

Yet, in the other ear, there is still the constant drumbeat of “if you like it, buy it!”, or “only buy what you can afford!” or “Interest rates are still low!”

No one is saying “houses are overpriced” except these fringe bloggers like Dr.HB. You can’t even say it on this blog with out trolls flaming the comment boards with prolonged econ 101 hack-job discussions on what “home value” actually means.

All that to say: we are a long ways away from REALISTIC home pricing is being set.

California is once again ahead of the curve:

“The current GSE conforming loan limit for lenders willing to originate conforming mortgage loans for median-priced homes in California is $417,000; however, according to the California Association of Realtors, the median price of a single family residence in July was $586,030. Again, this disparity makes these products practically irrelevant in California,” Gov. Schwarzenegger writes in the letter to Congress.

Raise the limits, baby.

GSE Loan Limit Exceptions: Are They Really Fair?