Comments on: Real Homes of Genius: Today we Salute you Glendale. When Prime is no Longer Prime and WaMu Dilution.

By: Exit

Exit — Fri, 11 Apr 2008 01:44:32 +0000

@Don-

Your website link wasn’t linking.

I think what “What?!” is saying, is, generally speaking, all statistical generalizations never count none of the infinite variety of perfectly formed J-shaped curves supporting the perpetual increase in home values.

Or put another way, Horse hockey. If you make claims or spout platitudes, provide data or expect to get called out. And this piece - “The federal government are buying these MBS’s to stabilize the market. A stable market will adjust itself to the correct pricing levels.”

That’s EXACTLY the point. What ARE ‘the correct pricing levels’? Less or greater than what the gubmint is paying? The discontent you see is from people recognizing that taxpayers - US - foot the difference. Because if you think for one split second that the firms that sold the incorrectly priced MBS to US are gonna be forced to come up with the difference, once the market is ’stabilized’ and they no longer are in imminent danger of collapse - sparky, I have a bridge with your name on it, crossing some Florida swampland. Or to update the cliche, an overpass of the 405 that you can buy.

By: What?!

What?! — Thu, 10 Apr 2008 20:04:51 +0000

“Values are subjective. In S. California there is a big influx of Asians that come to the states with money. They buy nice houses, cars and start businesses with there family.”

That’s nice Don, could you please ask this loaded group of individuals to purchase some of the lovely homes in the San Fernando Valley (Toluca Lake, Studio City, Sherman Oaks, Encino), they’ve been languishing on the market for many months with numerous price reductions and they still aren’t moving.

“The average income in this area also includes the low wage Mexican immigrants, which there are many. It is not at all unusual for a married couple to make $150K per year here. That is the norm. That is how a $500K starter house is affordable. ”

What area are you referring to where the average income of a married couple is $150k per year?

By: Jason

Jason — Thu, 10 Apr 2008 18:36:44 +0000

In the next 30 days I will be credit card debt free. Then I am going to work on my home equ. In a few more years I should be riding fat. I payed $14,900 in credit card debt in 14 months! Shweet!

Jason

By: Don

Don — Thu, 10 Apr 2008 17:30:01 +0000

Values are subjective. In S. California there is a big influx of Asians that come to the states with money. They buy nice houses, cars and start businesses with there family. As there wealth grows they pool there resources and buy family members homes and help them start a business or get a college degree to become a Doctor or etc. The cost of housing is high, but there are other costs that help off set some of these costs. The cost to heat my house this past winter was @ $30.00 a month. $3000.00 for heating oil, nope! No salt on the roads means no rusted cars after a few years. There are costs and benefit off-sets to the prices of homes here. And there are people who feel the costs are justified. That is why the market sets the prices and buyers pay the prices. There are always times of price and demand increase and decreases.
When panic sets into a market it can become the driving force of the market. The federal government are buying these MBS’s to stabilize the market. A stable market will adjust itself to the correct pricing levels.
The average income in this area also includes the low wage Mexican immigrants, which there are many. It is not at all unusual for a married couple to make $150K per year here. That is the norm. That is how a $500K starter house is affordable. And when they are ready to move up to a 900K house in a fews years they take there equity from there first house which make the $900K affordable. It is all relative to the complete market in which it all operates.

By: js

js — Thu, 10 Apr 2008 01:04:19 +0000

regarding Nick’s post and the video: does the savings amount include retirement savings/investments? If not then we’re comparing apples to oranges.

I think it is true that previous generations didn’t save as much for retirement and thus could have more liquid savings. There are several reasons for this. The primary reason for the shift in types of savings toward retirement plans is that previous generations were getting more our of social security and were far more likely to have a pension. Thus in many ways previous generations really were richer! But the secondary reason is that the one thing that has increased drastically in CA (besides house prices!) compared to previous generations is taxes. Taxable savings are punished pretty harshly. There’s a very strong incentive to put that money in tax deferred accounts or at least in tax free accounts.

I wonder a lot about how my parents did it (got by and bought a house and retired comfortably and everything). I ask them what percentage of their income they put away for retirement when they were younger. It’s shocking. For a long time my mom for instance put away very little for retirement! She wasn’t like me trying to put away at the very *minumum* 10% for retirement come hell, high water and the end of the earth. She claims she gave retirement savings low priority then because she was putting all her money into paying off the house early! As for me, property in CA is unaffordable (sad but true) but retirement savings are non-negotiable.