Comments on: Southern California Housing Still Not Finding a Bottom: Worst Decline Ever, no Exaggeration. Examining the Numbers in Great Detail.

By: Hugh Pavletich

Hugh Pavletich — Fri, 18 Apr 2008 06:14:55 +0000

Why not compare the current performances of Texas and California?

California has severe land scarcities and excessive land use regulation - creating a fertile environment for housing bubbles to form. Texas does not have these artificial scarcities.

Unless these land scarcities and excessive regulations are dealt with - California can look forward to more destructive housing bubbles in the future.

If these artificial scarcities push housing above the affordable maximum of three times household income - housing bubbles will likely form - pop - then deflate.

Check out the latest 2008 4th Edition Demographia Survey www.demographia.com of the 227 major urban markets of the United States, Canada, Republic of Ireland, United Kingdom, Australia and New Zealand.

Hugh Pavletich
Co author - Annual Demographia International Housing Affordability Survey

By: Teresa

Teresa — Thu, 17 Apr 2008 11:47:14 +0000

——Many are living paycheck to paycheck with only 1 to 2 months of emergency funds.——-

You probably don’t hear this very often, but you’re being optimistic here. =) A helluva lot of people don’t even have one to two WEEKS of emergency funds. One missed paycheck–just one–and their house of cards topples.

By: Jes

Jes — Thu, 17 Apr 2008 05:04:01 +0000

I want to know why the banks continue to sit on all these properties (more than 11 months inventory!) It’s hard to understand how they seem to think it’s better to get nothing than to get a little bit, given that most of these houses are simply not selling at all.
Riverside renter, if you’re in a position to do so, what about offering 50K less on that house? If they say no, you can up your bid.

By: Jed Steven

Jed Steven — Thu, 17 Apr 2008 03:50:43 +0000

I think the effects are alarming. We are at the mercy of the secondary markets and investors. They have taken away that which financed so many. I too hope the taxes start to fall to help us somehow.

By: AnnScott

AnnScott — Wed, 16 Apr 2008 22:47:28 +0000

Riverside Renter - you ask about the Adabi comment in Hong’s article. I have previously posted the income groups and the prices which are affordable for the incomes in different areas, and how to calculate them. Doc runs them all the time. Adabi is looking at the Census data for a specific neighborhood (usually by zip code) and calculating what those incomes can afford. Now, there is a cathc in defining what is affordable. The California Realtors group uses some pretty loopy numbers like figuirng that a household can spend 50% of income on the mortgage payment alone but not including taxes and insurance. If you want to see if the prices in an area are ‘affordable’ for the people who live there, pull up the income data for that zip code on the US Census site (most complete datat is for 2006 - there is a year lag in numbers) and see how many people can afford the median priced house if they do 10% down with a 30 year fixed at the interest rate du jour - and still not spend more than 31% of their gross income on mortgage taxes and insurance. To add in taxes, a working nmuber is to add an amount equal to 1% of the purchase price and for insurance, figure $50-60 per $100,000 of insured value.
****As for me,I’m going back to painting the living room, dining room and kitchen. Too chilly here yet to go to the beach.