“Now Priced to Sell!”

“Now priced to sell” at a mere $1,050,000. Let’s do the math here, if the suggested price of a house should be 2.5 times what you earn, that would mean that the family that would fill this 3b 2.5 bath , directly next to the freeway would need to be earning $420,000 a year salary. I don’t know about you, but if I were making that kind of money, I seriously doubt that I would chose to live right next to the freeway. Hmmm. In 1993 this same house sold for $115,525. That would mean that a person or family earning $46,210 a year could live there. That seems more appropriate, don’t you think? And, if, let’s say, this house had appreciated at, lets say a generous 3% a year (average?) after 14 years, this house would be valued at $171,741.93. Heck, that is the range of a house I would actually consider myself!

Okay, I’ve been reading Patrick.net pretty religiously the past week or so, and while massively depressing, it is also a learning experience. I am just, and I’ll probably say this a lot, really glad to be a renter right now and not employed in the real estate industry.

The media is playing the blame and sympathy game.
After reading these articles it is clear that these are the people to blame:
The realtors (greed)
The mortgage brokers (greed)
The fraud (greed and evil)
The Fed (who the fuck knows)
The Appraisers (they need a job too, you know?)
The new home builders (build build build!)
The government (property taxes baby!)
The media
And finally,
The buyers.

BUT, we can feel sympathy for the buyer’s situation because they were either “duped” or suckered into getting their “dream” or they didn’t know what they were signing, or, in a few news articles I’ve read they have chronic or life-threatening illnesses also sapping away at their income. Some even were preyed upon by mortgage lenders. There was even an article about a blind person who couldn’t read the mortgage contract, or someone who didn’t speak English, who also was unable to read the contract, who ALSO was given a mortgage with fraudulent information being used to get him the mortgage to begin with. But I just have to wonder…yes, really wonder…if you make $9 an hour why you would ever even think that you could own a half million dollar home or more? So, I lump the buyers in the blame pile too, because bottom line: they are the bottom line: it is their signature.

Now, it is unfortunate that people are losing everything, going bankrupt and having to forclosure or shortsale. It is even sucking for people who are now paying a mortgage on a house that’s appreciation is now in the reverse direction. But c’mon people! Even I went out and bought a book on “House buying for Dummies”. And really, after doing an online mortgage calculator (be wary of –who- offers the calculator) I came to the conclusion that the homes in the Los Angeles market were out of reach. Just based on my INCOME (hello? Anyone remember that income is what rents and prices are supposed to be based on?)

When I moved here in 1999, I should have bought a condo. BUT, I had no steady employment, and I wasn’t convinced that an interest-only mortgage with nothing down was a good idea? Why? Because everyone I’ve ever talked to or listened to about this subject in my life suggested a 30 year fixed, making an extra payment a year to shorten the life of the loan. Why be careless? So, I didn’t.

And now, looking at the 10 or 11 month supply of homes on the market (depending whose talking about available homes on the market) and the lack of real mortgages out there, it is looking bleak for a lot of people. The simple economics of supply and demand haven’t really started to show. I’m certain they are shaking people to the core, but they haven’t quite come to understand the full gravity of the situation here.

I have to write about this. One of the reasons I’m so under-whelmed about the idea of a bailout is because I think the government needs to let things be so the market can continue with the cycle and not prolong the pain of this bubble bursting. Even if the pain lasts 10-11 years. OH, yes, I did include the government on the blame game. I put the government on this list because they get to charge property taxes on your home, so yeah, they love the fact that the appreciation went up some 700% or more in some areas. What a pork-belly treat!

I get to be pissed at the media too. This is like a hunt and peck for the worst victim out there, and all that really does is inspire the government to “help”. The government should have to hold our hands through life. While I agree that they should go after those that committed actual crimes, like “LIAR LOANS” and out and out fraud, I think giving bail out money is a mistake. Giving Freddie Mac and Fannie Mae a larger cap is a mistake. These are just band-aids on a gaping wound anyway. This maybe the ONLY time I’ve ever semi-agreed with that monkey Bush, but he suggested that we have temporary relief, and I have to say that this actually sounded like the wisest choice. We’re damned if we do, damned if we don’t.

I’m out-

3 Responses to ““Now Priced to Sell!””

  1. I stumbled here by accident but will stick around!


  2. Please keep these excellent posts coming

    John Masters

  3. I think mortgage brokers, appraisal companies and the major banks had their hands in the cookie jar on this one. They all saw $ signs and everyone wanted to join in. Only the smaller banks were the smart ones and issued good mortgages.

    Shaun G

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