[Moneyguy1]

Please educate me. I was a real estate broker back in New York State, and when we sold a house, it was a general although not universal practice to "pre qualify" a potential buyer. Once this was done, a range of affordability was established beyond which we would recommend against purchase. Given average indebtedness, the monthly PITI was not to exceed 35% of gross income.

So, given even today's interest rates and, say, an annual income of $120k, this would result in a monthly of $10 k, and $3,500 available for the total monthly payment. Now, assuming a mortgage of $800 k on some of the houses that have been mentioned, an interest rate of 6% and 30 years, the principal and interest alone come to $4,796. Given the rule(s) of thumb, and only guessing at the taxes and insurance, the annual income for such a property would be in excess of $200k.

Are there actually that many people in that earnings range in California? Seems to me that this would put many people out of the race for home ownership. Using the example of 6% interest, then every $100,000 of mortgage for 30 years would be just pennies under $600 per month, so even a more modest mortgage of, say, $400,000 would be $2,400 not including taxes and insurance. Once again, that would require an income of $82,300.

So, the question...Who in Hell is buying these homes and with what?