Quote:
Originally posted by Moses
I think if you live in stable but unremarkable community the prices will be pretty solid. The problem is the price of houses in the white-hot areas like the bay area and coastal southern California. Quite simply, the price of homes has outpaced the wage profile of the vast majority of homeowners. What kind of income do you need to get into a million dollar fixer-upper starter home? It's absurd. In response to the housing market rocketing beyond the "normal" families grasp, the markets have responded with equity plus loans, interest only loans and other ill advised policys. The real estate market is walking a tightrope...while keeping a dozen plates spinning in the air. At some point it will all come crashing down and the margin players will get hurt.
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Absolutely 100% correct. I can vouch for this personally. I'm 35, work a professional job, my wife works and makes good money also. I own three Porsches but there's no way on earth we could afford a place right now. Even condos are going for $350k and up. Unless there's a major correction (as in 25% or more) I don't see how anyone can get into a place nowadays without some very creative (and dangerous) financing.
Edit: The above applies to first-time buyers like myself. If you own property, you can buy property but I'm mostly speaking of a "barrier-to-entry" that's becoming insurmountable for anyone not born into a trust fund.