Re: Cannot get a grip on house values on west coast

"Scott" <sblanky@xxxxxxxxx> wrote...
I just one of those house fliipping shows on TV (on TLC channel, i
think), where a dude bought a 3 BR 1.5 Bath 1500 sq foot house for
$993,000... (and sold it after fixing it up for $1.5 million).
So, how does this work? Where do Joe and Jane Blue Collar live in CA?

So, assuming 6%, 30 year, $1,000,000 loan, Joe and Jane Blue Collar are
making $6,000/month mortgage payments? That's $72,000/year in mortgage
payments alone. That would require probably $120,000/year salary JUST to
make the mortage payments. Doesn't count utilities, food, cars, or
anything else. I'm going to go out on a limb here and estimate that
someone would have to make at least $300,000/year to comfortably make
payments, and pay for other life expenses. Joe and Jane really make
$300,000/year?

Probably not. They probably bought the house 5 or 10 years ago when the
price was ~$200K, and could barely afford that. But now they CAN afford
the mortgage, but would not be able to afford to buy the same house today.

Joe & Jane don't flip houses, unless they bought one a while back and
started flipping when the entry price was much lower.

I bought a house in Seattle 12 years ago, and could easily pay the
mortgage. Today I'd have to struggle to pay for a mortgage if I bought the
same house at current prices. Good thing I don't want to move!


.

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