House Price to Income

This is what people are referring to when they say prices revert to the mean. You can clearly see the bubble of the late 80s and the price deflation that followed. You can also get a sense of the magnitude of our current bubble.

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Just for fun today, I want to share a couple of items with your today. First is an email I was forwarded by a reader. It shows the desperation of realtors to find knife catchers, and their arguments are completely refuted by the chart above…

This was an interesting blog I found that I wanted to share with you……………

Here is what the thought is of todya’s buyers market…

There will always be a stand off between buyers & sellers, in a buyers market. Sellers eventually give up some in but not nearly as much as ALL of the buyers sitting on the fence would like. This explains why the slowdown of RE in the early 80’s prices NEVER reverted to the 70’s levels. Then the next RE slowdown occurred in the 90’s and once again prices never did return to the 80’s levels. And in the current slowdown in prices, if histroy repets itself, should NEVER drop back to their 1990’s levels

In the end it is being said that the market will bottom out in 2008 & interest rates will drop to historical lows. (we are almost there now!) 2008 will prove to be the BEST time to buy. BUT, very few buyers will have the COURAGE to take the plunge until they know for a fact the bottomed out! UNFORTUNATELY, nobody rings the bell at the bottom, instead buyers must wait for wait for signs that the market has officially improved,when all the buyers get off the and buy. The conditions will not be prime at that point. It goes on to say that the prime time to buy will be in 2008, with many choices, GREAT opportunities, pressure on prices the absolute best interest rates and the knowledge that in time , the market will hit higher highs again, than those of 2006.

Your Realtor who put your name in the “Home Buyers Scouting Report” can help guide you to create wealth in this market for the long term! Using this system to shop and tracking those properties in your notebook that you like will give you knowledge to have them negotiate the best deal possible.

Have an Amazing and profitable 2008!

Indy Mac Bank & the Home Team Phil, Ron,& Steve are here for you as well!

The Home Team

Office Phone: 562 988-1774

Fax: 866 451-9550

Steve x226: Phil x273

Ron x221:

Email

Indymac Bank

View my Video message

I debated to myself whether or not to include the links and the pictures above. Is this free advertising for them, or is it over-the-top public humiliation? I will leave that judgment to all of you.

How do you like the varied use of fonts, font sizes, bold face and random CAPS LOCK?

It does get worse though, below is quite possibly the worst description in the MLS:

Price: $1,656,888

105 CAPEBERRY

Irvine, CA 92603

Beds: 4
Baths: 4.5
Sq. Ft.: 3,150
$/Sq. Ft.: $526
Lot Size: 6,800 sq. ft.
Type: Single Family Residence
Style: Contemporary/Modern
Year Built: 2004
Stories: Two Levels
View(s): City Lights
Area: Quail Hill
County: Orange
MLS#: S515386
Status: Active
On Redfin: 26 days

* * LARGE LOT ON VIEW SIDE IN QUIL HILL OF CHANTILLTY TRACT. * * 4BED, 4.5BATH, EACH BEDROOM WITH BATH, * * HUGE FAMILY ROOM WITH /FIRE PLACE, * * FORMAL DINING ROOM WITH SIDE YARD. * * KITCHEN COUNTER TOP IS GRANITE. * * STAINLESS STEEL APPLANCES, DOUBLE OVEN, * * BUILD-IN STAINLESS REFRIGERATOR, * * GRANITE TILE FLOOR IN ENTRANCE AREA, HALLWAY, KITCHEN & ALL BATHROOM. * * MASTER BATH ROOM OF SINK COUNTER TOP IS BUTIFULLY GRANITE, MASTER BEDROOM WITH BALOCONY TO LOOK PANORAMIC VIEW, * * LAUNTRY ROOM IN 2ND FLOOR WITH MATAG WASHER & DRYER. * * HUGE BACK YARD WITH A BIG SIZE OF BUILD-IN BBQ, 3 PATIOES AND A WATER FALL. * * ALARM SYSTEM. * * NEXT TO CUL-DE-SAC. * * COUMMUNITY POOL, TENNIS COURT, CLUB HOUSE. * * CLOSE TO PARK, SCHOOL, SHAPPING PLAZA, FREE WAY.

How many errors can you count?

55 thoughts on “House Price to Income

  1. brave buyer

    I know people reading this blog will not agree with my view. For over 10 years, I never saw deals that you can put 0 down and breakeven in rent. Now I see tons and tons. When you read blogs like this, you may think all listings are like the ones overpriced featured. Well, thanks for not looking, we bought homes at 40-60% off peak prices. Good, new homes with decent yard in good area for investment. And “postive cash flow” after counting mortgage, tax, HOA, insurance, and still earns 8% return on our 20% down payment. And, we just rented out the 2 we closed 1 & 2 weeks ago. (One in Lake Elsinore, one in Perris) and then the 2 in Riverside are still in escrow, with deposit paid, renter promised to move in as soon as escrow closes. And since we bought as “investment properties”, the nice sales lady at builders’ office helped us show the homes to the few renters, we did not even have to show the homes.
    Of course, we ran the risk of not finding tenants, depreciation, further drop in price, etc. But if the lands were free, building homes like the ones we bought would have cost 20% more than what we paid for. So, although there is a possiblity the price will be dropped further, I am betting that it wouldn’t drop beyond the price we paid. And if they do, well, what do I get to worry if I am getting positive cash on the homes.
    —–

  2. former_irvine_resident

    QUIL = quail
    CHANTILLTY = Chantilly
    APPLANCES = appliances
    BALOCONY = balcony
    BUTIFULLY = beautifully
    LAUNTRY = laundry
    MATAG = Maytag
    PATIOES = patios
    COUMMUNITY = community
    SHAPPING = shopping

    Did I miss any?

    This level of spelling incompetence just shows you how uneducated or careless they are. What kills me is that most applications these days have built in spell checkers. And we are supposed to trust that this ‘expert’ has a thorough understanding of the local market? I think not….

  3. former_irvine_resident

    Keep drinking the kool aid knife catcher! If you are going to convince anyone here you need to offer actual proof to these deals.

  4. lee in irvine

    I stick with what I said on Lansner’s Blog yesterday:

    “Latte drinking bimbo’s and cheap suit wearing carnival barkers, at one time had control over our local real estate market, but those days are over. Logic, reason and value will once again dictate & rule. That’s all but guaranteed at this point.”

    Furthermore, most (not all) realtor’s are vastly under educated in their chosen field. Why is it so easy for us to stereotype these people? … can you say boiler plate — most of them look the same, talk the same, and act the same.

    Because my business is indirectly associated with real estate, I deal with these people all the time. Most of them are consumed with closing the deal, with little regard for their clients best interest.

  5. ice weasel

    I won’t even bother to count mistakes. I much prefer to revel in the delightful prose of “* FORMAL DINING ROOM WITH SIDE YARD. *”

    Sweet on so many levels.

    And $526 per square foot without a single image of all that granite – or that side yard?

    Hilarious.

  6. awgee

    The question that comes to my mind; If you are the seller, how are you feeling when you see this description of you $1.4M property? And how much faith do you continue having in your realtor?
    Maybe the NAR should give grammer and spelling lessons in addition to ethics classes?

  7. ice weasel

    Awgee, I agree but frankly, isn’t this an example of how far past “classes” realtors are. I mean, you’re selling a property listed for over a million dollars and you have an extraordinarily bad description and three pictures? That’s so clueless I’m almost speechless. And yet this realtor somehow feels that a 6% commission has been earned? There are ten year olds on eBay with more selling acumen and professionalism. It’s examples such as this one that relieve me of any possible guilt when I giggle at realtors being describing in the most degrading ways possible.

  8. former_irvine_resident

    When I left Irvine in September 2006 I priced my home 55K below my neighbor with the same model and sold it without a REALTARD. I passed on all the ‘savings’ to my buyer and got the hell out. I do feel somewhat guilty for handing the knife catcher such a ‘good deal’. My neighbor finally sold their home nearly a year later for 8k more than me – but they used a REALTARD.

  9. NoWow!way

    I would like to offer the possibility that the writer of the description of the home may be a second language learner – their first language is not English. Just think of some of the more funky written things you have seen in some of the local ethnic restaurants and markets and you know where I’m coming from! 😉

    However, that does not excuse the realtor from doing some due diligence and getting someone to proof read it and make sure the submission is done competently. That’s a very expensive property that appears tacky in the MLS listing.

  10. SeattleGameboy

    LOL! That is some good stuff.

    If you want to get a feeling on what the people on the other side of the fence are thinking about, go check out the forum for “Flip That House” TV show.

    Here is a sample…

    nismott… this weak market is the EXACT RIGHT TIME TO BUY!!! Are YOU nuts? Prices are at rock bottom. I just bought a 4 plex (fully rented) for 30% LESS than anyother 4-plex in town has sold for in the last 2 years. The appraiser didn’t know how to appraise it for the bank because they would have thought he was juicing the apparisal. Even after he appraised it low, the bank still did a review. So now i have a property that will automatically have 40-60K in equity once the market bounces back, and thats NOT INCLUDING the uprgades i have planned. I’m thankful that the market is the way it is right now, it has allowed me to get my foot in the door, and as long as I keep a level head, I am on my way…

  11. FairEconomist

    Most people on this blog think 40-60% off peak will be a reasonable price. Maybe there are a few out there, but for the most part we’re not even halfway there. Frankly, I think you’re making it up. Feel free to post some actual numbers and links to at least comparable properties if you want a meaningful discussion.

  12. maureen

    Brave buyer,

    If you look up housingtracker.net, you will see how far down asking prices have come (about 20%), and how far down they will continue to go in 2008. Also, please understand that most of us here in the irvine housing blog family are not looking to buy in Lake Elsinore or Perris, but in Orange County. We have to be much more savy about how we time the market, because there is a lot more money at stake than in the areas you mentioned.

    Most of us are looking up multiple sources of data, and there is no question from any of these sources that real estate has still a long way to drop.

    Of course, you have just invested in real estate, so you have a motive to convince us otherwise.

    Very few housing bulls offer SPECIFIC numbers, facts or data to prove their point. It must be frustrating, I’m sure. A bit like drowning in quicksand…

  13. FairEconomist

    mostly not spelling, but:

    /FIREPLACE
    BUILD-IN (several times)
    ALL BATHROOM
    FREE WAY
    TO LOOK PANORAMIC VIEW
    BIG SIZE OF BUILD-IN BBQ
    WATER FALL

    numerous comma splices
    inconsistent use of punctuation (sometimes , separates items and sometimes . )
    inconsistent use of *’ (sometimes one and sometime two, with no logic)

  14. FairEconomist

    I think the ratio you want to look at is house *payment* against income. Yes, house prices are much higher relative to income. However, interest rates are quite a bit lower. The 1990 peak had interest rates of nearly 10%. Now they are 6%. Eyeballing the numbers and running Excel I estimate this bubble is only 15% worse than the previous one on a payment basis. Still big and painful – the last correction was about 20% so this would be around 35% – but not as much so as your chart would indicate.

  15. lee in irvine

    I remember listening to a story from Bruce Norris (RE Investor), where he talked about buying a house in the mid nineties in Riverside for less money than he had paid for his son’s new car purchased in the previous week. I think he paid about $17,000 for the house.

    The areas you talk about (Lake Elsinore & Perris) may have investment value in the future, but most people in this venue are not real estate investors and are never going to move there.

    One more point & JMHO; I think Corona of all places may create opportunities for investors in the future. Homes that are 1500 sqft (+/- 200 sqft) will likely drop below 100k in the coming 24 months or so. These homes will be able to cash flow positive because of the close proximity to jobs in Orange County. This will likely be a cheap rental option to those future Orange County foreclosed households … at least the one’s that don’t leave the state.

    BTW, for the record. I hate Corona and would never live there, but I’m not a desperate homeowner facing foreclosure, and thinking of a cheap place to live, where I can maintain my job and start over … even with the traffic on the 91 freeway. These people have to feed their children, and they will be looking for cheap housing.

  16. IrvineRenter

    “So now i have a property that will automatically have 40-60K in equity once the market bounces back,”

    LOL! Now that is some kool aid. I would like to hear how he feels in 2 years when he is $200K in the hole.

  17. IrvineRenter

    Interest rates dropped 30% in the early 90s or the correction would have been much worse. You appear to be making the assumption that our historically low interest rates are here to stay permanently. I doubt this is the case.

  18. alan

    wotz relly sad iz tat wth comish $100,000.00 (I’ll bet they get that one right down to the penny) these Idiots can’t even get their description done correctly..

    I’ll bet Trump would say.. “Your Fired!!”

  19. alan

    IR..

    Redfin says lease option avaliable…

    Why don’t you call and play dumb to see what they would rent it for.

  20. Laura Louzader

    Your post proves this blog’s point.. that prices are dropping and will continue to drop.

    If you managed to get property at prices where it would cash-flow as rental, then you did OK and you found reasonable, realistic sellers.. the leading edge.

    However, if you look at the listings of properties available in almost any city, you will see that such deals are still rare and that prices are still very bloated. Name any locale-Irvine, Los Angeles, Chicago, Cleveland, wherever… and no matter how low or high they may seem to readers of this blog, they are still completely overpriced relative to local rents and local incomes.

    When I can get a deal on a condo such as you say have scored, I will buy, not a minute before.

    However, so far, in my area (Chicagoland), the prices are about twice what they need to be to cash-flow at current rental levels, in any neighborhood you look.

    Same thing goes for cheap “non-bubble” metros like Cleveland and Detroit. These areas might look cheap to a denizen of CA, but they are really atrociously expensive given that these are the most depressed areas of the country with unemployment rates and percentage of citizens living in poverty that are off the charts. No matter how cheap the properties in these extremely depressed areas appear, they should be priced at half as much, given the income levels of likely buyers.

  21. FairEconomist

    Yes, the 90’s drops in interest rates might change the overall story. It might turn out (indeed I suspect it’s the case) that mid-90’s prices were substantially more affordable than anything since at least the 70’s and the drop in the early 90’s was worse than your chart shows. But that’s yet another reason to switch to payment ratios, because then it would be more accurate for both the 90’s and for today.

    It’s not possible to know interest rates in the distant future, but the fact that the 30-year bond is at 4.38% is pretty powerful evidence that rates will remain low. In any case, people mostly make purchase decisions on payment affordability. If the 30-year fully amortized payment is affordable, the house is affordable. The possibility that rates might rise substantially in the future is a possibility that very few can meaningfully evaluate and virtually nobody uses in house purchase decisions.

  22. Golfproz

    Homes that size have not been below $100k since 1982. I seriously doubt they will be below that anytime soon. And if they do fall below $100k then the median in OC will need to fall to around $150k. It’s hard to find anything under $300k in the 1500 sq/ft range that’s not a tear down. They might hit $200k which would be about 60% off peak.

  23. Trooper

    Fair, I remember the high interest rates of the early 90’s as I bought my first place with an 11%, 30 yr fixed (and that was low, and FHA 1st time buyer program).

    What was the 30 year bond at back then ? Did the high interest rates correlate with it, or were they high just because of the investor risk.

  24. No_Such_Reality

    At $200K, a 20% down 7% no owner occupied loan will yield an investor near 12% tax free ROI provided rents don’t depress.

    At 7%, the $160K loan merely costs $1064 a month. Property tax will be $2000 a year which will leave somewhere north of $350/month for expenses if you rent it dirt cheap at $1600.

    If you rent more competitively at $1800 (currently, rents may depress), that leaves $550 a month. Less $100 for property management, less $200 for misc expenses and you still cashflow $250 not including principal, for an ROI of 7.5%. Add back the principal and you’re pushing 11.5% not only tax free but you’ll likely carry an additional $3000+ tax loss forward.

  25. Chicken Little

    “Interest rates dropped 30% in the early 90s or the correction would have been much worse. You appear to be making the assumption that our historically low interest rates are here to stay permanently. I doubt this is the case.”

    How do you define “permanently”?

    If historically low interest rates are “only” here for the next 10-20 years, are you going to wait that long so you can get a good deal on a house?

    Or would you be willing to buy today, knowing that rates will jump in a few years and your property value will tank?

  26. OChomehunter

    Well, even though interest rates this time around are lower than post bubble in 1990, I can tell you that situation is worse than ever. Oil hitting all time highs, UD$ continuing to fall and hitting all time lows, credit dried up and no appetite or reward for investors to invest in CDO’s, I dont knwo how and what will save us from a bad recession. Forget the %age drops at this time. If people start losing jobs, we already see this happening, it doesnt matter whether you are subprime or prime buyer, it does not matter if your home rent pays for mortgage, what will matter is that you have stable job in order to keep your mortgage payments and I dont see this happening, actually getting worse. I predict that we will be in deep recession by Fall 2008 to Summer 2009.

    Gotta have a job, not a home to feed family,.

  27. lee in irvine

    Golfpro,

    I really hate to disagree with you, but I do.

    Maybe you should read my statement about Corona again. The banks have not adjusted, but it’s coming.

    BTW, I think the premium for Orange County is greater than 50 percent of Corona prices. Right now there are homes listed in Corona for less than 150 a sqft, and the banks would likely unload them for less than 130 a sqft. These prices will most certainly drop further in the future.

    🙂

  28. FairEconomist

    Where are you getting your numbers? I’ve made a chart eyeballing your chart for the price ratio numbers but that’s obviously not precise. The overall pattern is what I expect, with most of the 90’s having quite low house prices, and a recent rise to above the 1989 peak but not nearly as jawdropping as it looks on your price chart.

  29. ElricSeven

    Our insolvent government, depreciating currency and monetary policy that floods the market with easy funds at any hint of a slowdown is powerful evidence to me that interest rates will eventually have nowhere to go but up. Imagine what that would do to this market. Low interest rates can’t go much lower, the risk is all to the upside. Current losses are tightening of lender’s requirements which affects only a portion of borrowers. Higher interest rates will affect all borrowers.

  30. No_Such_Reality

    Sorry Lee, that doesn’t match current reality.

    Pulling up Redfin, typing Corona, and 3 bed and zooming to get below 500 on the map, I center up on the 15/91 interchange. Of the 182 properties on the map, zero are below $150/sf, 19 below $200/sf, 65 below $250/sf.

    Doing the same with Mission Viejo, which centers us around 5 between El Toro and Oso touching Lake Forest, and Laguna Hills, Aliso, etc, I get 415 properties. 2 below $200, 32 below $250/sf and only 100 over $375/sf ($250+50%) and frankly, many of those look like WTF prices.

  31. Rocker

    There are no other assets left to be inflated, I think that what saved the US economy of the 2001-2002 recession was the housing boom, but now that’s gone, what is going to save it? I don’t see anything in the near future, there’s no visibility.

  32. FairEconomist

    In 1991 the long bond was 8.14% and the average mortgage rate 9.35% (1.21% higher). In 2007 the long bond was 4.84% and the mortgage rate 6.58% (1.74% higher). They are very well-correlated, with an r-square of 96% (meaning 96% of the change in mortgage rate is explained by changed in the long bond rate).

    The Fed may not be dumping money into the system. M1 has been basically flat this year. M3 has soared. Which counts? Nobody knows, actually. The Fed certainly can keep inflation low if it wishes. Given that soaring inflation would bankrupt the banks (what with all their long-term lending at low rates) and the fact that the Fed is run by bankers, I don’t expect massive inflation.

  33. Lost Cause

    Buying multiple single family residences to rent out as an investment is a fool’s game. This is not something that serious investors do, because they stick to multi-family dwelling, which are not usually completely vacant, as a house would be when the sole tenant moves out.

    It is just wishful thinking from the old bubble days. You are losing thousands in equity every month. I am sure there are bargains out there, but this gives you away as someone who will be learning hard lessons.

  34. ElricSeven

    Regardless, though, for one considering to buy, lower interest rates are an indicator that risk is higher, not lower. Again, interest rates have really nowhere to go but up. And, if they do, this already horrible situation will get worse.

  35. Lost Cause

    I notice more and more vacant commercial space, especially in strip malls. Someone mentioned that this is occuring in the Inland Empire, and now I see it spreading to OC.

  36. Lost Cause

    Yes, “reversion to the mean” is like rolling a boulder up a hill. A little hill, the boulder rolls back a little. A big hill, well — things get a little messy.

  37. IrvineRenter

    Year…..Income……….Price……….Ratio
    1981 $29,726 $130,125 4.38 100%
    1982 $30,922 $129,641 4.19 96%
    1983 $32,118 $131,456 4.09 93%
    1984 $31,609 $130,668 4.13 94%
    1985 $33,726 $132,758 3.94 90%
    1986 $36,263 $144,441 3.98 91%
    1987 $37,683 $163,218 4.33 99%
    1988 $37,859 $203,860 5.38 123%
    1989 $41,261 $241,708 5.86 134%
    1990 $41,613 $242,358 5.82 133%
    1991 $42,080 $239,680 5.70 130%
    1992 $43,629 $230,860 5.29 121%
    1993 $42,591 $217,210 5.10 117%
    1994 $44,164 $214,540 4.86 111%
    1995 $46,261 $209,400 4.53 103%
    1996 $48,515 $213,370 4.40 100%
    1997 $49,618 $229,840 4.63 106%
    1998 $51,168 $261,700 5.11 117%
    1999 $54,536 $280,900 5.15 118%
    2000 $57,706 $318,010 5.51 126%
    2001 $57,457 $360,080 6.27 143%
    2002 $57,831 $435,650 7.53 172%
    2003 $60,113 $496,370 8.26 189%
    2004 $64,416 $543,000 8.43 193%
    2005 $65,953 $595,000 9.02 206%
    2006 $67,113 $643,000 9.58 219%

  38. GrewUpInIrvine

    I watched the video message from that “let me help you find the right loan guy.” Wow. People with enough money to buy (in O.C.) actually use these people? I suppose that nothing should shock me anymore. I guess I can’t imagine someone who can afford 750K worth of house, needing anyone to explain how money works. Maybe that’s always been the catch…nobody could afford the 750K.

  39. GrewUpInIrvine

    That’s part of the whole “ponzi” scheme of Fed economics. Every so often, they just change what factors are considered… I mean sure, if you exclude energy, durable goods, change what it means to be unemployed, and exclude general negativity… pretty soon nothing signals an inflationary cycle, which is exactly why the economy is booming.

    After all, everything is still a dollar on the dollar menu.

  40. lawyerliz

    I’m seeing more and more vacancy signs on office buildings and such in Miami, and also up here in Brevard.

  41. surfing in newport

    Someone made a comment about prices going up when interests go down. That only holds when demand is strong. That’s because it’s how much the buyer is willing to spend to live where they want. When demand goes down, then the price will be closer to what the seller is willing to sell for. This is because it takes years to build new houses (prep the land, permits, design, building etc…).

    Anyway I found it interesting that prices relative to income went down in the 90’s at the same time interest rates were going down. You would have expected the opposite based on the logic of some of the comments.

    From the freddiemac website:

    http://www.freddiemac.com/pmms/pmms30.htm

    1985 – 12.43
    1986 – 10.19
    1987 – 10.21
    1988 – 10.34
    1989 – 10.32
    1990 – 10.13
    1991 – 9.25
    1992 – 8.39
    1993 – 7.31
    1994 – 8.38
    1995 – 7.93
    1996 – 7.81
    1997 – 7.6
    1998 – 6.94
    1999 – 7.44
    2000 – 8.05
    2001 – 6.97
    2002 – 6.54
    2003 – 5.83
    2004 – 5.84
    2005 – 5.87
    2006 – 6.41
    2007 – 6.34

  42. Chicken Little

    OMG A RECESSION… HOW WILL WE EVER SURVIVE??

    Relax. It’s just the business cycle. The economy will heal itself – it always does.

  43. golfproz

    There are lots of homes in Corona under $150 sq/ft, but they are all huge homes. I lived in this area for 20 years and I’m fully expecting 40% to 60% off peak prices. But short of a nuclear meltdown house prices will not be going back to 1982 levels, even in the IE. The smaller homes will probably settle back to low $200s if they are decent homes. Those $1500 sq/ft homes sold for $160k to $200K in 1997/1998 (I nearly bought one). The home I almost bought was $180k in 1997 (near the 91/15 interchange). At the peak that $180K house was fetching close to $600k. Homes in that tract are now listed for $400k to mid $500s. Of course none are selling right now because you can buy a newer bigger home for less just down the 15 or over in Eastvale. Why would anyone buy a $1500 sq/ft home when you can get a 2500 s/f for the same price. But when those homes drop to $250k to $300k I fully expect them to start moving. Because at that point they will pencil out to the same cost as renting. They will never hit $100k because that’s 1/3rd the cost of a renting. They will be “snapped up” long before that.

  44. Chicken Little

    In case you don’t have the pleasure of working with any “boomers,” allow me to assure you that they are mostly dead weight and a drag on the economy. Productivity will improve once they are replaced with sharp, motivated younger workers who have less of an entitlement mentality.

  45. iplay5

    I agree with you re low rates verses price. That’s the chance I took in 2005 when I bought a 1500sf condo for $535K in RSM. Rates were low and I thought prices would at least stablize – WRONG. I’m currently in the middle of a short sale for that property. I took a chance, but didn’t count all the costs – never again. You have to have enough down payment to make a fully amortized loan affordable!

  46. Dave Doolin

    What a numbskull.

    It’s not about courage.

    If 2008 proves to be the bottom… it’s about making over $100k/yr and being *permanently* priced out of the market.

    Courage has nothing to do with it.

  47. doug r

    I suspect there are no pictures of the backyard so you won’t notice it’s right by the “fire gully”. Or is that “landslide gully”?

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