Comments on: What would you say to these Manteca folks?

By: Pantrax

Pantrax — Sun, 28 Oct 2007 00:02:06 +0000

Anyone who has installed a miniature golf course at his home is either rich enough to afford a measly quarter million dollar loss or is an idiot.

Judging by this guy’s reaction, I’m guessing he is in the latter category.

By: Why “california bay area home price” will never fall -- Burbed.com: Your San Francisco Bay Area Home and Mortgage Insanity Blog

Sat, 27 Oct 2007 13:54:41 +0000

[...] a Kevin posted a good explanation: What would you say to these Manteca folks? — Burbed.com: Your San Francisco Bay Area Home and … The median household income for all bay area counties is $72,000. For Santa Clara County, it’s [...]

By: sanfrantim

sanfrantim — Fri, 26 Oct 2007 21:48:59 +0000

kiss your downpayment goodbye and walk, no run, away.

By: Jim

Jim — Thu, 25 Oct 2007 21:20:33 +0000

Take heart in the fact that the guy with his arms over his head also paid too much.

By: Kevin

Kevin — Thu, 25 Oct 2007 09:26:43 +0000

The median household income for all bay area counties is $72,000. For Santa Clara County, it’s $78,000.

The median income is not what you should use to guage the median house price. Historically, in virtually every part of the country (including the bay area), the median house price has hovered around 5.0-5.5x the local median income. This means that if the median income is $80,000, the market will support house prices in the range of 400-480k.

The median house is NOT bought by the median income family. Generally speaking, only the top 60-80% of incomes can/should realistically qualify for the mortgage on anything, with the remaining 20-40% renting permanently.

Lop off the bottom 30% of households from the “buyers” category and you wind up moving that median from $80,000 to around $120,000 — suddenly the $500k house looks reasonable. At 20% down and a 6.5% fixed 30 year mortgage you’d be paying under 30% with property taxes included. If you’re making $120k a year and can’t save $100k over the course of 4-5 years while renting, stop buying so much crap.

By that metric, it’s probably safe to say that a reasonable median in the bay area is $400-500k. Currently the median is still nearly $700k. It would take a minimum 20-30% price drop to make things rational.

Unfortunately, bay area buyers are not rational. People are more than willing to spend more than half of their income on a house. Thanks to Prop 13 and reverse mortgages we aren’t seeing old people being “forced” to sell. Greedy owners who are overly concerned with property values refuse to allow any significant new development, despite the huge swaths of unused land all throughout the bay area cities. I fully expect people to continue shelling out outrageous sums of money for shitty houses for many long years.

By: RealEstater

RealEstater — Wed, 24 Oct 2007 22:53:33 +0000

Shoulda…Coulda…Woulda….bought a shack in Sunnyvale for $670K.

By: Pralay

Pralay — Wed, 24 Oct 2007 22:33:33 +0000

> “I lost a quarter million dollars in value. I’m screwed.”

Only way you can recover those million dollars by buying more homes with miniature golf course. After all THEY ARE NOT MAKING LAND ANYMORE!

By: sonarrat

sonarrat — Wed, 24 Oct 2007 21:00:51 +0000

That’s true, in 2005-2006 people were lumping everything from Sacramento (hey, you’ve got the Capitol Corridor, right?) down to San Luis Obispo into the Bay Area. Now that houses are foreclosing, we’re seeing which areas REALLY deserve to be in the Bay Area. That’s the 2.0 part.

By: ex-sunnyvale-renter

ex-sunnyvale-renter — Wed, 24 Oct 2007 20:44:31 +0000

I thought the median BA income was around $50k, but then I remembered just now, that’s for the OLD BA …….

By: Brendan

Brendan — Wed, 24 Oct 2007 19:50:18 +0000

This is insane. I knew people spending 600k in manteca were all out of their fricken minds. I feel bad for this guy, but he deserves it. I mean CMON ITS MANTECA!!!!! WTF??