Comments on: “housing is the linchpin of our economy” – in NY http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/ San Francisco Bay Area, Silicon Valley House Price and Mortgage Insanity Blog Thu, 09 Feb 2012 01:07:13 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Tommy’s parents avoided being foolish [Burbed.com] http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3021 Tommy’s parents avoided being foolish [Burbed.com] Fri, 30 Nov 2007 12:42:20 +0000 http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3021 [...] other day, Burbed reader Tommy posted this comment: “housing is the linchpin of our economy” - in NY [Burbed.com] As for housing being considered retirement/rainy day funds: My folks felt that way and have refi-ed [...] [...] other day, Burbed reader Tommy posted this comment: “housing is the linchpin of our economy” – in NY [Burbed.com] As for housing being considered retirement/rainy day funds: My folks felt that way and have refi-ed [...]

]]> By: rick http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3020 rick Thu, 29 Nov 2007 01:41:06 +0000 http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3020 burbed, I keep hearing that talk about prop 13. I don't disagree that it is ridiculous, but I disagree that it skews the medium income of buyers that much. CA is not the top spot in home price gains in the past few years, or at least that far pacing the rest of the states with big gains. So if the prop 13 crowd does not fall into the figure because they've already owned one or two houses, same for other states (I would imagine they at least own one?). So that does not make any difference in determining the medium buyers' income. burbed, I keep hearing that talk about prop 13. I don’t disagree that it is ridiculous, but I disagree that it skews the medium income of buyers that much.

CA is not the top spot in home price gains in the past few years, or at least that far pacing the rest of the states with big gains. So if the prop 13 crowd does not fall into the figure because they’ve already owned one or two houses, same for other states (I would imagine they at least own one?). So that does not make any difference in determining the medium buyers’ income.

]]> By: Tommy http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3019 Tommy Wed, 28 Nov 2007 16:24:22 +0000 http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3019 burbed...hmmm what you say does make a lot of sense. I'll need to keep that in mind when I go house hunting next in a few years. Hopefully facebook doesn't IPO for $100 billion by then ;) As for housing being considered retirement/rainy day funds: My folks felt that way and have refi-ed their way into $150K of debt. The funny thing is that their house originally cost something ridiculous like $25K in the 70s. I'm not looking to get into that kind of trouble and hope to have my house paid in full asap along with my cash hordes :) burbed…hmmm what you say does make a lot of sense. I’ll need to keep that in mind when I go house hunting next in a few years. Hopefully facebook doesn’t IPO for $100 billion by then ;)

As for housing being considered retirement/rainy day funds: My folks felt that way and have refi-ed their way into $150K of debt. The funny thing is that their house originally cost something ridiculous like $25K in the 70s. I’m not looking to get into that kind of trouble and hope to have my house paid in full asap along with my cash hordes :)

]]> By: burbed http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3018 burbed Wed, 28 Nov 2007 02:22:58 +0000 http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3018 Also: <i>still put 15K in their 401K and 4K in their Roth IRA, and maintain their 6 month rainy day fund.</i> Haven't you heard? Houses are retirement funds and rainy day funds! Also:

still put 15K in their 401K and 4K in their Roth IRA, and maintain their 6 month rainy day fund.

Haven’t you heard? Houses are retirement funds and rainy day funds!

]]> By: burbed http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3017 burbed Wed, 28 Nov 2007 02:22:17 +0000 http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3017 <i>If the median income in the Silicon Valley is about 70K or so, then the median home price should be at most 4x that so figure 280K</i> To be fair though, the median income is skewed here because it includes all the Pre Prop 13'ers - you know, people who make $40k a year but have $1 million dollar houses because they bought them before 1978 and thus pay $200 a year in property tax. When you're looking to buy a place, you're not competing against those people. The median income of the people you're competing against is easily $100k+. If the median income in the Silicon Valley is about 70K or so, then the median home price should be at most 4x that so figure 280K

To be fair though, the median income is skewed here because it includes all the Pre Prop 13′ers – you know, people who make $40k a year but have $1 million dollar houses because they bought them before 1978 and thus pay $200 a year in property tax.

When you’re looking to buy a place, you’re not competing against those people. The median income of the people you’re competing against is easily $100k+.

]]> By: Tommy http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3016 Tommy Wed, 28 Nov 2007 02:05:43 +0000 http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3016 I agree with rick. DensityDuck, ownership of a home is not a right, it's a privilege for those who have saved enough for a down payment and have the money to pay a decent sized mortgage. I make wall above the national average salary (but basically average for a Silicon Valley software engineer) and laughed when some dumb sales lady at Rivermark said I could afford a $650K mortgage with no money down. Luckily I didn't take the bait and went home to ponder the mystery of how someone not making $250K per year can afford a $650K home and still put 15K in their 401K and 4K in their Roth IRA, and maintain their 6 month rainy day fund. The numbers didn't add up then (2004) and they still don't add up now. If the median income in the Silicon Valley is about 70K or so, then the median home price should be at most 4x that so figure 280K, I'll give you 300K if that'll make you feel better. We really have a long way to fall. Anyway, I'm saving my pennies like a good little Puritan and will buy someone's foreclosure in cash in a couple of years. Screw this mortgage business. As for the original topic: does the national housing market tanking affect the Bay Area. I think emphatically yes. Who buys all of those iPods and iPhones being pumped out of Cupertino? Certainly not just Silicon Valley-nites. Who pours truck loads of money into Google's money-making-ad-machine? Certainly not just Silicon Valley companies. I think those of us here in the Valley want to believe that we exist in a vacuum that is isolated from the riff raff of the common working class joe that is the bulk of America, but in the end, we only exist because these working class joes and janes buy the stuff we engineers dream up each and every day. I agree with rick. DensityDuck, ownership of a home is not a right, it’s a privilege for those who have saved enough for a down payment and have the money to pay a decent sized mortgage. I make wall above the national average salary (but basically average for a Silicon Valley software engineer) and laughed when some dumb sales lady at Rivermark said I could afford a $650K mortgage with no money down. Luckily I didn’t take the bait and went home to ponder the mystery of how someone not making $250K per year can afford a $650K home and still put 15K in their 401K and 4K in their Roth IRA, and maintain their 6 month rainy day fund. The numbers didn’t add up then (2004) and they still don’t add up now. If the median income in the Silicon Valley is about 70K or so, then the median home price should be at most 4x that so figure 280K, I’ll give you 300K if that’ll make you feel better. We really have a long way to fall. Anyway, I’m saving my pennies like a good little Puritan and will buy someone’s foreclosure in cash in a couple of years. Screw this mortgage business.

As for the original topic: does the national housing market tanking affect the Bay Area. I think emphatically yes. Who buys all of those iPods and iPhones being pumped out of Cupertino? Certainly not just Silicon Valley-nites. Who pours truck loads of money into Google’s money-making-ad-machine? Certainly not just Silicon Valley companies. I think those of us here in the Valley want to believe that we exist in a vacuum that is isolated from the riff raff of the common working class joe that is the bulk of America, but in the end, we only exist because these working class joes and janes buy the stuff we engineers dream up each and every day.

]]> By: rick http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3015 rick Wed, 28 Nov 2007 01:28:26 +0000 http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3015 To DensityDuck, If the house is priced right, you don't have to worry about it sitting empty for 10 years. So no, that is not gonna happen. As to wanting others to suffer, why do you think the BA renters who are making better than average money are such bad people? How about those could have afforded but have refused to join in the housing bandwagon and have been sufferring? Oh no sympathy for us, we are those bad people without a home and can't wait to pile on the poor house snobs. So yeah, sorry we have no sympathy for thee. To DensityDuck,

If the house is priced right, you don’t have to worry about it sitting empty for 10 years. So no, that is not gonna happen.

As to wanting others to suffer, why do you think the BA renters who are making better than average money are such bad people? How about those could have afforded but have refused to join in the housing bandwagon and have been sufferring? Oh no sympathy for us, we are those bad people without a home and can’t wait to pile on the poor house snobs.

So yeah, sorry we have no sympathy for thee.

]]> By: RealEstater http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3014 RealEstater Tue, 27 Nov 2007 00:36:58 +0000 http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3014 As humorous as it seems, the examples shown in this website are very real. All over the "real" Bay Area, 50+ year old shacks on 5000 sq. ft. lots are still asking for $800K - $1mil even though housing markets outside of the magic zone are falling off the cliff. There's still a sense of invincibility toward these markets due to what transpired in the past few years. Better be careful...there was a time not so long ago when you couldn't move these houses at half the price. As humorous as it seems, the examples shown in this website are very real. All over the “real” Bay Area, 50+ year old shacks on 5000 sq. ft. lots are still asking for $800K – $1mil even though housing markets outside of the magic zone are falling off the cliff. There’s still a sense of invincibility toward these markets due to what transpired in the past few years. Better be careful…there was a time not so long ago when you couldn’t move these houses at half the price.

]]> By: RealEstater http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3013 RealEstater Tue, 27 Nov 2007 00:18:24 +0000 http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3013 Alan Greenspan's goal on the economy was pretty much the same as George Bush's goal on Iraq -- keep it going for as long as he is in office, and let the next guy worry about it. The problem is not solveable, but postponable! Alan Greenspan’s goal on the economy was pretty much the same as George Bush’s goal on Iraq — keep it going for as long as he is in office, and let the next guy worry about it. The problem is not solveable, but postponable!

]]> By: sonarrat http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3012 sonarrat Mon, 26 Nov 2007 21:13:43 +0000 http://www.burbed.com/2007/11/25/housing-is-the-linchpin-of-our-economy-in-ny/#comment-3012 A lot of this is people who DID cheat, because they took out loans they had no intention of repaying and no means to repay just to keep the bubble going. Now we're going to have layoffs coming from the same financial sector that fed the few real buyers in places like San Mateo and San Francisco, and it's going to hurt. A lot of this is people who DID cheat, because they took out loans they had no intention of repaying and no means to repay just to keep the bubble going. Now we’re going to have layoffs coming from the same financial sector that fed the few real buyers in places like San Mateo and San Francisco, and it’s going to hurt.

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