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From the local paper today:The Orange County housing market set another record in May as the median selling price hit $590,000, DataQuick reported today.Maybe it's just me, but it sounds like the newspaper is bragging about this or celebrating this fact in some way. All this says to me is that we live in an area where paying too much for a house is ok, which is another way of saying that a bunch of frigging idiots live here, or they are normal people who are overpayed or overextended. Can we say "interest only loan"? Do you realize that after paying interest only for 5 years, you have ZERO equity in that house? This makes sense how?
It's the fifth time in six months that median prices have hit new highs.
April's old record was $576,000. May's median price is up 8.7 percent from a year earlier.
One more point I'd like to make - we were house sitting at el Jefe's mcMansion this past weekend (it is very nice, don't get me wrong), but we noticed that all the residents of that fine neighborhood appeared to not be home. Were they all working? Traveling? What exactly is the point of paying $2 million+ for a house if you are never there to enjoy it?
It is definitely time to move. I can't even tell you what kind of crap $590,000 buys you here. Priced out? That's an understatement. We need to know the best bohemian bargain out there. I'm packing my bags right now.
See ya, suckers! I am pretty sure we wouldn't pay that much money for a house even if we had it. The "OC" can suck it!
posted by Anita at
11:37 AM
5 comment(s):
Ah, this is just another sympton of the impending real estate crash that will inevitably happen sometime over the summer or shortly thereafter. I feel real pity for those who are paying interest-only loans who will shortly be saddled with the fact that they actually have negative equity in a house that they already can't afford. And for those who thought it genious to get a negative-amortization loan? Two words. Great Depression. I'm in the same boat to some extent, but I have money down on my house and could at least absorb some of the real-estate backlash with some meager equity. Gotta love this instant-gratification culture that continually creeps its way through California. I feel sad for those who will truly pay for it with everything they own. And, of course, the rich get richer, mostly by the follies of the not-rich. Is it just me, or is something horrifically wrong here?
PS - If you do find a good spot to settle into, do yourself a favor and don't tell anyone about it - lest the real estate boom will carve its way through hill and valley to bring further ruin upon yet another secret hideaway.
By
Anonymous, at
2:55 PM
We're seeing the exact same thing happen over here on the east coast. I've got friends and coworkers paying $300K for TINY one bedroom condos. And thats the low end of the spectrum. People seem to be proud of that. I think they're getting ripped off.
By
Anonymous, at
4:38 AM
It's tragic and inhumane what is happening with the housing market. It's all fueled by greed. I'm in a house, but am really worried about those who are not. Very demoralizing to have a two income family and not be able to buy a home. Hard working families are getting priced right out of the American Dream.
By
Anonymous, at
6:36 AM
GREED. Because the rich are buying 2nd, 3rd, 4th, 5th houses for renting out to the rest of the unwashed masses. But there is one thing not technically correct with your post. Even an interest-only loan gains the equity provided by the crazy increase in value the house gets over time. But certainly it's not smart and it's a gamble for sure. Where this all comes back to bite ass is in about 4 or 5 years when all those super cheap rates expire on those who locked them in for the short term ride.
By
Anonymous, at
4:49 PM
Anonymous: you are obviously very smart. I agree with everything you said except the equity thing. You CAN earn equity if your home's appraisal value rises over the five years that you are paying interest only. But, people are paying much more than their house is actually worth right now. And they are paying much, much more than they can afford. Unless appreciation continues at the current rate, their equity will not rise to the level of what they overpayed for their house. It is very risky and I think it's foolish to think the appreciation rates can be sustained at their current rate. That's all. It is demoralizing and I am quite certain it will be the reason we leave the state of California ultimately.
By
Anita, at
10:40 AM
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