kitchen table math, the sequel: "a pool in the front yard, right where you need it"

Wednesday, February 18, 2009

"a pool in the front yard, right where you need it"

11 comments:

Catherine Johnson said...

This one's pretty excruciating

Assuming you were hoping to see something excruciating tonight...

Jim the Realtor

oh, boy

CassyT said...

JTR rocks!

The husband has been a big fan of JTR for years. He (my husband, that is)WAS a Realtor in Phoenix. When Jim agreed with his assessment of the market, we sold our house. Two years ago - just before the famed Phoenix fall.

Whew.

Husband just pointed out the math lesson:
Median home prices should correlate to median income. During the bubble, prices spiked and borrowers got loans they can't afford.

Additionally, median home prices should correlate to rents.

An example: we rent a 4400 sq ft house for $1900/month. If rents correlated to sales price, this house should be worth $265K. Zillow lists it at $435K.

Unlike Chula Vista - our house still has the pillars and appliances.

Dawn said...

This is probably the naive country hick in me talking but man, those are some big, ugly houses and in a big ugly location. I don't get why they're so expensive. If you pay that kind of money for a house here you're getting a mansion on an island with it's own helipad.

Gosh. Those are just gruesomely bloated subdivision houses.

Catherine Johnson said...

Who is Jim the Realtor??

I never heard of him 'til yesterday.

Catherine Johnson said...

Dawn----

You have never gone house hunting in the Southlands!

When we bought our first house, we looked at houses in L.A.

We saw teardowns priced at $300,000 -- and this was over 20 years ago.

I'll never forget going inside some of these houses & finding virtually no furniture or appliances except for a TV & a VCR. (VCRs cost a thousand then.)

Catherine Johnson said...

Median home prices should correlate to median income.

You can say that again.

CassyT said...

If rents correlated to sales price, this house should be worth $265K. Zillow lists it at $435K.

We'll buy it if it gets to $265k!

Good friend WAS a Realtor in Southern Cal. - Torrance, Redondo, Hermosa & Manhattan Beach areas. Five years ago, she sold $500K cottages to all her friends & neighbors. Then those friends got really greedy and tried to flip them for a million in 2 years. She left the business. I wonder whether those people can still afford their places?

Catherine Johnson said...

Why did she leave the business (this was before the crash, right?)

Catherine Johnson said...

We sold our cottage in Studio City for 500K.

It was a little bigger than a cottage by the time we sold it since we'd added a fairly large fourth bedroom & had expanded the kitchen a bit.

Basically, it was a cottage with a pretty nice master bedroom suite added on.

Not unlike our current house, actually.

Though our current house has a master suite and a family room added on.

CassyT said...

Why did she leave the business (this was before the crash, right?)

She was disgusted by her client's greed. She now runs a spice store. I haven't asked, but I'll bet she wishes she stayed in RE a little longer and reaped the benefits before the crash. Can't be many people buying gourmet spices in So. Cal right now.

GoogleMaster said...

According to one of the many housing bubble blogs that I read, the sales price should be no more than 100x the monthly rental. So in the case of a $1900/month rental, that should sell for ~$190K.