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Great post and great examples! Despite the credit being low as a percentage of the purchase price for the Bay Area buyers, everybody loves getting something for free, no matter how wealthy you are. The classic case is the free lunch…. offer a free lunch to the richest or most senior individuals at your company, and they will likely accept.
I’m pretty confident property will come back… it might take 10 years, but it will come back. My co-writer and I are definitely on the hunt now, but in Nevada, of course
Shogun
I don’t get this $750K thing at all. It’s being brought up on several blogs. Even if they make exactly $150K, unless they had a huge down payment thanks to Bank of Mom and Dad, they will be paying more than 50% of their income to this house.
I think this one is worth watching as a potential foreclosure in a year or two. This sounds exactly like what most people did in California during the bubble.
I also doubt they make $150K combined as a hairdresser and a “crane operator” (??!) They bit off WAY more than they can chew.
-Erica
Erica – You’ll be surprised how much people make. We all learned from the Dockworker strikes 4-5 years ago, that the average salary for an Oakland dockworker is around 120K, and they only work 35 hours a week.
You’ll be surprised how much some people make.
I was looking at your catagories for this post. One of them is the catagory “stupid”. I then perused your “studip” catagory which entails 4 articles about the government. I think I see a trend.
And yes I do agree with you and I am anxious for the housing market to get back to normal. I sold my home in 2007 with the intent of repurchasing a new one in 2010. At the time our country’s household debt ratio was unsustainable and I assumed that the recession would clean up household our country’s balance sheets and reduce house prices to a sustainable level. I never would have thought that after 2 years of pain from the recession that our country’s households would have more debt in relation to their net worth than in 2007. It’s like a twilight zone episode with Paul Krugman doing the Rod Serling intro.
I only mentioned Paul Krugman because I just read his New York Times article and I am amazed at how our financial elite just don’t understand the situation we are in today. Krugman didn’t even mention Austrian economics which is the only school of thought that can explain some of the problems that are happening in our economy today. Of course the other problems can be explained by behavioural economics. Keyes and Friedman are dead literally and figuratively.
I think you are doing a great job, keep it up.
[...] the $8000 first time housing credit spur you to buy a home this year? I wrote this post about seven families profiled on CNN who used the $8000 housing credit. 5 out of the 7 either felt [...]
Hey Xin – Gave you a shout out on my latest post. I’m sure you will be in full support of this family I mention!!
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