Housing prices
Link to the la times article
In 2002, the median price of a single-family home in Los Angeles was $270,000 and the median homeowner's income was $65,000. With a $50,000 down payment, the annual cost of that house (taxes, insurance and payment on a 30-year fixed-rate conventional mortgage) would add up to about 33% of the median household's income -- just under the 35% mark that the Federal Housing Administration calls the upper limit of "affordable."
By 2006, the cost of that same house doubled, to $540,000 -- pushed by unbridled speculation fueled by unparalleled access to mortgage capital. But median income rose a paltry 15%. So today that same set of costs come to 60% of gross income.
... Prices must and will fall. Everywhere. Probably 25% to 30% from their peak.
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Well thank you CHRISTOPHER THORNBERG, you must be a genius for pointing out what I have been saying since I got a real job and started thinking about buying a house. Prices must fall because, if you don't already have equity in a home or parents to give you a down payment, it is impossible to buy a home. I'm hoping for prices fall upwards of 45% from their peak. Come on earthquake...
In 2002, the median price of a single-family home in Los Angeles was $270,000 and the median homeowner's income was $65,000. With a $50,000 down payment, the annual cost of that house (taxes, insurance and payment on a 30-year fixed-rate conventional mortgage) would add up to about 33% of the median household's income -- just under the 35% mark that the Federal Housing Administration calls the upper limit of "affordable."
By 2006, the cost of that same house doubled, to $540,000 -- pushed by unbridled speculation fueled by unparalleled access to mortgage capital. But median income rose a paltry 15%. So today that same set of costs come to 60% of gross income.
... Prices must and will fall. Everywhere. Probably 25% to 30% from their peak.
---------------
Well thank you CHRISTOPHER THORNBERG, you must be a genius for pointing out what I have been saying since I got a real job and started thinking about buying a house. Prices must fall because, if you don't already have equity in a home or parents to give you a down payment, it is impossible to buy a home. I'm hoping for prices fall upwards of 45% from their peak. Come on earthquake...