How it it done?
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5/5/2006
I am still dumb struck....A full year after relocating out of Victorville, having sold at the peak of the housing market over-inflation, I have not yet grasped an understanding of how buyers manage their financial obligations. This region is said to be the most affordable area within commuting distance to Los Angeles, Riverside, Ontario. Yet home prices remain well over 325k for modest track homes in marginal communities, with few amenities.
How can buyers swing this? Is everybody making over 100k? Is all of California trustafarians? Then on top of it all, everyone has the toys; boats, trucks, quads, dirt bikes, camper trailers, jet skis, toy haulers. Check out the I-15 heading to Vegas and the river each and every weekend to catch the parade. How do people have money left over at the end of the month to put gas in the tank and get to work? And what kinds of jobs do people work to support the high cost of living?
I envision a day of reckoning on the horizon. This can't keep up. Markets will adjust one way or another. As foreclosures rise, so too will inventory, sellers will be competing once again with HUD and new builds offering many big incentives to move properties that were once hot. Prices will fall. That's common sense, huh?
And sure, investors will once again buy back properties they made huge gains on during the past few years at bargain prices. Only who are they going to sell them to when everyone has a bankruptcy on their recent credit report?
Now I know I'm generalizing, and not being fair by stating that this is an example of everyone’s personal spending habits, but quite a few people do. I simply would like an understanding of how they manage it. It seems like that mortgage commercial "somebody, please help me." Do people feel that way yet? I wouldn't be able to sleep at night.
Hold onto your cash, save and wait for the market to adjust, people are spending themselves right out of their homes, right?
Robert | Trempealeau, WI