Saturday, May 18, 2013

Housing Bubbles in 2013

Wizard of Oz Snow Globe Music Box $64.95

It's been over 3 years now since I got married and I'm still in an apartment rental with my husband. Our kind landlord had kept our rent the same for the whole time, God bless him!!!  For the last 3 years, we have been told it was the best time to buy.  It seems no matter what year or what month we went to an open house, the brokers always said the same thing, "Now is the best time to buy."

Throughout the years, there were few times when we submitted an offer on something we liked and also could afford.  But each of the offer we submitted (we offered at listing price) were outbid by other offers that  were tens of thousands of dollars more.  Since 2008, I had never seen housing price come down much in much of the Los Angeles area except for the ghettos or areas close to the ghettos and high crime areas where nobody wants to live, like Carson, Hawthorne, Inglewood, Compton, South Gate, Baldwin Hills, on and on.   When I look at the map, it's a shame to see these areas where nobody wants to live make up most of Los Angeles.. How did this happen??

It's heart breaking to go to an open house of an ugly 2 bedroom condo or townhouse that is over 40 years old and that is asking for over $500K and even $600K.  Yet such properties are selling.  People are buying them because they fear that they will miss the benefit of low mortgage interest rate if they don't buy now.

I don't care about the low interest rate, no matter how low the interest rate is, I still have to pay interest.  Since my husband and I don't itemize on our tax return, we can't deduct the interest on our tax return.   The price of the home is our main concern.  The price of the home to our income is too high... We just don't want to be in debt for several hundred thousand dollars for the next 30 years after putting down $200K.  The current home price level for a 2 bedrooms in a decent area and in decent condition is just way too high for our combined annual income.  My mom told me in the past, the price of a new single family  home was only 3 times to my dad's annual income.  Now I look at the price of an ugly 2 bedroom condo with expensive HOA fees that is costing more than half of million, it really makes me sick.

The housing bubbles are definitely still going on, even though I don't know exactly what the government, Fannie and Freddie  had done to preserve the bubbles.  According to economists and experts in the real estate industry, homes are currently overpriced.  Why is my paycheck not increasing the same speed?  I have been trying to find a job that pays a few thousands more a year, but haven't had any luck yet....