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....

14144 Burbank Blvd, #3

After being rejected unknown number of times for my application to rent a house / townhouse. I decided that may be it would be easier just to buy a place instead....

Today during lunch time, I went to see this listed condo in Sherman Oaks. This condo was built in 1965. It has a monthly HOA fees of $190, which is resonably low in LA standard. From the information on the real estate website, this condo unit looks nice and the fact that it's listed for $250,000 just makes it a must-see property. I had never seen anything this cheap in Sherman Oaks, CA. Well, now I know why......

First of all, this property is a couple buildings next to the gas station on Burbank Blvd. Burbank Blvd used to be part of Van Nuys (not really a desirable area for investing a home), in recent years, it's been re-zoned to be part of Sherman Oaks. So now, this is a Sherman Oaks property that has a little Van Nuys vibe.

Burbank Blvd is lined with muti-units condo buildings, townhomes compelexes and many apartment buildings. Many of the apartment buildings are old and run down looking. So it's really not the quiet and valuable residential street. The school district is LA Unified, (not a hot school district either).

I can put up with traffic noise from Burbank Blvd and I can live without a good school district because I don't have kids. But I can't live as a prisoner in my own home where I will have to keep my blinds all closed and my home in complete darkness 24/7 just to have my privacy. One thing I have to say about my current apartment is, I can open up all the windows and see the sky and trees and not other people's windows or walls.

I just can't imagine myself living in a place where I am walled in, and I have no freedom to open my blinds. The cheap and beat up apartment building next to this condo building is so run down that just by looking at the windows, one can imagine just what kind of tenants are living there. One may ask why should I be bothered with the quality of tenants from an apartment building next door? Well, I won't be bothered if their windows aren't so close in distance to the windows of this condo unit that I was visiting.

Front view of the building where driveway to the garage is.


Living room area opens to the unit's own fenced private patio. The ceiling is high so there is an extra section of window above the sliding doors to the patio. However I don't think that section is too practical because when the blinds are open above, the neighbours living in the next beat up apartment building can see the entire living room and also the step-up dining area in close proximity. I am not sure anyone who lives in this unit would like to have the blinds on top open. If only they had sealed up that section of the wall up to the ceiling, I would like this unit better.

Step-up dining area and open kitchen. All the kitchen appliances are gutted and taken away by the owner. The first floor is all bamboo floor. It's a bit dirty and there is some tear and wear, but it's one of the kinds of floor that I like. The kitchen has nice cabinets, granite counter tops and stainless steel double sink. This is another plus, but then the kitchen window is too close to the condo neighbour across. Again, makes me feel there is no privacy and too claustrophic.

The second bedroom. The size is reasonbly good for similar condo units I had seen. Unfortunately, the window of the bedroom opens right next to the beatup apartment building next door. Anyone who lives there and any of the visitors of the tenants there will have a very close view of the bedroom, whether they stay in their units or they walk up and down the stairways to and from their units. What homeowners want to put up with traffic of an extra apartment building where they don't even live in? There is a lack of privacy issue here. I just can't see myself closing the blinds 24/7 and make myself a prisoner of my own home. Both the master bedroom and this bedroom has berber carpet.

The bathroom inside the master bedroom. This bathroom is very spacious that has nice size bathtub, a separate shower stall, nice granite coutner tops with double sinks and very nice carbinet. There is also a huge walk in closet in this spacious bathroom. There is another smaller full bathroom in the hallway outside the master bedroom, and a 1/2 bathroom (without bathtub or shower but with laundry hookups downstairs). All bathrooms have nice counter tops and nice travertine floors. I like the bathrooms number and also their condition.

The unit has its own 2 cars garage with storage inside. The garage is of reasonably good size. Just it's not attached to the interior of the unit. There is a separate entrace outside next to the main entrace to the unit that goes down to the garage. I prefer attached garage. Above the garage is the master bedroom. The master bedroom is spacious but there is a door opens out to the connected hallway (balcony) that connects all units' master bedrooms in the building. (Look on the top of the picture). Again, there is a privacy problem for me because the master bedroom's only window opens to this connected wrap around common hallway of the building. I just can't tolerate neighbours or traffic passing through my bedroom window. What homeowners want all this traffic right outside their bedroom and the fact that they have to keep the blind closed 24/7 to maintain privacy? This is the biggest turn off for me. Besides the traffic, neighbours inside the condo units across the connected hallway, can also see into the master bedroom within close proxmity. Beyond them, tenants in that beatup apartment building next door can also have a very clear view of the master bedroom interior in close proximity. This condo building is very small and is right next to this beatup apartment. Privacy is a huge issue.

I wish this condo building wasn't next to a beat up apartment building. I wish this condo unit wasn't so walled in and surrounded by neighbour's close scrunity. I wish this condo building wasn't so close to the gas station. I certainly won't want to buy it at $250,000. I rather add another $250,000 to buy another townhouse that is bigger, in a nicer area and that has more privacy. But does a townhouse / house like this exist in Los Angeles?

Home Tax Credit Extension

According to the Associated Press, homebuyers may get an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring.

Senate Majority Leader Harry Reid, D-Nev., is proposing today that he wants to give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.

The proposal would only allow people who already have signed contracts to finish at the later date. This is an amendment to a bill that would extend jobless benefits through the end of November.

The National Association of Realtors is said to have been pushing hard in Congress for the extension. Mortgage lenders are reported to have been swamped with borrowers trying to get approved by the end of the month. Many potential borrowers are unlikely to make the deadline.

For those folks who can make the deadline, they are eligible for a tax credit of up to $8,000 if they are buying their first home for the first time. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.

I just don't get it, what difference is $8,000 going to make when an average decent house in a good neighbourhood with good schools are $600K - 800K plus in Los Angeles.

For people who are relying on a zero percent down FHA loan to buy into a crappy house somewhere in Carson, or a bad street in Van Nuys for $300-400K, $8000 tax credit isn't going to make their monthly payment any more affordable to them in 30 years....

All this nonsense tax credit does is just to drive ignorant people (particularly the ones who are really bad in math, and one who doesn't have solid job skills to secured their paychecks...) to frock out to bid up real estates again...

There have been too many idiots out there bidding on homes they can't actually afford because of their misconception about this tax credit, then there are people who actually have the bucks and the loans to buy a home but have to bid a higher price to outbid all these tax credit stimulated idiots out there to actually buy their first homes. I hope all these losers fall out of escrow when reality reckons and banks deny financing due to their low monthly income versus monthly housing expenses.... Or the banks will not care as long as FHA gives an OK to guarantee the use of taxpayers money to repay to the banks when these losers default? This is just a whole new bubble and bidding war created by our tax dollars. Thank you, Uncle Sam!!

We Need To Move!!

We just got married and the two apartments we are currently living in both Redondo Beach and Sherman Oaks are getting on our nerves. Until we can find a new place where we can both move in without compromising our space, we will have to keep living apart till weekends do we unite......