Funny real estate market
I find it very funny, not sure about everybody else, but -- I see
condos (1 bedroom) for sale (in SF and LA) which:
1. Require to be 1st time buyer
2. Require income not to exceed 95k/yr for 2 people
3. Cost 350-400k
4. Want 10% minimum downpayment, but obviously prefer 20%
5. Are called affordable Okay, so let's lay down some numbers for say, 375k 1 bedroom
"affordable" condo. That means that two people with limited income
have to cough (somehow) 75k for downpayment. Which is almost their
annual income. Nice. But it's not over. So they will have to finance
the rest which is 300k.
For 30 years on average interest rate, plus adding annual taxes and
insurance and modest $300/mnth HOA fees (and hoping they'll not grow)
and also hoping nothing major breaks -- so keeping this all in mind --
they are looking at good $2900-3100 PER MONTH. Over the course of 30
years the $$$ spent only on principal and interest will be about
680-700k (I am not even adding here HOA and taxes).
Does anybody think their condo will cost these money in 30 years? Nope. So the question is -- is this really "affordable"?? Does it make sense
to buy? Not for me. California real estate market is just crazy. Dumb
crazy.
condos (1 bedroom) for sale (in SF and LA) which:
1. Require to be 1st time buyer
2. Require income not to exceed 95k/yr for 2 people
3. Cost 350-400k
4. Want 10% minimum downpayment, but obviously prefer 20%
5. Are called affordable Okay, so let's lay down some numbers for say, 375k 1 bedroom
"affordable" condo. That means that two people with limited income
have to cough (somehow) 75k for downpayment. Which is almost their
annual income. Nice. But it's not over. So they will have to finance
the rest which is 300k.
For 30 years on average interest rate, plus adding annual taxes and
insurance and modest $300/mnth HOA fees (and hoping they'll not grow)
and also hoping nothing major breaks -- so keeping this all in mind --
they are looking at good $2900-3100 PER MONTH. Over the course of 30
years the $$$ spent only on principal and interest will be about
680-700k (I am not even adding here HOA and taxes).
Does anybody think their condo will cost these money in 30 years? Nope. So the question is -- is this really "affordable"?? Does it make sense
to buy? Not for me. California real estate market is just crazy. Dumb
crazy.
