I'm so stinkin' frustrated, it's not even funny! I have been stuck in my apartment for the last 10 years! I didn't even unpack my boxes for the first two of those years; only those things necessary to live day-to-day, as I was certain I'd get out of here well before now, and back into a house as an owner, not a renter. As the years passed, more and more boxes were opened and as of now, I'm reluctantly painting the inside of my apartment, as I don't think I'll be moving out anytime soon. My landlord refuses to change the old carpet, amongst many other things. So here I am...stuck.
What really ticks me off is that we, (my husband and I), decided that I should stay home with the kids shortly after the birth of my second child), and believe me, we took quite a lumping from the lack of my income, but it was that or fork out $1000 a month for our two little ones to be cared for by a stranger. We made the right choice, right? I wonder...anyway, let me get to what really ticks me off. What makes me really mad is that now I am back to work part-time, as a Curriculum Aide, AND my husband landed a new position, a promotion that increased our monthly income substantially, and we still CANNOT AFFORD TO MOVE! Why is this? Because of the flippin' housing market. That's why. Here we are, hard working individuals, who literally missed the boat to buying a home while it was somewhat affordable, and now we are unable to move, because landlords are taking advantage of us here in Burbank, California.
Let me give you an example of my landlord's greediness. She strolls around the building like a Queen Bee. Her husband passed away about two years ago, and after that she made some changes; changes that cost us all a heap of cash. Sure we thought she was wonderful when she added the beautiful flower pots around the pool, but that was about it. And it cost us renters plenty. She's got 15 of us in this building, and last year she increased our rent at unbelievable amounts. I lucked out. I only pay $100 a month more for this little gem of an apartment, but my neighbors across the way saw anything from $200 to $300 more a month. I freaked when I learned of this! How could she do this and show her face around the building? How could she do this knowing how bad the economy is for so many of us? The point is she didn't care, and probably was offsetting her own financial struggles by tapping into her tenants pocket books. One of the renters asked her why she did this and her response was that the City of Burbank had gotten on her about having such "low" rents and needing to raise them to keep up with the rest of the rents in the area. Is she for real?
Here's our struggle...no one is moving. None of us can afford to move. The average cost to rent an apartment in Burbank is about $1500 to $1650 a month. And believe me, these places for rent are nothing special. Many are quite old with a couple of "updates" to try and justify the high price they are asking for rents.
So what does this mean to me? I can't move. I get sick every day when I think about it. My landlord knows this. She raised it to just under the price to rent somewhere else. Unlike some people, there is no family to help us to get into a home. We're doing it all on our own. I pay $1300 a month to our landlord and she's living the good life as a result of it. She's brilliant and I'm the dummy, right?
So what do I do about it? Not only do I go back to work part-time, but I go back to school. It's never too late, right? It's never too late to get a college education? How the heck else am I going to get out of here without getting decent dollars coming in? I struggle and work hard while raising a family, going to school and working, and all the while I'm pulling off "A"s, but I can't help but feel sometimes like what's the point? Especially since learning of the bailout this weekend. I sent my letters opposing the bailout, but the government isn't looking out for folks like us people who didn't jump into unaffordable mortgages because we were logical enough to realize that we couldn't afford the price of homes. Here's where I get really angry.
WHY DID ALL OF YOU PEOPLE BUY HOMES YOU COULDN'T AFFORD?
That's what I want to know. It's a bunch of crap that you got talked into it. You were greedy. You wanted a home like everyone else. Maybe you became afraid that you may never be able to get home, like myself, so you took a chance, hoping against hope that some day down the road you would be able to afford more than an interest only payment, but come on! You knew you couldn't afford the home you were buying. Now you are making me and others who have never ever owned a home suffer as a result of it. I'm angry at you for this as much as I am the lenders and the stupid speculators that did this to us!
What is my government doing for me and all the other renters and first time buyers who can't afford to buy?
NOTHING!
So here I am...the logical one, the idiot who didn't take on more than she could afford. The one who stayed home and struggled for years in order to care for her kids, but cannot afford to move anywhere. We are hard workers, what about us government?
Instead, you are helping the rich, the speculators, the dummies, who bought homes that they couldn't afford. It's called greed, and you are funding it, and families like mine are suffering because of it. A $7500 credit is not going to help me buy a home. And your bailout is going to slow the lowering of homes values, which will only hurt families like us even more. Here's the point Uncle Sam. Please hear me:
We cannot afford the homes that are for sale, therefore there aren't enough buyers. The homes were never affordable in the first place, that's why we got into this mess. If the prices are too high for us to pay the monthly mortgage, the price of the homes has to come down!
It's simple. We can't afford the homes, and the "Mickey-Mouse" loans are gone, so the buyer pool has been virtually eliminated. Hello? Are you listening?
Please explain how the bailout plan is going to help us renters and want-to-be home buyers? Please explain this to me and give us some hope.
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45 comments:
You're not alone. Many of us were fiscally prudent and waited. Now we're being punished. Be patient during this time and save up as much as you can. It might take 5 years for this housing mess to sort itself out. Maybe prices will return to some normalcy... who knows.
Just remember that the rich keep getting richer, and the poor keep getting poorer in this country. That's just messed up.
Keep going!
I read all this crap about "Where is the outrage?"
Oh it's here. There's plenty of outrage. A better question is "Who is listening."
Nobody that matters, that's who.
Since I have been saving the last 10 years and increasingly priced out at a faster rate, now I get to watch my saving evaporate as they crank up inflation to pay down all this bad debt the government acquired from private banks.
Pfftt.
I'm so mad I could just spit.
I'm in the same boat, which is why I bitch and moan whenever anyone brings up the impending elections. Democrat/Republican is moot: they are all controlled by corporations, banks, and lobbyists. Renters and the poor have no/few lobbyists, which is why this time, as every time since 2000, I will vote Green again, and will do my best to unseat every incumbent. Green, socialist, libertarian...3rd parties are essential now. When my Democrat friends give me the 'throwing away your vote' speech, I point to Dodd, Mozilo, Pelosi, et alia and tell them to shove off. I have $300k in purchasing power right now (which will not increase because my rent is high and interest rates are going up and inflation rises etc.), but I will keep renting until $300k buys more than a brick dump surrounded by tumbleweeds in a dusty town where median income is under $30k. Turning the thumbscrews on sellers is the only option I have left as a buyer, and I will do it as hard as I can.
The sad thing is that by the time the prices do fall - and they will and hard - interest rates will be so high that the monthly payments will still be too high. That will be partly due to high inflation, and partly because the banking system is in the ICU.
Propping up Fannie and Freddie is unconscionable - they have been the instrument of the bubble. And they won't even reinflate it - it's burst! It will however put public money into private pockets. And may bankrupt the US government on the way.
They should let the prices come down to a sensible base - say 1996 prices inflation adjusted - and then provide some missing liquidity (only during the absence of a real market) for would-be buyers who can afford a down payment and a sensible monthly amount.
But I guess that would just be too fair.
I feel your pain girl, there are a lot of us out here that are just PISSED OFF! I have been renting for 4 years now and was happy to see the bubble finally burst because I had a crazy feeling that maybe I could finally afford a house for my family. Imagine my shock and horror when our idiot politicians elected to bail out the other irresponsible idiots. Like Tucson said, I'm voting Ron Paul because I think he'll give the middle finger to the other Washington scum.
Hi--I'm in Sherman Oaks/NoHo and I feel the same way. We're about to add our second child to the mix, but you can't get a 1 bedroom for what we are currently renting our (overpriced) 2 bd now. AND our property management decided, after the 7 years we've been here that they are not going to heat the pool this year. (it gets very little sun).
We want to move to Burbank because of the schools, but the rents are preposterous. They are peoples' over-inflated mortgages. Who is renting these places, is what I want to know??? And there are many new developments along Magnolia (only $2995!). IF you don't want to eat or buy cloths. Ever.
Anyway, you are NOT alone, in fact our stories are almost identical, except for the flower pots around the pool.
And I just saw an article the other day that said Los Angeles is the 2nd most expensive city to live in. Man, were they not kidding. If it weren't for the steady employment I am currently enjoying, we'd probably try to fend somewhere else, even though somewhere else is probably just as cruddy with greed and stupidity.
Yes, I too write my representatives constantly. They do not hear, because we do not have the $$$. We DO need to vote out the incumbents, even the damn Democrats (grr) that have ignored the pleas to not "save" troubled house owners who bought something they did not earn. If they couldn't afford it, couldn't understand the contract what-ever, they were just as much a part of the problem as the solution as Wall Street and their unregulated ways are.
Keep writin' sister, it's good stuff.
Sorry Kell, I'm in Ventura and my story is virtually identical. Except for the kids and all.
Who knew that you could get ahead in this country by being incredibly naive or just insanely greedy. My wife and I have been open housing for the last 3 years here and so far found one house that was remotely decent; and even that one got caught in a bidding war. And that was in May!!!
Yesterday we saw a 40 year old tract home that was full of black mold and the bank wanted $400k... If i want four hundred thousand dollars of mold i'll go to a labratory.
Prices can't stay up there forever no matter what the realtors say. I've been hearing that the bottom was here since sometime last year; which was the last time i heard that real estate never goes down.
We are in New Jersey where the bubble hasn't bursted.
We just went to see a 90 year old, tiny kitchen, needs a new roof, oil heat house for $415,000 plus property taxes which will add &600 a month to the cost.
Congress only cares about the wealthy home owners and the banks.
Your landlord is not a charity. If you think you are being cheated, move to a cheaper place. If you can't find a cheaper place with similar amenities, well then that's just what rentals in your area cost. It's not some sort of vast conspiracy on the part of landlords - it's supply and demand. If your landlord raised all the rents, and nobody moved out - almost by definition the place is worth that rent amount, if not more.
I wish you lived locally to me. I'd love to chat over coffee!
I share your views
I pay the same rent as you. I have burnt orange kitchen counters. :)
Your time is gonna come.
It may be 2 or 3 years or more, but prices will be reasonable again.
Use the time to save a down payment- banks are going to start requiring them.
There are several important truths here, but not all.
We live in a time of multiple elephants in the room, and a couple of tyrranosauri. One of the latter is the energy armageddon that will transform every aspect of our lives and our thinking, can cause many of us to relocate/migrate.
So this time around, it's not a question of waiting out the "housing cycle" to buy. Rather, it's one of whether to buy at all, where to buy that's close to commerce, or even not buying until the migration to more energy-sustainable lifestyle and locale is completed. Complicated...yes, but that's what our gluttony (compared with the rest of the world) of recent years has left us with. Read James Kunstler on why suburbia is a dead issue. Read multiple Internet articles on how homes located far from commerce are dropping precipitously in market price.
So as much as LA was my first home, and remains in my heart, I have moved to Seattle. Here we have water, good public transit, high agricultural entrepreneurism, progressive thinking, and homes lots cheaper than California though comparatively stable in value. I've been successfully carfree for 2 years now. We're facing less bleak prospects than the rest of North America as we head into an era of energy austerity. Bring some jackets and a change of attitude, viz, lose the "need" for sunshine 320 days per year. Be ready to live longer, as any good doctor will tell you that the crappy LA air is killing millions of people softly, a kind of death by a thousand cuts.
You lost me when you started complaining about your rent, which you admit is $200 to $350 below the going rate in your area.
Isn't it ridiculous that the government solution to the housing bubble is to INCREASE the available financing to fund more LOANS? As though the problem is not that the prices are higher than fundamentals, but that the available funding for us to borrow from (to pay the artificially high prices) is merely too low.
Of course easier loans simply means higher prices. After all, it is a free market, so when the govt injects $$ into it, the prices will go up (duh). Markets adjust for changes like that. As they say, "the only fair tax is an old tax" (because once the tax is an old tax, the market has had time to adjust the expense of the tax into all the related industries and balance out).
Freddie and Fannie have a charter of increasing home ownership. But by increasing funding, they contribute to increased prices. Their short term fix is that they'll lower loan expense (cheap loans) but the house prices quickly adjust high (artificially high) in response. The longer term affect is that when prices go up, home ownership ultimately goes down. This is actually contrary to the Freddie/Fannie charter.
Dear "elected" officials: Don't lower prices bring more home buyers? Then stop artificially propping up house prices in the name of increasing home ownership!
The increase in rent is a problem with people who live on a fixed income and try to do it by the book. You people who think that controlled rent is a joke, just have disposable income at your finger tips? What kind of "ah hem, you lost me" is this? It isn't about the GOING RATE which is also inflated. It is about living within our means, which has practically become near impossible for most families either here or in LA.
I meant to say "here in LA or the rest of the country". Sorry.
It seems to me that regardless of how much money the gov makes available for loans thru Fannie & Freddie, people still have to qualify. Who has 10% or 20% down for an overly priced house in Cali? The appraiser still has to appraise the house. The buyer has to have a huge credit score. All of this tells me that prices have to come down if someone wants to sell their house. I've talked to quite a few people who have potential buyers for their homes but the buyers can't qualify for the loans. So, fear not . . . prices are coming down. But I do agree that interest rates have nowhere to go but up. So SAVE, SAVE, SAVE for that downpayment. And hang in there. Try to keep a positive attitude by staying away from all of the doomer blogs. It's amazing how a few days away from the computer can lift my spirits.
I'm more or less in the same situation as you. My wife and I used to own a home in Sacramento (where the housing bubble implosion began). Back in 2001, I could afford my home with a nice down payment and no fancy loan. We sold in 2003 (with a profit), and moved to Monrovia (in LA). We decided not to buy at this time since we felt the whole industry was out of control. I kept telling my wife, "wait and you will see this all come crashing to the ground". Well, here we are, five years later and I'm still renting and angry at the industry... buyers, appraisers, agents, and bankers. My only consolation is that the bailout will not really help people, and will lead to a general correction. If people are over their heads, a bailout will only prolong the pain that some overextended buyers already feel. The plan is not wide enough or deep enough to affect the more systemic problems of the bubble. In the end, prices will continue to drop for the exact reasons you so nicely wrote.
Thanks everyone for your responses. You all make fantastic points! There were a couple of digs amongst the many comments, but the majority of us all get it. I think the other two need to read my blog post a couple of times to gather some understanding of what I am trying to say, although one of them "joshy" must be a landlord based on his response. The point of my blog is simply to be heard and to voice the pain and discouragement I'm sure so many of us are experiencing with the housing mess. Thank you so much for sharing your heartfelt feelings and stories. I too feel your pain.
It's bad enough people like me have to compete for jobs against people that are willing to take $12/hr since they can live a comfortable life because they are on Sec. 8 housing, their on food stamps & go to the county food pantry for all groceries. They get all their medical expenses paid for. They mooch off society in every way possible, while bringing down wages for the rest of us that aren’t on the government cheese. Now rich homeowners that bought plasma TV’s, boats & expensive vacations are getting bailed out by people like me. This country is a joke!
You have a choice. Right now you insist on living in an upscale neighborhood with better schools. Simply, you can just afford it. There are less expensive neighborhoods.
Why is your dream to OWN a home?? Do you see what just happened to homeowners as well?? You think it's fun struggling to upkeep a home when you know you will be upside down on it in a matter of weeks??
I am sorry to say, but the dream of staying at home and raising the kids is kind of over....much like the middle class is over. It's a hard reality to face, especially when your income says you should be doing better.
All I can say is wait, save, and prepare because the bottom will be here in a couple years and there may be opportunity.
Amen to everything you have said! My wife and I made the exact same decision that you and your husband made... one income while we raised our two children at home with a parent.
They are now both in school and my wife is working. Combined we make almost $100k a year and in Santa Cruz County, I could purchase a home in the middle of gangland or a one room shack so far up in the mountains that we would have to truck our sewage down to town. Basically the price of decent housing is still way, way too high.
Like you as well, mommy and daddy did not have the means or the will to help us with a downpayment for a us. And after 8 years on one income with a couple of job losses in the middle, we are low on debt, but have little savings and a 'meh' credit score.
In the middle of the mortgage madness we looked around to purchase the house we were renting at the time. The red carpet was rolled out for us with ZERO downpayment and a myriad of ways I could get a loan for a way, way, way overpriced house. I took one look at the loan terms and realized very quickly that if I was paying interest only on these loans for 5 years and the price went down (hell, it could not go up anymore it was so ridiculous!) I would be underwater and stuck in that house. Not only would I be stuck, but I would be underwater with a 5 year ticking timebomb of a loan. I had zero faith that the super inflated price for that house had any chance in hell of increasing... how could it?
We know the people that bought that house. They are underwater (at least I didn't make that mistake) and thinking about walking away. Now they are praying the government will bail them out. If that happens I am going to f***ing storm Washington DC. Who wants to come with me. It's time for the million renter march!
This "bailout" (and it is debateable whether it will work or not) is government intervention into the free market at it's absolute worst! The reason the prices are un-affordable right now are because of the government! FHA, Fannie May, Freddie Mac... all supposed to make housing affordable. From what I have seen, those organizations have down the exact opposite!
Oh, and the $7,500 tax credit for first time buyers? I need $80,000 in the bank for a traditional 20% down mortgage right now in my area. Not even 10 years of tax credits would provide me with enough of a down payment to purchase right now.
The government needs to decide whether it wants to help people purchase houses or help their fatcat banking friends. The passing of this bill proves those chose the latter. If they really want to make housing available to people like you and I, they will get rid of all of the tax credits, government subsidies and programs. They would allow the market to set a fair price for houses and then, people making a decent wage will be able to afford house.
I used to live in Hollywood Hills. You asked for advice and here's some from someone in a similar situation on the East Coast (newlyweds,want to settle down, but have to wait.)
Renting an apartment in a complex is perhaps one of the most expensive ways to rent. The landlord or landlady, if you have one rather than a property manager, views you as a commodity and is out to make the biggest buck they can and that's entirely fair. After all, they advertise in the open market and are legally obliged to rent to anyone that walks in that qualifies.
If you want personal service, you need to get... personal. Hit the bulletin boards at the local coffee shop (I miss Priscillas), the PennySaver, and craigslist. You might be able to at least find a larger place in your price range. Landlords are NOT fans of children but on a personal level you can sell yourself to them as being reliable, able to handle small repairs by yourself (can you or your husband fix a toilet and water the plants?) and will you stay out of trouble? References from your old landlady are a MUST in this case!
Another option is to become a landlord yourself: Get a larger rental, such a house, and then find a couple or even a professional to share. There's a price point in rentals you have to deal with: Just getting a 'box' rental starts out at least $1000. Then you go into your range with a two bedroom for $1500. But if you get a whole place, you can find something for abou $2K or even $2200 with TWICE the space! Rent out the smaller half for $1000 a month and you get a similar value for $1200 (saving $300 plus the amenities of a home.)
In addition, with a renter you can work out deals to your mutual satisfaction. If the place is large enough, you can get a couple with a small child and split childcare saving money.
I hope that helps.
My suggestion is do what I did: LEAVE CALIFORNIA.
Trust me. You will be much happier. That state has turned into little more than a third world hierarchy. The middle class is rapidly becoming the lower class. Inflation is eroding our purchasing power and thanks to government stupidity, this housing bust will now take longer to complete its cycle since we are taking the Japanese approach of trying to prop it up. Rather than letting things correct on their own.
I lived in northern California for almost 10 years with housing being continuously out of my reach. When I realized that rents were starting their climb, largely due to the fact that absolutely NO ONE can afford anything any longer, I made the concious decision to move.
So now I call Austin, Texas home. While I still rent, it is substantially cheaper to live here, even with a pay cut. And I am planning to purchase a home in the next year or so once I get myself settled.
California is extraordinarily over-rated. It is little more than a playground for the rich. But it offers little to no value to the middle class worker. And with all the anti-development and NIMBY measures in place, you are guaranteed long commutes since the only areas being developed are on the outskirts.
Remember; this is a big country and being in California is not the end all and be all of living well. Sacrificing some nice weather for a roof over your head and peace of mind is well worth it in my opinion.
Good luck to you and everyone else.
I just read your blog and was like ...we're not the only ones, I am GLAD!!
Me and my wife are here in Woodland Hills renting a POS house for $2200/month...unfortunately, for that price you cannot buy anything acceptable in this neighborhood...whenever a house on the block sells, I am thinking...are you $hitting me...you're gonna pay $4000/month for THAT house build in 1931, never updated since???
well, when we looked into buying 5 years ago (and gave up)...I shook my head and was wondering how real estate could climb and climb...eveyr realtor was laughing at my "hater" prognosis that things will crash..."California will NEVER crash..." was the word...well, were are those guys now??
It's frustrating! and yes, the government isn't doing anything to help us "first time" buyers to get in...
thanks for your blog though...it does help to know there are others that share the same notions...
I agree...I really should and have been considering moving out of Burbank. It's my home town and my parents home town, so it's difficult to leave and there are a ton of things I love about it, but there are equally a ton of things I don't like about it.
I realize that Burbank is pricey, but it wasn't when I moved back here 17 years ago. In fact, it didn't become completely unaffordable until about 4 years ago, hence my reason for believing that I would only be living in this apartment for two years, not ten.
My kids are settled in good schools and are doing very well. My husband's job is here in Burbank and so is mine. That is why we stay here, but believe me, I am looking everywhere and considering everything. With the cost of gas, moving to outter areas are not in the cards either.
It's not easy picking up and moving elsewhere. It's not an easy decision to make, especially with children. I have to take them into consideration, as they are very important to me; as important as having a home. That's tough. My days of picking up and moving wherever I like at a whim were over once the first child was born.
There are lots of things I would have done differently, had I had the education and resources back then. I am actively trying to figure this thing out, and I'm certain I will, in time. Still, it's frustrating to be back at work, with a better income and unable to live better. Do you understand this? Imagine how frustrating it is to be making more money, and not be able to make improvements on your living conditions amongst other things? The housing crisis did this to me.
Am I going to sit around and whine, but do nothing about it? No way. That's not how I roll. I have been through enormous struggles as a stay-at-home parent, which have made me a much stronger person. I tend to bounce right up when knocked down, getting right into recovery mode. Still, it gets old being constantly knocked down.
Thanks again for all your responses. It's good that we are talking and learning from each others experiences.
As a 29 year old here in Long Island, NY, I can empathize. I graduated college just too late to be able to get on my feet and get into the market before all the unprecedented mortgage craziness began. I have a 4 month old and my wife and I decided she should stay home to raise her. I love how people look at you like you have two heads when you tell them that raising your own child is more important than having 2 salaries (what is wrong with America?).
But the fact is, I make almost double the average salary in the town I live, yet I couldn't afford one house there. I have excellent credit, and no high interest debt. My rent, which includes utilities, would barely cover the taxes and utilities if I owned the house. This bailout creates moral hazard on top of the moral hazard that got us here. It simply amazes me how 180 degrees out of phase this is.
The silver lining is that despite the governments attempts to prop up artificially inflated housing prices, it's only a matter of time. Without the low interest rates, no down payment, no income verification, HELOC, liar loans, there is no way for the housing market to remain as inflated as it STILL is, despite the historic drops in prices.
Rent in Sacramento isn't so bad. I got a 3 bed 1 bath home on 2/3 acre for just $1100 a month with electricity costs included. Not a bad gig considering if I had bought this home I'd have to pay close to $2000 a month with electricity not included.
If anything, us renters are realists. We got to watch everyone go off and live in a fantasy land. Good riddance!
I can sympathize with your frustration over increasing costs, but it sounds like your anger toward your landlord is misplaced. If your rent is $1300 and comparable or suckier places are $1500+, then you are continuing to get a discount and should be happy about that.
It isn't fair for your landlord to subsidize your housing costs by maintaining lower than average rent. If you truly feel that you are getting a bad deal, then move.
My rent went up $100/month this year. They tried to raise it $200, but I negotiated with them. We also offered to take over the landscaping for a $150/month credit so it became a net-win for everyone. We pay $50/mo less and the landlord gets to keep $100/mo more. Comparable rentals in my area are the same price +/- $200, which doesn't justify the expense of a move.
Next year, however, as foreclosed homes flood the markeet, I expect rentals to start fallings due to over supply, so hang in there!
The housing bill concept
****************************
Home bought in 2005 for $200,000 — now worth $150,000. Loan is $200,000.
Bailout plan:
Borrower: Shows that he or she can afford a loan for 90 percent of the home’s value: $135,000.
Lender: Agrees to lower the principal of the loan by 15 percent of the reassessed value: $127,500 (borrower must love this new back-dated price).
Borrower: Monthly payment of $1,470 at 8 percent balloon rate falls to $875 at 6.75 percent fixed rate. (borrower who speculated on house and rates gets to go back in time and get a great rate)
Enough to start a revolution? Yes, imho.
Or for a darker alternative and likely to become a prevalent one:
The lender sends the borrower a note saying "we think your house is worth $190k, sign this paper conveniently pre-filled-in with some assertions about your ability to pay, and your interest rate and principal will drop, significantly lowering your monthly payment, plus the loan will now be insured by the federal government so we won't need to foreclose even if you do default! Since the bank is now dropping the principal by a lot less, and is getting the shiny federal guarantee, it's delighted to find an assessor willing to give the highest possible value. Given that a condition of the deal is that the house will not get sold for a while, it'll be awfully hard to show that the assessor exaggerated... So, the bank is happy and the assessor is happy to get a big pile of business from the bank; the homeowner just got their payments lowered noticeably, so they aren't going to complain; the FHA official whose job depends on maximizing the number of these loan deals that happen is happy...
We are relying on the complete honesty of these participants, as demonstrated by the entirely ethical behavior of banks, assessors, and borrowers in setting up the very loans that led to this situation.
You people are angry -and justifiably so- because you had the foresight to abstain from buying overpriced homes.
Well, people like ME had the foresight to abstain from putting a RETARD into the White House while many of you RENTERS voted for him ..not ONCE but TWICE.
Moreover, whenever we tried to raise the alarm about what was going on or critisize the RETARD ..many of you are the same asswipes who shouted us down calling us 'traitors' or 'unpatriotic' or saying 'you're either with us or against us'.
NOW ..eat shit & die. I hope the entire USA goes bankrupt and that ALL you WAR CRIMINAL asswipes drop dead. As for me, I'm LEAVING this 3rd World Shithole of a country forever.
Patience. Another year or two of prices falling and you'll be able to afford something. Live below your means, keep saving for a downpayment, and you'll get there.
Prices are no longer accelerating faster than wages, they're falling faster. much faster. And this housing bailout ain't gonna stop it.
Someone must be tracking your local prices, just as I'm tracking the fall of Portland prices.
http://portlandrealestateoutsider.blogspot.com/
Kelly -- I see your frustration with the 'box' your family is in. This mess was engineered by bankers using their positions to raid the economy. It's being propped up right now but it's questionable as to whether it will work.
The ultra-rich who 'make' money from skimming off Other People's Money can threaten to dump their bonds and bring the whole country, and probably the world, down in an all-out crash. So I think the Wall Street Boyz are holding the govt hostage. We think that the rich are better off, but they've brought themselves to the brink as well as the rest of the world.
We have all been raised to believe that if we work hard and save that we will get the "American Dream' but then we see those who do the exact opposite appear to come out as the winners.
I think it's questionable whether life will return to 'normal' any time soon, if ever. This great unwinding is playing out against the back-drop of global wage arbitrage and peak oil and will likely get worse, not better. It could be that the Western way of life will continue to decline until it reaches parity with the emerging countries.
What will happen to us who are okay with living within our means?
Kelly, your post touched me deeply—I couldn’t decide between vomiting or entering exorcism style freak-out mode. You live in BURBANK CALIFORNIA, which sounds like a pretty bad-ass place to live. Obviously the rents & houses are going to be expensive there, and more importantly, it’s blatantly clear that you can’t afford to live there. Whey are you whining?
Hey, guess what? I want to live in Aspen and have 2 kids and stay at home all day and hit the slopes at noon. BUT I CAN’T AFFORD IT! So wouldn’t it be ridiculous if I was whining about not being able to afford to live in Aspen? Yeah.
There are plenty of affordable places for uneducated, hardworking people with archaic 1960’s era fantasy dillusions of american life to live affordably. Houston Texas is one example—you could easily “own” a 2,000 square foot home in the exurbs for way under what you’re paying in rent. If home”ownership” is so important to you and your offspring, why don’t you just move there?
It’s all about priorities and facing the reality that you can’t have everything you want. You’ve obviously placed a higher priority on living in a ‘good” neighborhood than on staying home with your kids. There’s no shame in that, but there is shame in your inability to recognize that your priorities aren’t the same as the ones advertised by the american marketing machine, specifically the 60’s-era marketing machine.
Here’s a suggestion of how you could possibly afford your Burbank: As a previous poster alluded to, you could easily purchase a multifamily unit (specifically a quadplex, triplex, or duplex) with a 3% down FHA loan, use the projected rental income as part of your qualifying income, and build equity way faster than you would with a single family home. You could potentially generate enough equity in 10 – 15 years to justify buying that timeshare in Burbank…oh, but that would require an objective evaluation of reality…is there a class for that?
(Note 1: Birth control—when used effectively—may provide the modern couple with the time necessary to accumulate the capital required to purchase a house prior to procreation. This method has proven particularly beneficial to those who seek to “live the american dream”, and are willing to sacrifice an extra 4 – 10 years of education and/or career building prior to procreation.
Note 2: consider the implications of the word “dream” as used in Note 1 above. )
bouler, you missed Kelly's point completely and you are a complete jackass.
Burbank is no paradise. The people that think CA is one big party all the time because it is so nice are fooling themselves. Is it going to be more expensive to live here? You bet, but it was not too long ago people like Kelly and I could afford to purchase a home. Try the 90's and early 2000's. Nobody expects to own in Santa Barbara, but when a craphole like Fresno was fetching $600k for a 3-4 bedroom house... Fresno is the sewer of sewers.
When you have low savings and no job prospects to pack up and move to a cheaper area, you are effectively stuck. And those cheaper areas are going to have no jobs soon enough as the Fed and Congress bankrupt this nation and bring us into the next depression.
She is pissed that the government decided to take her tax dollars and give them to liars and cheats, meanwhile delaying the inevitable drop in the price of housing to affordable levels.
Her decision to have kids before she bought her house is not even an issue and really none of your business. Look back to the 50's and you will find a time when one modest income could purchase a car, a house and send the kids to college.
Why, in the name of God, don't all of you who live in that awful over-priced Los Angeles/San Diego area just move the heck OUT of that hell-hole? I've visited there many times for work-related stuff and I just don't see the lure! The traffic is horrible, the smog unhealthy, the crime-rate has gone through the roof, and everything is overpriced! Do yourself a favor and promise yourself that you and your husband will find jobs in a part of the country where your babies will grow up safely and you won't have to live in a rathole.
Wow! I have to comment to an extremely rude response by "Bouler and Bust," but first let me please thank the following person "Damence72," who pretty much said it all.
Bouler...You are obviously an angry, simple, one-tracked mind person, who can only see things in one way, incapable of opening your mind to other ideas and different ways of approaching life, and you have zero tolerance for people who think differently tn you.
We are not born with cookie cutter minds that all think the same way. We are raised and educated in completely different ways, with completely different parents, financial situations, etc.
My parents didn't go to college, they went straight to work. When I got out of school, I went to straight to work as it was impressed upon me to do so. I made the decision to go to college later in life, because I LEARNED that in order to have a better lifestyle and to live in a better place, especially in this economic mess we're in, I needed an education. Plus I think it sets a good example to my children, who are GATE students, and already proving to do better than I did in school.
I think you are a very sad, sad person to try to take me down and others who have posted here in the same perdicament, with your rude, tunnel vision comments. I feel sorry for you, because you cannot see further than your nose, and you're a judgemental, ignorant and hateful person.
When I chose to have children, as Damnence72 pointed out also, is none of your business. It's easy for you to stand by and figure out others lives and what they should and should have done differently, right? Anyone can make cheapshots like that, so don't get to smug.
I could and probably should delete your message, but instead I think I'll leave it on so that people all over America can witness your ignorant, hateful behavior; the type of behavior I am teaching my children to avoid.
You're heartless, and ignorant, and you obviously missed the point all together. I hope that some day you get a clue and grow a heart.
I guess I expected to receive negative responses as well as supportative ones, but I guess I didn't expect people to behave so inappropriately or rudely, for that matter. I have to remember that we all think differently, and that everyone is allowed their opinions. Still, it doesn't make them right. Open your minds and be tolerant.
I hate it when people say "you can't have everything you want". It simply is not true. You can and you will, because you are asking for it.
A dream is just that, and all of the peanut gallery's input -does not matter-. If I, or Kelly actually found "help" out of the negative thoughts then we would probably waste more time thinking about them.
IMO-the reason this issue is garnering so much attention is because we feel robbed. We will get over it, because we know how to survive, regardless of the "entitlement"
and so-called "reality" seekers attempting to destroy the economy with greed.
No one has applauded the point that Kelly mentioned going back to school. I have been considering the same thing. And you know what? This is a great pursuit!Regardless of where one lives, where one wants to live, etc.
I liked this post because I've blogged on the completely and utterly rediculous asking prices for homes in the valley, and I go blind looking at what Silver Lake, Downtown and other "important" areas of this city think are fair and reasonable. When I was growing up, I thought all the million dollar homes had to be in Beverly Hills or Brentwood. What happened? Everyone decided that their radio-active granit countertops were worth their weight in someone elses' slavery?
As George Carlin said, "Debt is Slavery". We are not slaves if we struggle to keep ourselves from that. We are -s.m.a.r.t.-. And we have every right to object to capital traps, no matter the location.
As for the idea of "if you don't like it, move". That is such the cop out. Los Angeles is a 3.5 million people city. Considering this number, things aren't really that bad. Why do people move here? Because of work, opportunity. Usually other problems with "unjustice" follow you around no matter where you live. If you're fat or depressed, you are probably going to be fat and depressed no matter where you live.
Burbank is a nice area. The diversity of the area is largely due to people who come from all over the world to write and get into the "business". The houses and rentals in the area assume that you are a producer, writer or someone that wants to be close to the studios, so they expand their cost based on this convenience. Now, there are a lot of post production houses in Burbank, but there are many many production houses in Santa Monica. Santa Monica is a HOT area to live because of that, and the proximity to the beach and UCLA.
My point is people are expounding on "Burbank is so expensive" blah blah blah, well, other areas of this city are even more so, and they aren't near as nice. The price ratios make no sense for any area right now, and that is part of the problem with the attack on "justify the choice" to live there arguments.
fin.
Unfortunately Kelly, there are some truths to BandB's comments and they are not easy ones to face. You did do right by not deleting the comment because for every right there needs to be a left. Otherwise this is simply a woe is me blog about the hard times.
Entitlement. You act as if you are entitled to own a home in Burbank yet that is the exact way of thinking that got the whole of Southern California in this mess to begin with. Most thought they were entitled too, and they went and took out the death loans and now it's payback time.
Now me?? I live in one of the cheapest median home price areas in LA County. Would I like to live in Burbank?? Hell yeah!! Let's make it Manhattan Beach while we are at it and throw in a BMW 700 Series too!!
But my income and job location does not allow me to live in Burbank. We have the GATE program in the desert too. Perhaps it's time to look at other areas?? Maybe like North Hollywood?? Check out car.org, they have a lovely monthly price update by city. Burbank is kind of expensive really, more than double the area where I own a home that is about to go upside down any minute.
Before you say "well, you should not have bought a home you could not afford" let me state that I can afford my home, and bought a fixer upper well in advance of the big run up. I have great credit, saved my dough, and bought my first home in a very affordable area.
But hey, I have the liability now and you do not and be glad. You can maintain your credit and save money. I am stuck with a home I cannot sell and a mortgage that is more than the home's worth for the next two years or so if I am lucky.
So think about entitlement for a while. Then think about affordability, liability, etc. Why not just keep renting and saving your money?? But if you really want that $500k 1300 sqft home that needs a new roof, new wiring, and new plumbing, by all means go for it.
B and B may be harsh, but there are many truths buried in those comments. We all need to tighten our belts right now and be thankful for what we have. Just wait another year and see what I mean.
Right now the median home price in Burbank is $500,000. How much what it have to drop for you to consider it affordable?? 20%?? 50%??
Hey Timothy! Great points, but let me just say that there is no way that I would or even could buy a home in Burbank at this point, hence my reason for looking elsewere, but a lot of places elsewhere are just as expensive. I'm confused by your post though, 'cause you're saying your area is much more affordable, yet you are struggling with the mortgage now, and unable to unload your home?
I am not acting entitled. Read my latest post. At one point I could afford to live here, comfortably. You act as though I'm living in Beverly Hills. Far from it! And realize that I was raised in Burbank. It's not like I moved into the area to enjoy luxury. It's where I went to school and my parents went to school. It's been my hometown for years, and if I seem pissed off because now I can't afford to live here, who wouldn't? It's the housing crisis that has created this problem. I could have easily afforded a few years ago, but was unable to buy at the time, 'cause I put my children first, and to be honest, I would have never thought I'd be outpriced down the road, unable to buy any home. I figured that once I got back to work, I'd be able to improve our living conditions and buy a home, but no such luck thanks to the greed that caused this housing mess. It's a joke to say that I am acting "entitled" as it is so far from the truth.
I get you and forgive me if I am wrong, which happens more than I like to admit.
The entitlement thing I am talking about was the ATM mentality that really got us here. Not just the new sales and existing sales, but the cash out equity and refinance loans and yuck it up at the car lot mentality that has really pushed this over the edge.
My home is affordable, but every home is a liability in some manner. I suppose this is my lesson learned about buying a fixer upper. I am not struggling, sorry if that came across wrong. I am simply amazed that people can afford to live in expensive homes. I do pretty good and I just can't figure any of it out, where all this wealth comes from.
If anything, all of this just shows how little the powers that be actually care. This mess is another version of white collar crime, fraud, and basic thievery on the parts of the CEO's who are walking away with tens of millions.
There is no rescue, only cash being pumped into the banks to keep them solvent and able to stay in business. Loans are gone for anyone without top credit and a down payment. That is not a bad thing for now. But rates HAVE to rise, and they are.
I hope you find your peace (piece). Unfortunately the Burbanks of the world may not drop like they should in the coming year or so, but they might. It is a shame that normal folks can't live in certain areas, but this is the middle class fizzling out.
But we shall see, there is a long way to go in this mess and no indications that anything is getting better aside from some short sales getting bought up.
Timothy, sorry to hear you are heading underwater like everyone else with a home? Maybe buying wasn't the best idea after all. If you can still afford the mortgage look at it as a rental that you are on the hook for. Houses are not money generating despite what realtors will tell you. They are an expense like a car or your PG&E bill. You could have made money if you bought in 2001 then sold in 2006. But since you need it as a place to live it is pure expense.
Seriously...
You have 100% missed the point as well. Kelly never stated she felt entitled to a home in Burbank. Her point is that less than a decade ago, and if she was in the financial situation she is in now, she could have afforded to purchase a home in Burbank or close enough to make her situation work.
You don't want to live in Burbank. Your job is close to your house right now. I don't know where you live, but if it was your goal to live in Burbank how long and how much money would it take to land the job you needed so you could move? How easy would that be with kids and two jobs in your family? Unless you are a fireman or a teacher (etc.) whose job is very transportable. Guess what? Firemen and teachers cannot afford a Burbank house. Maybe you are in a position to get Kelly or her husband a job in your area. Heck, I'll take one too for that matter so I can afford to buy.
Also, Kelly never said she wanted a $500k home. She would probably live with a decent 250k home in a decent area. How much more does housing need to go down? 50% in most areas in CA at least. Some are already there. Some of the higher priced areas will take much longer to get there, but get there they will. Anything the government does will just prolong it and it is going to be painful for most... very, very painful.
But rest assured Kelly, if you can tough it out and make it work, your time will come. Your comments are exactly right about service workers, police and firemen. There will only be so many people able to pay cash for or afford an overpriced home now that lending is tight. People will walk-away. Homes will be foreclosed. People will sell at a loss. It is coming in the next two years and will make the current situation look like a cakewalk. Some areas have already experienced fat declines, but places like Burbank are sure to follow.
Kelly,
I'm in exactly the same situation, except in northern CA. I can't afford to purchase a decent house so I rent. I can rent a $1million+ home (well it probably used to be worth that) within a slight ocean view for the same price as a 2 bdrm condo in the middle of drive-by shootings. Basically, I can make mortgage (ie rent to the bank) payments on a declining value property and hold ALL the risk in a crap-house for the same price I rent a practical luxury home and save money. How does that even make sense?
Anyways I have a good job that allows me to rent in a good neighborhood and raise my kids at a good school. If nothing were to change (income, house prices etc.) I am at least 10 years from purchasing a home in this area and 3-4 years from being able to effectively move to a place like Austin (if I can find a job from 1500 miles away). But as I said above the tide is turning and it is going to get ugly.
It will turn out that you were the smart one after-all when prices come down despite Congressional bailouts. People will be wiped out and there will be affordable houses everywhere. Keep yourself out of debt as much as possible and save as much as you can. You can pack up and move right now if you had to. Unfortunately Timothy is not so lucky. (Well actually he could walk-away if it made sense).
You are not alone. My husband and I live in Chicago with our 4 children. We waited and saved to buy a house. I have to say, at least you can stay in your place. Our lease was just not renewed after 8 years of good tennancy!!!! So, because house prices are still falling rapidly - and we don't want to be stuck in something smaller (what we can afford now) forever, we are going to rent a house - for more $ of course. Thank goodness my husband will be getting a very nice promo and raise soon (counting our blessings for that in this economy). It will still be difficult for us to buy. We plan to buy next year (or maybe year after) because it is SO hard not having our own place with a large family!
Just wanted to say I'm sure there are lots of us out here and the bailout is so outrageous. We are avid Ron Paul supporters - he is a hero in our time.
Hopefully good things will come to those of us who waited (eventually!) - despite this 'bailout' - oh, and the bailout isn't really going to keep home prices up - it is designed to help banks and the wealthy. You can't keep prices up with so many homes and so few buyers - just not possible. I try to remember we are doing the right thing because it is right - and hopefully our children will learn great lessons from it. But I know it's hard now....
Also - I have always stayed home with our kids - not easy to live on one income, but again, I think it is the right thing
And.....Chicago is rarely mentioned in housing commentaries - but the market has gone up insanely here as in other major metro areas....
Hey Damence72,
I'm so glad you get me. I think people get fixated on an idea, but ignore that I addressed their comments with sound responses.
I just went back to work last year. I just started college. I am laying the groundwork, but it's not as simple as just picking up everything and bolting out the door to a new area.
Now I have considered moving out to the Santa Clarita area. The commute is horrible, but maybe my husband could ride the Metrolink? There's a lot I've considered. I stay here for the reasons mentioned in my latest blog article.
It's funny, 'cause I'm wondering why I'm explaining myself to everyone. I think I've covered everything, so why don't they stop blaming me and poke their fingers at the economy? We could sit here all day and try to figure out what the heck Kelly could have done differently. Believe me, I have!
Anyway, you're great and the best of luck to you! I had another Bay Area poster who responded to my last blog. Like I told her, I've been watching the Bay Area for a long time and I remember when the prices were going up lightening fast. I thought to myself, "Oh my God, I hope that doesn't happen here." Well guess what? It did. At that time you could buy a house easily for $200. Heck the house I used to rent went for $225K, then two years later at $275K! It was crazy and everyone was amazed at how fast their houses were appreciating.
The majority of my friends own homes. They bought years ago, before this mess, the lucky ducks! They all admit that there is no way that they could afford their homes at their cost today. (Note I don't say "value", only cost).
Another note, I often consider directing my studies to become a teacher, mainly because of the flexibility of my position, as you can teach pretty much anywhere with certification. I am thinking about everything in terms of where I can AFFORD to live. Crazy, huh? It seems it become all about housing.
Timothy,
You know what's funny? As much as I could and should point my finger at you and be angry with you for taking part in this mess, I am unable to personally attack you. I feel sorry for you and others who are in this position, and I certainly don't want to see you out of your homes, but at the same time I don't want to pay for your mistakes. Would you want to pay for my mistakes? Guess what? I already am!
Thank goodness my moral compass guides me and allows me to have some compassion even in the midst of this housing mess. I could never treat another the way others have treated me. I care about people too much to do that. Don't get me wrong: I'm not a beating post and I will defend myself and my actions, but here is the perfect opportunity to personally direct my anger and I choose to pass. We all make mistakes.
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