Comments on: How many can afford a $500,000 condo? http://polizeros.com/2007/05/30/how-many-can-afford-a-500000-condo/ Musings on politics: anti-war, global warming, peak oil and otherwise Sat, 06 Sep 2008 05:40:30 +0000 http://wordpress.org/?v=abc By: DJ http://polizeros.com/2007/05/30/how-many-can-afford-a-500000-condo/#comment-138804 DJ Wed, 30 May 2007 19:44:24 +0000 http://polizeros.com/2007/05/30/how-many-can-afford-a-500000-condo/#comment-138804 Indeed... but it is predictable, and therefore manageable. The travesty is that our educational system turns out new members of society so completely unprepared for the realities of economic life. Indeed… but it is predictable, and therefore manageable. The travesty is that our educational system turns out new members of society so completely unprepared for the realities of economic life.

]]> By: Bob Morris http://polizeros.com/2007/05/30/how-many-can-afford-a-500000-condo/#comment-138801 Bob Morris Wed, 30 May 2007 16:37:02 +0000 http://polizeros.com/2007/05/30/how-many-can-afford-a-500000-condo/#comment-138801 The boom/bust cycle of capitalism grinds on. The boom/bust cycle of capitalism grinds on.

]]> By: DJ http://polizeros.com/2007/05/30/how-many-can-afford-a-500000-condo/#comment-138793 DJ Wed, 30 May 2007 12:19:27 +0000 http://polizeros.com/2007/05/30/how-many-can-afford-a-500000-condo/#comment-138793 The effects of the bubble(s) on our economy can still be seen, even in your calculations. It used to be that to be prudent, no more than 25% of one's income should go for housing, but that became entirely unrealistic in SoCal, and now in much of the country. This isn't the first housing bubble to burst, nor is it likely to be the last. I got badly burned in the 1990 housing bubble, and learned some valuable lessons. Everyone then predicted the market would take years to recover. Many people sold low, even when they didn't have to. In a couple of years, prices were surging again, the beginnings of a new bubble. Those who sold low were kicking themselves. My $140K condo first became an $80K condo, but two years later I sure wished I'd found a way to hang on to it! The lesson I learned was simple, but one most people don't ever seem to get: buy low, sell high, and keep credit to a minimum. BTW, in those days, just 17 years ago, $140K was considered absurdly expensive for a condo in LA. The conensus was that it was a temporary fluke in the market, and that once prices declined, they would never rise to that level again. Sound familiar? The effects of the bubble(s) on our economy can still be seen, even in your calculations. It used to be that to be prudent, no more than 25% of one’s income should go for housing, but that became entirely unrealistic in SoCal, and now in much of the country.

This isn’t the first housing bubble to burst, nor is it likely to be the last. I got badly burned in the 1990 housing bubble, and learned some valuable lessons. Everyone then predicted the market would take years to recover. Many people sold low, even when they didn’t have to. In a couple of years, prices were surging again, the beginnings of a new bubble. Those who sold low were kicking themselves. My $140K condo first became an $80K condo, but two years later I sure wished I’d found a way to hang on to it! The lesson I learned was simple, but one most people don’t ever seem to get: buy low, sell high, and keep credit to a minimum.

BTW, in those days, just 17 years ago, $140K was considered absurdly expensive for a condo in LA. The conensus was that it was a temporary fluke in the market, and that once prices declined, they would never rise to that level again. Sound familiar?

]]>