Here in Southern California, it is absolutely ridiculous! In a mere three years, our townhome has doubled in value. Great, you say, think of all the equity you can cash in on. Well, that is true, but the sad part is that that equity will get us absolutely nowhere.
We are looking for homes in two or three specific cities. Just today, a new listing came up for one of those cities. It has just a little over 1000 square feet, 33 to be exact, and they want 519,000.
Yes, you read correctly. Over half a million dollars for 1000 sqare feet, which is smaller than what we have now. This house is not by the beach, it does not have a view, and it is quite old. The school district is pretty good, but that is about all it has going for it.
Who are the people who are forking over that kind of money for that kind of property? If they would just stop paying such obscene amounts, don't they realize that the prices will go down? If everyone in the market for a house all said, "Forget this crap, a half mil for that?" Then, sellers would be forced to reduce prices. But no, apparently there are mindless people who have nothing better to do than pay over $6000 in property taxes, and I'm referring just to the first year. Property taxes do nothing but go up, they never go down.
So, here we are, frothing at the mouth in despair over ever getting a new house, unless it is in BFE, and even those are at least $350,000. You can try to tell me that prices are tied to wages, blah blah blah, but they really are not in this market, not here. People are financing with variable rate loans to get into these things, or using their large equities, plus variable rate loans. In some cities, they even have something called Mello Roos, which is sort of like an extra tax, something like you would pay for a homeowner's association. Mello Roos can be as low as $50 a month, or as high as $500.
It sure does suck to be poor. :)