You have to realize when you start talking your (CA) real estate prices, the rest of the country do a, "Say What?!" :eek:

True. Like the lovely starter home I saw in San Diego when I was there. 670 grand. Starter. Home.

Yikes!

yup. Even in this market, a 3+2 with a yard in a good neighborhood costs 750k. The plus side is, if you can make it work here, you can retire and take your equity anywhere and live like a feudal lord.

Yeah, you can buy a beautiful 3000 sf mountain chalet on 6 acres in Colorado for half that, complete with a breathing condition.

Colorado real estate prices are really interesting to me. I mean, our wages, here, really are not much different from any other place, but to buy a house seems unfairly matched. Of course, most areas here seem to have suffered from the decline in real estate values, but like Radar was saying about foreclosures...the really good deals are getting snatched up quickly and some areas are already starting to recover from the price decline.

We use to blame inflated home prices on Californians. So many from California migrated here in the late 80s and 90s and could afford to put half down or pay for a house in cash and end up with a house 3 times the size of their multi-milliondollar bungalows they sold in CA. This seriously drove our real estate values up during that period. Good for those of the previous generation who bought before that time. Bad for those of us who grew up here and suddenly could not afford to purchase a home in our own hometowns.

Good point. I wondered what the pay was like in that area for people in my career...could it possibly even come close to getting a small apartment?

How much would you have to make to afford a small place there, comfortably? It just seems it would be hard to do.

I would think it's hard to buy into LA making less than 100k/year.

I'm a bit skewed maybe, because there are certain properties that we're not considering because of schools, wanting a yard for the kids, proximity to studios, etc. If those are things you can be flexible on, and you are looking at condos or town homes, you can probably make it work on less.

I'm under 100k, but with my wife's income we're slightly over 100k, and we're scraping by. If I was earning this money and living in Pennsylvania or Ohio or something, I'd be living it up.

It's still cheaper to buy in CA than it is just about anywhere in australia.

I'm thinking we should sell up and invest in America!

An American dollar is worth 1.52 Australian dollars. My guess is when you adjust the price accordingly, Australian houses will be cheaper. I could be wrong though since I don't really know the going rate for a house in Australia.

Also, I'm guessing big cities like Perth, Canberra, Sydney, and Melbourne are more expensive than more rural areas.

Alia, what would a nice 3bed, 2bath house on a quarter acre (1,000 square meters) in an upscale suburb of Melbourne go for? In the most expensive parts of LA, it would still be over $1million USD, in the mid-range suburbs, probably 500-600k.

Radar, my wife is home with the little ones right now, and we are eagerly anticipating the additional income when she returns to working full-time once they hit school age. Being the sole income is just killing me.

We recently paid $520k in a semi rural area for a 3+2 on 800 square metres which is quite a large block over here.

To get something like that in Melbourne near the city you're looking at $3mill plus apparently. Here's a link to a property which fits the description.

In my experience, it's hard to get the wife to go back to work once she has had a taste of staying home for several years. And it's very convenient to have one parent at home, so you might not feel like pushing too hard. But you will be making more by then, and the mortgage will be the same, so you just might be able to swing it with her home.

My income isn't linear, it fluctuates pretty wildly from month to month and year to year, based on how much and what kind of work I'm getting. It's not necessarily the case that I'll be making more in 4 years than I am today.

You can obviously get homes that cost less, but not if you want a decent yard within a half hour/45 mim drive of the city. If you're really interested, check out realestate.com.au and do a search. There are a few that look much more reasonably priced (less than a mill) but no yard hardly (which is fairly common in the closer suburbs of Melbourne unless you're mega rich.

I'm at $85k right now which is less than what most IT Directors make, but I'm in a really cool environment, and I am building their network up from scratch. Most IT guys will tell you, it's really nice when you get to do things your own way instead of being forced to work on something someone else setup, especially when you know you can do it better.

Once I get everything up and running, and automated as smoothly as I want, we'll be developing our own web enabled inventory system for our props warehouse. If I can pull this off, my resume will look so good, I can go just about anywhere and make a lot more money. It might be hard to walk away from my baby after I've built it exactly the way I want it though.

Have you thought about developing the software and then selling it to them or selling the rights or creating a service agreement as a subcontractor? That sort of stuff pays big bucks over here. I can only assume it'd be the same there.

Actually I did think of that. There is one product that is used by virtually all props warehouses and it sucks badly. It's a VB front end and isn't web enabled, and all the companies pay something like $4,000 per month to use it.

I think if we develop something better, we'd be able to sell it to the other props houses. There aren't many of those places though. This is probably why they pay so much for the software.

well, things are brewing. We may still end up buying this house. The first counter-offer fell through, they came back to us and asked us to bump our offer by 1.5%.

We said no, our realtor said, "Yes!" and he's paying the difference out of his commission. We find out tomorrow!

Isn't that the truth.

Here is a good example of why I don't mind living in GA, this is a sample of what good rural property will cost you:


http://www.landandfarm.com/lf/asp/se...landstateid=13

The cost of living is so low that even if I made the same amount of money in a big city it would not even compare to how far my $ goes in the South.

The land is nice, but you've got to live around a lot of rednecks, hillbillies, and people who voted for Bush...on purpose.

Are there any negatives? lol

When you have enough room between you politics don't matter.

We just bought a house. Holy crap, I'm gonna be poor again.

Congrats! So I guess you got what you wanted.

that's freaking awesome. It's a beautiful place too. You'll need to give us a tour once you move in.

On the left is the room we rent to hobos to help make the mortgage payment, on the right is the cavernous whole in the floor that we can't afford to fix, upstairs you'll find the bucket I sit on when I weep in despair at our current poverty, and down here in the basement is where we keep all of the hopes and dreams that we will never be able to fulfill.

Welcome home!

Woo Hoo! Way to go! Congrats!! !! !!

Congratulations, sm! I hope you and your family will be happy there.

So what is monthly payment on a place like that going to cost you, if you don't mind me asking?

Woo Hoo!!! Congrats! That's awesome. West Coast Cellar meetup!

I hope I get mine too. I had to send a different check and sign different papers on my offer since I gave my best and final offer of $400k. I hope we get it.

I'd be willing to bet with insurance and taxes his payment is close to $4,000 per month.

In that range.

Congrats!

$4k per month? What term would that loan be over? We don't pay anywhere near that much for our mortgage (which would be around the same amount) even if you do include insurance etc.

20% down, 30 year fixed at 5%

When you say insurance, do you mean building/contents insurance or mortgage insurance?

Over here, you only have to get mortgage insurance if you're borrowing more than 80% of the value of the property in most cases.

That's with homeowners insurance, hazard insurance.

80% is the same cutoff for mortgage insurance.

Congrats, smooth! It's a beautiful place. I love mission-tile roofs, but they aren't common in this area.

We pay less than $2500/month with a slightly higher interest rate over a similar term (might be 25yrs actually).

There must be a different calculation here than there or something.

Interesting.

When is the move-in fiesta?

In the UK before we left, all the talk was about "Australian-style" mortgages and how you could save a load of money because interest was calculated daily rather than monthly or something....

There are different types of mortgages, but our interest is calculated on the minimum monthly balance, so what we do is load all our income into the mortgage account and live off the Credit Card, then pay it off at the end of the month. So in effect, although we're not paying any more off the loan, what we are paying is more capital and less interest. It's quite good really.

Here, at least awhile back, they were offering considerable savings if you agreed to make mortgage payments twice a month instead of once. That extra half month's interest, on half the monthly payment, adds up to a lot of money.

If you pay 13 monthly payments per year on a 30 year loan rather than 12 and ask the bank to put the extra payment on the principle, you'll knock 10 years off your loan.

Looking at refinancing now. We've got 24 years left on our mortgage, but looking at average national rates for 15 year mortgages, what we are paying now per month, and what our remaining balance is, it looks like we can probably refinance now to a 15 year mortgage and keep our monthly payments the same. We'd pay it off nine years sooner, and the only drawback would be the closing costs, which would probably be the equivalent of a couple months of mortgage payments.

We haven't actually shopped around or anything yet for actual quotes.

Does anyone happen to know if rates are expected to continue to drop? 15 year rates seem to be at 4.65% right now.

they may drop a little, but not by much. The banks themselves are getting money for free right now, so what you see on the rates is their profit margin. There's no skin left on the cat, so to speak. Nothing left to cut.

We got a 30-year fixed lock at 4.875, with an option or a one-time float down within 21 days. If the rate moves down within 21 days, we get the new rate.

I think the rates are going to be as low as you are going to see them. We refinanced to a 15yr loan and our payments went up a few hundred dollars. Best thing we ever did. We only owe 8 years or so. At the time, around 2001, closing costs were around $3500, but I guess it depends on the market and the size of the loan. Lookout could tell us better.

We ran a bunch of different calculators yesterday using all the actual numbers in front of us, and it looks like our monthly payments would go up by around $150 a month. That's actually a little too painful for us. We could swing it, but it would impact our already frugal standard of living for a few years. I think we may stick with the old loan. It's a tough call. Paying off the house 9 years sooner would be really nice. Ugh.

beest did the same and our increase was more painful that that....

I refinanced mine from a 30 to a fifteen about 6 years ago. It was painful at first, but now I only have a few years left and that feels really good.

Sheesh, do you people understand nothing about the American way of life? You're supposed to refinance a new 30-year mortgage, take out all of your equity and invest it in the stock market, preferably on margin.

Think of all the money you'll make! Can't lose!

A friend of mine got one of those "interest only" loans a few years ago and I thought he was an idiot. Then he told me he claims single/zero on his taxes, and since his payments are all interest...at the end of the year he gets a check for about $12,000. He has the discipline to use that check to pay down the principle of the house. Doing it this way, his payments are lower, and he's actually paying the house off faster than a conventional loan.

It does take a lot of discipline though. When you've got a big fat check like that in your hand, a lot of other ways to spend it must pop into your head.

What about the interest he could have been earning/losing all year? How does that factor into this equation? Wouldn't he be better off, if he is that disciplined, to pay more each month?

Yea, the neighbor bought a house on an interest only loan, 450k. He loses it today on the courthouse steps at auction to the highest bidder. The house is on prime real estate and is about 4000sq feet. Anyone who wants it can get it cheap.

I still can't get over the numbers you guys are tossing around.

What do you mean Griff?

The house prices mentioned are approaching one full decimal place from comparable homes in my local market. Beyond that, as an owner builder, I just can't conceive of paying down that kind of debt. I just wouldn't have the stomach for it. I think the stress of knowing I was one job away from financial ruin would be debilitating. I admire everybodies stones but am way more comfortable debt free.

You can't think of it that way. Add up the amount of money you pay into savings, into stock investments, and into mortgage each month. Now, instead of spreading it out into all of those places, you're putting all of that investment money into just one thing, the house.

In CA, the roll of the dice is a pretty good bet. If you're a generational buyer (buy once, live there forever), the chance that you'll retire with a home free and clear worth 10x your annual salary is a decent one. I don't know that that's true elsewhere.

It's a home, but it's also your primary savings and investment. That's a big part of why my wife and I are stretching so far to get into this house. We feel like it's the best leveraged investment we could make right now. Also, we really, really want to live there.

tax deduction