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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: kikogrey who wrote (25752)	12/9/2004 9:13:31 AM
From: Rutgers	Read Replies (2) \| Respond to of 306849

ok, I toss in my $.02 to comment on the dilemma faced by young couples today? My 26 y.o. daughter and son-in-law (new attorney) and 4 month old baby would love to buy a place in Los Angeles. Condos are at least $400,000+. HOA are usually $3-400/month. Add in taxes, insurance and mortgage and I tell them they are better off renting their 2 bd place for $1300. Sound advice for sure. But they see everyone and their nanny who are buying property and they want to buy too. I think it is great that you are at least discussing the situation. You may want to print out some of the articles regarding the less-than-stable Las Vegas market concerning people who purchased homes earlier this year only to have the developers drop the prices by some 25% recently. How do first time buyers survive this market? They don't have a downpayment (how many young couples have a spare 1 or $200,000?) and both have school loans. I tell them to wait for a down cycle. Personally I'd move out of LA because prices are just too crazy for what you get but it's out of the question for religious reasons. If they w/n move out of LA, and they absolutely must purchase something, I would suggest that they buy the ugliest condo/coop/house, in need of some tlc, in one of the less popular neighborhoods they can find (albeit one that safety is not an issue) in order to pay substantially less and therefore reduce their overall exposure if the bubble is pricked. good luck

To: kikogrey who wrote (25752)	12/9/2004 12:07:44 PM
From: John Vosilla	Respond to of 306849

<Care to comment on the dilemma faced by young couples today? My 26 y.o. daughter and son-in-law (new attorney) and 4 month old baby would love to buy a place in Los Angeles. Condos are at least $400,000+. HOA are usually $3-400/month. Add in taxes, insurance and mortgage and I tell them they are better off renting their 2 bd place for $1300. How do first time buyers survive this market? They don't have a downpayment (how many young couples have a spare 1 or $200,000?) and both have school loans. I tell them to wait for a down cycle. Personally I'd move out of LA because prices are just too crazy for what you get but it's out of the question for religious reasons.> Good advice. In the old school days condos would rent for roughly 1% of market value so $1300/month should be around $110-150k value not the $400k+ in today's market in LA. There are bargains galore if they could move to Houston or Dallas which are the complete opposite real estate climates today. When anyone tells you this time is different in your market after a long up cycle or we are in new paradigm run the other way. I loved to buy real estate in my markets during the times that no one wanted it and a whole generation of owners, builders and investors had all but given up hope of the market coming back.