Slow Down

The "McMansion" building continues, but at a much slower pace.

Click here to see a list of May 2007 Median Home Prices in California. It shows the year-to-year changes. Pretty interesting. Notice how hard hit Merced and Stanislaus counties are:

Merced County
$295,000.00 (2007)
$367,000.00 (2006)
-19.6%
Atwater
$327,000.00 (2007)
$365,750.00 (2006)
-10.6%
Los Banos
$345,750.00 (2007)
$440,000.00 (2006)
-21.4%
Merced
$286,250.00 (2007)
$358,000.00 (2006)
-20.0%

Stanislaus County
$339,000.00 (2007)
$385,000.00 (2006)
-11.9%
Ceres
$339,000.00 (2007)
$399,954.00 (2006)
-15.2%
Modesto
$325,000.00 (2007)
$345,000.00 (2006)
-5.8%
Patterson
$420,500.00 (2007)
$534,727.00 (2006)
-21.4%
Riverbank
$340,000.00 (2007)
$401,500.00 (2006)
-15.3%
Salida
$330,000.00 (2007)
$405,000.00 (2006)
-18.5%
Turlock
$345,000.00 (2007)
$377,000.00 (2006)
-8.5%

ARM's

From my comments: Just came across your blog and was curious when you had departed CA? Where you went? And, when you came back?

My wife and I moved out of California in 1998 to Lake Havasu City, Arizona, and then again in 2004 to northern Illinois, and now back to California last month in the Modesto area. My wife was born and raised here, has all her family close-by, so that is why we chose this area. I grew up in northern Illinois, and moved out to Santa Barbara in the 80's and was there until 1998 when we moved. It's great to be back...I love California. I realize it isn't for everyone, but it agrees with me.

I like the area we are in now, and it is affordable except for the over-inflated price of houses. The people who have lived and own homes here forever all say that they would not be able to qualify for a mortgage with current prices, so with the recent building boom I am convinced most people got in with ARM's. I talked to a man today, whose 81 year old father put $100,000 down on a house two years ago and the bank talked him into an ARM and his payment has gone from $800 to $1400 per month. His son has had to move in with him to help him afford the increase. He cannot refinance or sell it and is stuck right now. The value has decreased by approximately what his down payment was.

Howard hates ARM's more than his reindeer antlers (shh...we've convinced him they're bolts of lightning...it was the only way any self-respecting man-dog would agree to this picture).

No Bull

We are currently "renters." Some say that word with such disdain, and I guess I can see why many renters have earned themselves a bad rap with the "why take care of it, it's not mine mentality." Our current neighbors are such snobs that they will not even acknowledge me when I say, "Hey, how's it going?" They should be so lucky to have renters like us who do care about the house we are renting and keeping it up. We don't want our house, rental or not, looking bad. Anyway, they're probably just bitter because they have a house on the market that they cannot sell and owe, or are invested in, more than it's worth. Heh.

My wife and I have always been homeowners until our decision to move back to California. Now we are renting for the time being, saving more money, and waiting to see what the market does. Everyone has an opinion about what to do. My wife was having lunch with some friends recently, and one said, after mentioning they had taken a $50,000 (translation...$100,000) hit on their house, "oh the market is definitely going up in 2008." Others say that this is a "great time to buy." Hope springs eternal I suppose, but why would one buy now when the market hasn't even hit bottom yet?

My advice to someone looking to buy right now is plan on buying a house that you would enjoy being in for the next several years. I also like peahippo's advice left in my comments on another post:

If past housing bubbles are any indication (and they certainly are), then California's housing bubble is deflating, with losses being absorbed step by step, from one buyer to another on the way down like good little soldiers. Don't march into the machine guns like those morons. The bubble should bottom out around 2011 nationwide, but recent bailout actions in the Congress and especially the CA legislature will probably push that out to 2013 in CA itself. In the meantime, you have some fairly good properties that you can rent from the loss-takers (i.e. homedebtors), who will still be fairly grateful you'll be around to pay the rent to keep their mortgage-payment losses to a minimum. Rent, enjoy, and save money for your 20% down.