Housing Prices as the Toothless Hillbilly
Sunday, April 30th, 2006
I’ve been going to this new barber that isn’t raising his rates through the roof or having some type of issue in his personal life. The new barbershop, however, is pretty bare bones. A couple of TVs and a bunch of real estate booklets. Last time I went I saw a FHM or two by the door, but it was as I was leaving.
I flip through these real estate books while waiting. I have nothing else better to do. I noticed that it seemed that housing prices in this area might have gone done some. That’s what Gaylen Young keeps saying, isn’t it? Or maybe it is that sales have slowed down and not that prices have went down. Whatever the case, it seemed that the median price of most homes was around $280,000, according to these booklets.
Today, I was bored at the computer so I went to the Bloomberg mortgage calculator to see how these figures add up. I put in the loan amount of $280,000, found out that my bank charges 6.6% for a 30-year loan, and even added the notional down payment of $10,000. I ran the calculator.
It turns out that my monthly payments under such a situation would be $1,825.00. Holy fuck!
I guess this is one way to make people get married as that seems to be the only way to afford a mortgage like that as a first-time homebuyer. Wasn’t the old adage that housing should be a third of your income? I talked to an old real estate agent, and she said that has changed. It is now half your income. Are you kidding? Actually, $1825/month will eat up more than half my income for a good many years, and that’s with a meat and potatoes stable job. If you make $25/hour, and work a full-time 160 hours/mo, that’s $4000/mo before taxes.
I had a 25-year-old girlfriend a few years ago that bought a house for $109,000 just north of North High School. It wasn’t lavish: three bedrooms, small back yard, garage. Nice little place. Ain’t that ancient history.
After my visit to Oklahoma, I checked out house prices over there. What costs $85,000 over there is exactly what I am talking about with this post. What is that, a 300% difference?
I guess it is just bad timing on my part. Five years ago in Bakersfield would’ve definitely been different. Is it really the greedheads coming from the Los Angeles area, or are we supporting the retirement of baby boomers selling their houses at monstrous rates? A lot of my contemporaries feel the same way. However, when I tell this to an existing homeowner, I just get a blank look in response. I guess I might have to move to some fundamentalist state in order to afford a house in the next ten years.



