Saint Barbara and the Housing Bubble
There's been a lot of discussion this week on this blog on the pending mortage collapse, home prices and surprisingly -- whether any of us have a right to live here and own a home. We've seen comments that have surprised me (like the assertion that a county or city job is lucrative) and a passion that only comes from either protecting your property rights and home value or staring at your pay stub every week and wondering how you could ever own a home in this town.
I want to give a shout to Saint Barbara over at Santa Barbara Housing Bubble -- a blog I've been reading for the last couple of weeks. She covers interesting tidbits about the real estate market. This week's post shows how Avery labels were used in a recent advertising circular to chase the market down.
Over the next six months, we will likely be seeing more home owners "chasing the market down". Are you ready? What does it mean to be ready anyway?
I want to give a shout to Saint Barbara over at Santa Barbara Housing Bubble -- a blog I've been reading for the last couple of weeks. She covers interesting tidbits about the real estate market. This week's post shows how Avery labels were used in a recent advertising circular to chase the market down.
Over the next six months, we will likely be seeing more home owners "chasing the market down". Are you ready? What does it mean to be ready anyway?
Labels: real estate, Santa Barbara
posted by Sara De la Guerra | 11/12/2007 05:43:00 AM
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53 Comments:
No one has a "right" to live anywhere, including by the railroad tracks. And certainly not in Santa Barbara if you can't afford it.
How does one find ways to buy/rent their own home in Santa Barbara is the better choice for discussion.
City and county jobs are lucrative. What are you comparing them to?
Plus you have to add the dollar value of all the automatic benefits. These are very lucrative jobs and two of them will easily get one a chance to buy housing in Santa Barbara.
1 bedroom condos are going for $350,000. Going rate for custodians is $60,000 plus benefits and it goes up from there. Please tell me why you cannot buy a $350,000 condo on a $120,000 joint salary?
Nearly 15 years ago my wife and I were among the many who believed that we would never be able to buy a home on the South Coast. In fact we felt that we had made the conscious decision to have children rather than be home owners. Neither of us was willing to commute, so we resigned ourselves to being renters. Then the housing bubble burst and for a short time housing prices dropped and financing became tight for folks without accumulated savings. We had squirelled away some savings and were able to take advantage of the opportunity. Sure we had saved, but the opportunity was brought about mostly by luck. Now is another time like that. Folks who have been thrifty and patient now have an opportunity to buy into the South Coast housing market. Be bold and take the plunge.
Wow, a Penny-wise pound-foolish real estate agent who, instead of printing new flyers pasted a "circling the drain" series of ever-decreasing prices on the listing.
This would raise a huge red flag to any potential buyer as they would clearly see the trend graphically spelled out for them.
Why buy when the house will clearly continue to lose value?! (perceived and real)
Everyone has a right to live here and to own a home.
But they only have a right to live here if they can afford it and they only have a right to own a home if they can afford it.
The community does not have any obligation to somehow make it affordable to live here by anyone and everyone who would like to live herer in paradise.
Santa Barbara is the most beautiful and most desireabvle city in the world. There are 39,000,000 people in California and most all of them would love to live in Sata Barbnara. If we made it affordable ( through subsidy) for all those to be able to move here who wanted to it would ruin our city. It would require our city to grow up to 6 or more stories everywhere and traffic would be at full gridlock. There would no longer be any mounbtain views and no sunlight on our plazas and paseos. There woulkd be huge people congestion and a huge increase in crime.
Yes we need a middle class and it is ideal if our teachers and nurses and police and firemen can live in the community where they work. but by building another 10,000 housing units it will just increase outr population by 30,000 so then we will need even more teachers, nurses, firemen and police, etc., so this proves that we cannot build our way out of this problem. As we get bigger and bigger the problem just keeps getting bigger and biugger. Soon there would be 30,000 commuters instead of 20,0000 driving here to service the bigger population who live here.
WE CANNOT BUILD OUT WAY OUT OF THIS.
One solution is to preserve our existing rental stock---no condo conversions. Another way is to preserve our existing middle class housinhg stock---no change into McMansions allowed.
Aother issue is home ownership. Is it not o.k to rent? The american people have been brainwashed into thinking that they have to achieve the american dream of home ownership. One solutiuon is to build rental housing instead of housing for sale.
And yes, our existing salary of ciry workers is frelatively high compared to the rest of the country. A $60,000 or $75,000 salary is high!
A couple that is each making that kind of salary can easily buy a house here, if they know the creative financing methods.
The part about "whether any of us have a right to live here and own a home" stuck out for me for a few reasons.
One person's opinion...
I think there are people who have a sense of entitlement about home ownership, and about living here. I think too many people think that owning a home/condo/townhouse is a god-given right, or at least the ultimate achievement of the climb to happiness.
Folks who so-badly wanted to own a home that they'd buy property 40 minutes away, then complain about the commute and the traffic. And, of course, they'd want everyone else to help subsidize their move by building more lanes, commuter rail, and expanding bus service.
Folks who feel that we ought to build affordable housing for those who'd be counted in the top 10% of wage earners.
Folks who would use the adjustable rate, interest only, no income verified exotica that aided record home ownership, and brought new meaning to the 'barely making it' category as they stretched incomes and credit to levels heretofore unseen. Some of these are the '150k a year but we're middle class' folks.
Folks who think we ought to have affordable housing for as much of the middle, and as much of the working class, as possible. Though because we're in a tourist-dependent City, the number of residents falling into this category is very high, and affordable housing for this tier seems like a subsidy to to every restaurant, hotel, retail shop, and low-wage employer in town.
And there are folks who think that because they are 'Locals' and 'Natives' (not the Chumash kind) that they should have special treatment, or at least preference, in the affordable housing lottery. I used to be a member of the Descendientes, but I'm not claiming any special rights here.
Ownership is a great thing, but is it the end-all, and is it worth all that goes into it, looking at the bigger picture?
I am, in fact, a supporter of affordable housing. I think the City ought to take more of the risk, however, by forming and helping to fund public/private ventures instead of expecting developers--greedy as some may be-- to be altruistic. And instead of forcing affordable units in a carrot and stick thing. I support affordable housing, but find it hard to support affordable units when I hear folks who fall into the groups above complain as they do.
So what is the Political Play of the Week???
Why is everyone refusing to talk about how many rental units have been converted to short-term vacation rentals?
Who is supposed to do something about this?
And why is NO project being dedicated only to "teachers, fire fighters and police" yet the developers always try to make decision makers guilty by not providing housing for just this group of workers?
Have teachers, fire fighters, and police when shown the housing they would get and the limits placed upon their equity growth actually agreed to accept inclusionary/affordable housing?
Or do they prefer to keep commuting - actually only short distances when compared to any metropolitan area where they would also find employment.
45 minute commutes easily bring housing prices down and just getting anywhere in LA takes 45 minutes minimum. But here at least your 45 minute commute is scenic and sane.
I don't see teachers, police and firemen signing up for commuter busses. They are voting with their cars that they like commuting to their jobs.
How much more than the current 15% of existing housing stock do you want to have government imposed limits or subsidies?
How many police, fire and teachers currently live in this 15% of subsidized housing? Are they given priority on the waiting lists? Why not.
Has anyone asked them if they are signed up on the affordable housing waiting list?
Bus in the workforce or have them use the commuter rail. There is plenty of affordable housing, it's called Ventura!
As many of you know Santa Barbara has to subsidize many of our workers as does Ventura at the expense of the tax payers.
Perhaps it is time to have a living wage law passed in the area much like progressive Santa Monica did. It does work and as many have stated on this blog site the area can afford to do it and it would not hurt anyone but only raise the standard of living which may help reduce many of the social ills that plague the Santa Barbara area. It has been stated that most people in the Santa Barbara area have a great deal of money/wealth which is what allows them to live here. So it seems they would also have the money to pay the few extra pennies to support a living wage and if they can't afford the few extra pennies then perhaps they should then move away along with the workers that can no longer afford to live/commute and work in the area.
It would be interesting to see what would happen if the work force in the area went on strike for a living wage to pay for the increase in gas and the basic living expenses.
Let see just how progressive Santa Barbara is and how generous they are toward their fellow mankind.
Perhaps the workers of Santa Barbara should form a workers union and anyone who wants to work in the area can join. That would be an interesting social experiment and one that Santa Barbara could certainly afford.
If all the money people in the area give to local charities went instead to a living wage the perhaps the charities would no longer be needed.
Let Santa Barbara start a charity to start a living wage union.
Just before 2000, there was one last chance in SB to buy a decent home under $500K. Sounds like a small amount, huh? But it was huge then and it was it was scary but I had a back-up. A second home in northern CA. Within months, my home was worth $750K. Thought I hit the lottery. Soon it was worth a Million at least on paper.
Conventional wisdom said, take the equity and buy another home and then another but not in SB. It was no longer affordable and why take a chance? I wanted and needed a cash cushion just in case.
So, even though my main residence is still here, I continue to take the equity and invest elsewhere and when I can retire, I am outta here..........
I advised my plan to my clients. Some followed, others did not.
SB bubble is going to be the last to burst... my opinion only. That is why people try to hang on. Sadly, some banks and mortgage companies took advantage of people who really could not afford homes and they are suffering today.
So, to answer your question... "Are your ready?" Yes, I am... but it is because I took a chance and it worked out. I worked hard and spent in moderation. The market will go down but as the cycle of early 90's corrected, so will this one.
(Many people back then owed more than their homes were worth but they came back and then grew again and owners moved on.) Everything is cyclical but it is always scary.
It was scary buying at $75,000 back in 1979. Really scary but one has to grab the tiger by the tale sometime.
Look what happened and hard as it is to believe, it keeps happening exactly the same way. Daunting at first but with time, everyone who grabs the tiger wins.
I thought prices would drop too back then because a real house should cost no more than $40,000 in those days.
Was I crazy or what taking a chance on $75,000. Many thought so at the time. May this story give hope to others today.
At least it will give hope to those who appreciate long term goals. It will cause despair for those who want everything right now.
But it was worth the wait because each year things got better and better and I locked in my minimal property taxes now for life. That too is excellent. Even though this too causes howls from those who want free property taxes along with their free house.
Just ...do it. Or spend you life renting with nothing to show for it. Or, leave and commute. Or get in line for the subsidized units there are, and lock in your financial train wreck instead of riding the market up.
This city's biggest export is children. Why? Immigration.
Yup, all you folks who decided that Californy is the place you ought to be moved in and drove the price right out of sight. Too bad for my sons. Too bad for my grandchildren.
Most of us natives are too proud of our hospitality and our low key manners to tell you all to go to hell. I won't tell you that either.
I'll just remind you that we didn't make it too expensive to live here. You did.
I don't agree with solutions that invoke commuting... for two reasons:
1)The pollution and CO_2 emissions that cause global warming
2)Our politicians are incapable of working out mass transit
Building locally has the least environmental impact.
I think we can build our way out of this. The problems of that are:
1)Our developers have a rotten record of civic commitment. Just look at Isla Vista, which was built out under the complete direction of developers and a compliant Board of Supervisors in the 1960's. Isla Vista is a monument to what developers want to do.
2)Our County and City planners cannot rise to the occasion without strong interest groups that they feel are decisive and represent a majority. For a long time the NIMBYs and other naysayers have had the upper hand which is one reason the planners have been prostrate. Government ain't effective unless there is a strong public consensus.
To do the right thing, which is build fairly dense housing along transportation corridors and then provide good public transportation to avoid a traffic nightmare, will take interest groups as deep and wide as the environmental groups on the South Coast. There must be strong grass roots support that is not under the thumbs of developers, who dream of new Isla Vistas. And the designs must be green and well planned.
UCSB is going to doe this with new housing on their Storke Campus. The State has a vested interest in maintaining its many-billion dollar investment in the UCSB campus, and in the end, the State will demand enrollment increases because there is unquenchable (and appropriate) demand for higher education.
Whether all the other similar interest groups... businesses, schools, public safety groups, Vandenberg.... can band together and be as effective as UCSB remains to be seen.
The problem is not a shortage of housing but an excess of people.
One major problem is UCSB and the population that in brings in. UCSB should be closed down it would open up much need housing and reduce the pollution that comes with that population.
Santa Barbara does not need UCSB as most can go to other communities to get an education.
Exactly, Anonymous!
What did UCSB ever do to the life and economy of Santa Barbara County?
Really, no one ever knows anyone who works there or anything like that.
I know many people who have purchased housing in SB and have done it without having one of those so-called city or county jobs. They have done it by making sacrifices to their lifestyle and by renting a room or two in their newly purchased home. All of them went into the process knowing that they wouldn't necessarily be purchasing their dream home, that they might have to settle for a condo, and that it might not be in the neighborhood of thier choice. I think a lot of those complaining about not being able to afford to purchase a home have not considered how to make this work. You can buy a piece of property if you are willing to settle for less than your expectations on your first home purchase.
The problem with housing is the dearth of turnovers. Once people get here they stay until they die. This opens up relatively fewer housing units out of existing stock.
This is why planning schemes that may work somewhere else simply do not work here. The no vacany sign is lit and people have to move on to where there is room because we have no more.
Just like a motel is not forced to take more and more people in once it is full, Santa Barbara is full.
Sorry, but this is the truth and it is time we elect a new city council that understands this simple fact and does not feel guilty when they say no.
This is not a bad group of people, in fact they are too good because they can't say no. They need to or they will be gone and the rest of us have to clean up their mess. I hope they feel guilty about that too.
Why buy when renting is two to three times cheaper? The complex I live in is $1250/month for rent. To buy one is $400k plus.
$400,000 loan (since I have no savings)= $2,528 a month at 6.5%.
Property Taxes= $350/month
HOA= $250/month
Insurance= $40/month
$3168 a month total.... vs $1250.
Granted I have an Economics degree, but even a 2nd grader knows which number is smaller (<).
Anyone catch 60 Minutes last weekend on the "Millennial Generation"? S.B. is becoming like these spoiled kids, everyone assuming they get the best jobs, biggest dream houses, etc, all without working for it. I know several folks who were enrolled in our local affordable housing program (they were not eligible, but our local system is beyond broken), but refused the houses offered because they were not perfect. All you "affordable housing" whiners need to save your money, get a shack on the lower east side with a roommate and fix it up. Worked for me and I'm as middle class as they get.
P.S. On another note, from above, try asking the owner of that sandwich shop, pizza store, etc what a living wage means to his business. It means firing half his staff to pay above market, government mandated, subsidized wages to the remainder. Hope you have 2 hours to wait for your lunch.
There are a lot of folks who want to banish everyone except there little circle of friends and the illegals who do their garden and their housework. Nothing in our contemporary society encourages anything but utter selfishness, so it is hard to expect anything else.
There is no way folks today could build the infrastructure that we depend on... the water, sewer, roads... we'd be in endless fights and lawsuits. The majority of folks on the South Coast have no concept whatsoever of what it takes to keep them all alive here, and they take pride in their ignorance and relish beating up on the workers who keep them flush.
The locals begged for UCSB in the late 1930's and early 1940's... the locals paid for the entire state legislature to visit Santa Barbara and vigorously lobbied the Governor and the Regents... actually the UC system strongly opposed expansion here. But once the deed is done, there is no going back.
The runup in prices since 2000 has been exceptional, and lots of local residents are totally ignorant of the exorbinant cost of housing here. They are happy in their ignorance and they love to promulgate all sorts of BS about housing here.
With luck the global economy will now screw the US and bring local housing costs back to something reasonable. Most countries have raised their interest rates, and the Chinese government will soon shift its cash out of the US. The US has a rotten outlook... an unending war costing us $200 billion/year, enduring hatred of many countries, low interest rates that will fuel inflation, and a gutted infrastructure.
Mortgage interest rates will go up a lot over the next 5 years, just as they did in the early 1980's, to attract back foreign money. Then housing prices will really crash. Of course we'll still have the ultrarich who like it here, just as they third world has it ultrarich. But careful middle class savers will finally get back into the market in the coming years.
Look at a recent sale from the SBC Sales report. Looks like it was a Foreclosure and just sold for $700k. 23% drop in value from the May of 2005 purchase.
Sale History
10/19/2007: $700,000
04/19/2007: $785,925
05/16/2005: $909,000
Was curious about the claims of lucrative county jobs. Went to http://agency.governmentjobs.com/sbcounty/default.cfm and did a quick look on the posted salaries. 18 of the 37 postings have a salary range that is at least $75k annual (>$6250 monthly). These jobs mostly look to require a professional or advanced degree, but nearly 50% of the job postings pay a very nice wage.
10:13am is right on target. Renting is a better deal around here, particularly if you can invest the difference well... the historical gain of the stock market is 10% a year over the past 200 years on average, which is actually better than even the Santa Barbara housing market over the long haul.
A good website about the housing bubble.
8:04pm, that's a good point. having half of the open jobs at %75k a year does say something about government jobs.
What I wonder about is the total compensation, including all benefits.
Perhaps this is part of the problem, that people who would command that salary (professional and advanced degrees and such) wouldn't want to live here and rent.
Also, I wonder what the salaries and wages are like for those who currently hold jobs. That is, the clerks, the maintenance people, the rank-and-file, those in entry-level positions with the County... What do they make per year?
Oy. there's too much to deal with here in a comment, so I wrote a whole entry over at my blog about it.
Here's a bit of what you'll read there:
There have been arguments over at Blogabarbara of late trying to figure out what the housing bubble bursting might mean locally. That discussion continued yesterday and one commenter wrote:
1 bedroom condos are going for $350,000. Going rate for custodians is $60,000 plus benefits and it goes up from there. Please tell me why you cannot buy a $350,000 condo on a $120,000 joint salary?
Three sentence that prove you can write anything you want, but facts can be nice, too. Let's start in the middle--where, exactly, does a custodian make 60 grand a year? At least one website, which claims to review 50 million job postings total, seems to think otherwise, saying the going annual rate would be $25,000. That puts a couple doing such work at a combined salary less than the one "anonymous" suggested they would each earn individually. Indeed, Wikipedia quotes 2000 census statistics to say, "The median income for a household in [Santa Barbara] was $47,498, and the median income for a family was $57,880." Which of course means that half of the city has jobs worse than being a janitor.
9:11 -- you need to check out all the public agency websites in this area (City, county, UCSB, SBCC) for their job offering and salary schedules and you will learn opening positions for groundskeepers start around $65,000a year plus very, very generous benefits COLA, automatic raises and union negotiations every few years that always bring more of everything, never less.
Can't believe so many of you don't know how well paid public employees are and there are plenty of them in this town - they remain the biggest employers in our county. They make the money to buy houses here and you don't hear them demanding subsidized housing or getting on public housing lists.
Only the developers keep the chant going that we need to subsidize "first responders" when in fact they already make plenty with a double income to already live here, better than in any public housing scheme project.
These are your tax dollars at work so you should know where they are going and who pays for those slick campaign brochures and media ads that get you supporting candidates that promise more of the same and deliver to this growing elite group of public agency workers.
7:03am... check out
http://hr.ucsb.edu/ss/ss_5000-5999.php
A starting custodian at UCSB (5116/5117) makes $29,340, not $65,000.
I bet you sued the government for emotional damage from carpal tunnel syndrome and supervisor mistreatment and got a $200,000 a year payout and now spew false BS to assuage your guilt. Kind of like Rep. Craig being anti-gay.
9:18. You forget to add all the benefits that are paid on top of the salary schedules - at least $10,000 more in benefits. And once hired you get continual raises and COLA so you get higher on the schedules in little time plus knowing you can never get fired.
You need to dig deeper into this and add better. Find out what the average pay rates with benefits are -- the W-2 amounts these people take home with overtime etc, and the monetary value of their benefits compared to private industry who offers very few or lesser quality.
Then decide if dual public employees in this town do not do very, very well. Well enough to buy a house in this town.
7:03 - I could not find a posting for a custodian at UCSB to get the salary, but I found and opening for a plumber at $4600+ a month which is $55,600 a year, plus approximately $10,000 in benefits so there you have it. $65,000 a year plus COLA.
9:18pm good to see you're using all the free time supported from your $200,000 lawsuit settlement from the government for emotional distress.
Geez, a plumber? Plumbers in New York City make a million a year. Talk about a heavily unionized trade! The union makes darned sure that only their cousins and other relatives get certified. The salaries for plumbers don't support your case at all.
Exactly how do you propose that someone spend the $7,500/year UCSB contribution on healthcare on their housing? Actually, you neglect the $2,500/year payroll deduction UCSB takes to pay for healthcare.
Quit making stuff up to assuage your guilt. You get $200,000 a year from the taxpayers from your legal settlement for pain and suffering from supervisor's verbal abuse. That had a COLA in it too. There is absolutely no concept of COLA in the UCSB salary system.
You should try to get an actual fact instead of making up your nasty drivel. And apologize to the custodians of UCSB, who really do make $30,000/year. Your original postings mentioned custodians, not plumbers, but of course now you'll not admit that or acknowledge that, because you've got no respect for facts and the truth.
My wife works for the city of santa Barbara.
We are both retiring. After the same number of years working.
Over my career I made twice the salary as her but her monthly retirement check from the city retirement system is exactly double my check from the US government social security system.
This equates to her city retirement system benefits being FOUR TIMES HIGHER THAN SOCIAL SECURITY!
What is wrong with this picture?
The city benefits, and salaries, as approved by council, are way way too generous. And way better than private industry.
storke, not sure where you are going with your gratuitous comments, but I did say "groundskeeper" in my original post, not custodian, though if you search through all public agencies and not just UCSB, you will find good salaries, plus benefits for these entry level, low qualification jobs.
No, I never got a settlement for anything and that is not even relevant and constitutes a personal attack and really is inapproriate for this discussion.
Back to the real issue and one can fill in with specifics if they want: there are plenty of well paying public agency jobs in this town that do not take a lot of education and as a dual income can easily allow one to buy an entry level dwelling in this town.
I am sorry you wanted to only personally attack me and not the substance of the issue, because that really tried to draw the discussion away from the facts of this issue.
Bye.
Sorry 4:59pm, you're right, the fact is you did start with a groundskeeper. Groundskeepers are job title codes 8130-8134 at UCSB and they make $1,000/year *less* than Custodians (job title codes 5110-5119), see the web site
http://hr.ucsb.edu/ss/
Groundskeeper salaries top out at $37,000 for the supervisor, and the starting level is $26,500.
You never bother to check any facts, and you claimed that starting groundskeepers made $65,000.
Hey, I'm not personally attacking you, I'm personally complimenting you. I admire your savvy in suing the government and getting $200,000 a year for pain and suffering from your supervisors' verbal abuse. That they called you `careless with facts' is a terrible insult. Good for you!
The fact of the issue is that it is not at all easy to buy a house in this town. That you maintain otherwise is contrary to all known facts.
storke, stop the stupid diversions claiming I won some settlement. This is nonsense and has nothing to do with the discussion except undermine the rest of your fact presentation. This is off the wall and you need to keep researching public agency job schedules.
Back to our original discussion point - public agency low skill level jobs in this town allow people to buy houses when they are double incomes.
Get your plumber's license, meet a nice girl in your class, buy a house and get back to me.
8:15am... uh, I own a fair bit of land and 8 houses, after all, being descended from 19th century yankee landowners.
Noblesse oblige, my friend. You hardscrabble pimplebutt newcomers crack me up.
Plumbers in business for themselves in this town make a whole lot more than $65,000 a year, oatmeal cerebellum. They have to be real losers to work at a public agency like UCSB.
As for facts, the only facts on the internet are those that are referred to by in links to reliable sites like hr.ucsb.edu. That you don't bother to document your amazing claims says it all.
8:15 am What an elitist jerk! If you want to live in a class driven society, move to England. Having a professional degree doesn't make you smarter, wiser or even more educated. I have known many very well educated people, some with degrees and others who are self educated, who prefer earning their living with their hands and brains than life in cubicle hell. They respect hard work and understand that "class" has more to do with how a person lives their life, rather than the size of their paycheck.
If you typify the nouveau riche in SB, then this community is worse off than I feared. The real middle class doesn't stand a chance.
storke, you unwittingly made my point. You claim failed village idiots can even make $65K as plumbers for UCSB and oatmeal brained slouchers like me can even own houses in this town.
So why should we be subsidizing anyone further down the food chain with public housing -what drags on our community will that harvest, when any fool who can't even weild a pipewrench and lower middle class working wenches like me got into Santa Barbara housing here 1-2-3:
1. Work and save
2. Fund long-term goals
3. Sit back and enjoy the equity
Sunday NewPress advertises the following loans:
$500K - $2396 a month
$600K - $2875
$700K - $3354
A UCSB plumber can make $65,000 a year including health and retirement benefits.
There is plenty of housing inventory in Santa Barbara under $700,000 without resorting to public "affordable" housing.
Yes, even a solo plumber can afford to buy and live in Santa Barbara.
And do what the rest of us did, have to scrimp a bit the first few years and then with these fixed rate loans, watch our salaries go up and our house payments take less and less of our take home pay every single year until the house is free and clear and the equity is the best investment we ever so painlessly made.
Any one who claims the city must keep building "affordable" housing just for them and their lousy saving and sacrificing habits is barking up the wrong tree. There is plenty of money and there is plenty of market rate housing already in this town.
The city needs to get out of the housing business. Now, and not a moment too soon. Stop trashing up our neighborhoods with your public housing schemes while your public supported residents waste all their left over savings at the Chumash casino.
Sorry, 9:17am, you have gone wrong in your logic somewhere. Plumbers are poor examples for anything... the union totally regulates the supply of plumbers down to drive the salary up. The example of a plumber of any sort, UCSB or the County or anywhere, is pointless.
Using the News-Press for anything gave me a good laugh. Do they have anyone left who even proofreads their numbers? Those numbers were probably transposed or mistranscribed.
For serious Mortgage interest rates, go to:
http://www.nytimes.com/ref/business/markets/rates.html
For a jumbo (all of your examples are jumbos) the current rate is 6.56%. Then go over to bankrates to do some payment estimation
http://www.bankrate.com/brm/popcalc2.asp ...
$500,000 - $3180/month
$600,000 - $3816/month
$700,000 - $4452/month
uh... the take-home pay of someone making $65,000 a year is $3916/month, assuming they don't put anything in their IRA or 401k, See http://finance.yahoo.com/calculator/career-work/pay-02 and
http://www.ftb.ca.gov/individuals/tax_table/index.asp
It would be financially very unwise not to contribute to the IRA/401(k), given the precarious situation of the UCRP... in any case, UC is going to require employee contributions to the retirement plan of 8% in 2-3 years, and then the takehome pay of the plumber will fall to $3480.
9:17am, you are full of brave advice and nasty words for homebuyers, but you are pretty much innumerate.
And don't forget your original claim was that a starting *groundskeeper* makes $65,000/year; in reality they make $26,500/year.
I know plumbers in this town worth $30 million. None of them in their right minds would have ever worked at UCSB.
Pimplebutt wankers like you are are such a hoot.
Good, strong post save for the pimplebutt wankers comment -- hope the previous blogger has a smile on his/her face but at the same time -- let's try to stay away from name calling! That almost got a yabbadabba....and probably should have.
Sorry about that Sara. Wimplebutt plankers next time... no, not really, I'll try to keep it civil.
Not to worry Sara. Any true angliophile knows that "pimplebutt wanker" is a common term of respect and endearment "across the pond."
In fact I hear they refer to our beloved president as such.
Now "Bloody Pimplebutt Wanker"...dem's fightin' words.
Of course anyone who has no respect for the trade crafts probably goes by the name Dilbert, exists in a cubicle, doesn't see the benefit of being paid to exercise, belonging to that 60% subset of Americans...and has a leaky faucet.
sa1 -- funny comment AND THANKS to storke more for the mea culpa. It isn't so bad because it is a foreign, albeit British saying? I try to keep it light around here but I wonder if we lose readers because of the rancor that not everyone let's slip off their back.
Thanks...
Had to share this personal item: My friend, LEGAL, born here, educated but of Mexican decent gardner, OWNS his own business. He is 33, I have known him since he was 17. He bought the business from HIS boss and has done well.
Family man, he bought a home; was totally 'screwed' by the mortgage clowns who treated him 'different' because of his ethnic background with tales I can't even comprehend and he was going to lose his home. Sooooooo I took him in hand and put him with my accounting firm and some of our genius young graduates and new CPA's have come up with terrific, creative methods to help these young people keep their homes. Working the numbers. The firm is charging the clients a token sum just to help those hard working young homeowners in this community
If troubled people were guided in this helpful direction, perhaps the foreclosures can stop. There is a solution with no embarrassment or shame. We all should help and stop talking about the 'bubble.' It will recover as it always has in the past. What we need to worry about is China and our once mighty dollar. Meantime, help your own.
The bubble is a fact. A nice website is:
Patrick's Site on the Bubble
Loose financial procedures by US sharks kept interest rates low and foreigners bought up the mortgage debt through CDOs and SIVs. That fueled the real estate bubble of the past 10 years... nice plots for Santa Barbara in the presentation at:
October SBAR Report
Particularly page 16. It wouldn't be at all surprising if SB median home prices fell to $600k over the next 5 years. I'm sure their recover to $1,000,000 at latest by2030, no doubt in my mind... you are right, the prices always recover.
The foreigners (including China) won't get fooled again soon by this, and many are racing to get out of dollar based investments right now. Eventually the US will have to raise interest rates to re-attract foreign investment, and also to suppress the huge inflationary pressures (bought a gallon of gas lately?). And that will drive home prices down more.
A whole lot of people patiently saved their money during the housing bubble. It is sad they your friend got screwed by their mortgage company, but I think a lot more people who understood the terms of the nutty mortgage offerings over the past few years saved their money and will now be helped by the bursting of the real estate bubble.
11/18 9:17am I finally saw a News-Press with the ad for loans...
$500K - $2396 a month
$600K - $2875
$700K - $3354
These are for loans where only the first 5 years are guaranteed at a fixed interest rate, and furthermore, you only pay interest and no principal. So after 5 years you are no closer to paying off your debt, and the loan company is free to charge you 10% interest thereafter.
Those are the kind of loans that have led to the current foreclosure crisis.
The figures I gave:
$500,000 - $3180/month
$600,000 - $3816/month
$700,000 - $4452/month
are for honest-to-god fixed rate loans, where you can even pay principal off ahead of schedule if you want.
9:33... Thanks for your post and the websites.
I believe we are on the same page but really would like to help more than my 'own' friend who was taken with too much creative financing. I'm now thinking we will soon need legal representation plus those horrific fees to buy our next home.
I am thankful that another friend closed escrow on a first home as a result of prices coming down here in SB.
If you can't afford a $400,000 condo in Santa Barbara, you can't afford to live here.
THE HOUSING ISSUE IS DEAD!
The soicialist housing advocates lost.
Here are the two answers to all of our housing problems:
1. We need ZERO world population growth ( Limit each woman to three children in her lifetime and then mandatory sterilization.
2. We need NO MORE illegal immigrants ( from any country) ,
Just think, if we deported the 20,000,000 illegals it would free up 5,000,000 housing units and this extreme vacancy rate would drive down the price of both rental and for-sale housing in California by 20%.
It would also free up enough jobs that we would have a job for everyone and 0%unemployment. Think of how much better off those folkes would be and just think of what we could better spend all that tax money on instead of welfare.
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