Rosier picture was depicted on US economy by the mainstream news broadcaster last Friday, showing the better job number and unemployment number. Drummed up by Q4, consumers are expected to spend and shop more than usual starting this coming Thanksgiving week all the way until Holiday Season and Christmas sale.
The Feds still stubbornly keep depressing the interest rate in order to keep the housing house somehow inflated. On the street, a person with qualified FICO score can easily get 15-year mortgage interest rate around low 3% or 30-year mortgage interest rate around 4% or slightly less.
If truly more people are able to get a well-paid job and secure it theoretically then one can keep the artificial higher housing price. However, the truth speaks differently. The core American workers, aged 30-65, are mostly sandwich generation, who are responsible to put roof on top and put food on the table for their own core family (meaning their children) as well as taking care of their elderly parents. They are at the majority now in limbo, not knowing what will happen with their housing investment and how can their children have better financial condition compared to them.
This sandwich generation who is lucky enough having more affluent parents and well -invested parents are in better condition such as the old-timer Californian passing Proposition 13 (lower property tax) to their heirs.
Many are not that lucky, thus toiling with so much obligation put so much stress to this sandwich generation. If they are quite lucky and not bought into the hype and getting into the housing bubble price between 2004-2007, regardless whether their housing purchase was for dwelling or for investment, then they are still able to stay a bit calm.
For those who were buying into the bubble price, got strapped and have been watching their home value keep drowning. These folks, though not all, are mostly in denial and lead them to be stubborn and on the verge of delusional. Can't take the loss !! That's their main reason.
The predecessors of this sandwich generation is also burdened by the amped-up global job competition. They are mainly the teens college students to the 20s young professional who most of the time must sacrifice their privacy and must go back living in their parents' home in order to save for downpayment while working at entry-level jobs.
source from: NYTimes
In fact, the difference between the entry-level salary per hour (using 2010 USDollar as an inflation-adjusted base), is merely only $2 between 1979 and 2010 for male and female respectively. That is for two decades difference!! To make it worse, the trend is declining.
With the much higher housing price between 80s and 00s then this younger generation are at a disadvantage unless their parents are well off and handing them properties without debts.
Now, let's take a look at this house that I have been watching for quite sometimes since last winter. It is a townhouse with 4 beds and 3 baths, and located in a typical middle economic level of California city in the greater Los Angeles are. Very spacious at 2046 sqf, ideal to raise a family of 4-5 until the children start college comfortably. West Covina that is, has mixed diversity and quite a melting pot. In last Feb, this townhouse was asking $450,000 and then in May it was reduced to $425,000 hoping to get a bite for the upcoming summer. Now, fall season has started the asking price was reduced again to $419,000
Comparables surrounding the area has a value around $350K-375K but still this house is still stubbornly at the $400K level. We will see what will happen in the next 2-3months.
Again, here is another housing area that is quite delusional which is San Francisco area. It is also anice townhouse located in South San Francisco and overlooking a nice mountainous view at 1660 sqf. Perfect also for raising a family since it has 3 beds and 3 baths. Last winter it was asking to well over $570,000 and then reduced to $550,000 in spring, and now it got foreclosed and asking for $499,900.
Still, with that big gap and chasing-down market price, there are still stubborn sellers or brokers who just fish reaction from potential buyers at lower starting 'asked price' and then reply saying 'sorry, we won't entertain your offer if not more than xxx (much more than the written 'asked prie').... completely delusional...
The Feds still stubbornly keep depressing the interest rate in order to keep the housing house somehow inflated. On the street, a person with qualified FICO score can easily get 15-year mortgage interest rate around low 3% or 30-year mortgage interest rate around 4% or slightly less.
If truly more people are able to get a well-paid job and secure it theoretically then one can keep the artificial higher housing price. However, the truth speaks differently. The core American workers, aged 30-65, are mostly sandwich generation, who are responsible to put roof on top and put food on the table for their own core family (meaning their children) as well as taking care of their elderly parents. They are at the majority now in limbo, not knowing what will happen with their housing investment and how can their children have better financial condition compared to them.
This sandwich generation who is lucky enough having more affluent parents and well -invested parents are in better condition such as the old-timer Californian passing Proposition 13 (lower property tax) to their heirs.
Many are not that lucky, thus toiling with so much obligation put so much stress to this sandwich generation. If they are quite lucky and not bought into the hype and getting into the housing bubble price between 2004-2007, regardless whether their housing purchase was for dwelling or for investment, then they are still able to stay a bit calm.
For those who were buying into the bubble price, got strapped and have been watching their home value keep drowning. These folks, though not all, are mostly in denial and lead them to be stubborn and on the verge of delusional. Can't take the loss !! That's their main reason.
The predecessors of this sandwich generation is also burdened by the amped-up global job competition. They are mainly the teens college students to the 20s young professional who most of the time must sacrifice their privacy and must go back living in their parents' home in order to save for downpayment while working at entry-level jobs.
source from: NYTimes
In fact, the difference between the entry-level salary per hour (using 2010 USDollar as an inflation-adjusted base), is merely only $2 between 1979 and 2010 for male and female respectively. That is for two decades difference!! To make it worse, the trend is declining.
With the much higher housing price between 80s and 00s then this younger generation are at a disadvantage unless their parents are well off and handing them properties without debts.
Now, let's take a look at this house that I have been watching for quite sometimes since last winter. It is a townhouse with 4 beds and 3 baths, and located in a typical middle economic level of California city in the greater Los Angeles are. Very spacious at 2046 sqf, ideal to raise a family of 4-5 until the children start college comfortably. West Covina that is, has mixed diversity and quite a melting pot. In last Feb, this townhouse was asking $450,000 and then in May it was reduced to $425,000 hoping to get a bite for the upcoming summer. Now, fall season has started the asking price was reduced again to $419,000
Comparables surrounding the area has a value around $350K-375K but still this house is still stubbornly at the $400K level. We will see what will happen in the next 2-3months.
Again, here is another housing area that is quite delusional which is San Francisco area. It is also anice townhouse located in South San Francisco and overlooking a nice mountainous view at 1660 sqf. Perfect also for raising a family since it has 3 beds and 3 baths. Last winter it was asking to well over $570,000 and then reduced to $550,000 in spring, and now it got foreclosed and asking for $499,900.
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