‘225K Couple’ Responds: ‘It’s A Bubble, People!’

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Blogger’s Note: I have already broken blog etiquette by splitting the 225K Couple thread into separate posts, but thought this merited a new thread (Backstory: Couple Makes 225K, But Can’t See Buying a House in LA); Now, The Couple speaks, again...

‘Hello all. I am the ‘wife’ of the $225K couple - I read through everyone’s responses with a lot of interest and will try to respond to as many points as possible. First off, neither of us is driving a BMW and we’re not eating out every night of the week either. We (I) do have student loans to pay - wouldn’t be making my income without them so I guess it comes with the territory.

In any case, I won’t run down all of our finances because our point was never that we couldn’t afford the payment on a $650-$750K house, it was the fact that these prices are inflated (unreasonably inflated, in our estimation, inflated at least 25%). And inflated prices DO have an increased possibility of deflating (if the ‘bubble bursts,’ so to speak).

Read the entire response from 225K Couple by clicking below.

Any prudent buyer knows that they could buy today and they are risking losing a significant amount of equity (or even being upside down on their loan) should the deflation occur.

Now, having said that, IF we were to buy, and IF prices did deflate, we would possibly be “stuck” in this house for quite some time (some people in the 90’s were “stuck” for 10+ years), we don’t want to be “stuck” in what $650K buys you in this overinflated LA market.

To those of you who pointed out the great homes in Eagle Rock, Mount Washington, Montecito Heights, etc., at that price point - have you bothered to look at what many those same homes sold for in 2002-3 (incase you haven’t, we have, most were in the $250-300K range) - you mean to tell me these homes appreciated 100+% in 3-5 years and that’s not unreasonable “appreciation?” We think it is, we think it leaves a lot of room for aforementioned depreciation/deflation. It’s a bubble people!

Now, I’m sure there are great houses in the South Bay, Inland Empire, etc., however, we’re already working long hours and are not looking to move anywhere that requires more than 25 miles commute each way for either of us (even that’s a stretch considering we’ve also got environmental concerns - we’d prefer not to pollute with so much driving - and gas does cost $$$ - insurance also costs more based on one’s commute). For those who suggested a different state altogether, well, I don’t think we’d make the same income in Florida or Georgia, so it’s all relative.