I looked at some housing prices this weekend. I'm not really in the market but I like to keep tabs on where things are. I have noticed that there are a lot of new "For Sale" signs going up in and around the Pasadena area. I think most of this is people getting ready for the summer selling season. I think a lot of people held off trying to sell in the weak market that we have had in the last year but people can't wait anymore so here comes the inventory.
But when I look at housing, I think about the saying with regard to the dehydrated man stuck in the middle of the Ocean. "Water, Water everywhere without a drop to drink." While I am interested in housing and there seems to be a lot of inventory, there really is nothing to buy. How did I come to this conclusion?
I just did the math. I pay $1700 for my two bedroom apartment. I admit that it is a pretty good deal when you factor in where I live but I don't want to be spending way more than that right now. Doing the math backward, I looked at houses with mortgage if I paid $2000 per month. That comes out to a $300K mortgage. Factor in a down payment, and you get a house of around $350K.
My search criteria was simple. Find me a single family starter home in the $350K range located in Pasadena that has at least 3 bedrooms. I think there was something like 3 listings. All the close neighborhoods east are worse as they are even more expensive so there were no listings there. West in the Burbank area? Only a handful there too.
No way housing should still be this high. All I want is a decent starter home and there is nothing within a halfway decent range. So I'm staying out of the market looking for something to do with all this cash.