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THE WORLD THROUGH MY EYES

You may see things differently, but this is how I view my life.

1/15/2004

COST OF LIVING IN CALIFORNIA INCREASES WAY MORE THAN 4% PER YEAR

I’ve lived in California all my life. When I was 15 (which is approximately 14 years ago) my parents bought a brand new home for $130,000. They went from a $280 mortgage to a mortgage of over $1,100. This was scary and exciting to them. Being that I was a teenager and never worried about my parent’s financial status, I was like “whatever”. They however, thought they were totally stretching themselves with this new huge mortgage payment.

They have a nice 2-story house that is a little over 2,200 square feet. In the 14 years that they have lived there, their value on their home has more than doubled. Most of the increase has been in the past few years. It’s gone up over $50,000 in two years! That’s exactly what’s happening all over Southern California.

Another example: My boss bought a brand new home in November of 2002. Within a year, her home increased in value over $100,000!

It’s very discouraging for Jerry and I when we go look at a home or a piece of land. We’re going to be really stretching ourselves to the max when we find something we want to buy. Sure we could buy a nice, new track home with no yard for $220,000 and have our neighbors all up in our business and sell all of our toys because we won’t have any room to store them. OR we could go buy a quarter of a million dollar fixer-upper on a half an acre and not have any money left to fix the place up, since we’ll be strapped with the huge mortgage payment. Seriously, you’re LUCKY to find anything decent for a family to live in for less than $200,000 here.

We’ve been looking at property in the area, and have found a few pieces of land that would be awesome! But those pieces of land are going for $250,000. And that’s without a home on it! We’d have to buy a double-wide mobile home and pay for a septic tank, water, electricity, gas, etc. Besides that, we’d have to pay for the foundation and for someone to truck the thing up to the property! Now we’re talking about another 50 grand easy!

Jerry has about 50 to 60 in equity that we’re going to use but that just isn’t enough. Now I know what my parents went thorough when they were in the market to buy. Jerry and I are talking about more than doubling our current mortgage payment and it scares the shit out of us. But the thought owning acres of land and maybe one day building our dream home, totally excites us. We just have to ask ourselves if it’s worth the sacrifice.

Once a year I get a 4% cost of living increase at my job, plus a small bonus that the government taxes 45% of. To me 4% isn’t a cost of living increase, when housing is increasing more than 50% per year in this state. We’ve considered even moving out of state, but for what Jerry does, he wouldn’t make nearly what he’s making now in another state. It’s a catch 22. Housing in California (especially Southern California) is just out of control and I don't even live in Orange County!

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