Efrain Rojas

Missing From All the Credit Crisis Coverage: A Realistic Assessment of Where Home Prices Are Headed

Even in a tight market like Los Angeles where rents have zoomed up in the last five years, rental income does not even come close to covering the cost of a mortgage. The so called experts in the media and business do such a deplorable job of anticipating obvious train wrecks coming down the tracks such as this credit crunch that it is ill advised for anyone to defer to their opinion. Anecdotal observation, based on the people I know and encounter everyday, suggests that the worst is still to come. When illegal immigrants without even a valid Social Security number can borrow $300,000 for a dumpy house in a bad neighborhood, common sense tells me that a crappy house is not worth $300,000.You would in fact have to pay me to live there.

Even if you could live rent free, most average income earners would find it impossible to amass $300,000 over ten years. Is it realistic to expect average earners to amortize such a large nut over 30 years? That is just not realistic.