I’ve always taken these foreclosure notices on zillow with a grain of salt. But what I noticed this week were the number of them and the price points of the homes in trouble.
They are all family-sized homes with 44% being what would be considered a large home in El Segundo with 4 plus bedrooms.
I remember when my boss got laid off. He was making about $250K/year in salary with another $150-250K in bonus and stock/options. He had a new home in Manhattan Beach, stay-at-home wife and an ugly tax bill because of some stock options he received. Despite making about $14K a month in after tax money (pre-bonus) he was living paycheck to paycheck. He was in shock and because of the condition of the economy and stock market (post 9/11) there weren’t a lot of jobs to be had.
Despite everyone’s outside appearance in the southbay there are tons of people living paycheck to paycheck. When buying a modest home takes an income of ~$200K you’ll find many households need two incomes to keep the boat afloat. When one of those people lose their job and they have blown their life savings on a down payment how long can they get by on one income?
Is it worth it?