Well, I ran into a neighbor the other day, he was asking how our move (to a bigger apartment) went, so I sensed he wanted to be asked about the news.
They bought a house!!! And, they were able to secure funding despite the current credit crunch. A 3 bedroom, 2 bath, I figure they paid ~$800 000, and that they will need to spend another $40K to make it decent.
Besides being individually rich, I just do not see their math works out: he is a young lawyer, and in our town, it would be hard to imagine that he could be making more than $100K at this stage. Let's be generous, and assume $120K. His wife is a part-time admin worker/mother of a baby, so that is another $15K. They own two new Volvos, that is $1200/month. The house, unless they took some crazy loan, should cost about $5K+ (including insurance, property tax and tax deduction). So, it seems that their monthly available cash is ~ $1800. 2 adults, a kid, no retirement savings and no college fund. I know, a lot of people live with that much, but to me, this just does not compute.
A funny thing is that the guy made a serious comment:"Well, now we just have to pray". "For what?", I asked. "That the prices do go back to the previous level over the next few years".
Sounds like a lousy ARM deal to me...
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