msnbc.com
updated 7/27/2005 5:45:12 PM ET 2005-07-27T21:45:12

We received hundreds of letters from readers in response to our package of stories on "America's Housing Craze." Many of our readers told of feeling nervous about high and rising prices or frustrated that they are unable to buy. Others offered success stories of incredible profits that allowed real lifestyle changes.

But one thing  is certain, with real estate, it all boils down to location, location, location. In some cities, $235,000 seems like an exorbitant amount to pay for a home. In others, first-time buyers cannot even dream of homes under $350,000. Here are some of the letters, slightly edited for length and clarity:

When I moved from the Midwest to California five years ago, I was in sticker shock. Having a real estate background helped me only to understand that the market was supercharged. My fiance and I looked at one development after another -- beautiful homes that became a blur after awhile. When we became interested, they weren't even putting people on waiting lists for the new releases. We were told "come back" or "call us" to see if the new releases were available. We finally settled on a development. That was two years ago. The property has almost doubled in appreciation. It was struggle to make the down payment, but we knew that if we didn't jump on the train, it would be gone before we knew it.
Seralynn
Rocklin, Calif.

Buying a home is not even a option. My wife and I have two children and make a decent living. We have been saving for a few years. I am not willing to sacrifice on some unstable ARM or interest-only loan. All my years of education and research show what a risk people are taking to buy a piece of the American craze, or should I say dream. I am not even close to saving enough money to purchase a home. If I am not even close, that shows me that people have stopped saving for their retirements and have put all of their fate in the housing market. Have they not taught us not to put all your money in one place? Diversify? I'll take my chances and try in a few years. The media has done a good job in advertising that we are out of space. Last time we checked no one has received a 20 percent raise in a while.
Anonymous
Anaheim Hill, Calif.

After living in two places that were clearly beyond our means for purchasing a house (San Diego and Washington, D.C.), my wife and I moved to the Columbus, Ga., area. In less than three days we found a nice single-story three-bedroom house, in a nice neighborhood, less than 30 minutes from my work, on nearly an acre of land. The cost? It ended up at $137,600, low enough that my wife will not have to work and I won't need a second job just to make the house payment. All that while holding a government job that pays less than $55,000 per year. The solution to the insane housing prices is to discover another world, one .. with the small-town charm of having a house that is more than an arm’s distance from your neighbors window and you actually know their names.
Wayne
Phenix City, Ala.

The only "housing bubbles" that exist are primarily in California, the East Coast, and a handful of huge cities. I'm shopping for my first home here in Dallas, and I'm overwhelmed by affordable choices. I almost bought my dream house last year until the inspector helped me realize that it had hidden damage. I've had to work with a different (read: reputable) real estate agent this time, and I'm overwhelmed by what's available in my price range of $100,000 to $125,000. I'm almost always the only bidder. We always offer below the asking price. Similarly, my parents just bought a phenomenal home in a VERY nice area of Houston for less than $200,000! Houston is the fourth-largest city in the country, and there are TONS of affordable, immaculately clean homes on the market for qualified buyers. Please report on cities other than L.A. when yelling about the housing bubble. It may cause places with normal or flat housing markets to jump just because of the hype. There is just no crazy housing market in the Midwest, South, or Southwest that any of us have heard about, and we are the ones actually buying houses!
Heather
Dallas

My husband and I brought our 1961 house in Miami in a section that was devasted completely by Hurricane Andrew back in 1992. It is a three-bedroom, two-bath home with a pretty sizable corner lot. We purchased our home at $135,000 in 2002. Since then, our property taxes have risen dramatically, from $1,700 to over $3,200. We recently had an apprasial done on our home and without any major improvements to the home, our home is now valued at approximately $235,000. Needless to say our spending habits have changed. We don't go to movies and  we plan our vacations very carefully. Anyone know of good-sized tent for a family of four for sale???
Greta
Miami

I am a mortgage advisor in Seattle, so the hot housing market has made my job pretty important lately. My gripe with the hot housing market is with the media. All you hear about now is how the housing bubble will burst soon and the "doom and gloom" of what will happen afterwards. Why doesn't anyone write about the optimistic side of things? People will always need to own homes. There will always be a demand for homes. In places like Seattle, where vacant land is nowhere to be found, we are out of room for new houses. The supply is limited and demand is growing.. How does that equate to prices falling? Also, people have become so much more aware of the value of owning vs. renting in the last few years. Everyone wants a peice of the home ownership pie. There are so many new creative ways to buy a home with no money out of pocket, would-be-renters will be buyers now for the forseeable future. Let's see some more articles about the good stuff in real estate! I swear the media is trying to pop the housing bubble just to provide something to write about.

Nathan
Seattle

I live in the Washington, D.C. metro area. My wife and I started looking for a home this spring. We have used two different buyer's agents. Both went on about the hot market and about how most houses in our range went for $50,000 or $100,0000 over asking price (which is true). They reviewed with us how we would have to waive the inspection contingency and be prepared to go well over the asking price to have any chance for a successful bid. They also made sure to mention the incredibly low interest rates "that wouldn't last forever." They created anxiety and panic in us that if we didn't buy now, we might never be able to afford a house. I'm sure they sincerely believed what they were saying. But let's face it, spreading these notions also helps them sell houses and make money. These ideas are so pervasive in the D.C. marketplace that no one buying a home can escape them. Haven't these opinions in fact become a self-fulfilling prophecy? To make a long story short, we resisted being tempted by these wily serpents. We followed the advice of many in the business press and decided to postpone our plans. We will rent until next spring, by which time we hope the market will have cooled. If it hasn't, we'll just wait longer. It is only a matter of time. Hopefully more and more buyers will come to feel the way we do, which in itself will start to cool the market.
John
Silver Spring, MD

I live in the Greater Boston area and currently rent. My fiance and I have a combined yearly income of $110,000 and have recently begun to research the real estate market. We are utterly dumbfounded at how hyperinflated prices seem to be, and common sense is telling us that properties cannot continue to appreciate at such astronomical rates. We saw a 950-square-foot home in a good area, 2 bedrooms and 1 bath, for $350,000. Call me crazy, but this just seems inherently not right to me, and I cannot justify a price like that for such a house, no matter what interest rates are. For better or for worse, we are going to continue to rent for the forseeable future. Rents here appear to be going down and we are in no rush. I'm certainly no fool and don't count on a significant depreciation in the market, but my gut is telling me to hang tight. Or we'll move out of state.
Alison
Brookline, Mass.

At 50 years of age we are STILL not able to buy a house. With our income (approximately $75,000 combined), the most we can afford is a home valued around $250,000. There is NOTHING in that price range in the Northeast. Starter homes or bungalows are starting at $299,000. It's just ridiculous! Our income will never be in line with housing prices.
Laura
Nashua, N.H.

My wife and I graduated from college in 2000. We both worked and bought our first home in May 2002 in Sacramento, Calif., for $254,000. I recently sold it for $435,000. This equity has allowed my wife and I to pay off our car loans, college loans and a credit card. With no debt to our name and plenty of equity, we are moving out of state and buying a home with more square feet at half the cost. We are expecting our first child in December and now can afford to have just one income meet our needs going forward.
Ben
Sacramento, Calif.

My fiancee and I both sold houses two years ago in order to move to Manhattan. Aside from selling too soon and missing the most spectacular part of the rise in values, we are completely priced out of the market in Manhattan where the average two-bedroom condo is selling for north of $1.3 million. In our neighborhood there are no less than 14 "luxury" condo conversions taking place within a 10-block radius. We're talking conversion from office building to residential condos here -- a huge glut of them! All of them are starting at $1 million plus. I'm in banking and have lived through the last real estate bust, so I know what rampant speculation and overbuilding looks like. People are gambling on condominiums here like the poker craze that has swept the nation. I am afraid it will all end very badly.
David
New York

I am astounded by the housing costs in my area. I live in Northern California, and a home just four years ago would cost you about $120,000, now that same home is costing you upward of $350,000. This is a university town and many Bay area and Southern California parents are coming up here and buying houses for their Chico State Unversity children. That in turn is raising the home prices here for the rest of us. A home right next door to my in-laws in a very nice neighborhood in Chico sold for $549,000. This house was bought for a Southern California developer’s CHILDREN. In Chico you will be lucky to find a job that pays $10-plus an hour. Our local econonmy can’t keep up with the booming house prices. There were 160 homes listed for sale two weeks ago in our paper and not one was for under $200,000. I would love to sell my house and make a huge profit, but then where would I move in California? It’s really very sad and I am very lucky that we bought our house when we did or I would be living in Montana or Ohio.
Heather
Chico, Calif

Where I live in New York, it is unbelievably expensive. The average cost of a three- bedroom home without the bells and whistles that is 15 or more years old is at the $300,000 mark. Fixer-uppers and just plain dumps in the surrounding urban areas are over $200,000 when they used to go for under $50,000 four or five years ago. My husband makes an excellent salary, and we still have trouble finding a house to afford. The rent is way too inflated as well. This isn't even the most expensive area in New York State, but it is still way too much.
Bobbieann
New Paltz, N.Y.

My wife and I live in the red-hot Los Angeles area. Two years ago we sold our home with the expectation of rolling our profits into another home purchase. We moved into an apartment and decided to wait it out. Now we find ourselves priced out of the market and raising our two kids out of a two-bedroom apartment. We make a good living but refuse to pay the exhorbitant prices and live in a hut. I find it riduculous that people are willing to pay $500 per square foot for a 923-square-foot house. We are in the process of looking for opportunities to move out of state. I cannot see how this will not affect local economies negatively as people leave these regions and or demand more compensation.
Bryan
Glendora, Calif.

My husband and I have been priced out of the market. Although we make more than the median average in our neiborhood, as first-time home buyers we still cannot afford to buy. We have decided that the only way we will ever be able to afford a home is if we move to the middle of nowhere (Midwest), although we would still be making less. It is very frustrating seeing so many people around you that got rich so quickly on their homes giving advice on "how to buy a home with no money down” or with an ARM. These people have already made money. We now have to worry that if we buy, the market might crash and we might lose all of our hard-earned cash going with it.
Annie
Las Vegas

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