Los Angeles is the most expensive place to rent and here is the reason why. In the last decade LA has added mostly renter households.
Los Angeles County is the most populated county in the nation and it is also an area where renter households are the majority. Contrary to what some will say, this is not how “it has always been†since in the last decade the area has added mostly renting households tipping the figures to the other side. LA is also the most expensive area to rent in the nation. Isn’t San Francisco or New York more expensive? Rents are higher in those areas but so are household incomes. What you need to look at is the actual income of those living in the area and when we do that, we see why LA is the most expensive market and we will show some data to back up this assertion. Ultimately many households in LA rent and the amount of money spent on rents is consuming a growing amount of disposable income. Let us look at some charts.
LA renters
The amount of income spent on rent by LA households is staggering even when we compare it to other high-priced areas in the country. Take a look at the following chart:
LA renters spend approximately 45 percent of their income on rent. As you can see from the chart above, this is a new trend that largely started in the early 2000s. The Great Recession pushed more households into renting since many lost their homes to foreclosure. You also have the issue of low inventory:
The number of homes available for sale is low and so is sales volume relative to the past. So for those looking to buy, the amount of homes for sale is relatively low but since the Great Recession hit, there is now a larger amount of homes and apartments for rent.Â
It is also clear that for LA renter households have grown at a much faster pace than that of owner households:
This has tipped the scales to making LA a renting majority county. And we are seeing people thinking and voting more in line with their economic interests. We are seeing more talks about changing Prop 13 and more people talking about issues of housing affordability. And while people like to believe in the “free market†at their core many are simply NIMBY-protectionist. If you look at places with growing city populations say in China, what is being built is high-rise apartments and not your cookie cutter McMansions. Given the massive population growth in LA, what we need is more high-density housing if we were really to go with the free market versus protecting the past.
The housing market in LA is largely a mix of protectionist clauses, NIMBYism, and a suburban dream that was designed in the early days of the Baby Boomer era. We now don’t live under those conditions. We now have a globally hyper-competitive market, LA county now has more than 10 million people living in it, and laws that were designed to protect a suburban dream that just doesn’t fit with the number of people that we have living here today. Much of the old mindset is stuck in this fantasy narrative that somehow they are “free market†thinkers but really they are nothing more than opportunist looking for a handout (a negative trait they throw out against others and align to the so-called socialist movement). The free market at the moment wants more rentals, higher density housing, and less laws protecting homeowners in LA. Think this isn’t happening? A Prop 13 overhaul is in the works:
“(SF Chronicle) Former Vice President Joe Biden offered his support last week, becoming the eighth presidential candidate to endorse the proposal to raise taxes for large commercial properties while keeping Prop. 13’s limits in place for homeowners. All the leading contenders, including Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts, are now on board with the measure, whose backers are collecting signatures to qualify it for the November 2020 ballot.â€
It is clear that many are misinformed in terms of how much social welfare is thrown behind being a homeowner. People have this cognitive dissonance when they talk about the free market and then hug onto the breaks that are given to homeowners as if it were a security blanket. I’m totally okay with encouraging homeownership but let us call it what it is – a government supported program. And you are already seeing that politically, people are going to vote in their best interest and when LA County is made up of mostly renters, then paying subsidies to protect homeowners is probably not going to be seen as something to preserve.
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306 Responses to “Los Angeles is the most expensive place to rent and here is the reason why. In the last decade LA has added mostly renter households.”
I Called It, And So Does He- “The Bubble’s Already Poppedâ€: Peter Schiff Warns “Ignore What The Fed Says, Look At What They Doâ€
https://www.zerohedge.com/markets/bubbles-already-popped-peter-schiff-warns-ignore-what-fed-says-look-what-they-do
Cheerleaders, is it still a great time to buy ??? lmao
Is that Adam Schiff’s brother giving the advice?
I’m not a cheerleader, just a homeowner who agrees that the market is inflated. However, 6 months ago I thought it would pop as well because of the China trade war. To my surprise I checked Zillow and the comps show that my house value went up $60k since June. /shrug My advice is if you can’t beat them, join them. The longer you wait, the more expensive it’s going to be to get in.
It’s a great time to buy. Buy now or be priced out forever. Housing can never go down.
There may be a continued trend for more rental units and more landlords in Los Angeles.
However Los Angeles has been over 60% renters for decades now… nothing new there.
I do agree that there will only be more renters in the future in Los Angeles as the data shows.
Just look at mature markets like Europe to see the future of property ownership by the few and wealthy…. and many of these European countries are semi socialist.
Yup for decades…..except in 2009 it was majority ownership. As always I present actual facts to back it up.
https://fred.stlouisfed.org/series/HOWNRATEACS006037
It’s because they’re socialist, that they’re also renting countries. Socialism by its nature doesn’t allow any wealth to be created. This is what’s happening in LA as well. The more socialist CA gets, the more renters there will be. Enjoy your “free” health care and your “free” college tuition suckers!! LOL
“Socialism by its nature doesn’t allow any wealth to be created. ”
This is just stupid. And 100% BS also. Who do you think owns the houses/apartments being rented?
State? If, then you are talking about communism and even Russia doesn’t have that anymore.
And yes, the owners are the people whose wealth is accumulating fast, while poor renters stay poor.
That’s the whole idea of renting, exploitation of the masses ny the few.
Thomas, with due respect, Mr. Landlord always repeats “don’t rent long term, kids – that is financial destruction”. He never advised anybody to rent. He said many times, that if someone can not buy in CA to move to other states and cities where they can buy. He means it because he relocated to Eastern WA where he was able to buy.
I did the same thing, and I advised my son to do the same; he moved to a Midwest town. So, both, the Landlord and I walk the talk. The advise he gave is sound.
“It’s because they’re socialist, that they’re also renting countries. Socialism by its nature doesn’t allow any wealth to be created. This is what’s happening in LA as well. The more socialist CA gets, the more renters there will be. Enjoy your “free†health care and your “free†college tuition suckers!! LOL”
What blither blather is this? If we were to prevent the “creation of wealth” we would have more owners not less. Fewer owners means more landlords getting rich, rich, rich. Hey, let’s help people own houses by restricting the number of houses a person can own. The we can help individuals “create wealth” instead of corporations. Landlord for the Little Guy! Solidarity!
“Given the massive population growth in LA, what we need is more high-density housing”
I agree, based on demand for housing. In terms of quality of life, that will lead to all freeways to be simple parking lots (they almost look like that without the high density).
If people can not get to work due to traffic congestion, then they will have to leave home 2 hours or more in advance in order to use public transportation and walking. Depending on the area, many ladies will be afraid to use public transportation – some areas of LA look like war zones (imagine having to wait in a bad area to change the initial bus for the next).
Due to these considerations, most of the new housing available will be in condos. For that prepare to pay ever increasing HOA dues and ever increasing property taxes (assuming the Prop 13 is abolished and also that you have the condo paid in full). It will be like renting your unit from the government and HOA and there is still no protection from inflation (and these for the few lucky once with unit paid in full). The car will be parked on ever congested streets with lots of homeless and thieves willing to break into cars and steal – CA laws are very lenient towards homeless and thieves and most condos do not have garages.
Personally I see a massive deterioration in quality of life for everyone – homeowners, condo owners and renters. Well, I guess some people like that – people vote with their dollars. Wait till Prop. 13 is removed and then we’ll see how people vote with their dollars.
with all the muddling though the economy, it boggles the mind that there is so many apartment and condo projects in this city.
We think LA is such a sh*thole, but the flight out of LA is not much AND I bet ALL these projects in this link will be rented out in a reasonable amount of time.
those moving out
https://losangeles.cbslocal.com/2019/06/26/census-data-shows-thousands-more-moving-out-of-la-oc-than-moving-in/
check out all these residential projects popping up.
https://urbanize.la/
LA needs high density housing/ massive skyscrapers. And of course the biggest scam in history (prop 13) needs to be repealed and replaced. Boomers and the mega rich have gotten enough freebies.
Abolishing prop 13 is the worst thing possible that can happen to the Millenials…
And the funny thing is they won’t understand until it’s too late.
Anybody who has ever leaved anywhere property taxes can go up whenever the local government says so knows this all too well.
But again there is no point in even bothering to explain this…. they will eat only understand when it’s too late.
Hey notankininsight
You must be a total moron. Prop 13 allows the banks to stay solvent by artificially pushing up housing costs via lower interest rates which hurts savers. Abolishing prop 13 will force the laziest generation in history aka millennials to get off their butts and do something about the criminal banking and political systems by rioting in the streets until these systems have been burned to the ground and rebuilt.
Millenials don’t understand much of anything other than capitalism bad, socialism good. They’ll earn soon enough.
everything you have said is true and already happening, cali is mostly a over priced expensive ghetto, with extremely nice pockets of gated communities that only the elite can afford.
Currently, a lot of businesses lease their buildings because buying Real Estate resets the property tax under Prop 13. What could happen is a big pfffffft in commercial real estate values as the taxes go up and landlords can’t get enough money to cover the reassessments. So, will the adjustment lead to less of a tax burden for buying commercial property or a mass exodus of business from CA?
People that decided not to purchase a home made a huge financial mistake that they will never recover from. These renters may want to leave the area because they are screwed.
JT, “People that decided not to purchase a home made a huge financial mistake that they will never recover from. These renters may want to leave the area because they are screwed.â€
Maybe, maybe not. The devil is in the details.
If somebody is spending every last dime on rent, and is saving zero, you may be right.
But, if somebody made the conscious decision to rent in order to save money every month ILO overextending on a purchase, then you may be dead wrong.
We will find out in the coming months and years, which strategy is correct.
There is no right or wrong strategy because the market is situational based at this point. It’s at this goldilocks level where it isn’t too hot or too cold so it really comes down to the buyer’s unique situation. Not planning on moving anytime soon with a stable job and paying more in rent than a mortgage for the same property? Better to buy. Plan on jumping around from place to place and finding good rent rates in the process? Just rent and save/invest elsewhere. We keep going back and forth on this forum like there’s a definitive answer to whether we’re in a bubble or not but the answer is there is no answer. Analyze your work and living situation and execute accordingly. The only unknowns in the equation is interest rates which is anyone’s guess as to where they’re heading but signs are pointing towards lower so the outlook on prices is pointing towards higher
Renting long term is NEVER a good idea.
Option A: Pay fixed $X for 30 years and have a fully paid off house
Option B: Pay ever increasing $Y for 30 years and have nothing
Now you can say if Y is smaller than X, invest the difference and over 30 years you have the same. Maybe. But let’s be real. Nobody is investing anything. They’re buying $18 avocado toast and $300 Nike shoes with the difference. And Y will always increase, which means at some point over the 30 years it will be bigger than X.
If nothing else, owning a home is a forced savings plan, which leads to a nice nest egg in retirement.
@Mr Landlord
Man oh man do I disagree with you on this one. There are cases where renting is better than buying.
Ex: I buy a house in 2006 for $500K in Riverside,CA. I put down $100K @ 4% and my monthly comes out to $2800 including taxes, insurance and $250 a month in maintenance. Thirteen years later my house still hasn’t appreciated back up to the price I bought it. In fact, it’s worth about $470K. Over the course of these 13 years I could’ve rented the same house for $2200/month average. What did I lose as a buyer?
1. $78K in difference between monthly living expenses. Doesn’t matter if I have equity, I’m still down on my home if I wanted to cash out.
2. Investment properties during the crash because I tied up $100K in cash.
3. Mobility in chasing lucrative work opportunities outside of the area I live in. Rent the house you say? I can’t get in rent what I’m paying in mortgage and maintenance. I’m bleeding every month.
I based my numbers as accurately as possible. THAT was a horrible time to but. Halfway into my mortgage with tons of money lost in countless opportunities that I had to forego because I’m physically tied down to my area, nevermind the investment opportunities that emerged a few years later. Halfway into my mortgage and there’s no end in sight as to how much more money I’ll be losing. Maybe I should declare bankruptcy but that’s financial suicide. You cannot say that buying is better in that case. If the market is a pendulum, we were on the far end of a seller’s market in that example before we swung right back to the far end of a buyer’s market 3 years later. Today’s market would be about in the middle neither one or the other. It’s on its way to swinging to the 2006 end before we swing back to the 2009 end. And since it’s balanced, it’s situational as to what’s better. In 2006 you’d be stupid to buy and in 2009 you’d be stupid to rent. Today, depending on your situation and the pros and cons will determine how stupid or smart you are.
New Age,
In your hypothetical there is no way that house is underwater today. Home prices today are well above 2006. And how do you get $2800 a month, given a mortgage with your numbers is $1900? $900/mo for tax and insurance is way too high for a $500K house. And as usual, renters always forget that rents aren’t static. During that 13 year period your rent would have increased. Maybe not every year but at least every other year. That $2200 in 2006 is easily $3000 today and likely more.
But even using your numbers, you’re still wrong. Since 2006 you would have paid off $85K of the mortgage. So you “lost” $30K equity buy you “made” $85K equity. Net is $55K. Add in the tax deductions over 13 years and that’s another $25-30K. And even in your absolute worst case, once in a lifetime horrible buying scenario (and once in a lifetime best case scenario renting with no rent increase in 13 years) , you’re still basically breaking even with renting.
I pay $1,600 to rent a 3 bed 2 bath house worth just under $1 million (was worth ~ $600k when I first started renting it). This has allowed me to save and invest a lot of money over the last 10 years which actually results in a balance that is well in excess of any “return” that would have resulted from buying that same house. And I don’t have to pay any commission to access that money, can treat most of it as a long term capital gain, and my cost to maintain the investment is only .04%. Plus the amount of annual taxes I have to pay on the income generated by my investment (can be as low as zero depending on how I structure my income) is much less than any annual property tax payment even if the federal deductions hadn’t been capped.
Just to give you an idea, assuming 20% down, that down payment plus the amount of money saved each month by not buying (roughly $1,500) saved in a low cost index fund produces a current portfolio value of $737,000. Meanwhile, I would still owe $390,000 on the house if I had purchased it and, current value minus the loan amount leaves me at only $610,000…minus the 5-6% to sell the property.
JR,
No idea how you came up with those numbers.
If you put 20% down on a $600K house, a $480K mortgage at 3.5% (or even lower since mortgages were hovering around 3% in the 2010-2011 time frame), would be $2155. Add another $550 for taxes/insurance and call it $2700.
So you’re saving $1100/mo renting. Great!!
You don’t say how long ago you started renting but let’s use 10 years as an example.
Invest $900/mo over 10 years at an average 8% return (which is the historic average) would give you $190K total. Your returns are taxable. So take 20% off that $190K and we’re down to $150K.
Now let’s do the house.
You said right off the bat, the home appreciated $400K, which is all tax free if you live in it for 5 years. And the mortgage balance after 10 years is down to $370K. Sell for $1M, pay off $370K you have $630K. Take off $75K in closing costs to buy and sell and you’re down to somewhere around $550K.
$550K to own vs $150K renting.
And it’s even better than that since you get some additional tax savings by owning that you don’t get by renting. Even post Trump tax law.
No matter how you spin it, renting long term is financial suicide.
Lets do the math. If you bought that house for 600K with 10% down, which is 60K, and it is now worth 1M, your return on your 60K is 21% per year. And, this is all tax free ( if you are marrried ). I do not think you beat this return with your investments … where can you get 21% return tax free for 10 years?
This is one of the most ridiculous things I have ever read on this blog. So let me get this straight, you rent a 3/2 in socal worth 1M for $1600 per month. Is your landlord in the charity business? $1600/month rents you a 1 bedroom apartment in an average part of town in socal…that is a fact. If you have anything to refute this, please post some links where we can find 3/2 houses worth a 1M renting for $1600. Do your calculation again paying market rate rent (likely $3500 plus) for your house and get back to us.
If you had bought the house you are currently renting, you would have a small fortune in equity. 120K downpayment, 400K appreciation, likely 100K+ principal paydown and savings and investment returns. And you can access your equity anytime via equity line of credit or cash out refi. Listen to Mr. Landlord regarding long term renting strategies, DON’T DO IT. How many wealthy long term homeowners do I know? Hundreds. How many wealthy long term renters do I know? Maybe one or two. This isn’t rocket science folks!
Lord B: A 3BR 2Ba near me in the neighborhood (that Zillow says is worth $660K) rents for $2999/Mo. That was the advertised rent and they had no trouble finding someone to take it quickly. JR doesn’t say when he started renting, but maybe he suckered someone into a long term lease? That happened to someone I know.
RE cheerleaders hate rental parity math or any housing related math because it shows that buying at the peak never works out. You save in good times and buy houses during the ten year crash. Overpaying 50-70% for a house is the dumbest choice one can make in life. Every RE expert knows that housing is all about timing. Obviously a RE shill can’t agree because they need the greater fool to buy at the top to keep on order to keep the bubble going.
Hey Millenial,
Everyone knows there is a “crash†every 10 years…
Except for that time when the cycle went from 1990 to 2007…
And except for that other time when the cycle went from 2007 to beyond 2020…
DOH !!!
The more you know….
Exactly right. It crashes every ten years. Sometimes it’s seven years. Sometimes 13 years. If it’s longer, the crash is usually much harder and the discounts greater. You can only win by waiting and buying 50-70% off. You lose big if you buy at the peak. It’s simple once you educate yourself and learn that housing is all about timing. No wonder they call me a RE expert.
“The more you knowâ€
Are you saying the dot com bubble had no impact to the stock/housing market?
It’s a shame what has become of LA. A once beautiful city has become a cesspool filled with homeless and illegal immigrants. For this we can thank our politicians and their liberal agendas. If CA continues down this path the exodus of the middle class to other states will only increase, leaving behind a class system consisting of only the ultra-wealthy and the ultra-poor.
exactly, ultra rich and the ultra poor makes up cali. california isnt on “the path”, its on the highway hell
I have said this multiple times….today’s CA is Brazil. A small sliver of ultra rich, while people surrounded by brown people living in poverty. With nice weather and lots of beaches.
These dystopian descriptions of CA are silly. Where do you and Paul Simon live anyway? San Diego County is gigantic and most of it is nice or really nice. North County is especially great as are many of the schools there. Orange County is the same story. Personally, I avoid LA, which is probably where you visited for a couple days while forming an opinion of the entire state.
It is a True Capitalist Dream. The rich are getting richer and the poor will soon be out of the game.
Round 5 of a good Monopoly game.
These are all sanctuary cities, I wonder if there’s a connection? 35+ years of unchecked illegal immigration+anchor baby or 4 is going to show up sometime… its just math.
These are all sanctuary cities, I wonder if there’s a connection? 35+ years of illegal immigration+anchor baby or 4 is going to show itself sometime…it’s just math.
Increasing the property taxes on commercial property will increase the businesses expenses. They can reduce their profits, leave, or increase prices. What do you think?
Property values will go down as the property taxes go up.
Good question;
If Prop 13 taxes are raised on commercial property (retail, office) those higher taxes are passed onto the tenants because most commercial leases are Triple Net. So, then what happens. All those small businesses pay higher taxes, which means those costs get passed on us, the consumer. Rent rates would likely need to decrease, esp on retail space. Am I missing something here or does an increase in Prop 13 taxes (on commercial property) hurt all of us except the property owner???
Finally, the last two comments got to the point. I L L E G A L S need to be deported. Clogging our freeways, driving up our water consumption and causing rents to escalate, not to mention burdening our school systems. Hello? D E P O R T!
The landlords raise rent because minimum wage went up and they can gouge more out of the tenant, even though the tenant is already paying 50% of their full time income for rent. Then the landlords get upset that people are asking Gov’t to intervene. People wouldn’t need Gov’t to intervene if their wasn’t an obvious abuse taking place. Landlords need to learn a lesson soon and I think it’s coming from the iron fist of Gov’t.
The government can NEVER provide a solution to a problem they have created.
If you take the profit motives from housing, who is going to invest in housing? If no one will invest in housing, what is going to happen with the supply? If the supply goes down, what is going to happen to rents? Answer these questions one by one and think.
If being landlord is such a good occupation, why don’t you become one? Interest is as low as it can be.
The problem with your “solution†is that government tried before to implement variations of this and the effect for renters was exactly the opposite of what they expected – renters were worse off than before.
If your idea is so “brilliantâ€, why don’t you apply it to food (even more of a “rightâ€), restaurants, education, health care, cars, etc. Actually, all the communist countries tried different variations of you propose and they all went bankrupt; no exception. Only China didn’t because they applied market based rules. Go to SF, NY and other communist cities and see the result of decades of rent control; just check how easy and “cheap†it is for the renters there.
kent: The landlords raise rent because minimum wage went up and they can gouge more out of the tenant, …
Okay, kent. Now try some logic.
1. Minimum wage increases.
2. Ergo, business expenses increase. Including businesses that service landlords (e.g., general maintenance & repairs — painters, carpeting, plumbing, landscaping, cleaning, attorney’s, insurance firms, etc.). Sure, landlords’ attorneys and insurance brokers don’t normally pay minimum wage — but they too have service providers who do pay minimum wage, which costs they pass on to their clients, etc.
3. Ergo, landlords’ expenses increase. Which they pass on to tenants.
Any increase in the minimum wage, just like any increase in the cost of fuel, trickles down throughout the whole economy.
Every time the government interferes with market forces, everyone is worse off.
For example, if the government increases the minimum wage from $10/h to $15/h, that is a 50% increase. However, historically the market forces create a balance between minimum wage jobs and highly skilled trade jobs, like electricians (or other trades) and rents. Therefore, all the skilled jobs go up by 50% (for example, an electrician who used to charge $80/h, now is asking $120/h). If they don’t go up across the board right away, it is just a matter of time till the ratio goes back to the old balance.
The higher rents are required for three reasons:
1. It costs way more to maintain the property than before.
2. The landlord has to pay higher property taxes
3. Whatever profit is left (IF anything gets left) buys less than before due to increase in all wages – loss of purchasing power for the landlord. That is the reason for the increase, not the desire of the landlord to take the last penny from the wage increase.
The socialists promotion of higher and higher minimum wage, is not helping anyone, except the largest banks; everyone else in the economy is worse off for more reasons than one. The inflation created is the most REGRESSIVE forms of taxation on the poor and middle class (it is an invisible tax). The minimum wage, ALWAYS, with no exception, buys a minimum wage lifestyle. The banks are the beneficiaries because they took a large risk when they make a loan (leverage) and get a title. All of a sudden all the titles held by the bank are worth more units of measurement (dollars), which means a lower ration of debt to assets for the bank. The banks are lobbying the politicians for higher minimum wages, the politicians like that because they win lobby money from the bankers and votes from the uneducated – what is not to like?!?….Poor, middle class and upper middle class, all lose. If someone does not understand why inflation is a very REGRESSIVE form of taxation, I can explain that, too.
Of course, you have to run a business or study real economics to understand this. Destroying business and entrepreneurs because you don’t know how to play the game is not going to help anyone.
“Destroying business and entrepreneurs because you don’t know how to play the game is not going to help anyone.” You don’t understand. We don’t want to learn how to “play the game”.//In fact, we are AGAINST this game-playing going on in this country. Only recent immigrants think that’s how things are done in America, that’s how you get ahead here. I can assure you that is not the case. I believe you are the poster on this board who “escaped” from some communist east European country. And think that this capitalist country is so wonderful compared to where you came from. You are in for a rude awakening when this game machine that you like to play, and have studied so hard to learn, starts flashing: Game Over. The only winning move is not to play. https://www.youtube.com/watch?v=uOoXwxqeVzg
“Destroying business and entrepreneurs because you don’t know how to play the game is not going to help anyone.” You don’t understand. We don’t want to learn how to “play the game”. In fact, we are AGAINST this game-playing going on in this country. Only recent immigrants think that’s how things are done in America, that’s how you get ahead here. I can assure you that is not the case. I believe you are the poster on this board who “escaped” from some communist east European country. And think that this capitalist country is so wonderful compared to where you came from. You are in for a rude awakening when this game machine that you like to play, and have studied so hard to learn, starts flashing: Game Over. The only winning move is not to play. https://www.youtube.com/watch?v=uOoXwxqeVzg
LaHacienda@ “You are in for a rude awakening when this game machine that you like to play, and have studied so hard to learn, starts flashing”
Who said I like to play it? I didn’t invent it and I talked against it many times on this blog; for years….I like capitalism but don’t like “crony capitalism”, aka Centralized Planning by the FED. I spoke against the FED hundreds of times because it works like the Central Committee of Politburo picking winners and losers.
Like you, regardless if I like it or not, I have to live in it and play by their rules. Yes, I like it in US far more than in my native country; as much corruption as you see here, it is a million times better than the other level of corruption you see in EU and the level of opportunities for the average person is a million times better. I speak as someone who lived under various regimes and can tell the difference.
Is this system going to crash? I believe so. Like you I don’t know when. All I can do is prepare the best I can. I don’t think that the rest of the world will have it easier. I travelled extensively and I know what is out there. There is no perfect place but I believe the US is in the best position. Staying a renter in SoCal, I don’t think it helps anyone, but people are free to live wherever they like.
Kent, I believe you are confused and misinformed. Landlords have overhead like mortgages, property taxes, maintenance, legal fees, accounting, etc. And these expenses never end and only increase EVERY year. Having been a landlord for many years I can tell you that it’s a lot of work. Some months you do well and some months you don’t. Regardless of what you think the majority of landlords make only a modest profit. Are they not allowed to make a profit for providing a service? If it wasn’t for rentals people who couldn’t buy would be living under bridges. This idea people have of the greedy landlord holding bags of money and being indifferent to tenants struggle is just plain false in most cases. If you run the landlords out of business, who will provide housing? Will U? The government? Maybe UNICEF will get into the rental business.
You’re right. Most people are just yapping away without understand the other side’s position. Everyone is doing what is best for themselves. If services are provided, you should be allowed to charge for it. If someone is labeling the other as “greedy” then is it right for the other party to label you as “cheap”?
It depends on what type of landlord you are. I rented a room built next to a garage and my landlord didn’t do one repair in 5 years of me living there. How much profit do you think the landlord made when I was paying $750 a month? The utilities were maybe about $150 a month.
So let me get this straight. You import million of illegals, who for the most part rent. Then the price of rent increases. And then the solution is, of course, more open borders. This is what happens when you vote straight “D”.
Most of the illegals in CA are working in the red zones where Republicans are in rural areas with their farms using cheap illegal labor to make a huge profit. This was recently proven in Alabama where Kock Industries was caught using a bunch of central Americans illegals to run their chicken factories. They kicked out all the African American workers because they dared to unionize and ask for a living wage. Republicans can’t stand a living wage because it means they won’t be able to feel high and might and buy another yacht. I think you’re taking the lord part of landlord a little to literally.
Well, based on your “logic”, those rich republicans are getting richer by using illegals to work for them. If those democrats you love so much and control the whole state of CA want to deprive those republicans farmers of illegal labor, all they have to do is cooperate with ICE, eliminate all the sanctuary cities and kick all the illegals back – EASY. Then all those “poor” blacks can unionize to their heart content. Not only that, but they can demand higher wages because nobody will undermine them (competition disappear).
Well, again if you would use some real logic you would understand that the democrats want to keep not only the blacks poor, but the whole former middle class – that is the reason for open borders, so people can be a in a race to the bottom. Between the actions of the Democrats and the FED, you don’t have any future, not only in CA but anywhere in US (for that matter any country with central banks and globalists in power).
LOL, talk a blast from the past, the Koch brothers!! Those guys were the boogeyman of the left around 10 years ago.I think one of the brothers is dead. You need some new material friend.
And are you saying there are no illegals working in blue “zones???!!? No illegals work in LA
proper? Just out in the mythical red farm zones?
See this is your problem Kent. You are literally insane. It’s why you can’t find decent employment or housing. I suggest you seek immediate help?
So let me get this straight Kent…..according to you it’s the Republicans who are ruining CA by hiring illegals instead of African Americans because of unions and the Koch brothers are behind it all. I don’t know how I didn’t see this before. It’s so obvious to me now. Thanks for enlightening us.
Republicans are almost as guilty as Democrats when it comes to illegal immigration. It was Reagan who gave amnesty that led to California being a blue state. It was prop 187 that was found illegal by fed judges. Reagan and Bush 41 were president from 1981-1993 and you’re telling me they didn’t have enough time to fill the fed courts with right wing judges that would have upheld prop 187? No they filled those courts with judges that overturned prop 187. All prop 187 accomplished was turning latinos in CA against the Republican party. So don’t tell me that Republicans are not responsible for illegal immigration problems. Next blue states will be Texas and Florida and the Republican party can say bye bye to the presidency.
Before they start building 4 story apartment complexes next door to me we’ll need flying cars to handle the density..
Before flying cars, everyone in CA will be squished in public transportation like in Tokio, Japan. That is the quality of life of crowded places and there is no way around that, regardless of how much money you have, if you owe or own free and clear.
There is no density issue here. We need to build like there is no tomorrow. More supply keeps rents stable. Everything else doesn’t matter. Priorities people 🙂
I haven’t seen any specific figures but since commercial properties are protected under Prop 13 and commercial properties are less likely to flip than homes, I would think that a repeal of Prop 13 would hit renters pretty hard as well, at least many of those in properties that are 20+ years old. Has anyone done a study of what the impact of a repeal of Prop 13 would have on renters? I suspect the most likely first step is going to be a repeal of Prop 13 on commercial properties with many not realizing the impact it might have on renters. My thoughts above are agnostic on the issue, I am just curious. I rented for many years after moving to CA then bought after the 2007/8 bust so I am a definite beneficiary of Prop 13 BUT I am a Conservative (capital C) and do not agree with governmental favoritism AND I think it is bad for CA overall since it encourages absentee ownership which I think is bad for many communities.
You’re projecting a Bladerunner scenario…doesn’t work without flying cars density wise
My oh my. Does someone not like their landlord ? MMmmm…, perhaps they tried to
screw their landlord, and got evicted. Smart move in this market. So, which railroad track are you living next to now ?
I love my old landlord lady. I am not a big fan of boomers as they seem entitled and selfish. They have gotten too many freebies.
But my landlord lady is an exception. She hasn’t raised my rent and she believes all the sob stories that I can barely afford to buy food. Don’t tell her I have no debt, a six figure tech job, a large downpayment and a working wife. 😉 I call it househacking.
Longest economic expansion in 50 yrs, lowest unemployment in 50 years,
the Great Recession is a long way off.
Watch the video
https://loganmohtashami.com/2019/11/17/2019-economic-throw-down-video/
Logan’s slide deck and presentation were actually pretty decent… starting at 47 minutes and 30 seconds.
Zero Hedge and Wolfstreet should be solid money losers for another 12-24 months…. but go ahead and follow religiously anyway.. I can’t stop those here he do… it’s been the worst decade ever for ZeroHedge.
At some point I will change my name from NoTankinSight to RecessionCorrectioninSight
As a lender you would expect nothing less than a bullish presentation 😉
Logan is a lender….
Trump’s economic policy most resemble Herbert Hoover and what happened after Hoover left office? The Great Depression. It’s almost 2029, the 100 year mark from the Great Depression and here we are about to have another one. Having continuous fake prosperity isn’t a good sign.
k
I doubt that you know ANYTHING about Herbert Hoover other than that he’s the Democrat’s favorite Republican boogieman to compare any Republican to. Hoover was Coolidge’s Secretary of Commerce. When Coolidge chose not to run in 1928, Hoover ran and easily won with the campaign team of Republican insiders Hubert Work, Will Hays and Reed Smoot . He took all but one Northern state and lost only in the Deep South (where segregation was a big issue).
From Encyclopedia Brittanica: “In 1921 President-elect Warren G. Harding chose Hoover to serve as secretary of commerce. In the Harding cabinet Hoover proved to be one of the few progressive voices in a Republican administration that generally saw little role for government other than assisting the growth of business. Hoover alienated many Old Guard Republican leaders as he vigorously supported U.S. membership in the League of Nations, collective bargaining rights for labour, and government regulation of such new industries as radio broadcasting and commercial aviation.”
When Hoover took office, the NY Fed discount rate was about 5% and went up to about 6% as the investing frenzy rose. It crashed to about 2.5% in the wake of the crash. Hoover did not involve himself in pushing for lower rates, as the market for loans drove the rate down of its own accord. Contrast that to Trump, who in a booming economy, has been hectoring the Fed to further lower rates (Fed discount rate now 2.75%). Remember, in 1929 the dollar was pegged to gold at $20/ounce. Today, the dollar has no ties to gold and can be inflated with ease. So 2.75% is really much lower than 2.5% with gold dollars. The first step in removing the gold backing of the dollar was done by Franklin Roosevelt, when he confiscated gold and pegged the dollar to gold at $35/ounce. Roosevelt’s policies were popular with the unemployed, but after some small successes and his reelection, the economy crashed again in 1937.
Hoover is not a personal hero of mine, nor is Donald Trump. Both have their good points and bad points, but personally and politically they are very different. Stop using talking points and start reading history.
I was born and raised in LA, but left many years ago. Why anyone would commit financial suicide to live there is beyond me. Most people making an average income that are not already on the train are not getting on. The LA train wreck is such a disaster I can’t take my eyes off it, even from the comfort of being almost 1000 miles away. I must have a perversion for watching people in the midst of self-destruction, and its always the same irrational excuses. Either they believe they cannot find good work anywhere else, because of family and friends, or the worst reason is because of the weather. May we live in interesting times! This shit show is priceless.
Despite thinking they’re super duper wordly and educated, people in coastal areas are the most provincial people you’ll find. People in LA have been brainwashed by the MSM to think that outside their little bubble, there are no jobs. Or if there are jobs it’s all $8/hr meat packing jobs or whatever.
I know this one guy who was having a hard tome finding work. I told him about this job I heard of that was perfect for him. But it was in….eeeewwww Houston. I might as well have told him it was on the moon, they way he reacted. Mind you it paid $70-80K, which in Houston goes a long way. There’s no state income tax in Texas and a nice home can be had for $300K. But nope. It was in icky yucky Texas, where people have guns and pickup trucks and stuff. Never mind that Houston proper is as progressive as LA, its current mayor is a lesbian, LOL. To him the idea of living outside LA or SF was unfathomable. So he’s still in LA now living in some crappy apartment and complaining on Facebook non-stop about how unfair life is. But at least it’s 60 degrees in January…which is also true in Houston, funny enough. Oh well….
The job market in LA is the most appealing thing about the area for me. My salary instantly doubled moving here from the Midwest, and has since doubled again over the last 8 yrs. Despite the outrageous housing costs, now I’m spending only 25% of salary. And despite the terrible traffic, by picking jobs wisely I have limited my commute to 30 minutes which is not bad for most metro areas around the country. The community value for the arts here also helped my wife start her own business. There are other places with mountains or beaches or mild climate, but not many with all the above. When the fires or the smog get to be too much, maybe we’ll move to Oregon or Colorado for some fresh air.
Is he white? I’m Asian-American. There is no way I would live in certain parts of this country. I have a friend who lived outside Atlanta, GA, she faced harassment from racists on a daily basis. Happy to pay the Left Coast tax, not interested in living in Red America, life is too short.
Epic crash. LOL. I was told inventory was doubling like every 30 days or something. What happened? Womp Womp for the perma bears once again.
“In October, America’s home sales rose by 3.9%, marking the fourth month of the past six to post a year-over-year increase in sales, according to the RE/MAX National Housing Report. RE/MAX reports that although sales increased last month, the nation’s housing inventory posted a steep decline. According to the company, housing inventory fell 9% year-over-year across the report’s 54 housing markets, representing the largest retreat since May 2018.
Furthermore, October posted a 3.1-month supply of inventory, marking the lowest October amount in the report’s 11-year history. RE/MAX indicates homes spent 49 days on the market, which is the second-lowest figure for October in report history.”
Perma bears lose again.
Dean,
Either you’re full of s**t or you’re proving my point perfectly. That provincial mindset is exactly what I’m talking about. Try getting out of your little bubble, turn off MSNBC and go see some of the rest of the world. You may be surprised.
Seriously dude, have you ever been to Atlanta or Houston? I’m going to guess no. And I’m also guessing your “friend” is what you think it’s like or what you heard it was like 50 years ago. Or most likely what you saw on Twitter from another “friend”.
But whatever, stay in your bubble for all I care.
I forgot another ridiculous excuse.. “They are all racist outside of California”.
Dean: Is he white? I’m Asian-American. There is no way I would live in certain parts of this country. …
You think Whites can live anywhere? There are “certain parts of this country” where it would be suicidal for Whites to pass through.
I have a friend who lived outside Atlanta, GA, she faced harassment from racists on a daily basis.
In some neighborhoods, Whites don’t fear harassment from anti-White racists (who are mostly black, sometimes brown). We fear death.
Hey Millennial, look we have a Sean Hannity sock puppet. I remember hearing this same line verbatim from Sean Hannity in 2014 about him trying to get his loser friend an $80,000 a year starter job in North Dakota. Mr. Landlord says he tried to get his loser friend in Los Angeles a job in Houston. I can guess the job was a starter job in the oil industry that promised around $80,000 a year starting and am most likely correct. Mr. Landlord then goes on to tell you how his loser friend stayed in Los Angeles and chose to be poor. Well maybe Mr. Landlord’s loser friend is a lot smarter than Mr. Landlord.
I did research into this issue of oil jobs years ago because I kept hearing all this propaganda. It’s akin to the gold rush days propaganda. See back in the gold rush days someone in a town back easy heard their was gold in them hills out west and all you needed to do was move out west to be rich. Then when the sucker who moved out west to be rich got there, the sucker found out the gold was all mined and didn’t get rich. It’s the same mentality here with Mr. Landlord. Mr. Landlord probably doesn’t have a job in the oil industry, but he heard there’s black gold in them oceans near Houston, TX. He spreads the rumor of telling people with low income jobs to pack up and get to Houston to be rich. Then they show up to Houston only to find out the oil companies had to downsize due to Saudi Arabia increasing supply and oil going down to $50 a barrel. Now the only ones left with jobs are those with years of experience in the industry and friends in the industry.
Mr. Landlord is just one more person sitting high and mighty on his imaginary throne issuing orders to those he considers beneath him. The reality is Mr. Landllord’s friend is much smarter than him for staying put in Los Angeles, CA.
Just read these articles and see how stupid these right wing nuts are. Listen to them and you’ll more likely end up homeless and in another state.
https://bakkenoilbiz.com/bakken-jobs/get-america-back-to-work-92-million-not-participating-in-labor-force-pack-your-bags-and-move-out-west/
2015 article on oil job loss – https://money.cnn.com/2015/09/03/investing/cheap-oil-job-cuts/?iid=EL
2019 article on oil job loss – https://www.reuters.com/article/us-halliburton-layoffs/halliburton-cutting-650-jobs-in-us-as-oilfield-business-slows-idUSKBN1WO23P
Mr. Landlord your comment appears to be plagiarism of Sean Hannity’s work. I found the article for you.
The saga of a surfing, lobster-eating food stamp recipient continued on “Hannity” as the 29-year-old refused Sean’s assistance in finding a paying job.
You may remember Jason Greenslate from his interview with Bill O’Reilly’s producer Jesse Watters. Greenslate was first captured on camera by Fox News while purchasing lobster with taxpayer-funded food stamps.
Wearing sunglasses and smoking an electronic cigarette on set, Greenslate told Hannity that he hasn’t worked in a year for pay, but that he considers his band practice his job.
Hannity pointed out that Greenslate rides around in a Cadillac Escalade and frequents strip clubs, all while receiving government assistance and not working at a job that actually pays.
When Hannity asked Greenslate who he thinks pays for his food stamps and free health care, Greenslate said, “Government, taxes, us, the people.”
“Not you, because you’re not paying taxes,” Hannity responded.
Hannity went on to point out that nearly 60 cents out of every working Californian’s dollar goes to taxes. “You’re taking their money and you just don’t seem to care,” Hannity said.
“Who says I don’t care?” Greenslate asked, adding that he was “thankful.”
“I want to thank the United States of America, and the situation — the way things are set up,” said Greenslate.
Hannity concluded by asking Greenslate, “If I could get you a job that would pay you $80,000 a year driving a truck in North Dakota, would you take it?”
“No,” Greenslate replied.
https://insider.foxnews.com/2014/03/13/welfare-surfers-saga-continues-lobster-eating-food-stamps-recipient-refuses-hannitys-help
Here’s the reply to Sean Hannity from a North Dakota local –
https://www.sayanythingblog.com/entry/north-dakota-sean-hannity/
Kent,
The job in question had nothing to do with oil. But being you’re a dullard, you assume, Texas means oil. Assume – makes an ass out of U and Me. Well not so much me, just you. Perfect example of the provincial mentality I mentioned. You know nothing about the world around you.
Kent is the perfect definition of a loser. Stays poor in LA and votes for Democrats who promise him riches for doing nothing. How’s that going for you Kent? 20 years of Democrat rule in California. How rich are you feeling?
I don’t believe you Mr. Landlord(Sean Hannity) because what other jobs are starter jobs that pay $80,000 a year in Houston, TX? If I was wrong you could have simply told us the job you had waiting for your friend that starts at $80,000 a year.
Also, Mr. Landlord why would you call anyone a dullard who doesn’t think being rich is the coolest thing ever? When did being rich become the best thing ever? I see lots of rich people who are miserable. I’d rather be middle class or poor and be happy than being rich and miserable. Most rich people have to work very hard to keep their riches. They often neglect their own families and health to maintain riches. Wise people work less and enjoy life because life can be short. What’s the point of ending up dead with a huge amount of possessions when all you did was work hard all the time and neglect more important things than money?
Our slumlord from Spokane-istan is getting riled up when it comes to politics. The only truth comes from Fox News and maybe the NAR. No wonder he disappeared for a month when the stock market showed signs of weakness. If you watch Fox News all day you believe everything is awesome and the only way a recession may come is when a democrat will be elected. Not a surprise he keeps buying at the peak (stocks and houses). When the recession is here you won’t hear again from him. That’s a promise.
Mr Landlord is promoting is promoting mythical jobs for people without experience.
5 years ago under Obama, the fracking and oil jobs were booming in Houston.
Under Trump and capitalism, now there are too many frackers and not enough jobs. Things are crashing. And so is Houston.
Please note that Mr Landlord tells you to move to Houston to get an 80K job but in a previous post notes that Houston is not among the biggest housing growth.
Mr Landlord is contradicting himself. Again.
Prop 13 is relatively unknown among renters and beloved among homeowners. Not sure any massively altering legislation will pass on the residential side. Maybe they could modify the law to re-assess homes if it becomes a rental or if the heir takes ownership.
Prop 13 has allowed me, a renter, to rent a $1 million house for $1,600. My landlord passes most of that Prop 13 savings (bought in the 80s) on to me. Repealing prop 13 will raise rents.
Where’s the crash?
This Santa Monica house was listed for $2,395,000 — and sold for $2,610,000 — $215,000 over asking!: https://www.redfin.com/CA/Santa-Monica/1025-25th-St-90403/home/6769269
That is a very sweet house- a perfect 1920s Spanish-style casa. It’s a nice size and has been nicely upgraded and well-maintained.
Son of L – interesting to see how those insane home prices North of Montana Avenue are now creeping South of Montana down to Wilshire Blvd. The area which was once considered ‘nice’ but not comparable to North of Montana are now fetching such high prices. My guess is it is partly due to the coveted school district.
Some posts seem to promote government rental housing as an alternative to the
private markets and landlords. To refresh your memories, HUD, the gov housing dept.
built and managed many high-rise apartment complexes, especially in Eastern and some Southern inner cities during the 70s and 80s, etc.. They were so mismanaged that after several decades they literally had to be demolished. Most of them suffering from rampant crime, drugs and defective maintenance. Even the bureaucrats admitting they were terrible landlords and decided to subsidize rents instead of providing housing. Governments don’t do business. They regulate to keep a level playing field, but can’t actually run a business. Solyndra anyone ? Remember that fiasco ?
I have seen some of those old govt ‘projects’ up close. Right you are, crime was horrendous, and so many nutso tenants – they had to attach chain link fences across the whole facades of the balconies to prevent people from throwing their trash ( or each other ) off the balconies. And bright lights in the stairwells to reduce assaults and rapes, etc.
QE,
That is the future of socialism in this country – uneducated people demands it and the politicians “deliver”. It always ends the same way but some people never learn or don’t have the brain to process cause and effect.
They think that price control is the best thing happening without thinking about the consequences. If price control would be a solution, countries like Venezuela, Zimbabwe and others would be paradises. NOBODY, EVER, explained to me, why would price control work for rents but not for food or other things. Of course it doesn’t make sense on anything and always ends in disaster, but somehow, magically they think that rent control works, contrary to all history of such things.
What Millies don’t get is that as a landlord, I have costs. Mortgage, property taxes, maintenance, repairs, etc. All these costs are passed on to renters plus a little profit for me.
I don’t really care if I pay $100 or $1000 or $10,000 in property tax. I’m just the middle man. You, the renter, pays it. But instead of sending the money to the county, you send it to me, and then I sent it to the county. So repeal Prop 13 all you want, it won’t make a bit of difference to landlords.
So repeal Prop 13 all you want, it won’t make a bit of difference to landlords.
It will as rent control becomes more onerous.
In New York City, landlords were abandoning buildings. Just walking away because, due to rent control, their costs exceeded their rental receipts.
Some 30 years ago, The New York Times ran an expose, stating that the largest landlord in the city was … the city. This was because so many landlords had abandoned their buildings, failing to pay property taxes, whereupon the city took over.
And those city-managed buildings were the worse run in the city.
Every winter, back when I was living in NYC, the local TV stations ran “horror stories” of tenants without heat. And most of the time, those buildings were city-owned.
But no, landlords can’t always pass on higher property taxes to tenants. Not under the sort of strict rent controls they have in NYC, or Santa Monica, or Berkeley.
The only thing that’s preventing landlords from abandoning buildings in California is the Ellis Act, which let’s them stop renting, and convert the property into something more profitable. They don’t even have that in New York.
Yet the Left keeps trying to “reform” the Ellis Act in California. When Ellis and Prop 13 both are abolished, and rent control is tightened, expect to see more abandoned apartment buildings in California.
Keep waiting for that crash my renting friends……headline this morning…ouch that has to hurt.
“US housing starts rebound; building permits at highest level in over 12 years”
Poor Millie….destined to live with his mom for another decade at least.
Thank goodness nothing bad happened exactly 12 years ago, right? Oh wait…
Housing may go up, or it may go down. Nobody really knows. My advice (FWIW) is to assess your personal financial/life situation, make the buy vs rent comparison and take it from there. If you’re planning on staying put for 10 plus years then you’ll likely do fine since inflation is guaranteed like death and taxes.
This blog has been particularly skeptical on housing even during the trough of the markets from 2009-2011, even when low interest rates, low prices, and low mortgage payments were staring at us in the face. Just read the archives.
I remember reading this blog back in 2011 and not pulling the trigger on a couple of bargains in the Pasadena (CA) area because I was afraid. In late 2013 ended up buying a similar home for an extra $100k after the market spiked in 2012/2013. I didn’t enjoy paying the extra $100k vs the 2011 price but even still, my mortgage at the time was comparable to renting, and even less when subtracting principle.
But asides from money, I still live in the same house 6 years later and my son loves it there. It’s a roof over my head and a place to raise my family. And that to me is more important (as long as you can pay the mortgage).
“even when low interest rates, low prices, and low mortgage payments were staring at us in the face. ”
Low prices? in 2009? In whose reality? *Lower* than the absurd peak before it, but still very high as income hasn’t grown at all. Basically price in dollars is irrelevant, price/income-ratio is the only measurement which is tied to reality.
Unless you are an investor and that’s totally different ballgame then, as for an investor actual price is totally meaningless, only thing which matters is the income you can get from investment (rent) or price hike.
More expensive house, more profit in dollars when price increases 10%. Simple.
Cheerleaders Know Best- NOT, HOUSING BUBBLE 2.0 – Foreclosure Filings Up in 72% of States – NOT FAKE NEWS
https://www.youtube.com/watch?v=QZ3FbRYl_N8
Remember Kids, Buy Now or Be Priced Out Forever. lmao
“Foreclosure Filings Up in 72% of States” but you forget the rest of it……”Down 1% Year Over Year”.
Thanks for the FAKE NEWS Jim! Keep up the shoddy work. Like a broken clock you will eventually be right.
Ramen Eating Cheerleaders Said Buy Nowor Be Priced Out Forever? 10 Expert Predict When The Imminent Housing Market Crash & Economic Collapse Will Happen
https://www.youtube.com/watch?v=30O3jLVsE6E
I’d Rather Be 6 Months Early Then 1 Minute Late.
Ramen Eating Cheerleaders Said Buy Now or Be Priced Out Forever? 10 Expert Predict When The Imminent Housing Market Crash & Economic Collapse Will Happen
https://www.youtube.com/watch?v=30O3jLVsE6E
I’d Rather Be 6 Months Early Then 1 Minute Late.
Youtube experts are always right. They told me bitcoin will be at $100k next year too, so I’m all in that right now!
Cheerleaders Go Long on Ramen, 50% OFF- ‘And last year’s top seller, a 6,900-square-foot home at 110 Clapboard Ridge Road, sold for $17.5 million — 50 percent less than its original asking price’
Not Clapboard Ridge! Hey, weren’t we told 50% off is unrealistic?
‘the brutal Greenwich market’ in the words of the Wall Street Journal last week — can also have a dampening affect among ‘wealthy people at cocktail parties’
I was talking to a doctor about the apartment markets. She asked me what it all means and I said ‘some rich people are gonna lose money.’ Her eyes got big and scary.
http://housingbubble.blog/?p=2625
Hey, weren’t we told 50% off is unrealistic?
NO. You were NEVER told that. Try and remember, because I, and others, have posted this many times.
50% off the previous sales price is unrealistic.
50% off the asking price is not unrealistic, and by itself, proves nothing.
The rational and realistic way to measure rising or falling home prices is to compare actual sales prices for a house.
The Tarzana house I posted in this thread might undergo a major cut in its asking price, because it’s ridiculously high. But I’m sure it will sell over its previous sales price. Ergo, no crash.
RE experts (like me) know that a 50-70% crash off of peak prices is a given. It happens during every down cycle. RE cheerleaders try hard to change the facts and datalines.
Millennial right now if you are a Financed Buyer of houses outside of FHA limits there is a strong buy indicator right now. Most of the high end housing has fallen substantially over the year and with ultra low interest rates your monthly cost has fallen almost 20% from 2018.
Just be prepared to hold the house for decades and you will be fine.
I am still trying to find the source data from this article
https://thehill.com/changing-america/respect/poverty/471675-in-los-angeles-vacant-homes-outnumber-the-homeless
If 46% are institutional investors of LA condos and 70% are sold but empty this is a massive red flag for a speculative bubble. The owners are buying for the sole purpose of selling to a greater fool. Everyone should be terrified.
Oopps- Fremont, CA Housing Prices Crater 10% YOY As Bay Area Rental Rates Tank On Ballooning Housing Inventory
https://www.zillow.com/fremont-ca-94538/home-values/
Jim Taylor gave up. Millennial has all but given up. You’ll give up too, it’s just a matter of time and when you realize how much money you’ve lost listening to permabears. You can only deny reality so long.
Joe, given up on what? How can one lose money by not buying overpriced real estate? I would be interested to hear that 🙂
Also, why waste your time here with bears? Why not go out and buy real estate since it can never go down?
I already own. On my fourth house. Have made almost 200k (tax free baby) in the past 8 years. Thanks for asking.
You made 200k in 8 years by buying houses? Rofl that’s pathetic!
Muhahahaah i made a shit ton more than that by investing and by renting a cheap apartment. During the next real estate crash your book value is going down by 50-70%. I am glad we have people like joe. We absolutely need people who buy high and think the bubble will go on forever. Made my day!
You still don’t understand that you have irretrievably lost hundreds of thousands renting over the same time frame. You got zero return on your rent. Zero. So during that same time, not only was I maxing out my investment accounts, but also making roughly 5 percent a year in appreciation on my home even after expenses, plus paying down principle. In a few years, I’ll have a very nice 3500 sq foot home that I own free and clear. I just turned 30. I will take that extra money and invest more in my retirement accounts and childrens’ 529 accounts. All tax advantaged, just like my home has been. My wife likes knowing that she married a winner, she doesn’t have to work if she doesn’t want to. Our children will never want for anything. I feel bad for your wife, having to jump fences and trespass in other people’s pools, just to pretend like you can afford the good life. I suppose your putting off children until “the crash” as well. I hope you figure it out someday. You’ve only got maybe 50 years left on this earth. Tough to hop fences when you need new knees.
I must have hit the spot ;)after all you told me I understand why you have to be a RE cheerleader and wanting to sucker in the last fool before it all crashes again.
I still can’t believe you would actually post this. After 8 years such a pathetic gain. I saved more money by doing nothing but renting cheap. Rofl.
And the stuff that is invested can be liquidated tomorrow if I want to. Try that with a house. You are one of those that think that house bookvalue is yours to keep. No wonder you are Have to tell yourself and others there won’t be a crash.
Hopping fences lol. That’s your best shot? Come on, you can do better. It’s actually a Wall.
When the gate code changes to the adjacent community with he beautiful pool I am just a text message away from getting in 😀
Everything in Texas is BIGGER- Dallas, TX Housing Prices Crater 11% YOY Rental Rates Plunge
https://www.zillow.com/dallas-tx-75225/home-values/
Go on….
“Total sales in the Dallas area are up 2% from last year’s record market. Some of the biggest sales increases during the first nine months of 2019 have been in fast-growing suburban markets, including Prosper (up 24% year-over-year), Melissa (18%) and Allen (15%). Overall North Texas home prices in September were 6% higher than a year earlier, according to single-family sales data from local agents.”
DallasNews.com
10/25/19
There is no real estate crash in sight. The next one is at a year away or there would be some evidence of weakness in the home building/selling statistics right now. Real estate prices do not turn on a dime. They move like an oceanliner and cannot change directions quickly.
Still, I would not want to own real estate 2 years from now. The next crash figures to be as bad or worse than the 2006-2009 one. I am still considering selling both my investment property in Portland and my Orange Co. home if the spring selling is strong.
There is NO CRASH FOR 2020, that is for sure.
Watch this video from 47min to 58min.
enjoy
https://loganmohtashami.com/2019/11/17/2019-economic-throw-down-video/
That’s hilarious…. Logan M is a lender….it’s like asking a car salesman if niwnis a good time to buy a car. Of course there can never be a crash in Logan’s book. It’s like reading or listening to the NAR propaganda. Total waste of time.
I noticed there was some news yesterday about a “RECORD NUMBER” of millenials saying they will likely rent forever. The MSM was in a tizzy over the news. Then I read the story and it turns out the record is something like 12%, up from 11%. WOW!! In other words statistical noise. And I’d bet if you asked people 30 years ago, 10% would have also said they want to rent forever.
Just another example of how the MSM is nothing but lies and and left wing propaganda nonsense.
Insanely delusional flipper: https://www.redfin.com/CA/Tarzana/4625-Maleza-Pl-91356/home/4253573
Last May, this Tarzana house sold for $1,130,000.
This November — 6 months later! — they’re asking $2,479,000.
Are we really to believe that this flipper’s “upgrades” have added well over a million dollars to this home, more than doubling its value?
The listing calls it “An architectural masterpiece Craftsman estate …”
Huh? It doesn’t look like a Craftsman. Built in 1962, it looks like a typical, cookie cutter, mid-century home. How is this house an “architectural masterpiece”?
I assume the flipper doesn’t expect to get his asking. He chose a ridiculously high list so he could discount it by several hundred thousand, thus convincing a buyer that it’s a great deal.
I suppose if this house sold for just under $2 million, Milli will claim it’s evidence of an epic crash.
Good point here. The next crash will be epic.
The ten year boom and bust cycle in California let’s you buy 50-70% off of peak prices. You can already see price reductions left and right and higher inventory. Great signs. All you need is a bit patience. Plus, they are building everywhere in California. Love it, build like there is no tomorrow!!
Hello Millie Vanillie
When will the next crash begin? and when will the bottom be?
I say it starts in mid 2021 and then hit rock bottom in 2023.
Hey QE!
Yep, we will get buying opportunities within the next few years. Patience always pays big time! I’d say we are at the 2006/2007 timeframe right bow. So I am right there with you on the timeline. I am not in a hurry since my rent is dirt cheap and hasn’t increased plus it’s very close to my tech job and the beach. Savings lot of money and will buy when we have the 50-70% crash. Remember, “there are no soft landingsâ€.
🙂
All over the country, the real estate market is on fire. NE, SE, TX, SW, NW. Doesn’t matter where you look, same story all across the country. Rising prices sales. Sorry perma bears. Once again, you lose.
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“ORLANDO, Fla., Nov. 21, 2019 /PRNewswire/ — Florida’s housing market reported more single-family home sales, more pending sales, higher median prices and rising pending inventory in October 2019 compared to a year ago, according to the latest housing data released by Florida Realtors. Sales of single-family homes statewide totaled 23,440 last month, up 5.2% from October 2018.”
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Austin Statesman
Nov 21, 2019
“Real estate agents sold 2,721 homes across Central Texas last month, the board said Thursday in its latest home sales report. That’s the most for any October on record, and a 17% jump over October 2018′s volume, the board said.”
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WTOP (Washington DC Station)
Nov 15, 2019
“The Montgomery County, Maryland, housing market hit several milestones in what was a busy October for buyers and sellers. There were more than 1,000 home sales in Montgomery County that closed last month. That is 19.2% more than October 2018, and the highest October level in 10 years, according to the Greater Capital Area Association of Realtors.”
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November 21, 2019
NMAR News:
“The October New Mexico Housing Market continues to indicate 2019 will be a good year for the industry. A total of 2,265 October sales were reported to the New Mexico bringing the 2019 year-to-date sales number to 21,407. This is the 11th year NMAR has collected statewide housing numbers and only 2018 numbers exceed those we are seeing this year, NMAR President Paul Wilson said. We expect to finish the year with over 26,000 sales.”
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OregonLive
Nov 15, 2019
“The number of homes sold across the Portland metro area in October 2019 – 2,588 – was 8.9% more than the 2,377 closings recorded in September 2019. Compared with the same month in 2018, sales increased 6.1%. Looking at 2019 through October, the median sale price rose 2.5% from $400,000 to $410,000 from the same period in 2018.”
Dang, I often wake up and think to myself. What if I had rented the last ten years (I am 39 now-one more year and I have the big one). How much freakin money I would have wasted if I would have rented!!
The game changer for me was helping my dad to build an unpermitted granny flat. The intention was to actually have my grandma move in but for the first few years I convinced my dad that I should move back home, live in the granny flat and pay him a little bit. Well, I got away by not paying haha! Two years ago my grandma was doing badly and they planned on moving her in. So I fought every day and made them feel bad until they moved her into a home. I don’t deserve the full credit here because it would have meant that someone would have had to be home with her and take care of her. Now it’s a big win for everyone. I am so happy, thankful and I think the path is cleared to stay at the granny flat. I have no plans on paying someone else rent. There are much better ways to spend you hard earned money!
I am trying to get my parents to build a granny flat. Tired of living in the room I grew up in. I want to expand within the house. If there would be a crash I could see myself moving out all together. Any good arguments I could tell my parents to build that granny flat? Told them it would increase the value of the house, also I think they should call it “Millie-flatâ€. Wouldn’t you rather have your millennial kids live in it instead of grandma? Lol
Mr Landlord,
All of these place have Democrats in charge and VERY liberal governments.
Are you saying we should all vote for Democrats? They seem to be the most successful place in our great country.
Look at the places that you listed and please respond.
Mr Landlord,
All of these place have Democrats in charge and VERY liberal governments.
Are you saying we should all vote for Democrats? They seem to be in charge of the most successful place in our great country.
Look at the places that you listed and please respond.
Great points. I predict you will hear nothing but crickets coming from Mr. L.
For those of you expecting lower rents and lower RE prices:
https://www.msn.com/en-us/news/politics/elizabeth-warren-vows-to-use-taxpayer-dollars-to-tear-down-border-wall/vp-BBXa4bV
More people, mean higher demand and higher rents. Higher rents push up ROI, which means higher RE prices but lower quality of life for those places where these new immigrants will settle. It also means even a worse traffic jam on all streets and highways.
It will also increase taxes across the board to support the new immigrants with free education, health care, food and housing. Keep voting Democrats expecting higher quality of life!!!….Globalists want open borders – good for the banking elites, bad for everyone on this blog.
Flyover, you are delusional. For millennials like me it can’t get worse. The rebuplicans haven’t attacked blue states enough to make the housing crisis better. We need drastic change and higher taxes for those that are profiting from overpriced housing will help. Tax the shit out of them!
“Don’t Tax Me; Don’t Tax Thee; Tax the Fellow Behind the Tree”
Senator Russell Long (D LA)
Winston Churchill. “For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.â€
Why do Millennials think they have it so bad when in reality they have it better than 95% of the world’s population???
Correction: I agree with the other millennials. Tax the shit out of boomers. Repeal prop13 and tax the shit out of vacant homes.
I don’t say I have it bad but it will be better if we crash this f economy. I want to buy low.
Right now, boomers and the rich profit because of overpriced houses. Anything is fine with me in order to bring the economy down. A crushed housing market is all we need.
Great article about boomers and how they should earn their respect. Read the comments – many are very accurate. Boomers suck
https://www.zerohedge.com/personal-finance/ok-boomer-its-not-important-respect-all-your-elders
Yes we are totally accountable for 20trillion in debt the endless wars I wrote my senator every week to make sure we wasted billions and killed more Iraqis and Afghans . Jenny this one of the few time on this blog I am willing to show complete disrespect for someone that has no respect . You are a complete idiot .Bush , Obama and now Trump were and are the 3 worst presidents in US history .I supported not one of these poor excuses for leaders the war in Iraq after 9/11 I opposed strongly yet I spent 4 1/2 yrs as a contractor ,carpenter forman etc. because I believed in our troops not in the war in Iraq the same situation In Afghanistan for over a year . A war we had already won if not for the stupidity of the the Bush Cheney duo to take most of our military assets and transfer them to Iraq after 2yrs in Afghanistan also many of the troops in both war zones were the Guard and Ready reserve ,men in the 50s boomers friends because Bush was unwilling to start a draft to have your generation fight a war .WE worked 12-14hr/days 7days /wk in120F weather in Iraq to -10F and 3ft of snow in Afghanistan.I would never and have never supported bank bailouts or GMs bailout or dropping interest rates below 4-5%. the bankers and lawmakers decided to bailout everyone but the middle class in 2008-9 we should have taken the hit and likely our economy would be based on reality instead of bubbles and speculation and this boomer was 55 when he went and I met a lot of 20 somethings with courage, intelligence and compassion what a bigoted idiot like yourself will likely never experience !!The next depression is on its way shortly and will far worst than 2009-2012and pampered jerks like yourself will suffer the worst!!
Sry to pop your bubble. Nobody cares about your veteran bull crap. The only reason why we keep fighting wars is to benefit the defense industry. But only the lobby, some politicians and CEO’s actually make the big bucks. All you vet’s are just chess figures. You are not actually believing that if you fight a BS war you are keeping us safe at home, are you?
Btw, the reasons boomers suck is they got everything handed to them. Millennials have to pay horrendous tuition and overinflated rent/mortgages. We need a serious collapse in this country to re-build what boomers have destroyed. Boomers suck. Worst generation in US history.
If tuition is so horrendous, why didn’t you go to a junior college for the first two years and then transfer to an in-state 4 year school? If you did this and worked along the way, your student debt would be manageable. Instead, you probably signed a massive loan, lived it up for 6 years, and now blame everyone but yourself. You choose to live in one of the most expensive areas of the country and then complain it is too expensive. This perspective/myth that everything is rigged and a few puppet masters at the top are ruling over the serfs seems to be getting traction with Millennials. You will do much better by focusing on personal responsibility.
robble good luck with trying to teach some of these people responsibility just go through this blog and count how many are still living with mommy and daddy and feel put out that they have to pay their fair share and or believe they have right to impose on their family . I f this representative of our future generations ,democracy will soon be a thing of the past. I will agree that the last 15yrs the economic policies by 3 of the worst presidents in US history have been worst than wrong and actually corrupt and incompetent , but if you cannot make it in one of the most expensive places in the world MOVE to something more affordable . Jenny is one of the worst
NBC News › business-real_estate › h…
Web results
Housing market expected to cool in 2006 – Business – Real estate | NBC News
That is what they were saying it 2006
Guys, I am back!
I have been renting at my parents house and the ROI has been really good. Made a deal and am pretty proud of myself. I told them I am ready to buy a home but since the market is in a bubble I calculated how much money I would waste if I buy now. Soooo, since they want me to move out I explained that I would be moving out faster if they don’t charge me the 300 bucks per month for my room. Lol. It’s a freakin racket to even charge me in the first place (didn’t say this out loud). Anyways. Now I am rent free!! fuckin rofl
I actually don’t care if we get the crash anytime soon. If they come back in a few years and want 300 a month again I am just gonna laugh 😉 who wants to move out and pay thousands of dollars for an overpriced shack? Guys, I am rent free!!! Cable is paid for (I pay for my HBO channel) and the internet is fast. What else do I need?
I don’t believe you. You sound like a troll, spinning lies. You’re too gleeful. Less interested in communicating facts, than in riling up people.
I would be gleeful too if my rent were 0$!!!!!!
My parents charge us 500 dollars for two rooms! They have a huge house and want grandkids…yet they don’t really support us by charging us money!!! My husband is really not happy with my parents.
Georg,
You essentially don’t even exist. You are not part of the housing market at all… you are not a renter nor an owner.
Congratulations?
You will truly be inspirational to all when you no longer pay for HBO.
Dare to dream!
Multi generational living isn’t anything special anymore. It’s normal in other cultures and countries and it’s normal for Americans as well. Americans can’t afford to buy where they live so the only solution is to have your adult kids live with you. For the adult children it’s a great way of saving and getting ahead.i don’t see an issue here.
Georg@ “What else do I need?”
To grow up and become a man. Living under your mom’s skirt doesn’t make you a man and no, you are not smart for doing that, contrary to what your peers tell you. My son is 25, married, two children, bought a house and only one income. I taught him how to “fly” in order to be free and independent. He didn’t disappoint me by failing to launch. He was a doctor at 24. He paid for his school and living expenses while in school. He has a great deal of satisfaction and accomplishment.
A large percentage of millennials are just overgrown children. Yes, in some areas is not feasible or desirable to buy a house, but US is a big country.
As a father I feel like I did a good job in raising him. I taught him NEVER to blame others for his failures. I taught him responsibility. If I came in this country with zero and didn’t know the language, never had financial help from parents and I still accomplished a lot, then he doesn’t have any reason for not accomplishing far more than me. I am sure, that at my age he will have far more than me.
Flyover…. Interesting comment re how you raise your son coming from somebody who places the blame on somebody else or a group of people in every post
Say wha’ @ “Interesting comment re how you raise your son coming from somebody who places the blame on somebody else or a group of people in every post”
You didn’t get it did you? What I said is that I am doing well because of hard work, discipline and delayed gratification. That, and I don’t have a victim attitude. I taught my son the same thing and I believe that every father should teach their sons the same, verbally and in practice. I don’t have too many reasons to complain for myself and for this Thanksgiving I have a lot to be thankful for.
On the other hand I am free to observe causes and effects. Most of them refers to others, not myself. For example, I noticed that when the FED provided bailouts and dropped the interest to zero, they created winners and losers, the banks and the super rich being the winners. They created massive inequality and destroyed the savers. All these are objective observations and most of the people agree with them, democrats and conservatives. I never complained for myself; I know how to take care of myself. Even if I observe what is happening and express my criticism, I still believe the US is the best place in the whole world to be.
I always said that I am against big government and centralization of power and wealth – it is very destabilizing for the economy and most people. Contrary to popular opinion and what democrats say, more taxation ALWAYS leads to concentration of power and less opportunities for people (see most countries in EU and the world). Taxation = transfer of wealth from producers to those who are the richest and most powerful to siphon most of the taxes. Power corrupts and absolute power corrupts absolutely. I don’t trust anyone with that much power.
Hi Georg!
Living with your parents as an adult is incredibly smart.
RE experts call it California’s best kept secret. In highly inflated states like CA it’s the smartest thing to do. Sure, if we get a beautiful economic collapse it’s a good time to buy. But during the bubble years you want to keep your overhead expenses low and save save save! Smart guy!
Obviously, in Spokane-istan, you can buy a nice house and pay less than 350k. I could buy that in all cash. But in California you don’t even get a nice condo for that money. So why waste your money when you can just buy 50-70% off during the next crash?
Letting grown kids, and especially grown males live rent-free is a terrible idea. These are the Dbags with $700 car leases and a room in the basement. I’m OK with discounted rent (with an exit plan) and even giving the rent money back for a downpayment later but free housing breeds LOSERS. When my daughters are grown, this will be a red flag for any guys that come a courting…steer clear!!
“What else do I need?” How about getting a girlfriend. Very few women would want anything to do with the person you just described, a child in an adult’s body.
Yup, Housing Bubble 2.0 Already Popped, Says So Right Here! https://www.youtube.com/watch?v=1wXo43i1AMs
Millennial called the top in 2017 based on his expert analysis of the internet. What makes you think you’ll do any better than his utter failure?
Spot on Joe!
I have a proven track record and therefore people call me a RE expert which I agree with.
Just as I told you RE cheerleaders: the “There is no inventory lie†was just that, a lie. If there wouldn’t be enough inventory why would you see price reductions left and right.
Same with the, “this is the year millennials will go out and buy in droves lieâ€
We heard it every year now and it’s not happening. Just as I said, millennials are much smarter and better informed than previous generations. Boomers for instance were so dumb they believed the “this time is different lieâ€. And “buy now or be priced out forever lieâ€.
A few years ago I was also spot on calling BS on the “there is an Asian millionaire ready to buy your house. They are touring the neighborhoodsâ€.
Are you still hearing this BS after the capital controls China put in place? This story line changed rather quickly. It reminded me of what I read in the Newspapers from the 80’s: “the Japanese will buy up all inventoryâ€. That was just before they lost their shirt in the following crash.
It’s always the same spiel with RE shills: they desperately try to inject fear of something in order to sucker in the last fool before it all crashes again.
The next crash will be beautiful. 50-70% discounts are waiting. We will see it within the next few years. As we all know the market crashes every ten years on average. Experts like me know it’s all about timing and nothing else.
If you think now is a great time to buy why share your secret and waste your time trying to convince us? Go out and buy buddy.
Hey Millie.
I stopped watching when they quoted Harry Dent, the guru of doomsday LOL
Harry Dent lost a bet on the price of gold… and paid up.
https://goldsilver.com/blog/why-i-won-my-gold-bet-with-harry-dent/
Doomsday has differing possibilities, apparently. Dent disagrees with Voltaire:
https://www.azquotes.com/quote/1311577
Wow… If it says so on the YouTube video then it must be true.
Look at these beautiful charts! Big crash is coming! Can’t wait
https://wolfstreet.com/2019/11/26/the-most-splendid-housing-bubbles-crushed-markets-in-america-november-update/
There is a huge amount of supply coming. These useless boomers are all going to die soon
There is a huge amount of supply coming. These useless boomers are all going to die soon.
Unless you inherit from a Boomer, it won’t benefit you.
And Boomers are not dying anytime soon. I’m a tail end Boomer, in my 50s. My father was in his late 80s when he died. I might live another 30 years. Older Boomer might live another 20. You have a long wait.
Youngblood and Jenny if this representative of our future generation selfish useless parasites !!
Who complain about being responsible and likely have never done anything for anyone but themselves .
The crash will come but I doubt that either one of you will be prepared to take advantage of it ,you will still be waiting for that entitlement you never deserved or earned !!!!!!!!!
Can’t wait until this next crash crushes RE cheerleaders 🙂 🙂 I am going to celebrate every day once we have the crash!
Hi there! Usually I don’t post and just read (very entertaining!).
I am a millennial but disagree with most millennials. Buying is not an issue.
Just have good credit, no debt and wait for a crash. Until it crashes I would stay with your parents. That’s what I am doing. I love rent free and the fridge is full. It’s heaven!
This is an interesting map for those considering buying in LA:
https://www.google.com/maps/d/viewer?mid=1ul5yqMj7_JgM5xpfOn5gtlO-bTk&ll=34.091288205495026%2C-118.40766917964874&z=9
I was not surprised to see that gangs that were around when I was a kid are still there: Like the Avenues, Dogtown, Clovers, Happy Valley, and Cypress Park Boys. They’ve moved out from their original turfs, too.
Don’t say you weren’t warned!
“…Don’t say you weren’t warned!…”
Thanks for posting map.
I had absolutely no idea there were so many gangs in LA.
Do these people actually do anything except run drugs and shoot at each other?
The Avenues murdered an off duty cop this year.
https://la.eater.com/2019/7/29/8935019/avenue-26-tacos-police-shooting-lincoln-heights-news
I really like living with my mom. Doesn’t cost me much. Just listening to her advice once in a while 🙂 I want to grow old in my parents house. Why should I move out?
If you are an only child, it might work out. You live there with them for years and years, taking care of them when they are old arthritic wrecks. Then since you are with them, they don’t have to sell the house to move into a nursing home. You inherit and then you sell the house to move into a nursing home when you’re old since you haven’t married and have no kids to repeat the cycle. But if you have siblings, your folks might leave the place to all of you, and they might want their money right now and force a sale.
Oh you said “parents” and “mom”… Papa’s hangin’ out?
Yes, living with your parents is great. And I see it the same
Way. It’s basically your house. And if the market crashes you get a second home. Win win.
I am thankful for this upcoming recession. May the crash wipe out the housing market and stock market. Happy thanksgiving!
#wantdiscounts, #crash2020, #dontBuyHigh
Fannie and Freddie just raised loan limits again. Doesn’t seem very crashy…..
https://www.housingwire.com/articles/fannie-mae-freddie-mac-loan-limit-increases-to-more-than-510000/
Data from FHFA shows that home prices increased by 5.38% on average between the third quarter of 2018 and the third quarter of 2019. Therefore, the baseline maximum conforming loan limit in 2020 will increase by the same percentage.
For areas in which 115% of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit. HERA establishes the maximum loan limit in those areas as a multiple of the area median home value, while setting a “ceiling†on that limit of 150% of the baseline loan limit.
Median home values generally increased in high-cost areas in 2019, driving up the maximum loan limits in many areas. The new ceiling loan limit for one-unit properties in most high-cost areas will be $765,600 — or 150% of $510,400.
Hi all, I want to buy a house but prices seem too high. I still live with my parents so high rent is not an issue. Do you guys think it will crash next year? I think I would be okay with making the big step if prices were lower. I want a nice place close to my work for about 300-400k. I live in SoCal. Please let me know your ideas etc as I am new to the blog and how the housing market works. Thanks!
Real estate moves much slower than the stock market which is one reason there is so much debate over the boom bust cycle. If 2019 was the peak, the bottom might not come for a few years. For example 2006 was the top of the last cycle. In 2008 the stock market crashed which accelerated the decline of housing. The market finally bottomed out in 2011. That’s 5 years top to bottom. Prices will go down again, but nobody knows when, for how long or by how much. It’s not very likely that the crash will be as big this time around.
Market is dead. We see no more demand from retail (regular buyers). What we see is that there are a few flippers left looking to buy fixer uppers. Often they lose money as they can’t sell within a profit margin. Reminds me of how business was back in 2007 right before the great crash. Does history repeat again?
10 percent of the real estate agents do 90 percent of the business. You must not be in that group. Sorry your career choice didn’t pan out. There is always insurance sale…
Is that so….how come only you know this? Why not share your source of information…a link? Let me guess, you just know and have nothing in writing?
It’s common knowledge for those who work in the business. I’m guessing your handle is nothing more than a ploy for credibility. Sad.
Nice try.
So it’s common knowledge but you can’t find ONE website trying to prove it with data?
Not one???? Hell, there are even website stating that the earth is flat and you tell us common knowledge like this has never been referenced??? Who are you trying to fool here 🙂
I have a very bad feeling about this economy. It’s based on observations from around 2005-2007. I see a lot of people here in So Cal driving expensive cars while they work at low wage jobs. These are the same people who probably have kids. I’m seeing a lot of real estate frenzy. These homes aren’t selling like they used to, but I’m still seeing the same type of people I saw back in 2005 getting all excited about trying to be a part time real estate agent. It’s sort of like that story about the guy back in 1929 who was listening to all of those middle class and even poor people brag about how they are buying stocks right before the depression. I think we’re headed for another depression very soon.
Agreed, market is done for. In a few years people will look back and say: Gosh, I am so glad I didn’t buy during this hyper bubble. Those who bought at the peak (2019) will likely walk away and foreclose.
You see someone driving an expensive car….but you assume they have low wage jobs….and kids….
Weekend! Obviously that means a long open house tour! Obviously I must pretend so am seriously looking. In reality, I am going to wait for a beautiful crash! 50-70% discounts baby!!
OC register columnist Lansner’s piece today has the headline “California home price gains double the nation’s”. His gain time period is the last decade. Te decade started at a low point, and is still going up albeit slower than earlier in the decade. 2009 had a market where 71% of sales were foreclosures and short sales. Today. those sales are 7%. Short sales in my opinion are a trailing indicator. But the lower than historical building rate and the increase in renters make for conditions entirely different than in the pre-bubble burst market. He also mentions the tech fueled jobs boom of the 2010s decade. He explains that the current situation “can be viewed, in part, as one painful price of unexpected economic success”.
Translation: RE shill saying “this time is differentâ€
I’d say Lansner is at worst a semi-shill. This was my condensation of his article. My added comment is that short sale numbers are irrelevant. I agree with him about more renters as do Dr HB and probably you. And politicians are screaming about the low construction rate. I am not thinking about buying now nor would I recommend it to most potential buyers. History rhymes sometimes without repeating itself completely.
Speaking of economic success. With two recent interest rate cuts inventory is dropping again, DOM is decreasing, and homes are selling for asking price and over. All this at the traditionally slow holiday season. Prices are still increasing albeit a little slower than in previous years. Not a bad Xmas gift from the markets. And RE owners are preparing to ring in an upbeat forecast for the New Year. Time for the bears to hibernate for another 6 mos.. You might as well be cozy for the winter.
And After today’s job report, they’ll have to hibernate for another year, at least!
Housing Bubble 2.0 Already Popped-Bend, OR Housing Prices Crater 25% YOY As US Housing Demand Plummets To 21 Year Low
https://www.movoto.com/bend-or/market-trends/
A distinguished economist quipped, “Why buy a house when you can rent one for half the monthly cost. Buy it later after prices crater for 70% less.â€
Housing Bubble 2.0 Already Popped- Sacramento, CA Housing Prices Crater 19% YOY On Rampant Mortgage And Appraisal Fraud
https://www.zillow.com/sacramento-ca-95825/home-values/
*Select price from dropdown menu on first chart
You’re gonna read it here, there and everywhere… and like it.
The Fight for Prop 13 is ON!
https://fightforprop13.org/
I say go ahead and raise the Prop 13 taxes on all commercial properties (not residential).
What say you?
I already said it near the beginning of this current discussion. Go back and read it and then reconsider it. It could mean the end of small town Mom & Pop businesses in CA where the owners own the RE, and be another huge gift to Amazon, with more pressure on brick and mortar competitors.
Miami Real Estate Is About To Collapse… This is About Condos, and it Would Be Funny if it Weren’t so Serious.
https://wolfstreet.com/2019/09/26/miami-real-estate-is-about-to-collapse-this-is-about-condos-and-it-would-be-funny-if-it-werent-so-serious/
Split roll is being supported by public sector workers and ultra big business like Facebook. Winners obviously are big Si Valley firms which will benefit from destruction of smaller business and teachers union, because increased tax revenue will fund pensions. And losers? Small businesses whose rent will go up and will be passed on to ordinary Joe. Excess revenue will not go towards better school or better infrastructure. In the meanwhile, people who’ve owned houses will be able keep their very low taxes (Prop 13) and pass on their very low tax base to their children and grand-children. Talk about unfair! And not just that. As such, the’ step up’ provision in federal tax allows people to inherit multi million dollar homes without having to pay any tax. And prop 13 sweetens the deal by ability to inherit low property tax too. Just go to Zillow and see how low some of the property tax on some of the houses are. This is the reason why there are such a low inventory.
Housing Bubble 2.0 Already Popped – From Celebrity Networth. “Yet another famous celebrity home seller has been forced to levy a steep discount in order to try and move a property in an increasingly tough housing market. But unlike many other similar stories as of late, Tom Ford’s recently price-slashed 22,000-acre ranch isn’t located anywhere near Los Angeles.â€
“Instead, the fashion designer and filmmaker’s ranch sprawls over New Mexico land, and after first listing the property back in 2016 for $75 million, he’s cut the asking price by some $27 million down to $48 million.â€
JamesJim, I’ve already refuted your silly examples. I’ll do so again.
All you ever post are properties with a drop in listing price — which is meaningless.
When are you going to post a drop from the previous sales price?
Until you can post current sales prices that are lower than previous sales prices, then no, the housing bubble has NOT “already popped.”
Of can you offer an argument as to why a drop in listing price is relevant to anything?
He can’t, so he doesn’t. He really doesn’t reply to anything. Just posts mindless drivel. Sort of like the dementia patients who just repeat the same few things over and over. Nothing going on upstairs. Sad.
James, Great articles and examples of price reductions across the board show the market peak. Keep up the great work! 50-70% crash coming baby!
RE shills are mad because there are no more bidding wars 🙂 haha losers
Healdsburg, CA Housing Prices Crater 15% YOY As Sonoma County Sinks Deeper Into Mortgage And Appraisal Fraud
https://www.zillow.com/healdsburg-ca/home-values/
*Select price from dropdown menu on first chart
As one noted economist advises, “Mortgage debt is the most toxic and damaging debt of all. Avoid it at all costs.â€
An article in Consumer Reports would beg to differ with your assessment that “Mortgage debt is the most toxic and damaging debt of all. Avoid it at all costs.â€
https://www.consumerreports.org/student-loan-debt-crisis/student-loans-vs-mortgages-what-makes-student-debt-different/
And I’d like to add that those who regularly make use of payday loans will NEVER prosper. Plenty of folks with mortgages are doing just fine.
Commercial real estate prices may drop in anticipation of split roll if rents cannot rise any further. business owners may sell (to Blackstone group for instance) and move. I see no effect on residential rents or house prices. Prop 13 is a travesty anyway. Not only assessment value and tax are capped, according to Prop 13 the tax base can be transferred to your descendant! And those who pretend Prop13 is necessary to keep grandma (and all her descendants) at home, look no farther than Texas a red state! They have grandmas too. Not only is TX property tax is steep, it’s reassessed at MARKET VALUE of the property EVERY YEAR! Result is affordable house prices even in places like Austin. Prop 13 deprives CA of much needed taxes. Which is why the state is not able to maintain it’s infrastructure, keep poor people housed, cannot protect it’s cities from firestorm. Of course public sector employees’ exorbitant pension is another reason. It’s the poor private sector employees working 3 gig jobs who are the victims. If I were a young person starting out I will look to migrate to other states.
I am glad there are still smart people who get it like exCali.
Prop13 is the biggest scam in history and only benefits the rich and the boomers who have all that wealth. It massively screws up millennial buyers. It’s obvious that boomers and the rich should pay their fair share. It’s overdue to repeal and replace it.
Boomers have gotten enough freebies.
Here we go with the sour grapes. Just think … if you would have worked hard in school, you would have graduated from a top college, and you could have afforded a home in a beach city years ago. You would be a millionaire.
But, instead, you screwed up and have no money. So, now you wish doom and gloom on the people who have worked hard and had success. Shame on you.
I’m no where near a boomer (actually a young gen-x) and my wife is a millie like you. We are both definitely benefiting from Prop 13. We both make good money and pay our fair share. Our state tax bill alone would cover the mortgage for a nice home in most parts of the country.
That being said, I have no problem paying more taxes if I knew where the money was actually going. I’m not willing to repeal prop 13 so more of my money can be squandered.
I think if your old lady landlord suddenly had to pay current appraised value property tax rates, your days of cheap rent and sneaking into the neighbors pool would be over (and that’s the part your missing). Rentals are businesses and costs are passed on to the customer (renter).
I totally agree. Prop13 needs to go. It doesn’t help new buyers and only saves money for boomers who don’t need it.
I love Millie’s “Boomers have gotten enough freebies”. And let’s see, suddenly Gen X and Y, and future Millennial homeowners are not going to be interested in capping their property tax increases. They’re just going to sit back and be taxed into oblivion. And gov. will do that. How do you think Prop 13 started in the first place ? The county raised taxes without abandon. Many people had to sell merely because of the property taxes, and the proposed split-roll is just a stealthy way to ease the electorate into eliminating residential Prop 13. The largest proponents of eliminating Prop 13 are those who never think they’ll own a home in Cali. And that’s a very small contingent of renters, most of whom have hopes of home ownership. So, keep on with the Zerohedge and Wolfstreet fake news. No one in their right mind is going to vote against their own self interest.
I realize I have to dumb it down. You can quickly see who is smart and who isn’t.
Right now:
Boomers and the rich don’t pay their fair share.
2k property taxes (prop13 let’s you inherit locked in property taxes)
Millennial who buys the exact same house pays 1.2% of the sales price.
10k in this example
Boomer LOVES it because it screws millennials and the boomer gets another freebie.
What it Should be:
The current tax inflow is 5:1 in favor of the boomer. 2+10k=12k
All you have to do is make it equal. Same house, same taxes just like everywhere else on this earth.
So repeal the biggest scam (prop13) and boomer and millennial will pay each 6k.
Result; millennials (new buyers) will pay much, much less and boomer and the rich will pay a little bit more which will result in boomers downsizing: more inventory, bubble pops immediately.
It’s a giant win-win and results in the same tax inflow to the state.
Obviously, the boomer has to lie and say that somehow him paying his fair share will result in millennials paying more. Like always, it’s a lie just all these other lies this entitled generation (boomer) makes up.
#endTheScam #stopTheFreebies 🙂
It actually benefits the Millennials who had smart Boomer parents that bought a house.
The Millennials can inherit their smart parent’s house.
1) The Prop 13 tax rate is inherited (Sort of like Feudal European Dynasties) so the Millennial and Millennial’s children and grandchildren can pay ultra-low taxes forever.
2) The basis for the inherited house is stepped up to the date of death. So now the Millennial can inherit the $20K house purchased in the 70’s and step up the basis to the new $2M value. Milllennials don’t even have to pay taxes if they sell.
Milllennials are so lucky. They are lucky as long as they had smart parents who actually bought a house and did not rent. Hint
Sorry Millie but you are incorrect. Florida has a similar law. It is different from Prop 13 in that you have to inhabit the home, and the discounted tax basis is not inheritable. The Florida approach seems much more reasonable to me, but like many have pointed out, if you change the rules now the effect on renters may be dire. In addition to a capped annual tax increase, Florida gives a $50K homestead deduction (subtracted from assessed value). This helps home buyers right out of the gate, especially the lower income owners – homesteading can cut their taxes in half!
Robble,
“Sorry Millie but you are incorrect. Florida has a similar law. It is different from Prop 13 in that you have to inhabit the home, and the discounted tax basis is not inheritable. â€
Thanks robble, that helps. No reason to be sorry about it.
What you said confirms that even in states where is somewhat similar it’s actually very different.
We agree that it needs to be repealed so that millennials pay less property taxes and boomers finally start paying their fair share.
Boomers will finally downsize if we stop the freebies
Nowhere on this earth do you see such a scam as prop13.
Wait until the renters nation will find out that all they have to repeal prop13 and the bubble pops tomorrow.
House prices will be affordable and all you did was have those that can afford it the most finally pay a fair share.
It’s such a brilliant simple solution 🙂 I should get an award.
I don’t understand this listing: https://www.zillow.com/homedetails/421-19th-St-Santa-Monica-CA-90402/20476639_zpid/
This Santa Monica house sold last August for $675,000 — then a month later, was listed for sale for $3,360,000.
WTF is going on?
Was the August sale some sort of insider deal, to save on property tax? But if they resell at the higher price a month later, the capital gains tax will be huge.
Again with that Santa Monica house. Above I put its Zillow listing. But check out its Redfin listing: https://www.redfin.com/CA/Santa-Monica/421-19th-St-90402/home/6770532
Same house. Different history.
Zillow has a 1999 sale for $1,070,000.
Redfin doesn’t have that. Instead it has a 1990 sale for $1,050,000.
Son,
Trulia, Zillow and Redfin is full of garbage data. Don’t get too hung up on stuff like that.
Zillow and Redfin are great sources of data.
Naturally, the slumlord from Spokane-Istan doesn’t like anything coming from sources that are not Fox News approved and NAR propaganda.
WOMP WOMP once again for the perma bears. Blowout job numbers once again. Sorry dudes.
You whiny millenial socialist renters should travel around the world a bit. You think $3000 for an apartment in LA is a lot? Try the socialist paradises like London or Paris or Amsterdam. An apartment there, in a non-crime infested area is $4K minimum. And that’s for something, OK, nothing fancy, 1 or 2 bedroom with 1 bathroom. No parking, no A/C, not even an elevator in the building that can have 4 or 5 stories. You want 3 bedrooms and more than 1 bathroom, an elevator, and A/C? $6K is the low end and prices easily run over $10K. Bbbbbbut they have free health care!!! LOL.
Slumlord, None of these examples are true or remotely realistic. You just make up stuff to justify the enormous housing bubble we are in. You want younger generations to buy the top because there is nobody left to buy at the peak and support the bubble prices.
Remember two-3 years ago? The RE cheerleaders were all over money inflow from China. That story stopped quickly. 🙂
RE cheerleaders like the slumlord from Spokane-istan were quick to switch and say “THIS is the year when millennials go out and buy in drovesâ€. Why? Because you need a large group of people that buy into these overpriced crapshacks.
And a year later, that line stopped as well.
Now it’s back to being grumpy “snowflakes, socialists bla blaâ€.
Bottomline: there is nobody left to support the bubble by buying at the peak. A crash is inevitable
Housing Bubble 2.0 Already Popped- Phoenix, AZ Housing Prices Crater 12% YOY On Surging Mortgage Loan Losses Across US
https://www.zillow.com/phoenix-az-85012/home-values/
The link provided shows that house prices increased year over year and will continue to increase in the next year. Did you provide the wrong link?
Housing Bubble 2.0 Already Popped- Seattle, WA Housing Prices Crater 18% YOY As Amazon And Microsoft Layoffs Drive Mortgage Defaults
https://www.zillow.com/seattle-wa-98102/home-values/
Housing Bubble 2.0 Already Popped- Bay Area home prices fall, hint toward market correction
https://www.mercurynews.com/2019/12/05/bay-area-home-prices-fall-hint-toward-market-correction/
It seems to me that Millennial et al are betting on a massive deflationary event, while Mr L and Co are betting on inflation. Right now with interest rates held below the rate of inflation artificially, I’d say L & Co are ahead. If you believe that the housing bubble and subprime caused the Great Recession, then I think that Mr L & Co will be right for the foreseeable future because we don’t have a lot of marginal people buying places on speculation now (Ponzi financing). However if like Larry Kotlikoff, you believe that the opaque investment banking system (e.g. Bear Stearns, Lehman Bros, etc.) caused the crash, then Millie et al are right eventually, the next time major investors get nervous about what these institutions are doing and pull the plug. Kotlikoff states that no structural changes to this system have occurred despite bailouts. The crash will cause unemployment which causes foreclosures. which craters RE. SO if you are sure you will still be employed when this happens or have deep pockets cheer away, your day is drawing near.
This is a good analysis.
However, the wildcard is the Fed. Who knows what they will do?
If houses drop 10%, they may decide to drop interest rates to negative.
If this is the case, I’d buy immediately. Someone will pay me to borrow money from them. Crazy, but it should drive house prices to new highs.
Probably rates will not drop to negative but the Fed may try to match countries like Japan.
Japan currently offers historically low interest rates, with rates for 10-year fixed mortgages generally available under 1% for the initial set period. Variable loans are currently even lower; for example, MUFJ bank offers 0.65% for a floating loan.Jan 30, 2019
This is a good analysis.
However, the wildcard is the Fed. Who knows what they will do?
If houses drop 10%, they may decide to drop interest rates to negative.
If this is the case, I’d buy immediately. Someone will pay me to borrow money from them. Crazy, but it should drive house prices to new highs.
Probably rates will not drop to negative but the Fed may try to match countries like Japan.
Japan currently offers historically low interest rates, with rates for 10-year fixed mortgages generally available under 1% for the initial set period. Variable loans are currently even lower; for example, MUFJ bank offers 0.65% for a floating loan.Jan 30, 2019
The Fed is currently signaling holding interest rates steady for 2020. If they raise rates, Trump will put pressure on them and if they lower more before the election (barring a big negative change in the economy) the opposition will go ballistic. So steady as she goes is the way to bet.
“Trump will put pressure on them and if they lower more before the election (barring a big negative change in the economy) the opposition will go ballistic.”
If the stock market or housing market drop 10% before the election due to affordability or any other cause, Trump will force the Fed to drop rates again (Negative?)
Since when did Trump or the Fed ever care if the Democrats go ballistic? If rates fall, Trump will be a hero and anyone opposed to that will not get elected.
It is a safe bet that housing prices will either continue to slowly rise with inflation and wage growth and oscillate +- 5%
Mainly due to Fed interest rate actions.
What I said was “barring a big negative change in the economy”…the fed will hold steady.
You said “If the stock market or housing market drop 10% before the election due to affordability or any other cause, Trump will force the Fed to drop rates again ” I think this is possible under the negative change in the economy I suggested, so we are basically in agreement. I don’t think it would come to negative rates for only a 10% drop. Not wanting to set off opposition needlessly in an election year could also be a motive to hold rates where they are if no real need arises in my opinion.
The smart money is selling real estate. Blackstone, which purchased a ton of single family homes in the 2008-12 time period, just sold the last of its interest in rental homes at a huge profit. Blackstone reaped about $7 billion in all, according to securities filings. That’s better than twice what the firm invested.
See:
https://www.wsj.com/articles/blackstone-moves-out-of-rental-home-wager-with-a-big-gain-11574345608
The ruling class likes to divide people on the basis of age, religion skin color,ethnicity etc. Divide and Rule policy is as old as mankind. The real divide however is Rich vs Everyone Else. Off-shoring and influx of undocumented workers have helped drive down labor costs all over the Northern Hemisphere. Loss of jobs and low wages have lead to destruction of private sector unions. Democrats sensing danger have augmented their voter base by throwing their weight behind public sector unions by increasing their wages and pension benefits year after year. Which lowers the ratio of tax revenue vs tax expenditure. So to balance the budget states have to either increase revenue or cut expenditure. And expenditure can be cut by either cutting services or cutting payment for those services. Most states especially the Blue ones choose to cut services with the hope that people won’t notice if they make blame it all on Climate change or corporate greed or some such boogeyman. Not saying corporations are not greedy. But that greed is selectively aided and abetted by the state’s decision as to which laws to apply and which laws to ignore. Si Valley companies are allowed to defy basic worker protection, consumer protection laws. But PG&E is subjected to egregious “Inverse Condemnation” law! Anyways , my point is even after all the service cuts, gouging older companies providing essential services etc the state of CA is still not able to make ends meet. So only one avenue left. Raise taxes! And that’s what they will do. And not on the very rich. They are the rain makers and they can simply take their rain and move. It will be on the middle class. In fact Chicago Fed put it very succinctly last year. Raise taxes on the houses because houses cannot move!
Housing Bubble 2.0 Already Popped- Dallas, TX Housing Prices Crater 10% YOY As Fear, Uncertainty And Doubt Permeates US Housing Market
https://www.zillow.com/dallas-tx-75230/home-values/
As one noted economist advises, “Mortgage debt is the most toxic and damaging debt of all. Avoid it at all costs.â€
Housing Bubble 2.0 Already Popped- Portland, OR Housing Prices Crater 11% YOY As Seattle and Vancouver BC Housing Markets Turn Toxic On Rampant Appraisal Fraud
https://www.zillow.com/portland-or-97209/home-values/
*Select price from dropdown menu on first chart
As a noted economist stated so eloquently, “A house is a rapidly depreciating asset that empties your wallet it every day you own it.â€
Housing Bubble 2.0 Already Popped-Mountain View, CA Housing Prices Crater 16% YOY As Businesses Exit California
https://www.movoto.com/mountain-view-ca/market-trends/
As one noted economist advises, “Mortgage debt is the most toxic and damaging debt of all. Avoid it at all costs.â€
Housing Bubble 2.0 Already Popped- Bend, OR Housing Prices Crater 25% YOY As Mortgage Defaults And Foreclosures Skyrocket
https://www.movoto.com/bend-or/market-trends/
As one noted economist advises, “Mortgage debt is the most toxic and damaging debt of all. Avoid it at all costs.â€
Nice! Hoping market continues to crash!!!!
Want to buy loooooow!
Pls keep posting these encouraging articles. I want a big big crash!
Proposition 13 is the worst thing that has ever been established. It’s the worst nightmare for millennials. Millennials are stuck paying for all other generations. We need to repeal and replace it ASAP and have boomers finally pay 1.2% of the market value of their houses. How can we be so stupid and let them get away with paying little to no taxes?????? No wonder they don’t downsize!!! Prop13 is the reason for the housing crises!!
You are stuck paying for other generations?
Get back to your childhood bedroom young lady if you want any free dinner tomorrow!
I find it funny that Millies think they will be 31 years old forever. Whatever benefit boomers may have received from Prop 13, you will get as well. But this generation is so short sighted it can’t think critically. The other part they don’t understand is that making an evil boomer pay more in taxes doesn’t mean they will pay less. If Prop 13 goes away EVERYONE will pay more taxes. And by everyone I mean every single person, whether a renter or owner. Every business will pay more taxes, which means…class…anyone….higher costs for everyone, including, yes, you my precious snowflake Millies.
Correct. Eliminating Prop13 makes a lot of sense for many reasons.
1. It will reduce property taxes for new buyers
2. Boomers and the rich will finally pay their fair share
3. The state can reduce the rate because of 2. And future increases can be capped as long as 2. Is implemented.
The key here is that the rich and boomers don’t want to pay their fair share of property taxes. As soon as that changes, new buyers (mainly millennials) won’t have to pay 1.2% of the sales price anylonger. The rate can easily be half as long as boomer pay the same rate as all everyone else.
Why allow boomers to pay 5 times less than new buyers? Boomers had buying opportunities when they were young. Houses were dirt cheap back then.Today’s record high house prices benefit those who bought a long time ago or inherited. Mainly Boomers. So is it too much to ask to pay the fair share in Property taxes?
Millennials are burdend with student debt and highly inflated house prices. On top of that millennials pay 1.2% of the inflated sales price in property taxes (in California, for a 500k condo, you would pay 6k in property taxes as a millennial buyer) while boomers pay 1-2k for their multi million dollar houses. They should be paying 1.2% of that market value they so often brag about!
That’s why most people who understand prop13 say we need to end this scam. Boomers had enough freebies that others have to finance.
About no more Prop 13:
“1. It will reduce property taxes for new buyers”
That is probably true because it will drive down property values when a lot of fixed income people from 70-90 have to sell at once. But, there is a rate cap in Prop13 for all homeowners and if they can jack up the rate as well as the assessment, that will also hammer RE. But if the rate cap goes, taxes on new buyers might NOT go down, just everyone’s taxes will go up up up!
Here is a explanation of the cap:
“1. One Percent Rate Cap. Proposition 13 capped, with limited exceptions, ad valorem property tax rates at one percent of full cash value at the time of acquisition. Prior to Proposition 13, local jurisdictions independently established their tax rates and the total property tax rate was the composite of the individual rates, with few limitations.”
If I lose my Prop 13, my taxes would probably go up about 60-70% because I didn’t start in the 1970s when houses were going for less than $100K. That is, if the property value doesn’t drop. If it does drop as much as you think it could, I might not be paying any more unless they also raise the rate above the current Prop 13 cap.
Here are the other features of prop 13:
“2. Assessment Rollback. Proposition 13 rolled back property values for tax purposes to their 1976 level.
3. Responsibility for Allocating Property Tax Transferred to State. Proposition 13 gave state lawmakers responsibility for allocating property tax revenues among local jurisdictions. Prior to Proposition 13, jurisdictions established their tax rates independently and property tax revenues depended solely on the rate levied and the assessed value of the land within the agency’s boundaries.
4. Reassessment Upon Change of Ownership. Proposition 13 replaced the practice of annually reassessing property at market value with a system based on cost at acquisition. Prior to Proposition 13, if homes in a neighborhood sold for higher prices, neighboring properties might have been reassessed based on the newly increased area values. Under Prop. 13, the property is assessed for tax purposes only when it changes ownership. As long as the property is not sold, future increases in assessed value are limited to an annual inflation factor of no more than 2%.
5. Vote Requirement for State Taxes. Proposition 13 requires any measure enacted for the purpose of increasing state revenues to be approved by a two- thirds vote of each house of the legislature.
6. Voter Approval for Local “Special†Taxes. Proposition 13 requires taxes raised by local governments for a designated or special purpose to be approved by two-thirds of the voters.”
The biggest benefit was for people who owned before 1976 (the rollback) or who inherited from someone in before ’76 under a subsequent addition to Prop 13. What you don’t like are the rollback and #4. But #5 and #6 protect old and new owners, and they would probably go in a repeal.
To add to what Joe R said:
In 1978, Pre-Prop 13, the tax rate on properties was at 3% of assessed value. There wasn’t any cap on tax increases. Since housing prices were going up dramatically during this time due to the influx of millions of new people(Many in aerospace in S. CA), the increase in taxes is what drove Californians to vote in Prop 13.
If you revoke Prop 13, does this mean the tax rate reverts back to 3%? Is there any cap on tax increases?
Think of all of the pensions that could be funded and how many High Speed trains could be built if the CA government receives that kind of windfall and revokes Prop 13 back to the way it was in 1977.
Thanks Joe! Finally someone who is actually willing to talk about it. Most boomers and RE cheerleaders just make up lies about prop 13 because they fear a discussion will wake most people up. They need to hide that scam behind blatant lies.
So you agree that abandoning prop13 reduces taxes for new buyers. Great.
Also, you are concerned about future increases. Now they are capped.
So, what’s the problem with lowering the tax rate and capping future increases?
Boomers and the rich will pay more but future increases are capped.
Millennials/new buyers will pay significantly less and future increases are capped.
Since it’s so out of whack right now in favor of the boomer and the rich it needs to be adjusted/corrected.
Currently most boomers pay 1-2k for a million dollar home while new buyers pay 12k. Why should we pay 10 times more for the same house?
“So you agree that abandoning prop13 reduces taxes for new buyers. Great.
Also, you are concerned about future increases. Now they are capped.”
It reduces taxes on new buyers only if the predicted selloff among older owners with limited means occurs AND the rate caps stay in place. A complete repeal of Prop 13 destroys both guaranteed future tax in absolute dollars and limited tax rates. The real powers that want it gone will be chomping at the bit to raise both assessments and tax rates so they can fund the public employee pension trough.
“So, what’s the problem with lowering the tax rate and capping future increases?
Boomers and the rich will pay more but future increases are capped.
Millennials/new buyers will pay significantly less and future increases are capped.”
You aren’t capping future increases in absolute dollars since there could be another round of property value inflation if more and more foreigners (and even out-of -staters who aren’t on the bum) pour into California. And I can’t see them not trying to raise rates to what they are in liberal New Jersey (>2%).
https://smartasset.com/taxes/new-jersey-property-tax-calculator
I think that in the long run, Californians are all better off with the current system of knowing in advance what future increases will be capped at. The system also caps increases on rental property that is held long term, discouraging a lot of flipping.
Millennial will get the same benefit form Prop13 ONLY IF house prices keep going up. They will not get any capital gains benefit enjoyed by boomers if the house prices stagnate or go down. Those who think house prices never go down only have to look at CT and IL even in today’s market. Secondly, if Prop 13 is repealed then boomers will be forced to sell, and house prices will go down. Which will benefit new buyers. They will benefit from lower house price as well as lower property tax. However house prices in CA may remain elevated as long as owners of capital aka oligarchs, want to remain in CA. Which maybe for ever. After all there are very few places on earth to equal CA’s weather and its beauty.
Glad to see there are still smart people who get it – like exCali
Here is a hypothetical Boomer situation:
The early Boomer born in 1950 purchased a house in S.CA when they were 30 in 1980 for 100K ( a nice house at that price in 1980). With the Prop 13 2% caps, they are now paying $2k/year for a house worth $1M. Their neighbor just purchased a house next door for $1M and is paying 11K/year in property taxes. Millennial shouts Unfair!! And I agree. The Boomer has paid off his house and his only expenses are utilities, insurance, and property taxes.
Prop 13 is revoked and everyone now pays 1% of assessed value. Sounds fair.
Housing prices plummet to Our Millennials 70% off.
The Boomer’s house is now assessed at $300K. His new taxes will be $3K/year.
Since the Boomers house is paid off, the old taxes were $2K and the new taxes are $3K.
Is this enough to make the Boomer move? I wouldn’t move. I’d enjoy my paid-off house and pay the extra 1K/year for the rest of my life.
Of course with such a hit in property tax revenue for the State of CA, and that pesky Prop 13 out of the way, why won’t the state revert back to the 3% property tax rate that existed before Prop 13? Now with no caps on taxes, and huge pension liabilities, and roads needing repairs, and High Speed Rail to be built, why can’t the state raise taxes to cover all of these like they did before Prop 13 was voted in? Nothing would stop them.
My prediction is another Prop 13 (hopefully fairer without inheritable taxes and no arbitrary 2% caps on increases (just cap it at inflation)) would be voted in very quickly.
My husband and I kept looking for a house to buy, but prices are way too high. For now, we will keep living at my in-laws. I think when the crash comes we should buy. But prices need to be half of what they are now. Luckily we can save a lot of money since we don’t pay rent. We are adding a baby soon 🙂 so, paying rent doesn’t really fit into the budget anyways. Hopefully, a big crash drives prices down soon.
While I don’t want to see another 2008 type Great Recession, I think you’d have to be willingly blind to not see how outlandish this economy is. You think a DOW that has gone from 6000 in 2008 to almost 30,000 isn’t outlandish? If you think that then you’re the type of person who must have smiled and pretended nothing was happening when the DOW was at 6000. In other words you’re beyond help. The DOW at these numbers combined with housing at all time highs again is without a doubt a sign of manipulation. Whoever is allowing this knows it’s going to blow up in their faces eventually. When has it not? This is the worst case scenario America has been in since 1929 and I don’t want to see it come crumbling down, but the meltdown is inevitable now and all I can do is sit back and hope it’s not as bad as 2008, but I won’t be surprised if it’s worse. The people currently in power have allowed all the market manipulators to get out of control again and this time we’re not going to have the higher interest rates to cut to save us.
You cherry picked the low point. Take a long view and the gains don’t appear out of line at all with prior cycles (on a percent basis).
A 2008 event would be very sweet. It resets and normalizes what’s broken.
For instance, when companies start laying off people it’s a great time to clean the house and get rid of bad apples.
Same with people who can’t afford the house they live in. During rising foreclosure rates it’s much easier to walk away and justify your bankruptcy to friends and family. You can just blame the bad economy, trump or China or whatever. You don’t have to admit you bought more house than you can afford.
Recessions are part of the cycles, normal and healthy (very, very healthy). After an 11 year bull run it would be a gift to get another 2008. Fantastic buying opportunity.
During a recessions, those who saved money and are smart win big and the dumb ones will have good excuses. It’s a giant win win for everyone.
The only ones that don’t like it are boomers because they want you to buy their hyper inflated crapshack. They also want you to buy skyhigh so your property taxes are skyhigh.
They know that a bigger fool is needed (younger generations) to massively overpay in taxes in order for them to get away with freebies (prop13). Boomers don’t like to contribute and pay their fair share. I have no idea where this entitlement comes from. Maybe because they are used to getting away with freebies? In a way, we spoiled them.
Check out this chart, it’s pretty interesting to see stock performance data in this format. Obviously we’ve had a good run but it’s not especially unique.
https://www.macrotrends.net/2526/sp-500-historical-annual-returns
Renting and saving money. Hoping for a biggie! Buying makes not much sense when houses are overpriced by 300-400k. Why should I make the seller rich? I rather stay with my mommy! She hasn’t charged me for renting my old bedroom. Also, if I don’t have to pay rent it’s more likely my mom does NOT have to help me out financially. So it just makes more sense if I stay at home. I am turning 40 in a couple of years and hope we’ll see a big economic meltdown so I can save 300-400k when I buy that house during the downturn!
Great!
https://www.businessinsider.com/millennials-vs-baby-boomers-big-houses-real-estate-market-problems-2019-3?utm_content=buffer03976&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer-bi
They finally figured out that millennials aren’t buying the overpriced houses 🙂 🙂
Maybe you guys can try to sell it to the kids of millennials….oh wait, they aren’t starting families with 2-5 kids either. Lol. Out of luck boomers? Who are the fools buying he overpriced houses from you now?
Fools like yourself when idiots like yourself learn respect for others maybe just maybe you will actually see some success but after reading comment after comment about adults still sponging off mommy and daddy not providing any help while invading their privacy and financial security it appears the latch key kids never grew up or learned responsibility.
What a joke your generation has become a group of parasites !!!
Richard,
Millennial adults who live at home are smart. They are financially responsible by not over paying in rent or a mortgage.
When the market crashes they can move out and invest the saved money in a home that’s priced appropriately.
Also, one important point you need to get out of your head. Respect has nothing to do with overpaying for an overpriced crapshack. That’s just stupid. That doesnt mean boomers are not respected. It’s actually disrespectful to potential buyers to overprice your crapshack. You make us submit lowball offers.
If a boomer wants more respect than earn it. Aren’t boomers the parasites? You pay 10 times less in propert taxes. Property taxes help your community but the lion share is paid by new buyers while boomers enjoy freebies? Sounds like we know who the true parasites are?
So much Milie delusion here about a coming crash. But I guess when you’re pushing 40 and living in your childhood bedroom, hope is all you have left. Or worse pushing 40, married and living in your childhood bedroom.
I’m not sure if I should laugh at you or cry for you. I’m serious, you are so pathetic and even worse you don’t realize it. And entire generation destroyed by its own narcissism. So sad.
Doom and gloom types have been predicting a Seattle crash for 6 or 7 years. Any day now I suppose…..LOL.
Seattle Q13
No end in sight for Puget Sound’s competitive housing market
Dec 12, 2019
“In November there were about 1.5 months of inventory on the market, a normal balanced market has about 6 months. “We are back down near record low inventory levels,†said Zillow Economist Jeff Tucker. Tucker said there are about 40 percent fewer homes in the Seattle Metro on sale right now compared to the same time last year.
Places like Pierce County are even more competitive. For example, there were 1,760 homes on the market this October compared to 3,000 in October of 2018.
“If you are sitting on the sidelines hoping a bunch of affordable homes will be coming on the market soon, I don’t know what to tell you,†Tucker said. What happens in King County and Pierce County matters for the rest of the state. “We basically start the trend and we see it elsewhere in Eastern WA and what not,†Frosaker said.”
_____
I keep telling you people, renting long term is financial suicide. Don’t do it.
One thing that is absolute
We have had a NO RECESSION decade.
This alone explains why home prices have seen such growth over the same decade.
Will it go on forever? of course not, but there will be no crash UNTIL there is a job-loss recession, which shows little signs of cracking in 2020. And with T Rump shooting for a re-election, he will force our friends at the Fed to pull out all stops to prevent a recession in 2020 and beyond if he is re-elected.
https://loganmohtashami.com/2019/12/06/no-recession-decade-vs-flat-earth-economics/
Remember when Logan M said prior to 2008 that the economy will crash?
Me neither. Because he didn’t.
What makes you think a lender will tell you when it crashes (as if he would know)?
A lender makes more money in a bull market and suffers in a recession.
If you just want bullish news why not read the NAR propaganda?
I am ready to buy!
Currently living with my parents but as soon as the housing market crashes I can afford a house. If the price reduces from 700k to say 340-365k I am in!
Millie can not convince people to abandon Prop 13 so he takes to demonizing and dividing them. Now, in his pea brain, anyone who votes in their own self interest, is “stupidâ€, etc.. And boomers are the “evil†exploiters. Dang, he should be running for Congress! Unfortunately for him, 80% of renters hope to be homeowners someday and will seek protection from the County tax collector. Oh well, keep that “expert†RE advice coming Millie. Those Zerohedge stats just seem to overwhelm us. LOL.
Market man, I am almost certain you are a boomer, am I right?
“Now, in his pea brain, anyone who votes in their own self interest, is “stupidâ€, etc..â€
Why would you think that? I am saying the opposite. Millennials/new buyers should finally vote in their self interest by abandoning prop13 and replacing it with something that lowers their taxes and let’s boomers and the rich pay their fair share finally.
“80 of renters hope to be homeowners one dayâ€
EXACTLY. So why wouldn’t they want to pay less property taxes than? Right now new buyers are paying ten times more than boomers thanks to the prop13 scam.
Marketman, I really think that if you are a boomer it’s natural for you to enjoy the freebie. Therefore, you won’t vote for a fair property tax law.
But If you are burdened with high taxes (mainly millennials) you should look into property taxes in other states/countries. You will have a hard time finding such a scam as prop13 anywhere else.
The illusion economy propped up by the corrupt Gov’t, banks, real estate appraisers and RE companies are fueling the reverse mortgage fraud once again. The Baby Boomers are going for one last corrupt Gov’t supported party. https://betterdwelling.com/canadian-seniors-now-owe-over-3-88-billion-in-reverse-mortgage-debt/
https://www.app.com/story/money/business/consumer/2019/06/13/ocean-county-reverse-mortgage-foreclosures/2849388002/
https://www.newhavenindependent.org/index.php/archives/entry/housing_winn/
https://www.ccn.com/full-blown-us-housing-market-crisis-on-the-way/
Housing crash!!! LOL
Homebuilder confidence jumps to highest level in 20 years
CNBC
Dec 16, 2019
Builder confidence in the newly built, single-family home market jumped 5 points in December to 76, the highest reading since June 1999, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Anything above 50 is considered positive. November’s reading was also revised higher by 1 point. The index stood at 56 last December. At the worst of the housing crash, in 2009, builder sentiment hit a low of just 8.
___
Sorry Mille and other Perma Bears. Your wishes for a crash are not coming true, at least for the foreseeable future.
Renting long term is financial suicide, don’t do it.
We want to buy soon and are looking forward to the upcoming crash. It sooo expensive. It needs to crash 4sure. Want to buy a 50% discount sale. Was thinking during Xmas we will see some deals but nope. Not yet. Gotta wait some mo for the crash.
Soooo happy about the crash!!! I wanted to buy for a while but finally the house prices are crashing. I will buy this time, was too young when 2008 happened. This time I am ready! I am still living at home but will soon be free!
Woody
“
Millennial right now if you are a Financed Buyer of houses outside of FHA limits there is a strong buy indicator right now. Most of the high end housing has fallen substantially over the year and with ultra low interest rates your monthly cost has fallen almost 20% from 2018.â€
Very true. For Over 1mio dollar homes, prices fell substantially. Under 500 is not getting softer and quality homes in the 600-750k still sell quickly.
What strong buy indicators are you referring to? I would appreciate if you could elaborate
The buy indicator compares the cost of rent vs the cost of ownership in historic terms. So if you had a market where it was historically 30% more expensive to own then rent and now it was only 20% more then it would flag as a buy at a 10% discount. It does not take into account the cost of the home only it’s monthly cost hence the financed buyer inclusion.
Woody, Do you track it for certain markets or nationwide? Do you have a website/link? Thanks!
HOUSING CRASH!! LOL
“U.S. homebuilding increased more than expected in November and permits for future home construction surged to a 12-1/2-year high as lower mortgage rates continue to boost the housing market and support the broader economy. Housing starts rose 3.2% to a seasonally adjusted annual rate of 1.365 million units last month, with single-family construction racing to a 10-month high and activity in the volatile multifamily sector increasing for a second straight month, the Commerce Department said on Tuesday.”
More sad news for Millie and Co.: ”
Builder confidence rose by 5 points in December to 76, the highest reading since June 1999″
https://www.foxbusiness.com/markets/housing-market-hot-2020-could-be-better
CNN
Dec 17, 2019
America’s housing market is coming back to life just in time to boost the 2020 economy
“Low mortgage rates, a strong labor market with rising wages and unemployment hitting at a 50-year low are underpinning the solid fundamentals that will help real estate next year. The housing market is probably going to be a modest tailwind to the economy,” David Berson, chief economist at Nationwide, told CNN Business.
The good news culminated in the Housing Market Index this week, which surged to a 20-year high in December.The survey is published by the National Association of Home Builders and Wells Fargo (WFC).
____
When even CNN is throwing in the towel, you know 2 things are happening. 1. Housing prices will see double digit growth next year and 2. Trump is easily winning a second term.
2020 gonna be LIT as the youngens say, LOL.
Everyone predicting some huge crash and claiming that they will SWOOP in and buy up the farm with their saved $$$$ seem to think that they are immune to any economic crash and everyone else is not…..so “when” the market crashes….no one will have money nor be brave to buy these cheap houses and only THEY will still have their well paying job and no fear to go in and buy houses hand over fist…..
METHINKS the only economic downturn they’ve lived thru was 2008. We hadn’t had that kind of economy since the late 70’s early 80’s. I am afraid you probably will have to wait until 2030 or 2040 to see that again if ever.
Sally, shhhhhhhhhhh….. You shouldn’t be speaking truths like this. Your going to upset them. Let them keep thinking they are special.
somebody up thread said their house went up 60K in the past 90 days or so.
i had to come in here and say what the og poster also said: that the value of his house is inflated. 60K in 90 days is totally completely ridiculous.
keep in mind there is a new QE by the fed to the tune of $60 billion a week, and almost $4 TRILLION dollars of money into the repo market, almost average $100 BILLION DAILY since september 17th when repo rates spiked.
that money goes directly into the assets of the top 10% (stocks, bonds, derivatives). the fed announced last week that they will be pumping $3 TRILLION DOLLARS into the repo market in the next 30 days.
that is a cummulative $7PLUS TRILLION dollars pumped into the assets of the top 10% in just 120 days!
in the meantime, we are told always to cut SS cut medicare and on any other public policy issue we are told there is no money, and we always have our hands out BEGGING FOR CRUMBS;
yet the fed gets to magic $7 TRILLION DOLLARS + (2X the cost of the iraq/afpak/911 wars over 10 years) out of the air and pump it into the wallets of the top 10%?
where is the law? what mandate does the fed have to do this? none. zero mandate.
California needs its own public infrastructure bank and issue its own bonds rather than go to JPmorgan et al., so does L.A. county. doing so would free public policy from wall street profit motives visavis bonds etc. thereby freeing up money for the majority of people rather than the top 20%.
do i think any of that will happen? no.
mark my words, you got a death grip on greed, but there will be blood.
mean regression is a bitch, then you die.
everything is great; nothing to see here, but manufacturing in 5th consecutive month of recession; ok manufacturing is ONLY 8-9% of total us GDP; FIRE sector is 40%, but hey who cares, the dow is up! hahahahahahahahahahaha..to eternity
https://www.frbatlanta.org/cqer/research/gdpnow
https://apps.newyorkfed.org/markets/autorates/tomo-results-display?SHOWMORE=TRUE&startDate=01/01/2000&enddate=01/01/2000
I have a Millennial friend. :^)
My millennial friend called my to ask me to loan them money to buy Bitcoin. I said “No.”
My Millennial friend called me and asked me to loan him money to buy a home he couldn’t afford. I said “No.”
My Millennial friend called me and asked me to loan him money for some risky startup business. I said “No.”
My Millennial friend no longer calls me. ;^(
Well, houses in my neighborhood have continually increased in value based on comps. 3 recent sales with the latest an all time high. Another just went on the market substantially higher than I think it will ultimately close at, so to say the bubble has popped I don’t think is true.
Most of these houses selling are boomers downsizing and young families moving in it’s a nice change to see.
The aforementioned listing at a record high, will probably sell for 10% less and many will point to a sign of the crash, but, in all honesty it’s just way over priced and will close pretty close to where the others have been closing.
Of course all RE is local and this is simply my anecdotal evidence, however, at least I can post with as much of my truth as possible. Unlike a couple doomers on here, one of which has multiple personalities including multiple screen names.
I agree Dan. Lots of kids in my neighborhood recently. A SFR in a good neighborhood / school district will always be a good long-term investment. There were two sales recently on my street and neither sat for more than 60 days and both sold for 1% below list (after appreciating year-over-year).
This is exactly what’s happening everywhere. The problem with Millie and his fellow doomers here is they believe the MSM. The MSM that told us forever how Millenials were changing (fill in the blank). And especially about housing. Oh wow, look 25 year olds want to live in downtown condos!! So that means the suburbs are dying man!!
It was really idiotic because of course young people do things differently than old people. Every 25 year old has wanted to live in a downtown condo forever. When I was 25 I lived in a downtown apartment. But the MSM made it sound like millies would stay 25 forever. But guess what happened? Those 25 year old singles who were CHANGING EVERYTHING turned into 35 year old parents with kids, who want what every 35 year old with kids wants…a nice home in a safe neighborhood with a yard and good schools.
The more things change the more they stay the same. I think some old white guy said that. LOL.
Millie is old news. Looks like Gen Z is figuring it out. They are moving to more reasonably priced areas where they can afford their own pool- not sneaking into their neighbors and praying for a market crash.
https://www.marketwatch.com/story/watch-out-millennials-generation-z-is-poised-to-dominate-homeownership-2019-12-19?siteid=yhoof2&yptr=yahoo
The ironic thing for Millies, who hate boomers, is that they are just like boomers. The two generations are so similar. Both whiny attention seekers. GenZ is going to be a lot like GenX. Just quietly going about their business, being successful in life without seeking a lot of attention. And of course success in life includes home ownership.
Yup, Already POPPED- Existing Home Sales Unexpectedly Tumble In November
https://www.zerohedge.com/personal-finance/existing-home-sales-unexpectedly-tumble-november
Yup, Already POPPED- Shirley, MA Housing Prices Crater 25% YOY As Boston Area Mortgage Defaults Reach New High
https://www.movoto.com/shirley-ma/market-trends/
You’re gonna read it…. and like it.
Yup, Already POPPED- Shirley, Smithfield, ME Housing Prices Crater 15% YOY As Portland/Boston Housing Market Tanks
https://www.movoto.com/smithfield-me/market-trends/
As a noted economists stated, “If you paid more than $500 an acre, you paid too much.â€
Yup, Already POPPED- San Diego, CA Housing Prices Crater 12% YOY As One Broker Quietly Admits, “Mortgage And Appraisal Fraud Is The Norm.â€
*Select price from dropdown menu on first chart
https://www.zillow.com/san-diego-ca-92037/home-values/
As one noted economist advises, “Mortgage debt is the most toxic and damaging debt of all. Avoid it at all costs.â€
Yup, Already POPPED- Minneapolis, MN Housing Prices Crater 21% YOY As Twin Cities Housing Demand Tanks On Rising Unemployment
https://www.zillow.com/minneapolis-mn-55414/home-values/
*Select price from dropdown menu on first chart
A noted economist stated, “A housing ‘recovery’ is falling prices to dramatically lower and more affordable levels by definition.â€
Housing price cuts are beginning in my county –
https://www.vcstar.com/story/money/business/2019/12/19/ventura-county-real-estate-homes-for-sale-reduced-pricing/2692709001/
Same is happening here. Price cuts across the board and the overpriced junk just sits and sits. Sellers seem a bit delusional. We are on the brink of a Recession and millennials just aren’t dumb enough to buy the peak. A lot of young adults do the smart thing and live with their parents.
So glad the market is crashing now. Was about time!
The Federal Reserve just announce another half-trillion in free money for the end of the year, to prop up equity and bond market. You folks waiting for a housing crash are doomed. As long as the Fed can paper the bubble, they will.
I wonder why they didn’t just give free money to stop the bubble from popping back in 06
JOE, I have been preaching the same thing for god knows how many years. If you think you outlast or outsmart the Fed, do so at your own peril. Everybody who tried this the past decade was utterly smashed to pieces. As long as the USD is the world’s reserve currency and the US military is the strongest in the world, things are dictated on our terms. And that means no tanking anywhere in sight.
This is not rocket science folks. Don’t over complicate things!
So about this supposed crash……
LA Times
Dec 19, 2019
Southern California’s housing market is heating up. Median price rises 5.6%
“The median home price for the six counties rose by 5.6% in November from a year earlier, to an all-time high of $549,000, according to data from DQNews. The percentage increase was also the largest in 15 months. Sales, meanwhile, also rose 5.6% — the third consecutive increase.
Further price gains will disappoint many Southern Californians struggling to purchase a home or who are already locked out of ownership in a region where tent encampments line the street. But Thornberg said prices are rising because enough people can afford the limited number of homes for sale. According to the California Assn. of Realtors, 25% of L.A. County households could afford the median-priced house in the third quarter, compared with 22% a year earlier and a low of 9% during last decade’s bubble”
___
What does Mr Landlord keep telling you kids? Everyone together now….RENTING LONG TERM IS FINANCIAL SUICIDE, DO NOT DO IT!
So 25% of the population can afford to buy a home. What about the other 75%? More for the elite less for the 99%. In a few generations home ownership will be a thing of the past. All homeowners will be owned by govt, banks, and the elite. Wait that sounds a lot like right now. If 75% of the population can’t buy a house is there not a problem? Apparently not as its catered to the 25%
“In a few generations home ownership will be a thing of the past.”
That is how it’s been in the premiere cities of Europe for decades. In Paris, Rome, Berlin, the majority of the population rent while the elite minority own the properties and pass them down from generation from generation. We came from Europe and we are destined to follow in their footsteps.
The decade will be over next week and there was NO TANKING of any kind in the RE market. There were plenty of opportunities to buy. But we constantly heard the bears with their doom and gloom.
2012: Don’t catch the falling knife
2015: Things have topped out, interest rates are going way up
2019: The 50-70% decline is in full swing.
Will there be a correction in the future. Absolutely. From past history, it takes YEARS for the market to bottom. I hope Millie can convince his wife to keep living in the small apartment in the shady part of town for a good part of the next decade. At least there is a pool to sneak in to. Listen to Mr. Landlord regarding longterm renting, DON’T DO IT. Houses in the south bay are selling very rapidly at record prices. Just wait until March or April for the real action.
Got a piece of junk email from a realtor. Here is some of what it said:
This coming year the housing market will be defined by 3 things- inventory, interest rates, and appreciation. But the biggest issue the housing market will face in 2020 is an inventory shortage. There aren’t enough homes on the market for buyers, especially on the lower end of the market. This is a topic that has come up frequently within the past several months.
Inventory shortage among lower priced homes. Makes sense.
More horrible no good awful news for the doom and gloom gang…
S&P 500 closes at record as rally stretches to fourth week
CNBC
Dec 20, 2019
“Stocks ended at record highs again Friday to cap a week of solid gains as geopolitical risks abate toward the end of a blockbuster 2019. The Dow gained 78 points, while the S&P 500 added 0.5% and the Nasdaq rose 0.4%. The S&P 500 was up more than 1.5% for the week and posted its fourth consecutive weekly gain. The Dow and Nasdaq were up 1.2% and 2.1%, respectively, for the week.”
Fills me with joy to see this market crash. Can’t wait to buy half off!
Glad I waited. Can’t imagine how it feels to buy at the top and then see it crash
Yup, Already Popped-From Yahoo Finance. “You might not think that Barack Obama, Giorgio Armani and Lachlan Murdoch are bargain hunters, yet each of them just bought luxury property for much less than the original asking price. These deals speak to a number of under-recognized financial crosscurrents—everything from central bank policy to taxes to technology and trade wars—roiling the world of real estate.â€
“Weakness in high-end real estate doesn’t make sense right now. The stock market is roaring ahead, and with wealthy investors benefitting disproportionately, prices for mansions, trophy homes and apartments should follow suit. Not this time.â€
‘Note that the three sale prices are down significantly — 47%, 36% and 57% respectively — from what was being asked only a few years ago. These aren’t haircuts, they’re massacres. It’s the kind of price action you’d expect in a stock market rout, not a rally. Remember the S&P is up 28% this year for Pete’s sake!’
What’s the word missing from this article? Bubble. The MSM can’t admit a bubble has popped when they never reported on it as such in the first place. Even yesterday the NYT had the bubble word, but it was a quote. And the other day the same paper said hey, maybe there’s a bubble – in Europe!
What is this crash people keep referencing here? In the S. Cali markets I follow prices are still sky high and climbing with slim inventory in the entry level and mid-range levels. So what the h*ll are you people talking about? Are you high, drunk, both or maybe this “crash” is some Millennial wet-dream? Please let me know because I don’t see it. Thank you.
It Already Popped- A report from the Los Angeles Times in California. “Neal Baer, the pediatrician-turned-TV-writer is asking less than he paid for his Brentwood home. The charming Midcentury just hit the market for $3.35 million — or $150,000 shy of what he bought it for five years ago, records show. It’s not his first attempt to sell the property. He first floated it for sale at $4.195 million in 2017 before trimming the tag to $3.695 million a year later.â€
The San Francisco Chronicle. “Has the Bay Area housing market finally priced itself out of reach for, well, everyone? According to a new survey of more than 100 economists and real estate experts, the answer is yes. As for the nation’s worst real estate market in 2020? The winner of that unfortunate designation is the Bay Area. San Francisco was at the top of the list for expected underperformers — 64% of experts believe it will underperform in 2020. It was closely trailed by San Jose: 61% of experts believe that city’s housing market will underperform.â€
“The question is, will the Bay Area experience slower growth for the right reasons? Unfortunately, the answer is no. In a well-functioning housing market, housing prices would be falling because increases in demand would result in increases in new construction. In the Bay Area, a major reason for the slowdown is that people are leaving — and taking their need for housing with them.â€
From ABC 7 News. “The housing market in the Bay Area will experience a cooling period this year, similar to 2019, according to a national survey conducted by Zillow. ‘Just based on interest rates and stock prices going up and down and fluctuating, I do believe there is a little bit of a slowdown,’ Simon Shue, a real estate agent with Compass said. ‘It’s still in an upward trend but we’re experiencing a little bit of a plateau.’â€
The Bay Area Newsgroup. “There’s a home on South Jackson Avenue in San Jose’s Mayfair neighborhood that has it all: excellent location within walking distance of a school, parks and shops; a nearly acre-sized backyard; and — a rarity in California — a basement. But for at least a decade it has sat unoccupied — one of an estimated 46,000 such homes in the five-county Bay Area. This estimated total comes from new data released by the U.S. Census Bureau in December. The bureau’s data is the best available, even though it includes some newly built homes that are not yet occupied.â€
“Based on the new census data, San Francisco has the most vacant homes in the five-county Bay Area at 11,760. It’s followed by Oakland at 5,898 and San Jose with 3,985. After that, Berkeley has 1,738 vacant homes and Richmond has 1,560. The margin of error in most other cities is too high for the data, which is based on a five-year aggregate of numbers compiled from 2014-2018, to be reliable.â€
“There are an additional 21,788 seasonal or occasional-use houses in the Bay Area — think weekend homes or beach cottages. Of those, 8,523 are in San Francisco, 1,337 are in San Jose and 1,060 are in Fremont. It’s not clear how the census data accounts for Airbnb properties and other similar, short-term rentals.â€
Yup, gotta be pretty desperate to think/hope/pray/lie that housing hasn’t popped, lmao
It Already Popped- Logan, UT Housing Prices Crater 17% YOY As One Salt Lake City Broker Concedes “Our Business Is Ethically Bankruptâ€
https://www.zillow.com/logan-ut-84341/home-values/
*Select price from dropdown menu on first chart
The Beatings Will Continue
https://www.youtube.com/watch?v=Ux9YdDee2DY
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