The growing underclass of the Orange County Bubble:Â You need to earn an hourly wage of $28 to afford a basic one-bedroom apartment but 68 percent of OC jobs pay less than that amount.
You have to love the Orange County bubble. It is fitting that Disneyland is in Anaheim and actually has some of the poorest households in the entire county. You have a world of Princesses and fantasy and right in the same city you have topless dancing fulfilling a fantasy of a different sort. You have cities like Irvine where most of the new homes are selling to investors or foreign buyers. It is an interesting county. Yet a new report continues to show that California is no place for the middle class. The report also found that Millennials are leaving the area while Taco Tuesday baby boomers and older folks are the only cohort actually expected to grow in proportion relative to other age groups over the next 25 years. It is also no surprise that plastic surgery and expensive leased cars dominate the crowded streets. Unlike L.A. County that understands that there is a large struggling class of people Orange County seems to be in a fog when it comes to the deeper realities.
The growing underclass of Orange County
So let us look at some challenging trends:
“(OC Register) — To afford a median-priced, one-bedroom rental unit, an hourly wage of $27.62 is needed. Yet 68 percent of Orange County jobs pay below that.
— Orange County’s cost of living is almost double the U.S. average (87% higher). Housing costs are 356% higher than the national average.
— Residents 65 and older are the only group projected to grow proportionate to other age groups in the next 25 years.
— 48 percent of children are not developmentally ready for kindergarten
–Nearly 60,000 households are on waiting lists for government rental assistance.
Michael Ruane, an affordable housing executive who was the county’s project director on its first indicators report 17 years ago, said the data show “there are two Orange Counties.â€
“What’s striking is the enormous variation. You have poverty in a prosperous region. You have a knowledge economy with high wages, and a tourism economy with lower wages.â€
First, let us examine costs for housing and income:
When people are spending half of their income on rent, there is little left over to save. Plus, you need to earn roughly $28 an hour for a basic rental but many jobs in OC don’t pay that (think of working at Disneyland for example).
Housing cost are 356% higher than the national average, which makes it tough for people to save to buy a home:
Fewer and fewer people that live here can buy so they don’t. You have old school Taco Tuesday baby boomers going gray and fragile in their homes while new buyers are dual-income professionals, investors, or foreign cash buyers. Those Taco Tuesday baby boomers are the broke folks in their hood while the new buyers are cruising around in Teslas and BMWs. So as the report finds, oldies are going to stay in their homes and are also welcoming back their economically struggling adult children back.
The fact that nearly half of kids are not ready for kindergarten is troubling. This is the future. If they are not being adequately prepared, are they going to be able to buy that $700,000 crap shack when it is their turn?
And finally, the vast majority of the new building is focusing on higher income housing:
So is it any surprise that you have a larger number of people just treading water in OC? But of course, don’t let that burst your perception of the OC.
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381 Responses to “The growing underclass of the Orange County Bubble:Â You need to earn an hourly wage of $28 to afford a basic one-bedroom apartment but 68 percent of OC jobs pay less than that amount.”
Orange County is lost already- too many illegals packed like sardines into cramped apartments, Chinese nationals hiding their money in real estate, and leftist moonbats voting for regressive policies that destroy the quality of life in CA just for the sake of politically correct virtue signalling.
Endless immigration and birthright citizenship is turning CA bluer every day, yet because of geography, weather, and existing industry/infrastructure, CA has been succeeding overall in spite of all these factors… but it won’t last forever; eventually the leftist morons of CA will realize their “everyone can come to CA, and we’ll pay for it!” stance was a mistake but by then it will be too late… SAD!
CA has always been a grifter’s paradise. OC is ground zero of grifters. You know a grifter based on fashionable looks, leased luxury cars, Equinox memberships, attending (insert evangelical church) to troll for “new investors” over coffee and donuts, etc., all precariously perching on a mountain of debt. Every 10 years the debt earthquake happens, and many of them get shaken out, to places like Denver and Phoenix, with a fresh batch of young grifters coming in from all over. It’s the circle of life.
The leftists are to blame for Orange County? It’s been Republican-dominated for decades. What on earth are you talking about?
Republicans in CA, especially in the big cities on the coast had zero power for a very long time.
Try again!
Democratic voters outnumber Republicans in Orange County’s three largest cities including Irvine. In the 2016 presidential election, Clinton beat Donald Trump by nearly five percentage points, or 39,000 votes, in the county.
http://www.ocregister.com/2016/02/19/irvine-is-latest-orange-county-city-to-tilt-democratic/
http://www.latimes.com/nation/politics/trailguide/la-na-election-aftermath-updates-trail-orange-county-turns-1478716018-htmlstory.html
“It’s been Republican-dominated for decades. What on earth are you talking about?”
If we were in 1995, you’d be correct. In case you haven’t noticed California of 2017 is nothing like it was 20 years ago.
The 48% of children not ready for Kindergarten are the Mexican immigrants that are of the servant class, as the English Overlords in India use to refer to the locals. Yes, to maintain our style of living, we need the servant class. California is great in this regards.
I knew that cat would come flying out of the bag in one of the first comments.
Now, you sound as non-PC as Trump. You are going to hurt the sensibilities of snow flakes.
I hear about around Monterey County and other ag areas you have public schools that are essentially baby sitting immigrant kids and don’t provide any education. Likely because they need labor that is not too educated but will remain here to serve the farmers.
yes, legal immigrants want too much money. It is preferable for many reasons to employ the undocumented. My friends in Marin County do this, but of course, we are all register Democrat and donate money to the party. Hypocrisy in the pursuit of money has never been a problem with us.
Homerun,
I grew up in Monterey & San Benito and do not feel this is the case. Could the teachers & schools be better? Sure! But it takes more than schooling to raise a child. The reality is that these children’s parents are usually never around and don’t give a shit about their children. They say they come here for a better life for their children but that is hardly the case. They come here for themselves.
@ Don Ciccio
Well I have heard from friends who live in the Salinas area that literally their mother in law quit because the other teachers claimed the person was making the other teachers look bad if one was making an effort to teach some of the immigrant children. Also some these children have social issue, which it made it difficult to even bother helping them. Although some teachers maybe more adaptable with these children than others. Just seems a bit suspicious from what I have heard.
Homerun – I am specifically from Salinas. Your story seems true. I just don’t think it is extremely widespread. The worst high school in Salinas is Alisal High. This issue might be more widespread at that specific high school.
The 52% that are “READY” get the pleasure to be injected with a COMMON CORE so that they end up no better off than the other 48%. You see Equality of OUTCOMES works!!!!!
If you only have a small down payment, you can only buy when private mortgage investors are confident in the value of the collateral behind the mortgage, which is your home. So, now is your chance. If you miss and wait till the recession hits, you have a difficult time getting in without a large down payment since mortgage investors will shy away from buying debt with falling home prices meaning falling collateral. In cheaper markets where GSE financing works, you can buy with a small down in a recession But, in higher priced markets, GSE financing is not available, and you borrow from a private lender, so you will have difficulties. The bottom line is if you buy in a high priced market with a small down payment, you have to take a chance and buy high because that is your only way into the market.
“… and you borrow from a private lender, so you will have difficulties. The bottom line is if you buy in a high priced market with a small down payment, you have to take a chance and buy high because that is your only way into the market.”
Maybe if you type it enough times, it will come true.
It is true. I was a private label, conventional, whole loan, CMBS, and CMO mortgage trader. That is how I know.
Then you should also know that different lenders have different requirements and standards. The standards may change a little with the market, but not enough to prevent a top tier borrower from getting financing.
Let’s take a hypothetical (but realistic and very common) potential borrower. $150k combined income, no debt, all six FICOs ranging from 770-820, ten years working in the same career. They have 20% to put down on a property that will result in a 37% back end.
You’re actually telling me they won’t be able to find a lender to approve them in a down market? That’s BS and you know it, so at this point I guess you’re more concerned with sticking to your story than being right.
Being top tier isn’t difficult or rare, and finding a lender is like shooting fish in a barrel for them in ANY market.
jt specifically said “small downpayment.” Your example used 20% down which is definitely not considered a small down. The buyer in your example should have no problem getting financing. Change that 20% to 5% are everything changes.
Yeah I chose to ignore that, because he changed his argument. In multiple prior threads he just made the blanket statement that it was difficult for anyone to get a loan in a recession. Then he amended that with “on the coast”, and now “small down payment”.
Yes, I imagine it would be difficult to get a jumbo loan with 5% down on a $3m Manhattan Beach property.
Jt,
so basically: Buy high with a small down payment and buy now or you wont get into the market!
Brilliant, you sound like Warren Buffet!
/sarcasm off
It is not BS. When an investor decides the mortgage securities they hold over-exposes them to house price volatility, which is the case with private lenders ( i.e. non GSE paper ), they stop buying. It does not matter what your individual numbers are. They want no more non-GSE pools, so you get no mortgage. They may still buy GSE paper since they get protection, but the limits on those loans are below what it takes to purchase a decent property in LA/OC.
“but the limits on those loans are below what it takes to purchase a decent property in LA/OC.”
Jt, you assume the prices in RE stay the same as they are today. In a RE collapse, that is not the case; prices will much lower. Therefore, those limits will not be a problem.
Your funny, private lenders are not buying anything right now, risk is too great and rates are too low. Why compete against the artificial low rates via the fed. The bankrupt govt. entities are still buying 80% of loans though they are in receivership. In fact, they should have been wound down by now. It tells me the smoke and mirrors economy and hyped RE market is just that
CD wrote: Your funny, private lenders are not buying anything right now, risk is too great and rates are too low. Why compete against the artificial low rates via the fed. The bankrupt govt. entities are still buying 80% of loans though they are in receivership. In fact, they should have been wound down by now. It tells me the smoke and mirrors economy and hyped RE market is just that
Very true! We just bought a house. We got a loan from NBKC Bank, 30 days later, they sold our loan to Wells Fargo and got a letter from each stating as much.
Then about two weeks later, we get a letter from Fannie Mae stating that Wells Fargo sold our loan to them, but Wells Fargo will still be our loan servicer.
So after all was said and done, our mortgage is now owned by the government!
L.A. will be hosting the Olympics in 2028. Housing to skyrocket in 2026 and tank in 2029.
So we wait 12 years to buy? Many of us will be dead by then, including some of the Millennials posting here. Just the odds. People die at every age.
I’ve no desire to wait 12 years for a nice house. Better to overpay now, if you can afford it.
that was a joke…
The opening ceremony will have cholos driving into the arena in low riders. Followed by the march of the baby mamas, with a synchronized dance that includes strollers going in various formations. The release of doves will be replaced with chickens standing on discarded couches.
“The release of doves will be replaced with chickens..”
These will be free-range chickens, and the eggs have more Omega 3’s (much healthier)
Classic. I suppose they will also feature no gender specific bathrooms – just open pits to be more “inclusive”.
The “Drive-By” will be introduced as a new summer event in the future LA Olympics.
The concession stands will accept SNAP and EBT.
There will be “Preferred Seating” for illegals and low-income spectators.
Due to diversity laws any event without minority representation will be cancelled.
Next to the Olympic Village in the parking lot there will be a Tent City with it’s own “Homeless Olympics” featuring timed shopping cart races.
Damn Jed, you’re on fire!
Cant wait to see the “indeterminate gender” greco-roman wrestling and competitors with hijabs.
Oh I forgot that Caitlyn Jenner will light the Olympic torch during the opening ceremonies and then receive a gold medal “just because”.
I think that RE prices in LA are going to be influenced negatively far more than Olympics by the dead and illegals voting in LA:
https://mishtalk.com/2017/08/05/california-has-11-counties-with-more-registered-voters-than-voting-age-citizens-registered-voters-144-of-egilibility/amp/
Ha! Since housing historically has been in 7 year cycles, it will crash starting this year, bottom out in 2021 and reach a new peak in 2026. Buy in 2021 and enjoy the Olympics but sell by 2028.
I heard they hired this guy.
https://www.youtube.com/watch?v=zW5gklIKcDg
QUOTE:
This is the complete NWO, satanic tunnel opening ceremony at the Gotthard tunnel in Switzerland. The ceremony took place in two parts. There is a short clip of dignitaries and elites spliced in between the two ritualistic ceremonies.
The first part of the ceremony took place in a train house before the elites were loaded onto the train and sent through the Gotthard tunnel. The second part of the ceremony took place after the trip though the tunnel.
Quote: “Those Taco Tuesday baby boomers are the broke folks in their hood while the new buyers are cruising around in Teslas and BMWs.”
That is just dumb. My renters drive big priced vehicles while they pay me north of $4,000 per month. One has an AMG MBZ. In the meantime, I drive a 5 year old Toyota and a 6 year old Honda Pilot. If you have money, you are best to keep it hidden by driving vanilla vehicles.
JT, this is another point where we think alike. Or maybe it was this mindset which helped us succeed at the RE game!!!!…
I just have a truck and a Subaru Outback although I can afford a Lamborghini. I like my money to work hard for me. For me it is more important to have free time and travel. On top of that, I don’t care to impress anybody.
I agree. But, even more than that. Driving a big price tag car just advertises your wealth, and criminals take notice. You are better off sliding by in a older normal car.
Buying a new luxury car is pretty much the stupidest financial decision one can make. It’s funny how people oooh and ahh when they see someone in a brand new $70K car. I look at them and think “what a fucking idiot”.
It’s not that terrible, you just have to keep and maintain it instead of swapping every two years and taking the hit over and over – I bought one of those and love it but it’s now almost 8 years old so the shiny has been almost fully amortized. (Bought the prior one new & shiny too, now in year 17 at 225k.)
Jim at Law, are your vehicles Lexus? BMW and Mercedes are money pits.
Each to their own I guess. The real smart play if you truly want a fancy name plate is to buy an off lease one that’s 2-3 years old. The initial depreciation hit is paid by someone else, you still have a relatively new, low mile car under warranty that can impress people just as much as the newest and shiniest. People who are impressed by a BMW or Mercedes don’t know the difference between a 2015 or a 2017, they just see the badge and go ooooooohhhhh ahhhhhhhhh, that person must be important. LOL
You can buy a fully loaded, lightly used, certified pre-owned Ford Fusion for 10-12k. Great looking car! I don’t understand why anyone would pay more than 30k for a vehicle… It better s*** my d*** while I’m driving if I’m paying more than that!
One Audi that was 60k in 2010 and one Ford that was 40k in 2001. Both new and beautiful when I bought them, the Audi still looks terrific, the Ford could use new paint but she has served me well for almost two decades and I will keep her until she drops or I do.
That is very accurate, especially for young people who have the following choice:
a. Spend 40K on a new car.
b. Keep your old beater and use that 40K to get into a socal property.
Going with Option a could be the biggest financial mistake of your life!
Just heard the announcement, Los Angeles agrees to host the 2028 Olympics. How awesome is that having the world’s greatest sporting event in our backyard! Can’t wait!
You won’t think it’s so effing awesome when you see the public bills for it, or experience the disruption. I can’t believe that people STILL think that these over-hyped events with their massive crowds and still more massive public costs for an event that is very short-lived and, worse, does not help local businesses at all outside the major hotel chains, are good for their city. A few businesses will clean up while the majority away from the game venues will lose traffic, and the jobs the event brings will mostly go to people who travel to take them. At best, the event is a wash, and it will end up costing Los Angeles billions of dollars more than advertised, just as it has nearly every other city that hosted it. As it is, we in the major cities have been bending over and picking up the soap, to put it delicately, for major sports team owners for over 50 years, soaking the taxpayers to pay for sports stadiums for giga-rich team owners.
Save Los Angeles- resist this event for the good of your city!
Laura, I don’t think you know what you are talking about. The selling point of LA is that the infrastructure is already there. Athens and Rio literally finished building stadiums and arenas a few weeks before the games started, not to mention their economies were horrific. The 84 LA Olympics was an economic success, this next go around won’t be any different.
Yes, traffic may be worse for a few weeks. That is a small price to pay to have the world’s spotlight on your city during that time. I vividly remember the 84 LA games, that was a high point for the city. Anybody who claims otherwise doesn’t know what they are talking about. I am excited and can’t wait.
Remember, this blog’s name is “How I learned to LOVE socal and forget about the housing bubble.” There is by far more hate here than love.
Lord Blankfein: Yes, traffic may be worse for a few weeks. That is a small price to pay to have the world’s spotlight on your city during that time.
Considering all the movies and TV shows that have been/are/will be shot in Los Angeles, plus the Oscars, Grammies, SAG Awards, and other awards and events, I’d say the world’s spotlight is already 24/7 on Los Angeles. The Olympics is at best an additional minor blip.
Lord Blankfein,
I think you are either a bit naive or own a construction company that is hoping for a lucrative contract with the City! The last Olympics was 1984. And despite some facilities being in place, I’m sure the planners will figure out how to spend $3 – $4 billion or more … Trouble is, there are a lot more problems today and it will be worse by 2028 at the rate California and the L.A. are are going! There are way more people, mass traffic congestion, rapidly declining infrastructure, a growing homeless problem, masses of poor, horrible public schools, gangs, serious mounting liabilities, and there might even be water restrictions for everyone but the Olympic pool by then! But, let’s pat ourselves on the back and show off our fine City!!!
You’re correct, studies with football have shown new stadiums only shift the money to the location of the new stadiums, usually at tax payer expense.
The 84 games were boycotted by the best athletes. The infrastructure was barely working in 84, what is new since then? Only by total focus on America were the games successful, this won’t happen again and the Olympics don’t carry the demand they did now that everything is divided for broadcast. You will not see a repeat of 84.
Sorry LB: you’re 792 years off. It’s 2820!
The greatest sporting event already happened when we won the Stanley Cup.
no, actually we just lost the worlds greatest sporting event ,,at choice of venue we placed it in the bahamas?? when S.F was already built for it? how dumb was that, besides the fact that there was literally no place for an audience unless you were uber-rich with a yacht to watch it from, which wasnt that great considering the light air ,,,yes land is cheaper in the bahamahs,, but S/F has a unique situation for the event ,plus great wind ,,,,no matter what country you come from the poor folks fish and sail to eat, sailing,and the “Americas Cup” is the greatest and oldest sporting trophy in the world
This is weird. I have been led to believe, by very smart liberals, that everyone on the coast makes $100K+, unlike those deplorable meth addicts living in trailers out in flyover land . Now you tell me only 68% of jobs in Orange County barely pay $50K a year? And this is in one of the wealthiest counties in the state no less.
LOL
You made the same meth remark in the previous thread. Why so obsessed with meth?
SOL, that is the stereotype created by media (MSM) about the people in red states – they are dumb and drug addicts (in a word “deplorables”) and those living in blue states are smart and beautiful. The conclusion for the basement dwellers, indoctrinated snow flakes was obvious – vote Democrats if want to be considered smart and beautiful.
Or so the MSM and Democrats hoped for….
Flyover,
Of course everyone in red states aren’t dumb hicks. But the drug epidemic sweeping the middle of the country (heroin) is real. You are out of touch with the youth if you believe otherwise.
States with the biggest increase in drug overdoses year over year:
Location Statistically Significant Percent Change from 2014-2015
Massachusetts Yes 35.3
New Hampshire Yes 30.9
Maine Yes 26.2
Connecticut Yes 25.6
Not quite “middle of the country”, is it?
https://www.cdc.gov/drugoverdose/data/statedeaths.html
SoCal,
It may be anecdotal, but my experience driving in SoCal (LA and Orange Counties) is that I see plenty of drug addicts and homeless. For the casual visitor, it looks like an epidemic and a third world country. When I am saying third world country, I think that I overestimate. I’ve been in most of Bolivia, the poorest country in So America, and I did not see so many homeless as I saw in SoCal. Homelessness, for the most part is due to drugs and the effects it has on the brain.
And I don’t even mention the smell of piss everywhere. With the exemption of some rich enclaves it looks pretty deplorable to me.
I don’t think that the red states have a corner in terms of economic despair. Like the doctor said, look at the millennials in SoCal (as blue as it can be) about hope for a decent standard of living in a decent area, especially if they have children. Thank the FED for their policies which caused this despair.
The opiod epidemic is where people are dying. That’s worst by far in Appalachia. “Flyover country” oversimplifies because some places considered “flyover” have low rates for the country (like the northern Plains) and some of the coastal areas have high rates (New England.) But California is doing comparatively well, although there’s certainly still too much opioid use here.
Cities in other states have apparently been caught recently literally busing their homeless to LA. Buying them tickets and loading them up.
But California is doing comparatively well?
Far more Californians die from drug poisoning each year than die in car accidents. More than twice as many Californians die of drug overdoses than are murdered.
http://www.sacbee.com/site-services/databases/article56168810.html
In 2014, California lost 4,521 of its residents to overdoses, the largest number of any state in America.
http://forterustreatment.com/california-treatment/opioid-statistics/
Yes, California is doing well on drug overdose rates compared to other states. It’s got the seventh lowest rate. Drug overdoses have become the leading cause of premature preventable death nationally, surpassing car accidents and guns in general (not just murders, which are a distinct minority of gun deaths). Comparisons to car and gun death rates aren’t particularly meaningful because CA is *also* good on both of those.
Which “smart liberals”? Reference please.
Well, this is why the Inland Empire exists, lower cost of living
you mean …like pomona? upland?
pomona crap 1 beds 1000, crap hi crime hoods, next to 10 fwy, let me rephrase what you said: this is why adelanto exists, lower cost of living….next to a supermax pen….but hey they might build a federal highway there and empty crap land is now for sale upwards of a million doelars! right now! get in while you fit in..
Scary thing is… This isnt just California with these figures. Its the whole world.say what you want I think its #lategamecapitalism
#lategamecapitalism
by no measure what so ever can what we have now be called capitalism. Failure is an integral part of capitalism and since banks/wallstreet are not allowed to fail……….
The sad state of hypocrisy! Don’t see any of those Laguna, Newport, or Corona Del Mar fine folks complaining about their housekeepers, gardeners, cooks, nannies, or bussing tables at those fine eating establishments. They seem to love the other side of the tracks … lots of cheap help! Kind of like watching those Hollywood Hills/Malibu celeb’s lecturing us on climate, equality, social justice, while they live behind walled estates, have their body guards, and all that help, and even have someone keep their daily schedule! I always chuckle at the perennial celeb who drive their Tesla or Toyota Prius, while they have a 10,000 square foot electricity eating estate and have to fly on their private jets! Just like the L.A. Olympics … think someone would eventually realize they have enough unfunded liabilities, degrading infrastructure, homeless, poor, horrible public schools, and would want to take care of those problems instead of spending on the Olympics …
It’s time for another bond issue to pay for the Olympics. A nice round figure, 2% sales tax increase. Enough glossy advertising about civic pride “showplace of the world” stuff, and bingo, the mind numbed zombies will approve it.
I was part of the protest against the Olympics here in Chicago, that helped kill our bid for the 2016 games, may the Gods be praised. At least we dodged THAT bullet. The citizens were all for the event at first, having bought the lie that the games would not cost the public a dime. Well, it did not take long for the word to get out that not only would the games put the city on the hook for unknown billions of $$ in the expense of building redundant infrastructure (like a special express train to O’Hare that is already well-served by the Blue LIne), but had already cost the city $100M, which was paid to a crony developer for the old Reese Medical property which was to be demolished to build the Olympic village.
So it baffles me that Los Angeles would want to bid when almost every other city that has hosted this even in the past few decades, wishes it had not. Nearly every host ended up incurring costs far over budget- London went $12 B over budget and wishes it had never thought of hosting this boondoggle, and Atlanta, Rio, and other cities are stuck with rotting game venues that are useless for any other purpose- and massive bills to pay. Only Salt Lake City event, managed by Mitt Romney, was able to clear a profit. Worse, the games cause massive disruption and displacement of poor people everywhere they take place, and here in Chicago, would have displaced 10,000 residents of the poverty-stricken Washington Park area, pushing the residents into other neighborhoods and causing an even greater shortage of low-priced housing than is already the case. Los Angeles may be in better financial condition than woefully mismanaged Chicago, but not by much, for there is almost no major city in the U.S. that does not have massive pension obligations and debt overhang. And both Los Angeles and Chicago have quite enough going for them in the way of cultural and entertainment venues, architecture, beauty, and overall attraction, that the games will detract from them, while adding nothing, and damaging the quality of life for all residents of all classes. Please, Los Angeles, fight this event for the good of your city.
Laura: “So it baffles me that Los Angeles would want to bid when almost every other city that has hosted this even in the past few decades, wishes it had not.”
The people who brought the Olympics who LA will make out like bandits. Every one of the people involved has a brother in law somewhere who will get a $50M contract out of it. 99.5% of the city’s residents will wish the Olympics never came. But for that other 0.5%, it will be like winning the lottery.
Laura, you need to stop dodging bullets and give up on that corrupt bankrupt city of Chicago. Your inability to purchase another property in Chicago is a blessing in disguise. The universe is telling you to move to someplace like FLORIDA!
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https://www.delwebb.com/homes/florida/sarasota/north-port/cypress-falls-at-the-woodlands-209208
Samantha, I just (finally) scored a BEAUTIFUL condominium here in Chicago, in a building I’ve hankered to live in for 30 years, in a neighborhood I love, and for the right price. Cash sale, quick close, and there is NOTHING in the shithole of Florida that can approach it in architecture or amenity for less than $900K.
I paid a tenth that much. My taxes are almost nothing because it is a large building. It is a historic masterpiece that is on the Architectural Foundation’s annual Open House tour almost every year.
Amazing the way you think that YOUR place is heaven, while mine is a dump. All you know about Chicago is likely what you hear on Fox News. News flash: most of this city is safe. The neighborhoods where 95% of the mayhem takes place are on the far south and far west sides of the city, which are a good 20 miles from my nabe on the far north side, as the bird flies. Longer if you have to drive or take transit. I absolutely LOVE Chicago, a city with peerless architecture, and top tier cultural institutions, entertainment venues, and beautiful parks & beaches. BTW, I live withing walking distance of the far north side beaches, which are calm and uncrowded; within 5 blocks of rail transit, and have 24/7 bus and rail withing a few blocks.
What does crappy Florida have but sinkholes, high insurance costs (my house insurance would cost at least 5X as much as here), and killer hot weather and sun that would kill me within two months? The only reason that it’s even possible to live and get a mortgage in that place is because Florida and other coastal states get steeply subsidized flood insurance. Jerk those subsidies, and ordinary home owners will not be able to afford the place on any terms.
Speak not of political corruption- Florida and its cities have been known for that for decades. And corruption is everywhere where there is a confluence of money and politicians.
Ummm I think LA came out pretty well in 1984 Olympics!
https://www.marketplace.org/2016/08/05/world/1984-when-los-angeles-actually-made-money-hosting-olympics
Laura, I don’t live in Florida and I’ve never been there. I don’t watch Fox news–we cut the cable cord long ago.
However, I’ve been to crappy Chicago many times because we have family who live there. My in-laws finally became fed up with Democrat corruption and insane taxation. They finally sold their northside bungalow and retired to Florida where they love it. We also have family who live in Libertyville which is on the north side of Chicago. They plan to leave Illinois and retire to South Carolina after their youngest finishes college.
Not only is the weather in Chicago awful and brutally cold, it has killer hot weather in the summer–literally. Ever summer there are news reports of people dying in those old brick buildings that you delusionally think are architectural masterpieces.
You claim that your property taxes are low (at least for now) but you are going to pay high taxes on everything else. Enjoy being a tax slave on your Democrat master’s bankrupt entitlement plantation!
Newport is a funny place. I work on my car, cut my lawn, work on my house, and all the other normal stuff in life. My Newport neighbors think something is wrong with me. And they really look down on my 5 year old vehicles.
Back in the 90s, when I graduated from college, lots of people in Newport lead normal lives. Over the years, most of them have cashed out and a new crop of unusually stuck up people have taken their place. My wife always tells me they make her feel uncomfortable. I don’t care.
I grew up in Santa Monica in the ‘North of Montana Ave’ neighborhood. Back in the 70’s then a good salaried blue collar worker could afford a home there. I have watched the neighborhood over the past couple decades for some reason attract movie stars and producers, I guess who want to avoid Brentwood, Beverly Hills, Bel Air and Palisades. And have watched the influx of $100K cars, and the original 3 bedroom homes be torn down for 3,000 – 4,000 sqft mansions. But the attitudes have changed also,,,, it is no longer a neighborhood where all these elite even greet each other as they walk down the street.
Preaching to the choir, but women are always more susceptible to social persuasion, peer pressure and ‘keeping up’ with the yup-yups (who are typically always in hundreds of thousands of dollars in compounding debt).
As a 30-year old entrepreneur who has never held a white (noose) I mean ‘collar’ job – or any job working for someone else, I have always driven old ass cars with well north of $500k in the bank (since I was 18 no less). I used to live in Montecito and everyone figured I must have been ‘down and out’ driving a 1990 mazda miata painted dayglo orange with purple roll bar. Yep, they just hated. To them, the t.v. and invisible social pressure says that the $90,000 G-wagon says that you’ve “MADE IT”. Nope, being free and being able to do whatever the hell you want all day and all night is the true measure of freedom.
They can take their HOAs, their cookie-cutter mcmansions with recockulous overpriced price tags to boot and shove them down their craws. I will lick their yuppie tears from their faces when they realize how colossally they have screwed themselves. Thankfully, as I know very well, the truly wealthy do NOT live in Santa Monica, Malibu, Newport Beach…the faux-riche live there. The truly wealthy live well out of sight of the public, where they don’t have to deal with the constant jealousy of the peasantry.
Hearst Castle?
Boomhakalaka.
When I was at OCC 20-ish years ago, I learned real quick to avoid the superficial, vapid, status obsessed, gold digging grifters from Newport. Still to this day, people that live in cities with “beach” in the name don’t get a whole lot of my time. Especially when it comes to dating. (Fwiw, the ones that grew up there weren’t usually as bad as the ones struggling to make ends meet in scummy apartments within shouting distance of Huntington Beach and Costa Mesa addresses.)
Attention all Southern California realtors! Please promptly pivot from low inventory, foreign buyer narrative to Olympics. Sincerely NAR and CAR.
Yes!! We finally have a new theme…. a year ago it was Buy now, millennials will go out and buy in droves. A few months ago it changed to buy now, we have trump now, he is a real estate guy! And now its, buy now, the Olympics are coming!!
Millie,
Did people actually use Trump as a reason to buy, because he’s a real estate guy? I think Trump as president is a good reason to buy because under him the economy is on fire. And will continue to be. But the fact he was in real estate means nothing as far as whether r/e is a good or bad investment.
Are you just being facetious or were people really saying that?
It makes sense to think that with Trump RE would continue its upward climb with the economy.
Obamacare repeal/replace/reform whatever
Tax cuts
More easy credit policies
All of the above spur growth.
Although; both parties seem to be stifling his agenda so I think he’s somewhat neutered in this equation.
Of course nobody seriously believes that. The difference is Millenial is young enough to think he’s the one ‘outsmarting the system’.
We were all young once. Ah yes, the good ole days. Where you believe you have it all figured out.
Oh yes, people made this comment. Here on this blog. I wanna say it came from JT or NoTankInsight. They are usually good for comments like that but it would be too tedious to go back and find it. When I see a treasure comment like that I add it to my list.
Goudy,
“The difference is Millenial is young enough to think he’s the one ‘outsmarting the system’.”
Agree 100%. I believe I am winning by waiting for a housing crash. There is no doubt in my mind we will have another severe crash. Just a matter of time.
“We were all young once. Ah yes, the good ole days. Where you believe you have it all figured out.”
Unfortunately, the younger ones often believe the older ones when it comes to buying a home. I almost made that mistake. Many first time buyers believe that the older ones share their experience and wisdom with good intentions. That’s how many first time buyers get screwed big time. They don’t understand that the advice they are receiving is not helping them but the person giving the advice. I almost bought in 2014. That experience led me to finding this blog and other blogs like this which prevented me from buying. It opened my eyes about this rigged market that screws many and benefits only a few sleazy realtards and lenders. On the bright side, there are people like flyover and POH who are different.
“Obamacare repeal/replace/reform whatever
Tax cuts
More easy credit policies
All of the above spur growth.”
Tax cuts (or any form of supply side economics) have proven to be ineffectual drivers in the long term. The upper class won’t re-invest into the economy, and the lower classes need incomes to grow substantially before discretionary spending can pick up.
Easy credit policies when the economy is already over-satured with debt won’t do much. 8+ years of the same, and GDP growth can’t even reach 3%.
Real growth can only follow once bad debt has substantially removed from the system. And the latter entails a recession.
Sorry Mr. Landlord, The economy has been growing at less than 2%, why do you think rates are so low. The great unwind begins in fall.
the Bernanke Put is soon to end, the unwinding of balance sheet will cause some big hiccups in multiple markets and this BS fed grifted economy will finally be seen for what it is. A depression cloaked in 18 trillion dollars and 0% interest rates….
Many folks here could use some schooling on how the economy works..
I laugh at the phillips curve…The fed is thinking this is the 60’s……funny they are
cd,
Peeps like you have been talking about the great unwinding forever. The doom and gloom is always just around the corner. It’s always this fall, or this spring or this (fill in the blank).
I think I know a thing or two about how the economy works, given my degree was in finance and I picked up a thing or two working in finance for 10ish years. But maybe you know better since you read Zero Hedge. I dunno.
We had 2% growth because we had a fucking communist in the White House that you and your fellow Californians happily voted for. That nightmare is over Thank Allah! Did you happen to catch the fact last Q2 GDP grew by 2.6%? Probably not. ZH doesn’t bother with those stories. Did you happen to catch the fact the number of people on welfare is at a 10 year low? Did you happen to catch the fact that consumer confidence is at a 15 year high? No probably not. That goes against the “DOOM AND GLOOM FOREVER” mantra of the perma-bears.
“The upper class won’t re-invest into the economy,”
LOL. Unless people put money under their mattress they can do 1 of two things with their money
1. Spend it
2. Invest it (including just parking it in a money market account or CD)
Either 1 or 2 circulates the money back into the economy and is a stimulant.
Millennial,
Sounds like you are a single dude renting a room (not saying in a derogatory manger at all) and if bought in 2014, could be up 100k right now.
I guess if you’re single and in your 20s stacking cash and waiting could make sense. OTOH, you could buy and rent rooms to your buddies who will pay your mortgage for you while you pocket the tax benefits and any appreciation is gravy.
Unfortunately I no longer have time to burn with a 7yr old and 9 month old; the wife has been clamoring for years about buying and actually having a house with a yard instead of a condo with a patio. I have been a housing bear for years thinking the prices in 10-12 would continue their decline and dramatically underestimating the feds ability to save the market. My wife is pretty much always wrong when it comes to our finances (luckily I control the money), but, if I had listened to her 4-5 yrs ago I would probably have over 250k in equity today along with paying a lot less in taxes.
I do not see much inventory there’s low turnover with Boomers just sitting in their paid off houses and still strong organic and foreign cash demand therefore I see this sideways to up Market continuing.
“LOL. Unless people put money under their mattress they can do 1 of two things with their money
1. Spend it
2. Invest it (including just parking it in a money market account or CD)
Either 1 or 2 circulates the money back into the economy and is a stimulant.”
1. Their spending won’t make much of a difference. After all, the economy depends on mass consumption, not 1% consumption.
2. Corporations have been borrowed heavily at the lowest rate in modern history mostly to acquire other companies (job cuts), increase stock dividends, or to shore up stock prices. They have increasingly invested in automation and offshoring. Spending for domestic expansion has comparatively been weak.
“We had 2% growth because we had a communist in the White House that you and your fellow Californians happily voted for. That nightmare is over Thank Allah! Did you happen to catch the fact last Q2 GDP grew by 2.6%? Probably not.”
And? Did you know that quarterly GDP growth was greater than 2.6% at least 7 times under Obama? It’s annual GDP growth that we’re concerned with.
And Obama — Mr. privatize corporate profits but social corporate losses — is a communist?.
Dan,
“you could be up by 100k”
This is a common mistake by many people. It does not matter if you could be up by 100k, 200k, 300k. This so called “equity” does not equal savings in the bank. It’s just a book value that is tied to an overpriced house. Book value does not pay any bills. It has no meaning unless you sell (or take out home equity loans which means you are living above your means most likely)
What I do is cut out all emotions and stories and just look at the numbers. What is my cash outflow when I buy and what is the cost of renting the equivalent.
If I would have bought in 2014 my monthly payment would have been much higher than what the rent is considering taxes, tax savings, maintenance, PMI, P&I, insurance, transactions costs and HOA’s. What I monthly save by not buying goes into the bank (and more). I couldn’t care less how much this condo or house goes up in price during the bubble. People think the bubble makes them wealthy and that they are “up” but in reality they are locked in to an overpriced house. I can see them already, walking away from the overpriced house when the market crashes cause they cant bear that a millennial bought next door for half the price.
@Millenial
“Book value does not pay any bills. It has no meaning unless you sell”
This might be the dumbest thing I’ve ever heard on here. Any equity in a home is a direct offset to not paying rent otherwise. For every $100k that home values go up you can bet your ass rent is going up by enough to make up for it if not more. I have seen this firsthand in LA in the 10 years I’ve lived here.
If you had bought a home 30 years ago in California and have it paid off by now, you won’t have cash but you’ll have either:
1) A roof over your head and NO RENT PAYMENT
2) An asset that you can rent out and get cash from
“Book value does not pay any bills” … how on earth does that even make sense…
I take it if someone signed a deed over to you for a $1M property on the westside with the stipulation you can’t sell it for 10 years, you wouldn’t be too excited? After all it’s just book value…it’s useless! You might as well turn that offer down!
AA81
“Any equity in a home is a direct offset to not paying rent otherwise.”
I have not the slightest idea what you are trying to say here.
“For every $100k that home values go up you can bet your ass rent is going up by enough to make up for it if not more.”
Never heard that before. I know my rent has not gone up since I started renting.
“Book value does not pay any bills … how on earth does that even make sense…”
I want to try helping you but I am not sure what you struggle with.
Maybe the term book value confuses you? What this means is an unrealized gain or loss. This so called equity in your homes does not help you to pay for your cable TV or the water bill. It’s a value on paper. That value can vaporize easily when there is a correction/crash. Therefore, I disregard this argument when people say “you could be up by x amount”. Book value has no meaning to me. I am waiting for a crash and save money by waiting. I am basically getting paid for waiting. The buyer who pays much more per month for mortgage, interest, transactions costs, taxes, PMI, maintenance and insurance sees his house value going up during the bubble which gives him the feeling of getting wealthy…..until the crash. That’s when I come in and buy for half off. Therefore, the temporary “equity/book value” this buyer had, had no meaning. It was like a nice looking bubble that just burst.
As I said, most people make this mistake and don’t understand it. So you are not alone but I hope my explanation turned on the lights.
Good news Los Angeles!! First the Olympics now this. You guys are on a roll. LOL
“The big real estate news out of Los Angeles is that rapper-magnate Jay-Z and superstar wife Beyoncé are in escrow to buy a mansion for $90 million. Their pick of Westside neighborhoods after years of house-hunting? Bel-Air. We’ll be sure to let you know as soon as they have the keys to the newly built 30,000-square-foot home.
Ahh Mr. Landlord, Touch a nerve a bit I see. Finance guys like you with your keynesian background are a bit to locked into their theories and phony profits. Sorry Mr. Landlord, I don’t know of this zeroedge site, why would I use a contrarian viewpoint setup by bankers for my news. You seem to know it well. Again I apologize for owning a home in San Francisco valued much more than what it’s worth Mr. Landlord.
Your snap statement-do you take into effect that states have now went back to work requirements to get welfare. Thus the drop noted by your fine paper is almost entirely due to this.
I believe you read Zero Edge since you mention it most. 2.6% GPD is rubbish when you consider the fed and Bernanke put, subprime ABS paper push started by the govt. buy out of GMAC and turning into Ally.
Sorry Mr Landlord for your 10 years of finance that leads you down a rabbit hole of bullshit. You top of the cake of speculators whom were literally saved by the fed and govt. actions. You sit there and spit on your fellow man because of your luck…
your full of shit
Agreeing with cd. Our GDP doesn’t matter if the debt is so huge. It’s most likely much more than the 18 trillion they mention (just like fudging the unemployment numbers).
That’s like saying my salary grew by 3% this year and I just bought a car that’s gonna take more than 4% of my salary to pay the monthly payments, so I should be all excited? I am going to have less money because I spend more.
You forgot the weather. As in — it was a few degrees above 80 F too high to go out shopping during the busiest buying season in So Cal.
this weeks 15 yr fixed avg at 3%
3% interest. borrow $600K pay back $910K………..3%
Wrong, 3% for 15 years as stated: borrow 600k, pay back 746k.
If you spend $3K a month on rent, and assuming a 3% average increase every year, after 15 years you will have paid $540,000 in rent.
What it comes down to is
option a) spend $540K and have nothing to show for it in 15 years, other than fine memories of renting and having to move every year or two
option b) spend $910K and have a house fully paid for, in 15 years, a house that could easily be worth $1M, and most likely would be in such a long time horizon
Your choice.
Mr. Landlord,
Please stop making sense.
Not quite that cut and dray Mr.Landlord:
Your monthly payment on that 600,000 is 4100 a month + 500 month in property taxes = 4600. Now add on homeowner insurance+ maintenance,closing costs.
One problem is people can’t afford the jump in monthly cash outlay when they are stretched to thin. But even saying they could. It not a slam dunk, UNLESS you do nothing with the money you would have spent on the above. Kinda depends somewhat on your long term view of the stock market and what average rate of return you can get on invested money vs housing appreciation.
One of my favorite calculators to use…
http://michaelbluejay.com/house/rentvsbuy.html#mdt
Or if you invest the money in stocks while you rent. You will have more cash in your bank account than the house is worth
Maintenance costs will be offset by the tax savings, and then some. It’s a wash for the most part.
The point is renting for 15 years leaves you with nothing at the end of that 15 years. While paying a mortgage for 15 years leaves you with a fully paid house at the end.
Well Mr Landlord,
Only sheeple would buy at the top of the market. It happens everyday in the stock market.
Lemmings are easy to shear on a 10% down move, most have no stops, so how about we drive it down another 15%. They cave and sell. 25% less money than staying in cash…..
Buying RE at today’s prices is a decision best left for lemmings. There is an ass for every seat….have at it…
As I was walking the dog thru the neighborhood tonight in San Francisco, I noticed 1 and 2 million homes with few lights on, small yards unkept and a silent terror as these folks are stretched so thin that one 15% down move will wipe 40% out…
Fairytales are just that, expect rents to fall, the top is here….enjoy it while you can…
“The point is renting for 15 years leaves you with nothing at the end of that 15 years. While paying a mortgage for 15 years leaves you with a fully paid house at the end.”
What Jim T. said above. Some financial advisers even recommended holding off paying your mortgage off in favor of taking advantage of the greater rate of return from the stock market.
cd: As I was walking the dog thru the neighborhood tonight in San Francisco, I noticed 1 and 2 million homes with few lights on, small yards unkept and a silent terror …
Really? You noticed “a silent terror”?
What does “a silent terror” look like? I’ve never seen one before.
The only way renting is better than buying is if prices fall dramatically over the time span you are in the house. Over 15 years, r/e has not dropped post WW2. There are exceptions like Detroit where houses got for $1 these days. But that’s an extreme example. In California (and 98% of the country) there is no 15 year period in the past 75 years where r/e prices fell.
“Some financial advisers even recommended holding off paying your mortgage off in favor of taking advantage of the greater rate of return from the stock market.”
LOL. Do you know who most “financial advisors” are? They are people who took a 5 week course on how to be a financial advisor. It’s the same people who advised clients to buy pets.com stock. It’s the same people who are sure that annuities are good idea. It’s the same people who advise clients to buy tax free municipal bonds in their retirement accounts. There are few people more useless than realtors on this planet, financial advisor is one of them.
Not paying off a mortgage to gamble in the stock market is idiotic advice. Paying down debt, even low interest rate debt of today’s mortgage is the smartest thing anyone can do. There is nothing more liberating in the world than making that final mortgage payment.
POH,
So, don’t buy a house at the top but invest in a stock market at the top?
Aren’t both of those asset classes, which according to you have been artificially propped up with cheap credit? Seems you are contradicting yourself
“Some financial advisers even recommended holding off paying your mortgage off in favor of taking advantage of the greater rate of return from the stock market.”
I have heard similar advice. However, every financial adviser worth their salt should tell you that owning a primary residence in a decent part of town is likely the important piece of the puzzle. Being close to retirement and not having any equity in a property is a disaster in the making. Many people have 2.x and 3.x mortgage interest rates, getting a better return in the market lately has been a no brainer. Not true when rates were 7% plus.
Dan,
Yeah it’s weird how some people don’t see the correlation between stocks and housing. If one crashes, the other one will. The two always go hand in hand. So while I can see the logic of not buying and hoarding cash in anticipation of a r/e crash, it makes zero sense to rent and put all your money in stocks. At least with r/e if you foreclose you get to live rent free for a year or two. With stocks, they money is gone in an instant when the crash comes.
@Dan
Yes, you’re correct in surmising that I believe that both stocks and RE markets are in a bubble. But that’s the only thing you can brag about. I never encouraged buying into either ones at current sky high valuations.
“Yeah it’s weird how some people don’t see the correlation between stocks and housing.”
@landlord
Who are these “people” specifically? Btw, my response about financial advisors and retiring mortgage didn’t nest correctly and is down there near the bottom of he posts.
“Being close to retirement and not having any equity in a property is a disaster in the making. Many people have 2.x and 3.x mortgage interest rates, getting a better return in the market lately has been a no brainer. Not true when rates were 7% plus.”
Being close to retirement with little or no savings is also a disaster. Depending on your just equity to find your twilight years is not advisable. The strategy that I cited depends on personal risk tolerance as well.
Last sentences should have said:
Being close to retirement with little or no savings is also a disaster. Depending on just your equity to finance your twilight years is not advisable. The strategy that I cited depends on personal risk tolerance as well.
You think traffic in LA is bad now, just wait for the olympics.
Thank god I left that godforsaken place.
LA is only worth it if you are the type who is willing to put extraordinary effort towards your career. If you are more normal, LA could be a bad deal for you. LA has always been that way.
An estimated one in five Los Angeles County residents — nearly 2.2 million people — are receiving public assistance payments or benefits.
Welfare is a career choice for many in LA.
http://articles.latimes.com/2009/feb/22/local/me-welfare22
That’s my fear with Trump. He is actively working on cutting housing assistance and food stamps. There are already 100K+ living in homeless camps. What happens when Trump adds the 2.2M more unfortunate people above to these camps? Do these 2.3M people travel to DC or Mar Lago and set up camp in Trump’s front lawn to protest like they did under the Republican Hoover before FDR was elected with his social programs? Will Trump’s latest speech recommending to bash the protestor’s heads on car doors/roofs sway public opinion? CA cannot afford to feed and house these people without federal assistance. What will happen?
“What happens when Trump adds the 2.2M more unfortunate people above to these camps?”
See in it all before Bob,
Trump does not add anybody. Is it such a novel idea that people get responsible for their own actions? Why should I take the money required for my children’s education and give it to people who were free to take or refuse drugs??? They were free to choose; now let them live with the consequences of their own decisions. Why should I and my children be penalized for someone else poor choices? Why should my children finish college with a mountain of debt because the liberals want to spend the money on drug addicts?? Just to perpetuate a spiral of despair?
Before they decided to take drugs the first time, they should have thought about consequences. Our youth is indoctrinated in schools to do whatever they like and the taxpayers will pay for the consequences. Now they say they are entitled to everything, even a universal income. If that seems normal and fair to you, then my comments are in vain.
I am just quoting the OC Register and the good Dr from his article.
“To afford a median-priced, one-bedroom rental unit, an hourly wage of $27.62 is needed. Yet 68 percent of Orange County jobs pay below that.”
These are not lazy people. They are hardworking people who need housing assistance to avoid living in a tent.
What happens when Trump removes the housing assistance and food stamps from 68% of the people in OC?
Where do they set up their tent? My guess is we we see the Trumpvilles rise up on the White House lawn and at Mar Lago.
If Jerry Brown is smart, he’d give them all free bus tickets to Florida near Mar Lago or to DC before Trump cuts everyone else’s benefits. At least they will be close enough to do some good.
“What happens when Trump removes the housing assistance and food stamps from 68% of the people in OC?”
Seen it all Bob,
What will happen? Rents will be lower, consequently house prices will be more affordable (because of lower ROI for investors makes house investment less desirable), in short, those “hard working people” will afford the market rents and for those frugal, actually to buy a house.
Government interventions in anything (RE, cash for clunkers, student loans, Section 8, health care, etc) raises the prices for consumers dramatically, to the point that all those “benefiting” will be under a mountain of debt, always dependent on the government.
In a free market system (not the rigged market we have today) ALL the hard working people and with financial discipline can afford to pay in full not just a house, but multiple. Socialism ALWAYS enriches the ruling class and those connected (0.0001%) and makes everybody else EQUAL poor.
The new generation is in slavery (debt to their eye balls) before they even finish school. Sorry, but you can give me any argument you want and you will never convince me that Keynesian economics (the foundation of socialism) works. It works up to a point, by delaying the inevitable correction (kick the can down the road), and is followed by a major depression or a Venezuelan type of inflation. Basically you change a sinusoid graph (typical of normal business cycle) to an exponential graph (equivalent of inflation in 1000s %).
Only Congress can pass legislation that cuts funding for housing assistance and food stamps. Only Democrat dimwits who watch fake news on CNN or MSNBC think that Trump can unilaterally cut funding. If there are already 100K+ living in homeless camps as you claim, then most of them ended up homeless under the Obama regime and the the Democrats who completely control California. Maybe California’s Democrats should do more to stem California’s homeless crisis instead of offering more entitlements to illegal aliens? Maybe Democrat Gov. Jerry Moonbeam Brown should provide assistance to the homeless instead of spending billions of taxpayer dollars on his train to nowhere boondoggle?
“LA is only worth it if you are the type who is willing to put extraordinary effort towards your career. If you are more normal, LA could be a bad deal for you.”
**”LA has always been that way.”**
This is SOO not true!!!!
Flyover, you have a great point. If housing assistance goes away rents will likely fall. Back in the late 1920’s, housing prices fell but wages and jobs fell at an even greater rate. Different causes, I realize, but without a safety net, I fear there will be millions of homeless under Trump/
Samantha, “Only Congress can pass legislation that cuts funding for housing assistance and food stamps.” The Republican Controlled Congress had been completely blocking Obama with raising Food Stamps and Housing Assistance. Obama has been vetoing every bill related to cutting these programs. Now that we have a Republican President and a Republican Congress, we’ll see how fast they will bring on disaster like the last times in the 1920’s and in 2008. I’ve seen it before and only the ignorant ignore the past. Especially since it has happened twice. Fools.
Isn’t the real point that there are 2.2 million on assistance … that is not a sign of a vibrant economy and casts a long shadow on a housing market being driven by extremely low inventory only available to a few with money!
In 1984 everyone freaked out about the Olympic traffic. So they all left town and you could roller skate on the 10 Fwy. Carmageddon – same thing.
I went to those Olympics. We had tickets to the boxing. That’s the only thing I remember about it, except for gobs of people selling pins and memorabilia in front of the arena.
Dollar absolutely in the shitter lately. This continues and you can kiss any crash long long goodbye. Between way too low rates and low dollar this could get very ugly for the renter and prohibitive for the would B buyer.
Consumer prices rose by over 4% in 2007. The dollar always starts heading down at the tail end of bull markets as the printed money starts hitting the real economy, outside of the asset bubble.
As stated before, housing will be a secondary concern should the value of the dollar crash. Look at Venezuela for an extreme example.
For that to happen you’d have to have a better option that dollars. Where will you put the money? The pound? Not likely with Brexit uncertainties. Euro? Good luck with that the next time Greece or Italy or Spain needs a bailout (and it’s not a matter of it just when). The Yen? Whatever. The Yuan? LOL. Let’s see what else is there, oh yeah the really stable currencies of Brazil and India!!
LOL I love arm chair investors who weren’t smart enough to get a home when everyone else has, yet thinks they’re smart enough to know the future
“For that to happen you’d have to have a better option that dollars. Where will you put the money? The pound? Not likely with Brexit uncertainties. Euro? Good luck with that the next time Greece or Italy or Spain needs a bailout (and it’s not a matter of it just when). The Yen? Whatever. The Yuan? LOL. Let’s see what else is there, oh yeah the really stable currencies of Brazil and India!!”
Tell that to the Fed and government, which have been actively de-valuing the dollar for several decades. It has been their calling economic card to encourage exports and inflate asset values.
Bitcoin
Median household income in LA County: $55,900
Median income nationwide: $51,900
Median home price LA County: $550,000
Median price nationwide: $200,000
So LA makes $4k more a year, but pays $250K more in housing.
Tell me again how totes smart blue cities are, LOL
Errrrr…..$350K more.
After a 10-20 years of migration from liberal SoCal residents to Denver, it is now a city with awful traffic, smog, illegal alien gangs roaming the streets, and run 100% by Democrats. It’s the New LA, but with shittier weather.
And what is Denver’s plan to make housing “affordable”? Why stealing other people’s property and give it to poor people of course. This will be coming soon to a blue city near you….
http://www.thedenverchannel.com/news/local-news/mayor-announces-rent-buy-down-program
“While there are hundreds of apartments in Denver sitting vacant, finding an affordable place to live is tough. That’s why Denver’s Mayor Michael Hancock is proposing an innovative partnership to bridge the gap between how much those existing vacant homes cost and how much many people can actually afford.
In his address, Hancock announced a new pilot program, a partnership to open 400 existing, vacant apartments to low and moderate income Denver residents.”
It will be fun to see the 26 year old $100K+ tech worker in Apartment 501, meet his new neighbors…welfare recipients Laqueeisha and DeAndre moving in to 502.
Socialism is awesome, eh kids!!
Fuck you with your racists comments
Raycist! Raycist! squeal the loony Democrat dimwits who can’t refute the facts.
So far Samantha has used the word ‘dimwit’ in each of her many posts.
Ha! Project much?
And if you are a landlord, I’m sure the new folks will take perfect care of your unit and then be happy to leave and leave it in perfect condition when the dole runs out. Enjoy!
Denver Housing Authority Executive Director Ismael Guerrero said that since the program will be mainly city-funded (aka taxpayer funded), participants likely won’t have to meet all of the same qualifications as federal housing programs like Section 8?
Democrat insanity.
The real underclass being victimized here – or perhaps we should call them the under-underclass – is the explosion of the homeless here in OC. The camps are everywhere, and this is new – I didn’t see them even 4 years ago. The police clear them out but of course they just reform because the homeless don’t disappear. Some people love to stereotype them as ravening crack addicts but I volunteer at shelters and that’s just not so. Generally they’re people who’ve had some kind of problem and in a area where it takes more than minimum wage income just to have an apartment it doesn’t take much of a problem to kick somebody onto the streets.
The increase of large apartments is painted as a bad thing because it will reduce rents and thus returns for investors but that’s backwards because rents are far too high and need to come down. Unfortunately it will be decades before current construction will drop enough in price to help at the low end. But, it’s still better than nothing.
I have to disagree, I’ve done a lot of work with homeless and I work with those who come out of prison and in twenty years I can only think of two families that were homeless, the rest were criminals, ex-cons, drug users and the mentally ill.
Being homeless isn’t about losing a home, it’s about being in a position where when you have nowhere to go you also have no one to take you in. You have to burn a lot of bridges to to get to that point unless you’re unlucky like those two families I can think of.
Though I will admit i have no experience with homeless in the west coast, but lots of it in Chicago, NY, DC and Miami.
It may not be the same in other places, because CA real estate prices are special. Prices are nuts everywhere here except in remote exurbs which aren’t an option for the homeless. I’ve worked at two shelters. One was a shelter exclusively for single mother families – and it was always full with a long waiting list. The other was a new shelter for the general homeless, and literally almost half of them had serious medical issues.
It’s true that these people aren’t just those suffering hard times. They are incapable of functioning in any capacity due to stupidity bordering on mental illness or drug abuse. Anyone can get off the streets in a matter of hours. I work with rehab homes all the time. They take anyone in and get them on track. No matter how stupid or addicted. The only condition is sobriety and a willingness to learn.
The real truth is the world is changing and these people offer no value to society. More will be joining them as robotics advances. Many commenters on this blog included.
Most homeless have major mental and drug problems. There are many safety nets to get people off the streets, but most choose to be there.
A family who is down on their luck (unemployed, no money, no family help, etc) is completely different than the bum sitting on the bench near the liquor store.
Found this article a positive read; and, thought others might as well.
And here’s the link:
https://qz.com/903194/vancouver-house-prices-are-falling-as-it-gets-its-real-estate-bubble-under-control/
What a joke. This article celebrates govt intervention in the free market. Any time the govt tries to make something “affordable” thats something becomes more expensive.
Also for those of you thinking you will see 70% drops in prices, look at the chart in that article. Vancouver barely budged in the 2008-2009 crash. And by 2010 the entire decline was a memory. Had you bought something at the peak of the last bubble in Vancouver, today that property would be worth 50% more than what you paid for it.
The government and central bank certainly interfered to push prices up. However, it doesn’t have the courage to truly deflate its bubble by themselves. In the end, the decision might be out of their hands, even with rates still near historic lows.
@SoCalGuy just have to pipe in due to that ignorant heroin comment. I’ll bet more people in California are addicted to Oxycotin, which is a synthetic form of heroin an opioid, no different, it’s just prescribed, then anywhere else in the country. It’s very hypocritical to think those addicted to Oxycotin are any better than those using heroin it’s the same drug. Smh. It’s just hypocritical is all.
Lynn,
But you see, if you voted for Obama and Hillary, you drug addiction is much more acceptable than if you voted for evil Trump.
Ignorant? No, CA actually ranks pretty well in overall drug overdoses including opioids (including Oxy) per the CDC. My wife is from northern KY/Ohio. It’s so bad they are using refrigerator trucks for bodies because there’s no room in the morgues. Appalachia is exceptionally bad. West Virgina is out of control… TN also. Now it’s spread to the east coast.
CA is just full of potheads.
California is just full of potheads?
Then why is it that more Californians die from drug poisoning each year than die in car accidents and more than twice as many Californians die of drug overdoses than are murdered?
@Samantha,
https://www.cdc.gov/mmwr/volumes/65/wr/mm655051e1.htm
Scroll down and you’ll see a graph from the CDC which shows number of drug deaths per capita and you’ll notice CA is near the bottom of the list. This was until 2015. The number of deaths have skyrocketed just in the last year in the states which were near the top. My wife’s family is from these regions and it’s really sad. No jobs, dying cities, lots of poor, mainly white people killing themselves. Even here in CA, the vast majority of deaths are not in the Hispanic and black communities. Drug death among asians (even though we have a large population) barely registers. It’s not in their culture.
I’m not sure what the number of car accident deaths or murders have to do with anything. But according to the IIHS, CA is relatively safe state to drive when comparing number of miles driven per capita. I can only speculate it’s because people drive/can afford newer vehicles that are safer with newer technology. Also, we sit in a lot of bumper to bumper traffic.
The whites are popping oxy then moving onto heroin. The Mexicans smoke weed and drink Chelada. The Asian kids are popping Adderal so they can stay up all night and study to get into med school.
Looked and saw this link from the cdc. California is around 12/100k. Where Best Virginia is about 45/100k.
https://www.cdc.gov/mmwr/volumes/65/wr/mm655051e1.htm
My theory is three fold why California is low.
1. Immigrants tend not to abuse drugs.
2. Culturally California has long experience with drugs. Results in limited cultural based immunity against abuse.
3. Drug abusing ne’er-do-wells often leave the state.
Gibbon1: Immigrants tend not to abuse drugs.
They don’t? No drug abuse among the Mexican gangs? You know this, how?
Gibbon1: Culturally California has long experience with drugs. Results in limited cultural based immunity against abuse.
??? California has “limited cultural based immunity against abuse”? I don’t even know what you’re trying to say.
Gibbon1: Drug abusing ne’er-do-wells often leave the state.
They do? Again, you know this, how?
The CDC report you linked to refers to states with the most increases in drug and opioid-involved overdose deaths for the period of 2010–2015.
California already had high drug and opioid-involved overdose deaths. As the state with the greatest population in the country, the rate of overdoses per 100,000 residents is substantially higher than in other states.
Orange County drug, alcohol deaths have soared 82 percent, with accidental opioid overdoses the primary cause
http://www.ocregister.com/2017/04/25/orange-county-drug-alcohol-deaths-soar-82-percent-with-accidental-opioid-overdoses-the-primary-cause/
Samantha, read the links. California has a pretty low rate of drug deaths for the United States, even after the increase you cite. Actually, the article says the increase is for 2000-2014, and I think the national rates about tripled in that period, so the increase is (comparatively) good.
@son of a landlord – immigrants don’t abuse opioids much, because they don’t get prescribed them. Current opioid addictions overwhelmingly start with legal prescriptions – either direct, or for a friend or relative who leaves unused pills in the medicine cabinet. Doctors are far more like to prescribe opiates to white people – quite possibly because the doctors are racist and think the blacks and Hispanics will abuse the drugs which the whites are “good people” and will only use them properly. In reality, of course, the biology of opiate addiction is the same for all races. Ironically, for once, racism is *protecting* non-whites.
Fair economist,
The statistics can be deceiving for many reasons. One of them is this – the population of CA is large (aprox. 40 mil), the state is big, but most of the homeless population is concentrated on the coast (LA, SF, OC). In these places, relative to the area they occupy and population, the homeless population represent a high percentage and seem way higher that what shows on paper for the state as a whole.
For the average person, on a day to day basis, it is the practical homelessness in these few concentrated centers they have to interact with, not the numbers on the paper for the state as a whole. Homelessness has many reasons why it exists. Very high cost of rents/ living in these coastal expensive areas is ONLY one of them.
watch this for some sad reality about OC
https://m.facebook.com/story.php?story_fbid=913066442151187&id=606314749493026
3rd World shanty towns, coming soon to an American city near you. This is the natural result of having an open border with Mexico – and by extension all of Central America – for 40 years.
That is a very good and accurate snap shot of RE in CA. Hey! At least they can go in the same day surfing at the ocean and skying in the mountains.
It is much better in that “camp ground” than in a hell hole in flyover country. At least they have good weather and they pay a premium for it. (sarc. off).
Most of the 3rd World has good weather.
This video is a glimpse into the future of California due to the massive wealth gap amongst classes and liberal politics which dominate the state. Pretty soon all of California will be dotted with “shanty towns”. Can’t wait for the day when people are having bidding wars for homes next to tents.
Grapes of Wrath. It’s hard to believe. I wonder how many live there. No restrooms, showers. Sad.
Grapes of Wrath and Hoovervilles were all of the same Depression Era. Except under Hoover we didn’t have Food Stamps (only breadlines) or housing assistance from the government(Only Hoovervilles). We are seeing it again. Trump’s solution is exactly the same as the Hoover solution, except under Hoover we didn’t have government assistance. Hoover asked business to hire and raise wages. They didn’t. Trump is asking businesses to hire and raise wages while also slashing government assistance for food and housing. Only idiots make the same mistake twice. The result is that a socialist FDR was elected for 4 terms with Social Security, housing assistance and government jobs programs. I think we are headed there again under Trump.
The Obama regime and California’s La Raza Democrats simply ignored the homeless crisis and instead pandered to illegals offering them ever more entitlements.
Obama gave the homeless healthcare and vetoed every attempt by the Republican Congress to slash food and housing aid to the poor. Trump is pushing slashing food and housing aid through this same Republican Congress. Let’s hope some of these Republicans have a conscience and remember back to the Republican Hooverville days during the Depression that the cost of doing this will be many US citizens dying and then electing a socialist FDR-like President for a very long time. If you think rent control is bad, just wait until the 68% of the OC population who can’t afford housing are dying in the streets. I’ve seen it before. We’ve all seen it before in the US which is why I don’t understand.
By passing the abomination of Obamacare, Obama and his fellow Marxist Democrats stole money from middle class taxpayers and give it to freeloaders and illegals. Now many many middle class tax payers are stuck with worthless Obamacare insurance policies with high premiums and high deductibles!
This income statistic of does not factor in the underground economies that are tax free. I just bought a mattress from a guy at his house for 75% off retail before the taxes. His neighbor is selling tools out of his garage. This is going on everywhere, I consider it an unintended consequence of over regulation and taxation. I save money and the beast gets starved of tax revenue, it’s a win win
I hope this wasn’t the guy you bought the discount mattress from
http://www.sickandwrongpodcast.com/wp-content/uploads/2016/01/ron-jeremy-482×298.jpg
More proof that LA has gone full on 3rd World Shithole. What you describe is an economy of a backwater country like Mexico or Russia, not the supposed richest state in America.
Now, that the liberal democrats in CA announced proudly that they are a sanctuary state, expect more tent dwellers from all over US to move over there. Those with better pay in high tech will pay for all their food, Obamacare and housing. Governor moonbeam and his gang for sure will not pay a dime for those. Hey, at least they showed the president who has the power and is in control. It is like shooting yourself in the foot and expect the president to die…LOL
Pretty soon, they will discover that you are free to elect the politicians but not the consequences for those politicians decisions.
The 10 to 20 time a year garage sale homes are pretty common in my little corner of Orange Co., which is the home of those lower upper middle class folks you may have heard had totally vanished. I don’t regularly visit the OC that the Dr described as I live in that area of North Orange County with lots of people in the middle. I don’t know where everyone gets the money to buy here, but they don’t look like trust babies, rich techies or hipsters to me. We have kids in the cul de sac riding bikes with training wheels. Just like in the good old days when my kids were young.
I do see a big homeless camp on my drive to work right by the Santa Ana River when I head to the I5 coming out of the Crush. Most look like well tanned white people to me. But they are a long way off and I’m going pretty fast since our traffic isn’t bad at all most days.
John you’re a thief, if you owe taxes pay it. If you don’t like something fair enough, then work to change the rules, but by buying things, not paying proper tax and things that are possibly stolen, you’re just shifting the burden to honest people such as myself.
You think you’ve gotten away with something, but you are an dishonest person, and that can never be taken away.
John isn’t a thief. The person selling the merchandise is responsible for the sales tax. People sell lightly used merchandise all the time and don’t owe anything if it was personal property that didn’t appreciate. I’d worry about the mattress sold by such a merchant. Maybe it was formerly infested with bedbugs and then fumigated and packaged like new.
These are called garage sales. Back in the 1970’s entire neighborhoods would have them without fear of being busted. As it should be still today.
I’ve lived in Orange County for a few years as a struggling fresh college grad and I can attest to this.
Back in 2013:
My work/living situation was 17$/hour averaging 60 hr/week living in a 3 bedroom apt with roomates in Woodbridge Irvine for $2400 for rent/utilities/cable/internet. So my share came out to about $750/month and I was able to live comfortably and save about $1500 month while enjoying the great restaurants and nightlife (in extreme moderation).
2017:
With today’s prices, my share of the apartment would be $1100/month and I’ll be damned if my old employer is paying above $20/hr for the same position. So right off the bat, you got a nearly 50% increase in living expenses and barely an increase in wages to go with it. Mind you I was working 60 hr/week to keep up. Had I worked a standard 40, I wouldn’t have made it back in 2013 either.
And my job, ironically, was soil testing for the construction of all those houses that the Chinese would gobble up (2-3 at a time on average) months before the sales office was even built. All cash buyers and none thought twice about the price. A two bedroom condo in Portola for $700K?!
Anywho, I’ve been on this forum for a long time and I loved reading all the comments before things got political or off track (who cares about the Olympics?! It’s not relevant!). Now the comments feel like sifting through garbage before one guy with good insight comes along. I remember when comments would be mainly centered around forecasts and where the market was headed and what factors backed it up (without the DAMN politics!!!). It was insightful and I learned quite a bit. Can we go back to that?
” A two bedroom condo in Portola for $700K?!”
A big condo in Orange would be 200K less now. Why the obsession in this blog with South County? If you work in LA county, it’s a lot closer from North County, and you can sneak into South County by the back way in the AM for work there too.
If you think politics and r/e are not intertwined you are very mistaken.
RE is not a free market. It is a rigged market by the government and FED and it is 100% dependent on politics.
Today, you can not talk about RE without politics. It is the only thing driving the RE prices. Economic fundamentals ceased to count too much in 1913 and more pronounced after 1971.
Without the FANNY and FREDDY MAC secondary market, you are talking about less that 1/3 the prices you see today. Those are political entities created by CONgress, kept afloat by taxpayers money for social engineering and the benefit of TBTF banks and full detriment of the middle class.
In terms of forecasting, by now EVERYONE agrees that it is going to be a correction and NOBODY knows exactly when (nobody has a crystal ball).
http://www.cnsnews.com/blog/craig-bannister/calexit-leader-were-exporting-our-middle-class-make-room-new-wave-immigrants?ref=yfp
Crazy interview but I think there’s a lot of truth to it.
Here is a property that I would not worry about buying while the market is hot. This is a high demand location, even during a recession.
https://www.redfin.com/CA/Torrance/21401-Mildred-Ave-90503/home/7710421
Naah, way overpriced. There is no way this is worth more than 500k. Tiny house, tiny backyard and over 60 years old.
Millennial, you are obviously not familiar with that part of Torrance. I know somebody who bought in that neighborhood back in 2001 and they paid over 400K (and this was for a 1000 sq ft box). You may get your 50% correction in the IE. I would bet money you won’t get that in desirable coastal adjacent neighborhoods.
Sure, you will always find people who overpay massively. Just because someone overpaid does not mean that price reflects the value of the crapshack. It just means someone overpaid. I agree the IE will see easily 50% price decreases, probably even more.
Living in Torrance you get to enjoy the smell of the oil refineries and the dangers that go with it. Enjoy the occasional flares from the refineries that shoot fireballs high into the sky and that result in the police needing to shut major streets down.
http://www.nbclosangeles.com/news/local/flaring-event-torrance-exxonmobil-fire-smoke-heat-del-amo-372300641.html
http://losangeles.cbslocal.com/2016/03/16/2-fireballs-light-up-night-sky-in-torrance-due-to-refinery-fire/
Don’t forget the gangbangers who call Torrance home…
Asian gangs in Torrance:
Ruthless Asian Criminals (RAC)
Sonny Side Wah Ching (SSWC)
Triad BoyZ (TBZ)
Wah Ching, T-Side
Wah Ching, Ken-side
Hispanic gangs in Torrance:
East Side Torrance
Tortilla Flats
Varrio 204th Street
And don’t forget another factoid about living in Torrance:
You get all the overflow who can’t afford Manhattan, Hermosa, Redondo, PV but refuse to live in Hawthorne, Gardena, Carson, Lawndale, etc. Owning properties in Torrance has been nothing but win-win.
How do you feel about being literally steps away from a high school and hearing the school bells every morning and recess?
The automobile entrance to the school does not connect with the street this home is on. So, no issue. It is school traffic that hurts the value … this home does not have that problem.
The trick with buying in the South Bay is making sure your street does not have cut through traffic. This home passes that test.
Bells wouldn’t bother me.
The 16 year old gang member “students” would.
Per Redfin, that home is already pending. Good call jt.
Here is Millennials formula: take list price and reducee by 70-80% and that’s the value in his opinion.
Then State how much Realtors suck and that he is willing to wait a hundred years for that price.
Dan,
Almost spot on!
Current list price minus 50-70% is what I am willing to pay. That would reflect the actual value. No crash means no purchase. Waiting for a decade or two is no problem. In about 30 years or so I have to own homes due to inheritance. My dad owns several houses and so do my in-laws. And yes, realtards, lenders, banksters are the same. They have to lie for financial reasons in order to trick you into overpriced crapshacks.
Jobs not paying enough? Literally hundreds of thousands of Asians are coming to the US and making big bucks in the high tech industry. I have friends in the trades and they are making great wages. My buddy is an electrician and is doing quite well. There are nurses, doctors, police, small business owners, teachers and many others who are making a liveable wage. A 5 year degree in Psychology or Socialism is not going to cut it in the real world my Millennial friends!
Yes but half the people on here state that everyone they know make minimum wage at Home Depot and Walmart. There are successful people out there that have money? Go figure
That’s also true, there is an incredible amount of people in the us who are deep in financial trouble. 2/3 of the population has less than 1k in emergency savings. Luckily, I am one of the successful millennials due to saving and not spending money. I have a tech job, fantastic credit score, no debt and renting allowed me to save a boat load of money.
Yes, wages have not gone up since 20 years. Just look at inflation adjusted median household incomes.
“You need to earn an hourly wage of $28 to afford a basic one-bedroom apartment but 68 percent of OC jobs pay less than that amount.â€
I guess that no one realizes that both the husband and wife can work at $14 per hour to make that amount?
Get outta here with your logic…
It’s almost as if people in their 20’s would need to (gasp!) get a roommate! Whoever heard of such a thing??
“LOL. Do you know who most “financial advisors†are? They are people who took a 5 week course on how to be a financial advisor.”
Then find an experienced and qualified advisor if the current one doesn’t work out. On the other hand, recognize many working people have too little time and experience to manage their own long term finances.
“Not paying off a mortgage to gamble in the stock market is idiotic advice. Paying down debt, even low interest rate debt of today’s mortgage is the smartest thing anyone can do. There is nothing more liberating in the world than making that final mortgage payment.”
Depends on your personal situation. If you are risk adverse, then paying your mortgage off is good. Conversely, buying real estate itself can be a gamble that requires much more time, effort, and money than originally envisioned.
Just read the story that isn’t being discussed. Given Trump’s election and the collapse of Europe, millions of wealthy people all over the US and the world want to live in the most beautiful, exciting, cutting edge and liberal place with great weather on the planet. California is all that’s left, which will drive prices out of this world for a few years, more if Trump reelected. The world may tank, but not CA. 50% of the planet are liberal, many of whom are very wealthy and have nowhere else to go now. This will drive out the poor and middle class who will be replaced by robots anyway – Leaving the wealthy to own the entire state. The liberal utopia dream will become a reality for those who can afford it. Buy now.
Peter Fan,
You have to define the word “liberal”. Some rich (or I should say most) are social liberal and fiscal conservatives. When Hollande (France president) proposed a 95% tax on wealthy (mosts social liberals, like all France), guess what happened? Most transferred their wealth to UK and other tax friendly tax jurisdictions, although France has good mediterranean weather on the south (see Canes).
Most wealthy might be social liberals but they hate greedy politicians who want to buy votes confiscating their wealth. They might be foolish in some respects but they know how to make money and keep them; otherwise they would be poor not wealthy.
So, in the foolish fiscal environment promoted by Sacramento, I don’t think that your theory holds water.
Peter Fan: This will drive out the poor and middle class who will be replaced by robots anyway – Leaving the wealthy to own the entire state.
Idiotic fantasies. California is HUGE. The poor can move to the Inland Empire or Central Valley. Their numbers will SWELL, and they’ll vote for ever more welfare payments from the rich liberals on the coast.
All the rich liberals you predict will come here, they’ll attract even more poor people from Mexico and the poorer states, eager for those rich liberals’ taxes.
Sorry, but the poor aren’t going to conveniently disappear.
nice one! That deserves to be on the list:
The worlds liberals are all coming to California. Hurry! Buy now before the liberals are here or you will be priced out!
I’ve lived in the bay area my whole life, and travel to so-cal and New York for work frequently. Your statement is false. There are hardly any Europeans on the west coast, and other than poor southeast Asians (Korean, Vietnamese, Thai, filipino) in southern California, and the same for Chinese in San Francisco your wrong. There are 10 times more Europeans in new York city than all of California. Rich chinese may be buying the properties, but few are living in them or have desire to.
From your lips to the moneyed libs’ ears Pete! Get them all concentrated in one area and watch the rest of the country/world thrive while they claw at each other like rats in their utopia with TMZ doing the play by play.
for the Cali peeps here…
What’s your take on Calexit? Do you think it has any chance whatsoever to happen? And personally would you vote for it?
Personally I’d love it if CA went on its own. I think it would be a win-win for everyone involved.
On our own, never. California would need to have another major foreign power back California desire to leave. The US would never let us leave, and the state doesn’t have an army to fight for the right to leave.
I could imagine the state splitting into multiple states. That I would be in favor of.
I think it has no chance to pass, and the US would not let CA secede so easily with all the military here. I would not vote for it right now, but I think the ability to do secede should be legal.
There are many of us living in California who would like to secede from the loony leftist Democrats who dominate certain areas of California. We’d like to escape their authoritarian, dictatorial, and Marxist agenda.
The State of Jefferson is a proposed U.S. state that would span the contiguous, mostly rural area of southern Oregon and Northern California. Several attempts to separate from Oregon and California have already taken place.
http://stateofjefferson.com/
These people are looney tunes. States have no right of secession. Although not specifically mentioned in the constitution, it has been interpreted more than once by the Supreme Court. I guess these people slept through history class when they covered the civil war.
Voters within areas of a county or state can vote to secede from their current county or state and form a new governing entity. However in order for a secession to be possible, a new state would need approval from both Congress and the state Legislature.
In 2014, residents of Tehama county voted in favor of a measure that forced local officials to consider a plan to secede from the state and form the State of Jefferson. That decision passed by 55.74 percent in Tehama County, with nearly 1,000 more ballots cast towards seceding from California compared to staying.
https://www.rt.com/usa/163680-california-secession-vote-jefferson/
In 2013, the Siskiyou County Board of Supervisors voted 4-1 in favor of a declaration of secession in 2013 citing overregulation and a perceived lack of representation at the state capitol.
http://www.huffingtonpost.com/2013/09/04/california-secession_n_3867880.html
In 2011, elected officials in Riverside County endorsed a proposal to split California in half, calling the state too big to govern. The proposal was slammed by California Governor Jerry Moonbat Brown’s office at the time.
Mission County, to be formed from the northern portion of Santa Barbara County. A formal proposal was resoundingly rejected by voters in 2006.
High Desert County, to be formed largely from northern Los Angeles County as well as portions of San Bernardino County and Kern County. Proposed by late state senator Pete Knight in 2002.
Prior to the formation of Orange County, residents of Anaheim in 1870 pushed a bill in the state assembly for the creation of an Anaheim County. The proposal had the support of San Francisco.
In 1988, there was a serious effort, including a vote on the subject, to divide San Bernardino County into its urban Southwestern corner, which would have retained the name, and a new Mojave County to comprise the vast, sparsely populated Northern and Eastern portions.
https://en.wikipedia.org/wiki/List_of_U.S._county_secession_proposals
Five rural Colorado counties voted to secede from the state of Colorado in 2013. The results emphasize a growing frustration in conservative prairie towns in eastern Colorado. The five counties share borders, covering about 9,500 square miles that have long identified more with Kansas and Nebraska because of their agricultural background rather than urban cities along the Front Range like Denver.
http://www.seattletimes.com/nation-world/5-rural-colorado-counties-vote-to-secede-become-51st-state/
Pro-secession groups in Upstate New York state have proposed a couple of plans to secede from the state due because of domination of their area by liberal Democrats in New York City. The first would have Upstate New York secede to Pennsylvania, which would require approval from legislatures in both states and from U.S. Congress. The second would create a small government with two autonomous regions in New York State.
http://www.syracuse.com/state/index.ssf/2015/08/upstate_ny_secede_rally_new_amsterdam_bainbridge.html
Samantha,
People can vote for anything. A city trying to leave a county is one thing but states have no right to leave the union. I know Texas tried to but that went nowhere.
Unlike you, I’m educated and studied history and don’t rely on Dr. Google for information. If you were awake during history class before you dropped out of high school, you might recall something about Appomattox in 1865 where General Lee surrendered. Most scholars believe this put to rest the idea of states being able to leave the union. Furthermore, Justice Scalia already declared that a state cannot secede. You know there’s that part in the pledge of allegiance “one nation… indivisible”. The Supreme Court will not even hear the case if it makes it that far up the system. It’s been decided. And if a conservative justice agrees, what chance does the right wing have?
Let me guess… you also believe we don’t need to pay income taxes because the IRS has no right?
SoCalGuy: A city trying to leave a county is one thing but states have no right to leave the union.
She didn’t say that states had a right to leave the union. She was talking about counties leaving a state to form a new state, or join another state.
Semantics… the state of California does not want to leave the union, just all the people from every county within the state wish to form a new state. Not happening, ever…
SoCal guy,
The ones who proposed to separate CA from the rest of the union were the liberals from CA when they were upset that their idol, Hillary, lost the elections.
Are you preaching to them?
I think some states tried that in 1861. Didn’t work out too well…
Zero chance of CA seceding – an impossibility without a complete collapse of the union, or at the very least a zombie apocalypse. I’m thinking it would probably be bad news for us fiscal conservatives, but I don’t know nearly enough on the subject to give a real opinion. However, I agree that splitting into multiple states is a good idea, and that has very slightly better odds of happening than secession.
Liberals always bring up ethnic cuisine as if it’s the be all and end all of life. Yeah flyover land doesn’t have as good ethnic food as the coasts. Granted. But that is a small price to pay for not having to pay $1M for a 2 bedroom home next to a freeway, 13% income tax, 10% sales tax and god only knows how much property tax. I could literally fly to LA every Friday night, go to a Mexican restaurant for dinner, and fly home Saturday morning, and still spend less money than you spend for housing costs, in a year.
And as far as diversity goes, we also don’t have the diversity of gangs that are present in L.A. And isn’t the diversity of LA’s high schools awesome? You have 100% black high schools with 20% graduation rates along with 100% Hispanic schools with 20% graduation rates. COEXIST BABY!!
The diversity we have is hundreds of clean fresh water lakes, thousands of miles of hiking trails (not filled with garbage and/or homeless people), 4 diverse and distinct seasons and this weird thing called diversity of thought. The South Hill area of Spokane is an interesting mix of people especially. You have the dude with the Don’t Tread on Me flag living next to a guy with the gay Rainbow flag. And everyone just gets along. Try putting up Don’t Tread on Me flag in the middle of Irvine, and see how well that goes. And on the street you’ll have a 25 year old Volvo station, a Prius and a $70K totally pimped out F150 all parked on the same block. Compare that to the “diversity” of LA where everyone has a Lexus.
And speaking of cars, it’s always hilarious seeing so many base model BMWs in LA. These doofuses think driving a $349/mo 328 lease means they’re playahs!! LOL. When I first moved here from the coast, I had to train myself to not judge people by their cars. I had been programmed my whole life to think expensive car = good person, cheap car = loser. Then I moved here and discovered that, people with money don’t show it off. The “luxury” car here – generally speaking – is a 3-5 year old well equipped Camry or Accord or something along those lines. These things cost more than a base BMW, but you look 1000% less like a d-bag driving one vs driving the BMW, lol.
And also for the people who keep saying illegals only do the jobs Americans won’t do….come to Spokane some time and see what a load of shit that is. Americans here do jobs like cut grass, clean hotel rooms, work on farms, etc. You go into a McDonald’s and it’s 17 year old American kids working behind the counter. They actually understand your order in English, the first time. Crazy shit man.
Texas voted to secede while under President Obama. It failed. It may have been a Constitutional belief that prevented it from passing but after oil crashed, it was likely they discovered that Texas is collecting more from the Federal Government than giving back. CA is giving much more to the Federal Government than receiving and could likely be a successful country. However, sane politicians would not risk another Civil War.
Ahh the old liberal myth that CA gets pennies on the dollar for its federal income taxes. LOL
Reality is, CA gets 99 cents back in federal spending, for every $1 it pays in federal taxes.
http://www.latimes.com/politics/la-pol-sac-california-federal-government-money-20170205-story.html
And here’s a fun fact, Texas depends on federal spending for 15.5% of its GDP, CA on the other hand depends on federal spending for 15.7%.
https://mises.org/blog/which-states-rely-most-federal-spending
But hey, why let facts get in the way of a good story?
California is BROKE with unfunded liabilities close to an estimated $1 trillion dollars that will never be repaid.
http://www.ocregister.com/2016/05/25/oc-watchdog-unfunded-pension-debt-approaching-1-trillion/
Come on Mr Landlord, you can’t fool us all.
CA has over a 50% larger GDP than TX. It would do much better than TX as a country because CA has a much more diverse economy. Unlike TX, which depends mostly on oil.
TX is more like a boom/bust Venezuela.
Hey Landlord,
“The point is renting for 15 years leaves you with nothing at the end of that 15 years. While paying a mortgage for 15 years leaves you with a fully paid house at the end.”
Could we do an example?
Lets do Spokane since you are familiar with the area. A 3bed 2b, 1,600 sqft house costs about 230K. What’s the median rent for this house in Spokane? 1,2k a month?
You tell me if this sounds fair.
For 230K you’ll get a 4 bedroom 2000 sq ft house, which will rent for $1500. Right now you can get a 15 year mortgage for 3%. Property tax will be about $3000 a year (we have no income tax so property tax is relatively expensive). Insurance $500.
Do the math and over 15 years you’d be a fool to rent vs buy.
Millie,
I agree with you that in places like SoCal, buying isn’t a slam dunk. But in flyover country, when you can get a house for around $200K, at 3% interest rate, it’s virtually impossible to lose money long term. Even worst case scenario, say that $200K house drops in price to $100K. You’re still better off buying it vs renting it for 15 years.
PITI is around $2100.
Let’s keep inflation at 0% for both rent and home appreciation to keep the example simple.
Buy: $2100 X 180 = $378,000
Rent: $1500 X 180 = $279,000
So even in a worst case scenario where that $230K house today is only worth $150K in 15 years you’re still ahead buying vs renting.
And more likely in 15 years this $230K house will be worth at least $300K. And your $1500 a month rent today will be more like $2500 a month in 15 years.
230K? Oh my god you couldn’t buy a shitty home in Inglewood for that…Rock on Eastern Washington Mr. Landlord.
Although I do have to say that those rents are pathetic….we bought a 100 year old SFR in SoCal now in use as a rental in 1994 and we now get…wait for it…$8000 a month income. So location, location location indeed.
And that $230K was $160-170K in 2010. There’s been a pretty sharp increase in prices here as well, percentage wise. But it’s still relatively a bargain compared to SoCal, Seattle, Bay Area, etc.
A couple each making $35K a year can easily afford a very nice home, in a nice neighborhood here. And jobs paying $35K, even here in flyover land, are easy to come by for pretty much anyone who wants one.
$8K rent? WOW!! Well done!!
GreenGroovyMom may now be crowing about getting $8,000 a month for her 100 year old SFR in SoCal, but a major earthquake could quickly end that income stream with the house being condemned and looted. With the FSA and thugs living on the Democrat’s SoCal plantation, a major earthquake will through the region in chaos and GreenGroovyMom will probably need to flee for her life. So location, location location indeed.
Thanks Mr. Landlord and John.
Spokane is def. a market where buying makes sense.
Closer to $1,500-$1,600. Buying would be well under rent parity, with PITI and maintenance factored in. One of my sisters lives there, just retired at 57, paid a little more than that for a huge Victorian in a decent if not exceptional neighborhood.
Spokane is not a great place. I spent a lot of time up there with my old boss when his kids attended Gonzaga. It was pretty in the summer if you like outdoor activities but rained way too much and cold as eff in the winters. I saw plenty of druggies and professional pandhandlers/homeless. Also a lot of abandoned store fronts, strip malls and architecture similar to communist era Soviet Union.
Also, the food sucks. Spokane has ZERO diversity. It’s almost 100% white people (and I’m white) but felt eery. So if you like anything remotely ethnic to eat forget about it. Unless you consider Taco Bell to be Mexican food.
Lots of conservative white folk and a big catholic population. There was a huge uproar over the gay marraige thing. They also had some huge church sex scandal up there a few years ago. The CIA has a training facility nearby where they teach people how to torture others.
Cost of living is cheap. Crime rate is much higher than you’d expect. Lots of kids with beards and neck tattoos. No jobs/industry. Also, lots of unhealthy obese people. Probably the same people commenting on this board about about how great it’s where they live and how terrible CA is in comparison. If your a fat old white guy who likes to fish and live off SSI it’s paradise I suppose.
SoCal,
You are right. It’s hell. Tell all your friends.
Go 20 to 25 miles inland from the SoCal coast and much of SoCal is not a great place.
You’ll see plenty of druggies and professional pandhandlers/homeless. Also a lot of abandoned store fronts, strip malls with architecture similar to third world countries like Mexico, Cuba, Vietnam or Venezuela. Even though they’re cities on the coast, much of the eastside of Long Beach and San Pedro look like a third country.
In many areas of SoCal there is also little diversity. Hispanics dominate much of LA and in OC cities like Santa Ana while Asians dominate communities like Irvine and Monterrey Park. There are almost no white people to be found in some SoCal areas which must make self-hating white dimwits like SoCalGuy happy?
There are a lot of leftist brainwashed loonies who vote Democrat in SoCal. Being overwhelmingly Hispanic, LA has a big catholic population. There was a huge uproar over the gay marriage thing. They also had some huge church sex scandal in LA a few years ago.
LA, Long Beach, Santa Ana and other SoCal cities are sanctuary cities. The crime rate is horrifically high in much of LA and crime is even high in coastal cities like Santa Monica, Long Beach, and Huntington Beach.
You’ll see lots of metrosexual hipster wannabes and posers in some areas of LA like Santa Monica or Westwood with beards and tattoos.
Despite much of SoCal looking like a third world country, the cost of living is not cheap but the wages are. Most of the jobs in SoCal don’t pay that well with a per capita income of $27,987 in LA County and per capita income of $34,416 in OC.
California is the nation’s welfare capital with more than a third of the country’s welfare cases thanks to Democrats. Most of them live in SoCal. An estimated one in five Los Angeles County residents — nearly 2.2 million people — are receiving public assistance payments or benefits.
Also, there are lots of unhealthy obese people who eat too many tacos on Taco Tuesday.
It sounds like SoCalGuy may be a self-hating feminized white eunuch who has been brainwashed after years of leftist indoctrination and diversity training? Maybe BLM thugs have played the knockout game on his lame brain one too many times?
Much of SoCal is not a great place. You’ll see plenty of druggies and professional pandhandlers/homeless. Also a lot of abandoned store fronts, strip malls with architecture similar to third world countries like Mexico, Cuba, Vietnam or Venezuela. Even though they’re cities on the coast, much of the eastside of Long Beach and San Pedro look like a third country.
In many areas of SoCal there is also little diversity. Hispanics dominate much of LA and in OC cities like Santa Ana while Asians dominate communities like Irvine and Monterrey Park. There are almost no white people to be found in some SoCal areas which must make self-hating white dimwits like SoCalGuy happy?
There are a lot of leftist brainwashed loonies who vote Democrat in SoCal. Being overwhelmingly Hispanic, LA has a big catholic population. There was a huge uproar over the gay marriage thing. They also had some huge church sex scandal in LA a few years ago.
LA, Long Beach, Santa Ana and other SoCal cities are sanctuary cities. The crime rate is horrifically high in much of LA and crime is even high in coastal cities like Santa Monica, Long Beach, and Huntington Beach.
You’ll see lots of metrosexual hipster wannabes and posers in some areas of LA like Santa Monica or Westwood with beards and tattoos.
Despite much of SoCal looking like a third world country, the cost of living is not cheap but the wages are. Most of the jobs in SoCal don’t pay that well with a per capita income of $27,987 in LA County and per capita income of $34,416 in OC.
California is the nation’s welfare capital with more than a third of the country’s welfare cases thanks to Democrats. Most of them live in SoCal. An estimated one in five Los Angeles County residents — nearly 2.2 million people — are receiving public assistance payments or benefits.
Also, there are lots of unhealthy obese people who eat too many tacos on Taco Tuesday.
It sounds like SoCalGuy may be a self-hating feminized white eunuch who has been brainwashed after years of leftist indoctrination and diversity training? Maybe BLM thugs have played the knockout game on his lame brain one too many times?
SoCal,
SoCal is full of fat and obese people and the industry still there (left from massive exodus) is a fraction of what Spokane has. The people in Spokane are far nicer and courteous than those in SoCal. Yes it might have some transplant guys from SoCal with tattoos, but nothing like the number of tattoos guys you see in SoCal.
Winters are cold, I agree. That is why I don’t live there, but I’ve been there many times in winter and Summer. It has 4 seasons.
How do you all keep your sheets so clean for the Klan meetings?
Debating for Liberals in 3 simple steps
1. When losing an argument call your opponent racist.
2. Mumble something about Fox News
3. See #1
@ SoCalGuy, my sheets are always clean and the Klan is only alive in the warped minds of self-hating white eunuchs like yourself who have been thoroughly brainwashed by the white hating left.
Now go back to flogging yourself for being white.
Yeah agreed. I’ve spent time in Spokane and it’s not great. I had high hopes bc of the nature but the base of people there are ghetto white folks with poor paying/no jobs. It’s a sad place to be even with all the beauty.
Mr Landlord, many words, little wisdom… reveals a lack of experience or maturity. I “watch” this blog, and have participated for years, but the rhetoric has proven boring to me. I continue to ignore the advice provided by those that claim they know something that I do not, and I’m nearing financial independence, crash agnostic. I’ve already found my new “it” location to invest and relocate to from SoCal… soon… very soon.
Just like 2007, the self congratulatory trolls are loudest before the storm.
200K jobs created last month. Unemployment is at 4.3%, wages up 2.5% year over year. The ideal economy right now. Nice steady growth without the threat of inflation. Goldilocks baby!!
For all you perma-bears out there, this can’t be good.
Mr. Landlord
“…The ideal economy right now….Goldilocks baby!!…”
I am hardly a perma-bear, but I wouldn’t pop the champagne cork just yet.
As Marketwatch.com noted today, we are now entering into an “Amazon economy”.
(New jobs this month are mostly service and warehouse).
Wage growth is zilch.
I would characterize these new jobs as “fake jobs” as average low-wage incomes are essentially survival wages with few or no benefits.
Could someone then please explain how these folks are going to purchase real estate? (or much of anything else).
Fake jobs, and a (mostly) fake economy. It just goes on and on.
Some people are never happy. We get a very good jobs number and everyone has to find a nit to pick with it. Pick any jobs report over the past 50 years and you’ll find something bad about it. Yeah maybe it was blue collar jobs created, but why is that so bad? Unemployment for white collar workers right now is essentially 0%. There are no more people looking for work in that category. You can’t hire people who don’t exist. On the other hand, it’s the blue collar workers that have been struggling recently. And the fact tha they are now starting to find work is a good thing.
Remember, this is a report showing how many people were hired, not how many jobs are available. It’s two separate things. I know of several companies that are looking to hire but simply can’t find anyone.
What was not really reported much today:
“The share of Americans over 16 who were active in the workforce rose in July to 62.9% from 62.8%. One group that has been returning to the jobs market at a quick rate is prime-age workers ages 25 to 54. Their labor-force-participation rate rose to a new postrecession high of 78.7%, showing that the nine-year-old economic expansion had attracted them back into the workforce.”
I thought the self-delusion of a Goldilocks economy was exactly why Hillary and many Democrats lost in the first place? For his stake, Trump had better not fall in the same trap.
Prince of Heck, according to Hilary and MSM, she lost due to “Trump – Russian collusion”, or so the Deep State and MSM want us to believe. They are so transparent and they think that the whole population (or more than half) of US is full of idiots, easy to lie to. Yes, they are many of those, but not enough to win the presidency based on fabricated stories.
I think they learned a hard lesson – never underestimate the collective intelligence of the electorate. Don’t insult them and expect to win the presidency.
POH:
A lot has changed in the past 9 months since election. The number of people on welfare has plummeted. The labor participation rate is up significantly. Oil and gas production is at record levels. Exports (not just oil but overall) are at record levels. While not directly an economic item, the number of illegals coming in has plummeted as well. Fewer illegals = more Americans taking jobs that supposedly Americans won’t do (which is a complete lie, Americans will do any job if the pay is fair). Manufacturing employment has surpassed 2009 levels.
“In July 2017, according to BLS preliminary seasonally adjusted numbers, there were 12,425,000 employed in manufacturing. That is up 16,000 from the 12,409,000 who were employed in manufacturing in June and is the largest number of people employed in manufacturing in any month since January 2009, according to BLS.”
“AUGUST 02, 2017 4:00 AM
For 10 years, the number of California residents on food stamps increased, ultimately doubling to more than 4.4 million by late 2015. That trend has reversed in the last year, thanks largely to an improving economy and low unemployment. About 400,000 fewer Californians take food stamps today than during late 2015, according to the latest state and federal data.”
I know it’s always doom and gloom and the next great depression is right around the corner for many here. Reality says otherwise.
@Landlord
Speaking of goldilocks prognostication…
“A lot has changed in the past 9 months since election. The number of people on welfare has plummeted.”
Really? I haven’t seen any cuts in welfare programs being passed by Congress or Trump in the last 9 months.
“The labor participation rate is up significantly.”
According to BLS stats, it’s up by .2% from December 2016, but similar or lower to many months during Obama’s presidency: https://data.bls.gov/timeseries/LNS11300000
“Oil and gas production is at record levels. Exports (not just oil but overall) are at record levels.”
Considering that oil prices are at multi-year lows (due to low consumer demand), increasing oil production is self-defeating.
“While not directly an economic item, the number of illegals coming in has plummeted as well. Fewer illegals = more Americans taking jobs that supposedly Americans won’t do (which is a complete lie, Americans will do any job if the pay is fair).”
I agree that Americans will do any jobs if the pay is decent.
“Manufacturing employment has surpassed 2009 levels.”
That’s great. Except that it’s been trending up since then under Obama as well. And the rate of manufacturing job growth hasn’t been any more spectacular within the last 9 months. This leads me to conclude that Trump (or Obama) had little or nothing to do with the growth. The long term trend is that offshoring and automation will keep manufacturing jobs growth muted.
@Flyover
I’m assuming that you read about the Democrats’ new populist electoral message: “A Better Deal: Better Jobs, Better Wages, Better Future.” They promised to crack down on corporations — their very own influential donors. No mention about Fed and government manipulation that is causing economic stagnation.
Reminds me of “Hope and Change”. Nothing but recycled policies from Obama’s predecessor: privatize profits and socialize losses.
“A lot has changed in the past 9 months since election. The number of people on welfare has plummeted.â€
Really? I haven’t seen any cuts in welfare programs being passed by Congress or Trump in the last 9 months.
___
Huh? It’s not welfare cuts by the government. It’s fewer people needing welfare, because they now have this weird thing called a job.
“Considering that oil prices are at multi-year lows (due to low consumer demand), increasing oil production is self-defeating.”
Multi year lows? Not really. It was $30, 18 months ago. And now it’s at $50. And $50 is once again the sweet spot for oil. It’s cheap enough that consumers have cheap gas, but it’s expensive enough for producers to drill, especially American frackers. The number of American rigs is up 100% over last year. You really have no idea what you’re talking about amigo.
http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsoverview
“Huh? It’s not welfare cuts by the government. It’s fewer people needing welfae, because they now have this weird thing called a job.”
So by how much has the need for welfare benefits plummeted? Considering how stagnant the labor participation rate has been since Obama left office, more people have run out of benefits, more seniors have retired (they’re not), or the claim of sufficient job growth to isn’t true.
It takes 150K new jobs just to keep up with population growth each month. 2017 averaged 184K new jobs per month, or only 34K just above the minimum. Heck, new jobs averaged 196K/month for the first seven months of Obama’s last year in office. Neither averages are spectacular. And, as Octal77 pointed out, wage growth has been negligible that it wouldn’t cut significantly into the general need for welfare benefits.
“Multi year lows? Not really. It was $30, 18 months ago. And now it’s at $50. And $50 is once again the sweet spot for oil. It’s cheap enough that consumers have cheap gas, but it’s expensive enough for producers to drill, especially American frackers. The number of American rigs is up 100% over last year. You really have no idea what you’re talking about amigo.”
The price of oil today is the same as it was during the last recession in 2009. It’s the same as it was 13 years ago. All this despite higher inflation. Do you realize that prices hit a 9-month low in June? How sustainable is that $50 sweet spot? Investors don’t see too thrilled about the industry either.
When Donnie was campaigning he claimed all these numbers were fake but suddenly now that he’s president they’re real? LOL!
I agree with you. They were fake before and they are still fake today, calculated based on the same bad assumptions. Obama bragged about fake numbers before and Donny is doing the same.
Try to understand how all numbers are calculated and you can get a pretty good understanding about where this economy is heading.
Those lazy to study on their own and who expect the bureaucrats to provide them real numbers are going to be in for a rude awakening. Ignorance is never bliss, especially long term, when you suffer ALL the consequences.
Trump will cause the crash. Don’t ask me how or when, but he will do it, and it will be silly and stupid how it happens, probably cause someone hurt his ego, or was disloyal, and he will over react and sink us and the world with a tweet.
How can Trump “cause” a crash as president when he is being attacked on all fronts? It will be Democrats and RINO Republicans who will crash the system.
If anything, the last crash was papered over with debt, artificially low interest rates and money printing by Obama’s cronies at the Federal Reserve. The Obama regime racked up more debt than ALL previous presidents combined to $20 trillion dollars.
Dimwits like Jed choose to ignore facts, they’re too busy slurping up the fake Russia election nonsense coming from CNN, MSNBC and the rest of Democrat propaganda media.
@Jed
Trump might light the fuse, but any crash was baked in as soon as debt and asset valuations reached highly unsustainable levels. In other words, Trump stepped into the perfect storm.
Samantha seems to conveniently forget history. Who was President in 2007/2008 during the last crash? Republican GW Bush (2000-2008). Who was CA governor during the last crash that caused CA housing prices to drop nearly in half? Republican Arnold Schwarzenegger (2004-2012). After the disastrous housing polices of these 2 Republicans, does anyone wonder why Jerry Brown and Barack Obama were elected for multiples terms? Under Republican Trump, we will see a crash again. People forget history but I’ve seen it all before.
@ Samantha
“Dimwits like Jed”
Wow, Samantha’s a mean girl! Also quite dense. If you notice I didn’t mention Trump in terms of economics, did I?.I am talking about his nature as a frail ego that is highly erratic and even dangerous.
9 of the last 10 recessions have occurred under Republican presidents. Samantha didn’t forget history, she just failed that class. She is still arguing about states having the right to secede despite Appomattox. Now here comes her rebuttal from Dr. Google with a million links. Wait for it…
Seen it all before Bob,
While the Democrats are all the same and pursue the same globalist agenda, the republicans still have some original conservative guys like Ron Paul (anti globalist). Those coming from that hornet nest called CFR (council of foreign relation) and TC (trilateral commission) are all the same – globalists to the core regardless of R or D after their name. Personally I don’t see any difference between McCain, Romney, Obama, Bush and Hilary – all globalists against the interests of the american middle class.
So, while you are right about Bush, there is no difference between Bush , Hilary, Obama, Romney and McCain – they pursue the interests of the TBTF banks at the detriment of everybody else.
Trump did not come from CFR and I was hoping he will change the course. He still has time but I don’t have high hopes given the fact that he surrounded himself with the CFR guys. On top of that he has to fight a congress full of globalists (the vast majority). It looks like the bankers printed enough money to buy most of them. With Russia, they forced his hand to sign for sanctions – TRAITORS. He is firing some traitors and hires others who prove to be also traitors. That swamp in DC is full of traitors – whoever you hire is still a swamp creature.
So, laughing at Bush or Trump does not make Obama and Hillary look any better. I don’t sing praises to anyone. In my opinion all of them should be behind bars. Or I should say, lets wait for a full term for Trump and then pass judgement. However, one man in swamp full of traitors can not do too much by himself. It was the same with Ron Paul.
@ SoCalGuy, why don’t you try backing up your “facts” with sources?
I took several history courses that I passed with no problem. Maybe you should have taken a real history course instead of that diversity course that you took at community college?
?
Question and for me literally the million dollar question. I own a home near silicon beach in Mar Vista LA 90066 next to Culver City. What few homes there are on the market are a million plus and i am talking 3bdr 2 bath 5000sq ft lot built in the 40″s and 50’s.
Daughter has 4 more years of High School. No other ties here.
Should I sell and rent before there are no buyers or inventory increases and prices drop?
If I would have done this 4 years ago I would have left 400k on the table. And if I do this now will I be missing out on more gains?
I would like to unlock my equity but I am under the illusion that there is no place that is affordable that is as nice. Really all we have is an ocenn breeze but I really don’t like being hot and miserable.
Need advice.
Keep the house, in all of it’s Prop 13 glory. The marine layer is CA. No one should be here unless you live under its caressing bosom. Also, while the next three years will likely see a deflationary correction, about 4 or 5 years from now we will have massive inflationary pressure from QE4 QE5 and QE6. So the house could very well be a long term inflation hedge as well. That real estate will always be valuable. Right now it’s massively overvalued. But it will have a price floor that’s much higher than just about anywhere else.
Trex, I would sell it in this market. You don’t leave money on the table because you do something else with those money.
My investments produce 12% per year or more (various RE properties) in net cash flow. If they appreciate in value, that is bonus. I don’t count on that in this economy in the near future.
Let’s say, you sell and get 12% per year on a million dollar. That is $120,000 per year in passive income. Due to depreciation, you don’t pay almost any taxes or you pay 15% on a low amount. Now, that is freedom to travel and live wherever you like. No stress from employer and from the bank payments.
CA is hardly the most beautiful and safe place in the world. It might have been long time ago, but not today with homeless camps and gangs everywhere (especially with a girl in those public high schools!). After traveling a lot, you will agree with me. I did that long time ago and have no regrets. I homeschooled all 4 of my kids – the best decision and my children still thank me today. They ended up with 4.0 GPA all the way to the end of college. We enjoyed our children and they enjoyed us, as parents. We had lots of long vacations and trips before they entered college.
I concur with Flyover. There is a whole wide world out there besides coastal California. Take the $1M and run.
Thank you both for your responses. JR With says keep and enjoy the marine layer.
While flyover says sell, invest and live off the passive income.
Question for flyover is what would you do hypothetically with 1.2 million to invest in today’s market. Cash out and rebuy other units to rent then live on the passive income?
Cash out and rent til prices decline then buy?
Live where in the meantime and buy where?
My house for me to rent would cost 4K per month with no tax benefit.
So let me get this straight. You don’t live in CA or have anything to do with the market but repeatedly make posts on this blog to validate your life decisions. When it’s 80 in November and I’m out surfing I’ll be sure to comment how sucky the weather is in your town. You sir are the definition of a troll.
You’re right… you can’t count on appreciation where you live but you can in CA. I bought my first home (now a rental) in OC for $220K in 1997. It’s now worth over 800K and rents for $3600/mo (undermarket). I’ve never lowered rent even during recession. As LA gets more expensive I believe my home will skyrocket in the future. It’s not the I.E.
There are plenty of safe cities in CA especially in OC and south OC. Irvine, Lake Forest, Mission/Aliso Viejo, Newport. All excellent school systems as well. I knew a couple homeschooled kids. I could never put a finger on it but they were socially awkward.
You likely lost out on millions of dollars and your 12% is laughable. My parents have been investing since the 70s/80s. One of their rentals (a complete tear down today) is valued at 1.3M just for the dirt (double lot near the beach). And the property taxes are lower than my internet bill.
If you plan on retiring in Mar Vista, then keep the home. Otherwise, sell it now and pocket the gains and invest elsewhere. You never know what will happen with the economy or when a major earthquake will devastate the LA Basin.
Probably the only surfing that SoCalGuy does is online for male hookups on Craigslist, Grindr or Adam4Adam?
SoCal, good for you. I am happy for you, but you don’t look like a happy fellow to me.
Where I live, I live by choice not by necessity. I live where I live because I like it. I like small towns with no stress. You like big cities; good for you – it is a big country. I used to live in SoCal and I moved out long time ago.
When I invest, I am not looking only in my town. I invest based on ROI alone. I invest in AZ, CA, ID and HI. How much, it depends on the deal and I invest only when it makes sense. I had properties which doubled in a year. Those type of investments for me are like stocks. However, I like those with good cash flow because I don’t have to sell to realize the gain. I look at those like they are bonds. A mixture of “stocks and bonds” is best for peace of mind.
To see snow in the winter for some people is beautiful. I like it. If I want sun, I fly to HI (I go there every year for weeks) or S. America or Australia.
As for my children, they are social bugs; far more than me who was raised in public school. I see the children raised in public school today far more socially awkward than my children. If you take the phone from their hands they are lost. That is pretty much the extent of their socializing – phone and all the latest apps. For the most part they can not cary a conversation with adults. Mature people were always pleasantly surprised to interact with my children regardless of their walks of life.
Cheers!
My babysitter was home schooled. She got a full ride to an elite east coast college. It sucked for us since I was hoping she’d stay home and go to Gonzaga, lol. A good babysitter is like a good mechanic, when you find one, you do everything you can to hold on.
Anyway, I bring this up because she is by no means socially awkward. Oh and this…
http://www.businessinsider.com/homeschooling-is-the-new-path-to-harvard-2015-9
“Away from the standardized tests and rigid schedules in public education, kids can let their creative sides flourish, learn about the world they live in, and, when it’s time, earn acceptance into the best colleges in the world. “The high achievement level of homeschoolers is readily recognized by recruiters from some of the best colleges in the nation,” education expert Dr. Susan Berry recently told Alpha Omega. “Schools such as Massachusetts Institute of Technology, Harvard, Stanford, and Duke University all actively recruit homeschoolers,” Berry said. ”
My kids aren’t school age yet, but I’m definitely considering it as an option when the time comes.
Landlord,
You seem intelligent so please don’t quote business insider. Sure, home schooled kids make it to Ivy League schools but how many? I believe there are 3 (out off 1600+) in the Harvard incoming freshman class. Similar dismal numbers at MIT, Princeton, etc. It’s your choice to home school your kids but it’s hardly a path to the Ivy League. All schools publish their class demographics. Harvard just made big news because for the first time the incoming class majority was non-white.
I received a full ride sports scholarship. That’s hard to do when you are home schooled.
Mr. Landlord,
Homeschooling is the best gift and inheritance you can give your children, far more than all the money in the world. Nobody cares about your children like you do.
My children received merit scholarships in hundreds of thousands. One is almost done with medical school with less than a hundred thousand in student loans and he will have a doctors pay at 24 years old. That is almost nothing. Frugal as he is he will pay that the first year or second at most. Some hospitals pay for that upon hiring. They never received financial aid because of my high income and wealth. Homeschooled children don’t lose time in school to be babysat and go slow based on the slowest person speed. They go at their own speed. The boy of a friend of mine, also homeschooled, passed the Bar Exam to be a lawyer at 22. He passed 2 exams – for WA and ID.
Public school socializing is not always good. Most of the time it means bad influence from problem children coming from broken homes.
LOL, come on dude, shooting the messenger? Did you actually read the article? It has multiple sources, studies, etc. It’s not some op-ed by a jr. writer.
How about an academic study by Cal State? Is that OK to quote for your rigorous standards?
https://pqdtopen.proquest.com/doc/1011320109.html?FMT=AI&pubnum=1511345
It’s kind of long, but it basically says home schooled kids are perfectly normal and well adjusted emotionally and psychologically. The study founds they have more self esteem and better leadership qualities.
And they score higher on SATs and get accepted to top tier colleges at a much higher rate than public school kids. Stanford accepted 27% of home school kids compared to less than 10% for the general population. Not too shabby. And once in college, home school kids graduate at a higher rate and have higher GPAs than the general population of the college student body.
The more I look into this, the more I like the idea.
“You seem intelligent so please don’t quote business insider.”
SoCalGuy pulls BS out of his rear end and cites it as fact.
“Sure, home schooled kids make it to Ivy League schools but how many? I believe there are 3 (out off 1600+) in the Harvard incoming freshman class. Similar dismal numbers at MIT, Princeton, etc. It’s your choice to home school your kids but it’s hardly a path to the Ivy League.”
More BS pulled from SoCalGuy’s rear end and cited as fact.
“All schools publish their class demographics. Harvard just made big news because for the first time the incoming class majority was non-white.”
SoCalGuy got a tingly feeling up his ample rear end on the news.
“I received a full ride sports scholarship. That’s hard to do when you are home schooled.”
SoCalGuy got a full scholarship to the women’s synchronized swimming team at Orange Coast Community College.
https://admission.princeton.edu/how-apply/admission-statistics
Take a look at Princetons website. As I said, every school publishes their acceptable stats. Under homeschooling you will see a “.1” percent acceptable rate.
https://homeschoolersanonymous.org
Colleges look at the whole student. If you are homeschooled, you better have something special about you to stand out. I read about a kid at Princeton who has a GED but a musical genius in piano. I would suspect any homeschooled kid at a ivy League school is extraordinary in some extra curricular way.
Nice try Reality Bites AKA Samantha- sorry your reality sucks. Unlike you, I can afford to live here. Now it’s time to water my lush yard.
Trex,
Why don’t you just enjoy living in your home, not to mention provide stability for your daughter. You even admitted, timing the market is impossible. And have you looked at rent prices for a comparable property in your area (not a ghetto apartment)…they will likely make your jaw drop.
Enjoy your home, enjoy the Prop 13 tax basis. If you are dead set on moving/taking equity out in 4 years, explore the following. Turn your home into a rental and do a cashout refi to unlock equity if you want to move elsewhere. High rent prices for your neck of the woods are almost guaranteed going forward…not to mention any appreciation is just gravy.
Trex,
If you like where you are and want to live there, then live there; there is no point in moving or selling. If you sell, the best way is to move to a lower cost of living area in an area where you like it and you will be happy to live. When is a matter of personal residence, live where you are happy. If it is for business, forget all the emotions; ROI is everything.
With so much money, I would rent. I don’t like to rent. If you don’t have a choice, renting is OK, but that is not the case with you.
Also, every market in each state and city behaves differently. In So Cal you have big swings up and down, percentage wise. In smaller towns in flyover country you have small swings in prices. They are more stable. You can have some target markets, study them really good and make decisions based on the info you collect. That is what I am doing and that is the reason I am on this blog. SoCal market is one of many target markets I am studying. Based on my observation over the years, right know it looks overpriced. At some point in the future, it might be attractive again for other investments, but not to move there – that is not my ideal place for living but I understand those who like there; I have a sister there and I go there every year.
“With so much money, I would rent”
I meant “I wouldn’t rent”.
Since my last post, there were only two posts that mentioned anything about Orange County (both by samantha) and the references were only items in a long list of examples including many other counties and not specific to Orange County. The Dr’s premise of rich OC ignoring rising poverty while the middle class slowly fades away just doesn’t seem to me to be very much like what I see around here in North County. There was always large hispanic presence in Orange County from the days when Mexican agricultural workers picked crops. Look at the old colonias like the old part of Placentia or El Modena. Those areas are quite different from central Santa Ana. I know that there are bad areas out here, but compared to what I’ve seen in South Los Angeles, this is not bad at all. There are so many more working class and middle class households here than rich households, and pretending otherwise is just not right.
Joe R, If you read on this blog for a long time and read many other publications, you will know by now that the middle class in CA was contracting constantly for a long time. The 0.0001% and the poor in CA were feeding on the middle class for a long time – some became poor and some moved out to escape poverty.
This process did not stop. It continues to deteriorate the gap between the very rich and the poor. Due to these two massive forces (exodus of middle class from CA and taxing the middle class in poverty), the middle class will continue to decrease. When I say taxation, I am not talking ONLY about taxes, but also inflation (at least in RE, medical and education). Inflation is the most REGRESSIVE form of taxation. With the increase cost of RE, both to buy and to rent, the standard of living of the middle class deteriorated to the point that they are now poor relative to the cost of living.
You can not deny this. I don’t know where you fall in terms of class status, but these forces affect millions in CA. Millions who lost their homes in 2008-2010 became poor. Millions more will follow that path in the coming correction. If these forces don’t affect you, be happy.
I think that statistics can lie, and liars can use statistics. I am as middle class as they come, and so are my Daughter and her husband. We all live in middle class Orange County with a lot of friends who are also middle class Orange Countians. Prices for a lot of things have gone up, and also down for other things. With Prop 13, I can plan for my RE tax increases, something that isn’t possible to do in other states. I have a middle class job that I can work at for many years still, and I’m no longer a young man but a Grandpa who is eligible for SSA payments if I were dumb enough to take them now. With the Metro train and Uber, I could go to work even if I were too old to do my own commuter driving.
I’m under no pressure to leave, and I know that the grass isn’t necessarily greener elsewhere from my Oregon contacts. (It was 106 in the Willamette Valley yesterday and in the 80s here; go figure…) We’re not going anywhere, and the prices here are just high enough to keep out undesirables, and low enough so that I’m not tempted to cash out and move to my own tropical island.
The Orange County Register reported the largest group of outmigrants from California tends to be middle-aged people making between $100,000 and $200,000 annually. People migrating out of the Los Angeles-Orange County area have gone from 42,000 in 2011 to 88,000 this year. Since 2010, California has seen an overall net outflow of $36 billion from these migrants and the biggest gainers from this exchange were states such as Texas, Arizona and Nevada. Many California employers have joined these outmigrants.
http://www.ocregister.com/2017/04/23/leaving-california-after-slowing-the-trend-intensifies/
Meanwhile, the Orange County Register also reported that a staggering 80% of Latino illegal immigrant families in California are living in poverty and need to receive some form of assistance paid for by taxpayers.
http://www.thegatewaypundit.com/2015/08/80-of-california-latino-illegal-immigrant-families-live-in-poverty-need-government-assistance/
“Meanwhile, the Orange County Register also reported that a staggering 80% of Latino illegal immigrant families in California are living in poverty and need to receive some form of assistance paid for by taxpayers.”
No, that can’t be. I have been assured by very smart liberals on CNN and MSNBC that illegal aliens (errr I mean undocumented Democrat voters) are a net benefit to the country. I mean without illegals, a tomato would cost $1000 right?
Great news regarding the rent bubble
http://www.zerohedge.com/news/2017-08-05/time-its-bubble-rentals
Key phrase from the article: “cheap money entices developer to overdo it”
In California, we are far away from rental parity. If rents continue to decline due to increased supply it will make renting even more attractive compared to purchasing massively overpriced crapshacks.
There has definitely been a boom in apartment building nationwide. And rents will fall. But the market for rental apartments and homes are two distinct markets. The market for an apartment is the 26 year old single. The market for rental homes is families. Different markets with different demographics and different supply/demand curves.
not in California buddy. I am renting a condo and the condos/apartments next to us are all rented by couples and families. Even worse, what they do is sub-lease one of the bedrooms to a strangers because that’s the only way they can make the payments. Most Californians are broke. There is no more street parking available because people are crowding together. We need massive developments of multifamily housing.
Sounds like paradise. Families living in an apartment and sub leasing rooms to strangers. I’m sure that must be awesome when you have small kids, nothing like a complete stranger sleeping 10 feet away from the kids.
But hey it’s 70 degrees in November and there is a lot of good Mexican food. So it’s all worth it right? LOL
“If rents continue to decline…”
What area of the country are you referring to? No desirable parts of CA are seeing any decrease in rents. And that is a fact!
“Bay Area rents fall, with San Francisco down 9% since last year”
https://www.google.com/amp/s/www.bizjournals.com/sanfrancisco/news/2017/03/23/bay-area-rents-fall-with-sf-down-9-percent.amp.html
Not currently happening in my market (orange county)
Typically, when the housing market gets real strong, rents will stop rising because many renters throw in the towel and buy a home before they get priced out. Flat or falling rents can occur in a recession. Flat or falling rents can also occur in very strong housing markets. Currently, rents are beginning to flat line, and the cause is the strong housing market.
I forgot about the loony bin in SF. I am not aware of any markets in LA/OC that have declining rents. From now on, I will keep my comments to “desirable socal” markets.
Just as I thought, LB. When proven wrong, just change the argument. Suddenly, SF is loony or no longer desirable.
I only have pointed out that some of the most desirable and overpriced markets, including the afore-mentioned, were experiencing falling rents for the past….oh….several months.
Jt,
“strong housing market”…is that why we have low sales numbers and historic low ownership rates?
I am loving declining rents/flat rents. Why buy an overpriced house when your rent declines or stays flat? I cant think of a reason.
Based on comments in this thread, I might conclude that the peak in prices is near as that last of panic buyers rush in to buy. Seems thats already happened in the Bay Area.
POH, I don’t live in SF or follow that market. I have a VERY GOOD pulse on the LA/OC market. Do you have any sources stating rents are declining there? We’ve been hearing about declining rents for years from some of the bears; however, that has been anecdotally refuted by people getting significant rent increases.
@LB
So anecdotes are more influential than multiple articles based on objective studies are to you? Is there any point in using logic with you?
I’ve never been to outer space, but I’m more willing to listen to scientific studies over flat-earthers.
Do ex-Californians who move elsewhere, as so many on this blog have suggested, experience backlash? Are there any ex-CA people who can share how to transition? Not only am I from here, I work in “the biz” and even when I travel closer to my homeland in NorCal man do people bust my chops, non-stop. It’s beyond “funny” and just embarrassing! I don’t want the attention. LA LA land is a bubble, I’ve adapted to living here and I’m quite “normal” here. In SF and Marin and Sonoma, I’m an odd sort. I am looking ahead a decade or so to retiring elsewhere. Thanks Commentists!
Depends.
There are 2 types of ex-Californians
Type 1: Leaves CA because it is a liberal shithole that is un-livable. The second he gets to his new state, he registers as a Democrat and votes for the same people and the same policies that turned CA into a shithole which forced him to leave. (See also NYers who move to The South ). And this Californian will also go out of his way to tell everyone he can in his new state, how everything “back home” is better….the weather, the Mexican food, the beach, the (fill in the blank). And as an added bonus this Californian looks down his nose at all his new neighbors since they are all uneducated inbred hicks, dontcha know? He will also nearly vomit at the sight of a gun or a pick up truck, cuz they’re so icky.
Type 2: Movies to his new state, doesn’t act like an asshole, appreciates his new home, tries to immerse himself in the community without trying to turn into into California.
Be a Type 2 and you will have no backlash. Be a Type 1 and you will be universally hated by you new neighbors.
Then theres you. A type unto himself. Simply an asshole with no excuse.
Ad hominem attacks…..the last refuge of an online scoundrel.
Lol so true.
Do those who move from SoCal to other areas experience backlash? We haven’t left California yet but more than likely it depends on where you go and your attitude.
If you go somewhere bragging that you work in the biz in La La Land, don’t expect that everyone to be impressed especially in NorCal where many people in the Bay Area and inland valley areas hate LA and all that it stands for. They don’t like that a great quantity of northern California’s water is being shipped to LA to fill swimming pools and to water lush yards.
If you have an arrogant and know it all attitude like SoCalGuy, then expect to everyone to hate you.
Thanks, yes that is for certain and I should have clarified my situation a little better. I am from the Bay Area and went to college there and spend young adulthood having the same anti-SoCal bias that you describe. I lived in NYC for many years after college. Came to LA because I do work in film and TV but by no means do I use the language I put in my post (“the biz” and La La Land), I was just stereotyping myself in anticipation of how others will. In fact I’m a working stiff who is constantly stressed out, thinks the weather here is way to hot (live in the valley), hates the traffic, and I’m a quiet type, and not particularly “proud” of where I work or what I do. I just meant that when it DOES come up, down here it fits in (not that I ever wanted to fit in down here!) but up there my friends don’t even watch TV. Lived in SF for a long time but understand it’s a different scene there. My personal preference in the olden years is a smaller city, walkable, pretty, trees, not to cold not too hot.
So when I asked about transitioning from CA to elsewhere, I personally am not the douchebag type, drive a super old low key car, yes. It just seems “in general” ex-CA ppl, who move to Oregon etc, will face backlash regardless. Isn’t there a huge anti-CA climate in Oregon?
Socals arrogant? Oh my! Every Bay Brat Ive ever met constantly reminded me of how “GREAT” the Bay is. How much better it is in every way. So I always ask them what the hell they are doing in SoCal. They struggle with that for obvious reasons.
Passing Through:
You sound like a decent person. You will be welcomed wherever you go. People don’t hate Californians per se. They hate d-bag Californians locusts who move into a new place and destroy it.
I GTFO’d over a decade ago from north San Diego County, I think I’m just more suited to be where I am now – just more my pace. YMMV. When I go back, which is once every couple of years or so, I cant think of a single thing that has gotten better since I left and I feel pity on the people who live there – they seem dull, grey and weak. I have a small commute, epic lifestyle for my interests, and just have a lot more time to LIVE, not just commute, stand in line, etc. The first 2-3 years you ask yourself at times do you live your life in the terms defined by the place you left, or can you leave those things behind and embrace what your new place offers? For me the answer was easy, so I think you just have to find a place that fits you – do the research and be flexible – maybe you dont get it right the first time so put your stuff in storage rather than commit to a full move. By doing this you’ll also find out you can live with a lot less stuff.
If I had stayed perhaps I would have more money – although that may not have happened – but I’m sure I would have spent more time watching life passing me by than be out there living it. I havent had TV in 8+ years, no smart phone, not even a watch – but every free day and most days after work I’m out there in the great outdoors. I’m sure SoCalGuy will pipe up with the typical “I can surf and snowboard in the same day” argument, which is absurd – who would want to do that with all the traffic – just to say you could. But thats one of those illogical arguments people make to justify their decisions, similar to making the case that whatever decision you make is the best one when you could never know what your life would be like had you chosen an alternative.
For me the question became do I want to own things or do I want to do things? As I age I find my choice is a radical departure from most peoples thinking since this is a culture based on conspicuous consumption.
Thank you so much for your thoughtful perspective. I only ended up here cuz work opportunities (Bay Area born and bred, but came here via NYC), so moving here after NYC was an opportunity – I could afford my own apartment, it was dirt cheap 10 years after the riots, could save up and buy a condo, I live near work so commute is easy. So life ain’t bad, But when I look beyond my own bubble that are dictated by choices, not circumstance, I see myself in 10 yrs living somewhere different (Sonoma county kind of ideal but $$$), so it’s on me to get out there and find other pockets of good living!
Well, where ever the hell you are now. THANKS FOR LEAVING NCSD!
Years ago when I was a teenager my family moved to rural Western Oregon. Both of my parents had grown up in the Country. We however had grown up in an urban area next to a lot of vacant land in the LA hills. But years of tree climbing and dirt biking in our “back yard” left us uniquely qualified to fit in there. (PS you can’t do that stuff there now… too developed now.) We bought an unfinished house frame with a shake roof and no walls and camped there while we finished it. The locals got a kick out of that, and we fit right in.
A few years later at a local commission meeting in the township, the old guy who was chairman got really frosted at some recent arrivals and started on about “Damn Californians”. I got up and said Fred, I’m from California”. He then said ” Oh I didn’t mean you guys, I meant that V_____H_____!!. (A guy who though he was God’s gift to the woods and wanted to involve outside government in regulating the locals. A real I got mine to Hell with everyone else kind of guy.)
So fit in and don’t tell the locals everything you think that they don’t know.
Here you go. Welcome to reality
https://www.paragon-re.com/trend/bay-area-apartment-building-market
Interesting article:
http://www.ocregister.com/2017/08/06/the-forever-home-why-more-people-in-southern-california-arent-selling-their-homes/
“So they hired Rossmoor remodeling contractor Eddie Kesky and invested about $750,000 in renovations:”
Amazing. In most parts of the country, $750K will build a large brand new house.
“Most of my homeowners are staying put and remodeling,†Battres said. “It’s a seller’s market. If they go and sell their home, they’re going to move into a place that needs remodeling. So they choose to stay in their home and make it their forever home.â€
These charts are eye candy for me.
CC debt, student loans and auto loans have all surpassed previous highs
http://www.zerohedge.com/news/2017-08-07/us-credit-card-debt-surpasses-financial-crisis-record-student-and-auto-loans-hit-new
As usual the boyz at ZH forget to mention a few details.
First off the population is about 8% bigger today vs 2008. And adjusted for inflation $1 in 2008 is worth $1.16 in today’s dollars. So really, when adjusted for inflation and population growth we are nowhere near surpassing the 2008 highs.
Take $1T in 2008. Adjust for population growth, it’s 1.08. Adjust for inflation it’s 1.25. Or put more simply, as usual Zero Hedge is full of useless nonsense.
did you ever stop to consider college tuition costs more today than during the financial crisis — or that everything costs more due to inflation — and that there are more people of student/auto purchasing age now than before ? what you want is a per capita number not absolute number as the one you’ve cited. you are the reason people hate our generation. you act like you know everything but know less than other people your own age. how about speaking only when being spoken to. for everyone else: this guy doesn’t represent us
@this guy does not represent us,
I agree. I do not represent you or anybody else besides myself.
I am not aware I made that claim?
These charts are eye candy because I don’t have student loan debt, cc debt or auto loans. It feels good to be debt free and save money.
“You are the reason why millennials are hated”
That’s sounds like a compliment but I don’t think I have that power. I do see hostile comments from RE cheerleaders, realtors and lenders though. They want millennials to pick up the slack and follow the mistake former generations made. These individuals are beneficiaries of the housing bubble and there is nothing worse for them if people are waiting for a crash and delay their purchase plans.
One thing you got to remember is not everybody likes you in life. You can’t possible make everyone happy.
One question to you. What do you mean by “representing us”? Do you describe yourself as a typical millennial? If so, what attributes does a typical millennial have. I thought they come in all shapes and forms.
“or that everything costs more due to inflation”
oh boy, there it is again….INFLATION, INFLATION!
Sure, if you are in deep credit card debt it costs more to service that debt. Sure, if you always have to have the newest IPHONE it costs you more. Sure, if you don’t zwitch internet providers every two years it costs you more over time. Hell, there are still people out there who pay over 200 bucks for cable and a landline! You could stream the shows and movies for a fraction of that price. Not to mention that most content is free. Sure, if you buy a brand new car every 3-5 years it gets more expensive.
Have you stopped and considered all the things that are getting cheaper?
Clothing for instance. Can clothing get any cheaper than it is right now? Sure, if you buy designer brands they overcharge you by like 5000%. Look at TV’s and other electronics. Buy them used or not the newest model. You can pick up a nice Smart TV with all apps for a few hundred bucks. That used to be 2K back in the day.
Look at used cars and how cheap they are compared to a new one. Look at virtually everything in your household, most of that stuff is made in China and much cheaper than it was a few years ago. At my work, we always try to buy from Asia when it comes to components. These components are the same quality and cost a fraction compared to the stuff made here. Our competitors are doing the same. You need to lower prices to not lose market share.
Did you know that the oil price used to be over 150 bucks a barrel not that long ago?
And did you miss that even the FED keeps saying inflation is too LOW?
I seriously think that people are confusing their spending problems with inflation. Stupid!
From the Dr’s article:
“Michael Ruane, an affordable housing executive who was the county’s project director on its first indicators report 17 years ago, said the data show “there are two Orange Counties.â€
“What’s striking is the enormous variation. You have poverty in a prosperous region. You have a knowledge economy with high wages, and a tourism economy with lower wages.—
From what I see, the two Counties are the Americans and the Immigrants. There are some immigrants in my neighborhood, but they have money enough to live here (contractors). The hispanics are mostly Americans. Those who live in the rentals around here know they’re lucky to be here and not down in the poor side of Santa Ana. My street is mostly owner occupied. At my work, there have been a few educated immigrants, but we have had a lot more children of immigrants who went to US colleges. I’m fairly optimistic about the future of Orange County. Hopefully that optimism isn’t misplaced.
We have family who used to live in a “good” neighborhood in Fountain Valley. During the last housing downturn, several of the houses in the neighborhood became rentals. To afford the rent, the renters often moved in boarders, relatives and other families to live with them. Street parking became a nightmare and the rental houses became run down. Even a “good” neighborhood can quickly go down hill.
Unfortunately what you say is correct. In a lot of cities, the worst parts of town today, used to be the best parts of town 100 years ago. Nothing is permanent or guaranteed. Best you can do as a home owner is stay vigilant, get the city to enforce codes, zoning, etc. And at the first hint of a ‘nabe going downhill, get that For Sale sign up.
Exactly the same issue here in Woodbridge (Irvine). Last few years come home to find trash dumped in the street from all those extra people who now park upto 1/2 block away just to find a parking spot.
Not worrying about the growth of the tourist industry in Orange County since the minimum wages have caused prices to rise for restaurants and hotels and that means lots of Latinos and low income whites are out of jobs, In act minimum wage hikes are already destroying thousands of low skilled jobs in the bay area and Seattle. The problem is what will replaced it nothing because of California’s high cost of living or the start up aerospace companies like Vector, Rocket Lab and Terran Orbital, as someone mention there are still high income in south Orange County, Mission Viejo median income is 113,000 and lots of middle age people moved back to lived with their parents to inherit the house. This is not just happening in Orange County but throughout the US.
The grim reality about the wage is that most companies figure most people are in a relationship so that they assume a wage of a lot less than the $28 would be justifiable to pay in order for businesses keep wages within check. This of course does not work all the time where you have good employees where some business can’t justify paying higher wages just so that person doesn’t leave town.
On the flip side landlords don’t see it that way. Landlords rather keep rents high and assume that there are companies that could fill the void for these high rents. Surprisingly you will find these rents are high usually to renters who are not working in the area but were forced to work further away. Some of the high earner unfairly impact local economies where smaller companies can’t afford to justify increasing employees wages because these outsider indirectly create a wage disparity. This by far is really what is hurting smaller companies in depressed areas and in turns does not help smaller economies to improve.
I think monopoly run apartments complexes need to be reviewed to help keep competition in check so that we don’t have runaway rent increases.
Another interesting article
https://www.bloomberg.com/news/articles/2017-08-08/baby-boomers-who-won-t-sell-are-dominating-the-housing-market
Flyover,
Seems like your personal situation is a great personification of what’s happening in the socal market. You are comfortable, like where you live, and don’t plan on moving.
That is what’s happening with boomers around here and that is choking supply. What is the solution? More boomers are retiring daily, moving onto fixed incomes and stayting put
Dan,
I am not blaming any boomer or millennial and I am not blaming any president, liberal or conservative.
I always blame the FED and the globalists for all the consequences of their policies of enslaving the world. That is the sad reality if people admit it or not. Every person is just a market participant responding to the actions of these Globalists in charge of the TBTF banks, owners of the FED.
I did not say you were blaming anyone I merely pointed out that your current living situation albeit outside of California is extremely similar to thousands of homeowners in California, which is my point of why the inventoary is so limited.
You state globalism and the fed and currency debasement and cheap credit which may be a piece of the puzzle however you fail to recognize another large piece of the puzzle tugging the other way of your thesis are the Boomers such as yourself that, plan on living in their California homes until they die. Low turnover, low inventory, high competition for the market.
Is this the new normal? Maybe.
Millennials wet dream of a 70% crash, may in fact be just that…a dream
“Millennials wet dream of a 70% crash, may in fact be just that…a dream”
Time will tell. Lets wait and see.
You’ll never see this mentioned on CNN of course…..
https://www.usnews.com/news/articles/2017-08-08/job-openings-hit-all-time-high-as-layoffs-tick-up
“Job openings roared to an all-time high in June as employers scoured a tightening labor market for qualified applicants, according to a report published Tuesday by the Bureau of Labor Statistics. Nearly 6.2 million positions were up for grabs in June, up considerably from May’s 5.7 million openings and soaring past July 2016’s record of 5.97 million vacancies.
Manufacturing hiring managed to eclipse 300,000 for a fourth consecutive month – something the economy hasn’t seen since early 2008. And professional and business services posted their best back-to-back months on record in May and June with 1.15 and 1.17 million additions, respectively.”
But hey man, Trump is monster who will destroy the country and the next great depression is right around the corner. Right?
But but I don’t know anyone who makes more than 11 bucks an hour
Tell us exactly which law signed by president Trump caused these numbers to be what they are. And how much would these statistics differ if Trump didn’t sign any laws since he got into office.
Before the rapid development of OC in the 50’s, There were many barrios seperated by open farm land, I grew up in Santa Ana, near Mater Dei High.
In 72 fresh out of the service, I got my first house in Atwood. Near Placentia.
Atwood was a landing spot for agricultural workers coming up from Mexico since the 1900’s. as a train stop. It was one of the only areas in OC where non-whites could own land, before the 1950’s El Modena was the other area.
There has always been 2 Orange Counties.
The irony is that in RE, we only find out the “true” value of property with the crash happens and the bottom is reached. Once prices start to rise, they are already too high. If you think Im kidding consider this. What would happen if banks would no longer lend money for houses? What would the prices look like if you had to pay 100% with cash. Well, we would find out the real value wouldnt we. Simply by taking away the mortgage tax deduction, RE prices would drop 20% or more instantly. That’s simple math.
The true value of an asset is what someone is willing to pay for it. Whether the buyer uses cash of financing is irrelevant.
If I bought a 1960’s crapshack in the 90’s for $200k and I could sell it right now for $1m, then it is worth $1m. Value (and perception of value) changes. In three years it might be worth $700k, but that’s not any more its “true value” than the $1m was. You can say it’s “not worth the price” until you’re blue in the face, meanwhile someone else will buy it for $1m because it’s worth it to them.
Funny how that house will then seem “worth it” at $700k, ignoring the fact that it was $200k 20 years ago.
John D,
one could argue that just because someone overpays for an asset does not mean that asset is actually worth what this buyer paid. It just means someone overpaid. Maybe that buyer believed the lie of buy now or be priced out forever.
But most importantly, current prices are not the result of supply and demand. This housing market is not a normal functioning market. It’s highly manipulated by the Federal Housing Finance Agency (FHFA) and artificially propped up by historic low interest rates. The FHFA is a conservator of Fannie Mae and Freddy Mac. So they are Government-supported entities (GSE’s) meaning the taxpayer is on the hook. Heads they win, tails the taxpayer loses.
Fannie and Freddie own or guarantee over 60% of the total mortgage market. Without them, the market would crash. Of course people in power want Fannie and Freddy in place because they like government intervention as long as it makes them richer on paper. Ideally, we should have a privately owned lending process where the lender needs to hold that mortgage risk and cant sell it to the government. In that case, the interest rates would be much, much higher which would mean house prices would be about 70% lower compared to now. We need to get GSE’s out of the mortgage market and end the FED.
Another reason why I don’t buy a house. I don’t support this scam. No crash, no purchase.
Mille,
You’re right that the govt subsidizes housing. And I agree with you in theory that govt social engineering is not a good idea. The govt shouldn’t push people into home ownership. But that ship sailed about 75 years ago. This is reality, whether you like it or not.
So to say that the real price of a house is $X without govt intervention is like saying my real net worth would be 30% higher without income taxes. Both statements are correct in an abstract theoretical world. But we both know that income taxes and govt subsidized housing are never going away. Which means my net worth won’t ever jump 30% due to the end of the income tax, and houses will never fall 50% (or whatever number you claimed) because the govt will one day decide to get out of the house subsidy business.
“one could argue that just because someone overpays for an asset does not mean that asset is actually worth what this buyer paid.”
You probably should use the term “overvalued” instead of “worth”. Even that isn’t quite right, but it’s easier for me to get behind. What you pay for a house right now is what it is worth, right now. It doesn’t really matter how it got that way, or that it will be worth less (and then more) in the future. I agree that major changes are needed, but I don’t believe that will happen in my lifetime.
In some areas, property prices act like that of a collectible – rarity and desirability can cause people to go into a sort of “value worship” mode. It’s happening with older air-cooled 911s right now – even though brand new ones cost less, are much faster and much safer. Go figure.
You’re young – save your money or buy a cash-flow-positive rental in flyover country (a good alternative to a scary stock market). Just don’t expect a 50% haircut on the coast. Ain’t gonna happen. 30%, sure. 40% would shock me. I think it’s important that people sitting on the sidelines waiting for the crash take a look at a history chart of the median housing price in the areas you’re considering. For the country as a whole, in at least 50 years, downtrends have never gone as low as the previous downtrend.
Thanks John.
“You probably should use the term “overvalued†instead of “worthâ€. Even that isn’t quite right, but it’s easier for me to get behind. What you pay for a house right now is what it is worth, right now. It doesn’t really matter how it got that way, or that it will be worth less (and then more) in the future.”
We have to agree to disagree. I am saying price does not equal value – unless there is a crash. Prices fluctuate wildly, especially during a bubble but not the value. It depends on the individual buyer what they are willing to pay. That’s the reason why you hear people say the bubble draws in every last sucker until there is no greater fool to pay a higher price.
To me rental parity establishes the value of a house. If you bought a house today and lose your job in a month and you cant even cover your expenses by renting out your house it should tell you the house is way overpriced. And if you try selling the house, you are already in the red due to the high transaction costs. Sure, there is the emotional benefit of owning a house and the aspect of seeing it as a collectible. But for the avg. Joe, buying a house should be a numbers game.
Jay, please explain how losing the mortgage deduction would equate to a 20% haircut on housing prices? I would love to see your math.
Here’s mine:
If the median home price in LA is $600K. On a 20% down with 4% interest your deductible interest payments would be around $1600 a month or $19,000 a year. If the average taxpayer is in the 25% tax bracket, the mortgage deduction on said house would reduce their tax bill by about $4,800 a year. For those people who have been already paying a mortgage for a while the mortgage deduction is reduced and for those with their home paid off there is no tax advantage from the mortgage deduction. So how does this equate to a 20% haircut across the board? I think many people without knowing better exaggerate the actual tax benefits of owning a home.
it’s even more simpler than that, Fannie and Freddie are bankrupt entities. They were rescued by taxpayers with the guarantee of being wound down. Shut down the American Mortgage pyramid scheme and housing will drop 50% overnight….
If anyone believes that the last 10 years were reality, I have some pink ponies to sell you….The govt. rescued a bunch of over zealous specs and sacrificed the prudent and savers….
Govt. evil 101
We have relatives that used to live in a older neighborhood in Fountain Valley off of Edinger Avenue that was mostly owner occupied until the last housing recession when many of the homes were foreclosed. Investors bought the foreclosures and rented them out. Many of the renters took in relatives, boarders, and other families to pay the rent. The landlords didn’t care as long as the rent got paid. Meanwhile street parking became an issue and the houses became rundown. The neighborhood has gone down hill but prices have recovered.
Many of us are not so certain about the long term sustainability of Orange County which is riddled with earth quake fault lines and the millions who live there are almost totally dependent on water and food being brought in from hundreds of miles away.
@Samantha…if you are worried about earthquakes as you have mentioned it a few times…do not live in friggin’ California or Japan!
I have lived in So. Cal for 50 years and lived thru TWO 6.7 mag quakes in 1971 and ’94. My brick chimney fell off the house in the Northridge quake! And guess what? My homes are worth a hell of a lot more today AFTER the quakes….and apparently no one left the state either. Which is a damn shame.
Fountain Valley is fine. Anything off Edinger to the east is creeping into Santa Ana and has never been a great area.
https://www.zillow.com/homedetails/18520-Callens-Cir-Fountain-Valley-CA-92708/25284247_zpid/
This is a nice 5bdrm/3ba newer home bordering Huntington Beach. Public schools 9/10 and you are maybe a ten minute drive to the beach. I was looking in this area before I bought my current home. Not that I need a 5bdrm home but a similar home would cost double in my HB neighborhood just 15 min drive to the southwest.
LOL
Behind you is an Autozone. And you are one house away from a major thoroughfare (Ellis Ave). And across the street, another shopping center….all for the low low price of $869,000.
I guess if you don’t mind traffic 24/7 and gang members rolling up to Autozone in their low riders….it’s paradise!!
Here is more good news for renters
http://www.zerohedge.com/news/2017-08-07/us-rent-growth-flatlines-massive-flood-new-apartment-supply
RE cheerleader often try to deny that rents are flat or decline. Increasing rents is their main reason to convince you to buy that overpriced crapshack now. If rents decline they have trouble making an argument for buying overpriced RE.
What they say is: “rents are skyrocketing. And that’s a fact!”
This is truth by proclamation. When you prove them wrong they respond with anger or comments like “these loony’s in the Bay Area”. Realtors and RE shills are very predictable. It’s always the same pattern just recycled. But who can blame them. they are just used to the boom and bust housing cycles
Cannot comment on Nationwide rents as I merely focus on CA (socal to be more precise), but, from someone who searches both rentals and houses on the market; I can say rents aren’t dropping in my market (unfortunately).
BTW, I read zerohedge daily, but, take it with a grain bc their overwhelming theme is negative and doomer. Articles just a few years ago were focusing on apocalypse and banking system collapse and civilization decline into mad Max scenarios. Fear porn to feed the little blue pill addicts
Dan, even a broken clock in correct two time a day. Regardless of what zerohedge.com says the day of reckoning has arrived. It is very clear that both the stock market bubble and real estate bubble are topping out at this very moment. Signs of mania fatigue are appearing everywhere.
I am with you on that and are def. a red pill type of guy. I live in SoCal and my rent was flat the last few years but has not declined yet. I do see new housing being build everywhere I go. Especially, multi family. So we are going in the right direction and I don’t think the article is inaccurate. I like zerohedge but don’t take every article too seriously.
Housing bulls and realtors
Housing bears and zerohedge
Two peas in a pod!!!!
I was perusing San Diego listings on Redfin. There is this one house listed for $725K that has bars on every window. LOL. Jezuz fucking Christ. But hey, the weather’s good and lots of Mexican food, so it’s all worth it!
You are right Landlord. It’s not worth it at all. The listing prices here are a joke. I would not even pay half of what they are asking. That’s why most people rent here and long for the crash. It’s much cheaper to rent than to buy.
It will be worth it in 10 years and beyond, when San Diego, like OC, will become more and more gentrified. Its on its way to become like Manhattan, NY here now, forever expensive where demand will ALWAYS strip supply, keeping prices forever high, even in a recession.
Rule of thumb used to be renters could consider rent to be AFFORDABLE if it consumed 25% of net pay or less, and buying meant 33% of gross or 30% of net monthly income to service that debt. The reason for the gap between renting and buying was that buyers were getting that extra percentage offset with tax breaks and accumulation of equity while landlords got that benefit in a rental situation.
Well, because the Fed and BLS refuse to register any inflation and for many of the last 10 years instead registered “negative inflation” (they could not just call it deflation?) even as all major categories of expense except motor fuel were rising at double digit rates our COLAs never went up. This year a 0.03% raise, not even 2 bucks a month on social security, yet between 2011 and 2016 rent in the rural region I lived in rose from $700 for a LUX 2bed/2bath apartment in an upscale development to over $1,300 for a shabby older 2/2 in a bad neighborhood. That is easily 100% increase when you account for how much less you are getting for your money. And more important it is really hypothetical since the vacancy rate is now so low bidding wars erupt for vacant units.
Add to that more than 50% increase for health insurance, more than 45% increase in auto insurance, just about 40% increase at the grocery store, fast food and restaurants up more than 30% with some now double menu prices (who told McD’s they were a restaurant as opposed to the slop chute they really are?) so guess where I am living now? Ireland. Rent is bad here also but not as bad as the states. Affordability in the states is now accepted to be half your take home and even then people pay more, it is just not affordable. You want to know why retail is an economic dead man walking? Why theater box offices bomb one movie after another? Why the rate of uninsured motorists is steadily climbing? BECAUSE WE CAN’T AFFORD THEM ANY LONGER!
At almost 60 I will live in my car if I had one rather than have a roommate. It is another reason to live in Ireland, I can get by without a car here and in the states I would have to live in my vehicle had I stayed. I am a disabled vet and we have not had a DECENT raise since 2008. Neither has most of the labor in our economy. And the fat thieves at the Fed and federal government wonder why the USA is falling apart? Because ALL NEW WEALTH generated by our economy in the last 18 years has gone to the top ten percent and then some. And most of that to the top 1%. The day of reckoning is coming fat boys, and when it does I suspect the USA will not survive it.
But but but Millennial swears rents are decreasing, he even has a chart from zerohedge which I’m sure he tapes underneath the upper bunk he sleeps below.
And POH is constantly saying he sees 8 free months if you sign a 1 yr lease.
Just re-posting what others already posted here:
https://www.google.com/amp/s/www.bizjournals.com/sanfrancisco/news/2017/03/23/bay-area-rents-fall-with-sf-down-9-percent.amp.html
Bay Area rents are down 9%.
Why buy an overpriced crapshack if rents are stagnate or fall? I cant think of a reason. My rent has not increased in many years. I know reality hurts sometimes, especially for housing bulls.
Herk your rant was so real they couldn’t even respond lol
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