How expensive is housing in California?

[Childress]

I found this graph mind blowing.

[Michael Emrys]

Not showing. Just the blue box with a question mark.

Michael

[Childress]

I see.... Copy/paste not working. Damn,

It's at the bottom of this page:

http://thetechreader.com/top-ten/top-ten-reasons-why-california-is-no-longer-the-place-to-be-or-move-to/

EDIT: now it's showing.

Edited November 16, 2016 by Childress

[Michael Emrys]

1 hour ago, Childress said:

EDIT: now it's showing.

Not for me. What I think we have here is that if you have visited the page, you can see it. But if, like me at the moment, you haven't, you won't see it. I've noticed this phenomenon many times over the years. If it follows precedent, I will use your link to go to the page and when I come back I will be able to see it in your post.

Michael

PS: Well, it didn't show this time, even though I could see it on the linked page. Ah well, one more theory down the toilet.

Edited November 16, 2016 by Michael Emrys

[Childress]

Very odd. The rather shocking graph can be found in the supplied link.

Here's the text:

With a small 2 bedroom house starting at $650,000, and a sub $500,000 house entirely nonexistent, housing is ridiculously out of control. People are taking out million dollar mortgages for houses that will inevitably fall in price, because what goes up must come down. They naively believe that the prices will continue to climb, and ignore the massive debt burden they are taking on, in a market that could make them lose their job any day and be stuck with a million dollar foreclosure and a total loss of an amount of money that could have fully paid off a house in another area. 

California had more foreclosure filings that any other U.S. state in 2010. The 546,669 total foreclosure filings during the year means that over 4 percent of all the housing units in the state of California received a foreclosure filing at some point during 2010. 

Renting is no better, with apartments in nice areas starting at $2,500 per month for a small 2 bedroom apartment (a large one starts at $2800), and $1,800 as the lowest for less nice areas, the renting prices are just silly absurd. And let's not forget that every single year the rent goes up $100 to $200. In a few years a 2 bedroom apartment will cost over $3,000 per month. That's just stupidly ridiculous! Add to that some of the highest electricity costs in the country, and even renting is unaffordable for most people who have below an upper-class income. 

[Michael Emrys]

It's all about supply and demand. As long as there is someone willing to cough up the bread at those rates, landlords will continue to charge them. I left California in 1978 because it had clearly become overpopulated in the 15 years since I had moved there. Land prices were already starting to skyrocket and the writing was on the wall. The same process has been evident here on the Olympic Peninsula. Shortly after I moved here in 1986 I was shocked to read a newspaper article with projections of expected population growth on the Peninsula. But they have all become true. When I first visited Port Townsend in 1984, I fell in love with the place. It was a lovely, peaceful place largely inhabited by artists and aging hippies: exactly my kind of folk. In the early '90s, it got "discovered" by yuppies who showed up with fistfuls of money and promptly bidded up the price of practically everything, which had the effect of driving out exactly the folk who had made the place so attractive in the first place. Along with other effects, the amount of vehicular traffic on its streets has increased at least ten-fold. The once tranquil town is now a clamorous one.

Bottom line: There are simply way too many people on the planet. Inevitably they are turning it into half dessert, half sewer. This is not an environment that we are well adapted to preserve our sanity in, so it should come as no surprise that people are becoming crazier and crazier. Expect it to get worse.

Michael

[Childress]

7 hours ago, Michael Emrys said:

Bottom line: There are simply way too many people on the planet.

 

There are certainly too many people in CA. The freeways have become 24hr parking lots. One theory posits that the vast ( and I mean VAST) influx of immigrants* over the past few decades have pushed up housing and rental costs even though these groups tend to begin at the low end. In your case, the Northwest and Vancouver, I'm told this is driven, top-down style, by entrepreneurial Chinese nationals.

Or it may be a case of Tulip Mania:

https://en.wikipedia.org/wiki/Tulip_mania

As the graph illustrates, rents are 3.5 times the national average. In LA it's closer to 6 times. You see kids pushing 30 living with their parents out of financial necessity and apartments stuffed with multiple over-the-border families. Housing costs consume their lives.

Buyers who purchased homes in the 80s reaped extravagant appreciation. Those who bought over the past 10-15 years have seen similar gains at the expense of becoming mortgage slaves. Will this continue? A bubble?

*I married one, full disclosure.

Edited November 17, 2016 by Childress

[John Kettler]

Childress,

Very expensive generally. Bad in Los Angeles, worse in San Francisco and horrendous in the Silicon Valley. Still, cheaper than NYC, which is a bargain compared to Tokyo, Japan! For a frame of reference, I was paying $970/mo in early 2010 in Oxnard, California, (Oxnard Cove, 1.5 blocks from the beach, no view) for a 1 BR 1 BA  apt with a shared garage. Believe water was included but nothing else. This place wasn't swank, either. Blazing hot laundry room and zero amenities, including a pool. Building was grandfathered in vacation housing with lousy insulation. The current rental for that apartment variety there is now $1425!

Regards,

John Kettler

Edited November 18, 2016 by John Kettler

[sburke]

Sounds like the writer has an axe to grind about liberal California. Don't worry we are used to it. Wasn't one of the slogans of the republicans 4 years ago something about California values?  

Well I have lived here for over 20 years now and I can tell you that article is funny but bears only a cursory resemblance to reality.  No it isn't (and was never) the land of milk and honey, but I have considered moving elsewhere in retirement and am having a real issue deciding where that would be. I love it here and it isn't just the weather.  I live on a street where my neighbors all get along and socialize a lot. We camp together, have a locally famous July 4th street closing party open to anyone who wants to come. We had a blackout in the summer and everyone poured out to the street and hung in my next door neighbors yard, broke out the wine and had a nice time. I have two teachers on my street, a principal, a retired NFL player (long retired) and a home inspector etc so mostly not high flying techies or venture capitalists  

Yes housing prices (and rents) are ridiculous. How the writer interprets that as a failing economy is beyond me. Our problem is the tech sector is booming. Apple has the new spaceship hq going up, google is expanding etc etc. that brings in money and demand for housing. I bought my house 7 years ago and it is probably up 50% in value (and it will be paid off in 5 years so much for burying myself in a mountain of debt). 

Also keep in mind California is huge and most of the state is not LA and the Bay Area so housing figures they showed are not for the state, those are specific urban areas. Go to Humboldt and $450k will buy a 4bd, 3 bath house 

i am a philly boy born and bred, but I could never move back there.  I'll just have to visit every now and then for cheesesteaks and hoagies. 

[Childress]

58 minutes ago, sburke said:

Also keep in mind California is huge and most of the state is not LA and the Bay Area so housing figures they showed are not for the state, those are specific urban areas. Go to Humboldt and $450k will buy a 4bd, 3 bath house 

 

 

 

 

 

 

 

One can't compare California, an enormous state, to pricey and selective enclaves. Of course, NYC and SanFran are more expensive. Northern CA is more affordable- outside SF and Silicon Valley The author averaged the numbers. 

In LA County, you buy a modest 2000sq ft, 3 bdr house and you end up taking out a 4.5%, $900,000, 30 yr mortgage on this property. That's another $4500 a month. A stiff challenge for one with a middle-class income. Like my delivery man neighbor, he has no life. He bought 10yrs ago. Not applicable to your situation, of course.

You can get lucky. A good friend bought a house in Marina del Rey a few years ago. Google moved into Playa del Rey- next door. Jackpot.

Edited November 19, 2016 by Childress

[LukeFF]

7 hours ago, Childress said:

You can get lucky.

Oh, one certainly can, but it's more the exception than the rule. I was very blessed to marry someone who was living in a house that (a) is paid off and (b) is in a low-crime area. If it hadn't been for that, we'd be squeezed in together in a small apartment, with most of our money going towards rent. The downside to this living arrangement is that I have a 100-mile round trip commute to and from work, and it frankly sucks because we're stuck with a 1970s highway system - thanks in no small part to the guy who occupies the governor's seat in Sacramento.

Edited November 19, 2016 by LukeFF

[Childress]

Joel Kotkin, a self-described liberal, on CA's housing crunch: 

http://www.ocregister.com/articles/housing-698100-california-prices.html

'Much of the blame here can be ascribed to California’s convoluted, and highly ideologically driven, planning system.... Hit hardest of all will be the working-class renters. Los Angeles rents are already, relative to incomes, among the highest in the country. Orange County and even the Inland Empire are not far behind. In the Bay Area, rental inflation is moving steadily from San Francisco to once-affordable markets like Oakland, which is now the fourth most-expensive rental market in the country. In Los Angeles and San Francisco, roughly 40 percent of renters spend at least 40 percent of their incomes on rent; the national average is 30 percent. The same regulation-driven inflation that benefits an older, primarily Caucasian owner class is proving a disaster for heavily minority working- and middle-class families. '

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Edited November 19, 2016 by Childress