Want to move to CA (lived there before), but see people leaving (Orange: RV parks, apartment)

[speedoflight]

Sure, there are houses there for "cheap". But as said, there's nothing there but basic industries, i.e. gas stations, WalMart, Mickey D's, some lumber companies, trucking and that's about it. None of such jobs pay you enough money to own that "cheap" $300-500k house. Most of the people who end up here are often wealthy people from other parts of CA who have cashed out and choose to retire here. You rarely find younger people living here hoping to make a living unless you were SO LUCKY to be able to work from home.

Most younger (30-50s) people who would like a better lifestyle where they can have a nice and very affordable house and still need to work tend to opt for leaving the state. Over the years, CA has become a place where it's not easy to live. It's one place where you can earn a really good income and still can't buy a house. If you factor in the very high mortgage $3500-4500 for a basic small 1100 sq ft house, property taxes, insurance, maintenance and your other debt and living expenses (food, health insurance, basic medical stuff, gas), you can easily do the math and see that it's very hard to afford that house. There's tons of reports out, including ones in NY Times that I have seen where analysts are advising people to not even buy in markets like NY and CA but instead rent for according to these experts, you come out ahead by not buying. However, "rent" is not the same as owning, so it's a hard pill to swallow as well. And remember after all your mortgage and monthly payments, you will have little to no money left over for things like vacations. And then there's the enormous risks associated with such a high mortgage because should anything happen to you (i.e. sick, accident, lay off), you're in REALLY bad shape. It's not at all difficult to end up in bankruptcy.

The towns you are referring to are like what I'd listed, i.e Ukiah, Chico, etc. They aren't that big. And that part of CA isn't that liberal either. People think that all of CA is liberal. What a joke!

Originally Posted by Need_affordable_home

Thanks for the correction! San F. is geographically central but considered north Cali. When I say north Cali, I mean geographically north, like the northern third of Cali. SF is in the central third geographically speaking. Is 90k considered a small town? Its a pretty big city but not a huge metro. I will have to ask my friend what the name of that city was in very north Cali but houses there are "cheap" half mil gets you alotta house!

[Need_affordable_home]

Ok I can see geographically north California does not have a good job market. You are right, droves of people are leaving California as well as Florida and New Jersey. I guess most of those expensive houses can just sit empty or rent out at a "good" price. Wouldnt all the "cheap" areas become expensive once all the people move there? Then they will move back out once they get priced out to another cheap area. Repeat. Take North Carolina for example. Its starting to get expensive and people are starting to move out or not consider moving in!

[kansaslady]

The reason we left SO CAL was because of the crime and high cost of living. The mild winters were something that was hard to leave behind, but no place is perfect.

We are now living in KS, about 5 miles SW of Kansas City. We LOVE it here! We get the benefit of affordable housing (prices range anywhere from $80 - $1,000,000+....however, homes in the low $100's are very nice!). The job market is great and the pay is exceptionally good. My husband is an engineer and earns $80k, and I am a secretary and earn $18/hr. We are in a safe area, the air is very clean, it is not crowded, and the people here are very down to earth and friendly. What are the drawbacks? I guess I would have to say the winter months...however, in this area, the worst of it is just in January & February, and it's really not that bad. The roads are maintained very well and the worst weather never lasts more than a day or two at a time.

Would we move back to CA? We doubt it. We are getting ready to start a family and it's one of the best areas to raise children and the school systems are top rate!

[speedoflight]

If you were independently wealthy or had some money stashed away from whatever source or had your own business that is independent of the local economy, then living in one of these places like very Northern CA is OK. You're then enjoying the scenery, weather, etc. and not really participating in the job market and all it has to offer. But if not, you really have to look at how much does the job market pays, and if there's even the type of job you need to help you pay. $300k house is very "cheap" according to CA standards but as said, if your held a Mickey D's job, $300k is A LOT of money and you can't afford it. It's all ratio based. However, the phenomena/problem that exists in the bigger metropolitan areas in CA is this - you make a very good pay and heck, maybe there's even a 2-income family situation but you still can't afford that house for it's SO EXPENSIVE. When mortgages are going for like $5000-6000/month for a basic (and I stress BASIC) 1000-1200 sq ft house, what else can you even afford in your life, even if you can pay for the mortgage. And what will happen to you if you got laid off, got sick or etc. SSI and other disability and unemployment help does NOT pay you anything near that amount for your mortgage. Even with a savings account, you will soon be drained big time. Are you willing to go face bankruptcy court? It is enormous financial pressure. Everyone I know in CA who owns a home is so strapped for cash all the time. They hardly ever go anywhere. All they have is work because that's the only "recreation" since vacations are expensive.

If you are OK with renting and never trying to own a home, then you're fine in CA or if you are OK with just living in a tiny house for a lot of money and never aspiring to trade up to something bigger, then you're also "fine". It's all personal choices. But very hard choices to make at times. You have to ask yourself hard hitting questions like what you really want out of life, what you need for the future, what you hope to do with your life, do you want vacations, etc. etc. etc. What I have found extremely depressing for me is that I work good job with good pay and that there are tons of great career opportunities here in the SF Bay Area but no matter which job I take, it's never enough money for me to have a life where I know I can retire here. I can live day to day, maybe buy a house but that's all about it.

Originally Posted by Need_affordable_home

Ok I can see geographically north California does not have a good job market. You are right, droves of people are leaving California as well as Florida and New Jersey. I guess most of those expensive houses can just sit empty or rent out at a "good" price. Wouldnt all the "cheap" areas become expensive once all the people move there? Then they will move back out once they get priced out to another cheap area. Repeat. Take North Carolina for example. Its starting to get expensive and people are starting to move out or not consider moving in!

[Need_affordable_home]

Well said! Often someone has to give up that location as they have been priced out. Here in south Florida, people are leaving in droves, I will be leaving too. Florida, Hawaii, NYC, New Jersey, California, Virginia and a few other states are for the rich.

[speedoflight]

It's for the rich or the ones who happen to have bought in the 1970s, 1980s when it was still cheap enough. The thing is, you're not "priced out" today. You can still buy if you're willing to tone it all the way down to a tiny little place, willing to put up with super long commutes (1-2 hours) and willing to have little disposable income. However, if you don't buy now, I do believe you will indeed get priced out in the next 10 years because salaries are not increasing despite inflation, rising costs of living, etc. Most jobs that are advertised are still paying give/take the same despite the rise in prices - let's take gas prices for example. If salaries kept up with the rising prices, then everyone can afford a house. This is all not accounting for the aged old concept of "quality of life". That's priceless since it means a different thing to different people. Is quality of life good when you have to drive 1-2 hours each way? To some, they say it's worth it. To others, they say that's a nightmare. Is quality of life good when you live in a tiny place? Some say that's completely sufficient, others say it's hell. One thing people easily forget here is economic vulnerability. What is that? It's the fact that there's no such thing as job security. In today's economy, it's very easy to get laid off or lose your job for whatever reasons. So if you mortgaged yourself up that high, you really need to think like an accountant with the vision of an economist. You need to know how to project the upstreams and downstreams of the economy or like I'd said, you can easily find yourself facing bankruptcy court. It doesn't take much here in CA to end up in bankruptcy court with a foreclosure slapped on you because even with savings, it won't last long without a job. I'm not spelling you doom and gloom but just the realities of life.

Originally Posted by Need_affordable_home

Well said! Often someone has to give up that location as they have been priced out. Here in south Florida, people are leaving in droves, I will be leaving too. Florida, Hawaii, NYC, New Jersey, California, Virginia and a few other states are for the rich.

[greatbasinguide]

Here is a thought. If you are young, and retirement is a long way off. You still need to plan. You may want to.. find a location with predicted growth, but currently moderate prices. Buy,, by the time you hit your fifties, you have equity. When you sell, you can move to your pied a terre in the country, and have enough to live well..

[alex537]

I love San DIego, i wouldnt move to the desert

[Need_affordable_home]

Originally Posted by speedoflight

It's for the rich or the ones who happen to have bought in the 1970s, 1980s when it was still cheap enough. The thing is, you're not "priced out" today. You can still buy if you're willing to tone it all the way down to a tiny little place, willing to put up with super long commutes (1-2 hours) and willing to have little disposable income. However, if you don't buy now, I do believe you will indeed get priced out in the next 10 years because salaries are not increasing despite inflation, rising costs of living, etc. Most jobs that are advertised are still paying give/take the same despite the rise in prices - let's take gas prices for example. If salaries kept up with the rising prices, then everyone can afford a house. This is all not accounting for the aged old concept of "quality of life". That's priceless since it means a different thing to different people. Is quality of life good when you have to drive 1-2 hours each way? To some, they say it's worth it. To others, they say that's a nightmare. Is quality of life good when you live in a tiny place? Some say that's completely sufficient, others say it's hell. One thing people easily forget here is economic vulnerability. What is that? It's the fact that there's no such thing as job security. In today's economy, it's very easy to get laid off or lose your job for whatever reasons. So if you mortgaged yourself up that high, you really need to think like an accountant with the vision of an economist. You need to know how to project the upstreams and downstreams of the economy or like I'd said, you can easily find yourself facing bankruptcy court. It doesn't take much here in CA to end up in bankruptcy court with a foreclosure slapped on you because even with savings, it won't last long without a job. I'm not spelling you doom and gloom but just the realities of life.

Adjusted for inflation, houses were definately cheaper years ago. My dad paid $67k for his first house back in 1980 and that house is now easily quadriple the price. Inflation at 3% for those 26 years would be 2.15x making the house worth $144k. Lets factor in 5% annual appreciation for 26 years. The house would then be $238k. Doing my math, this has appreciated 5.5% to end at $270k. Lets see how much that $270k house would be at 5% annual appreciation(which by the way is a normal healthy market) at $270k today and 5% appreciation, it would be worth $716k 20 years in the future. Inflation at 3% would inflate $270k to $488k. Thats 1.47x higher than inflation. And salaries arent even quite keeping up with inflation! What would happen? Already we are seeing more and more homeless and those who use their car as a house!

[speedoflight]

You are precisely right. I've seen lots of economists do the inflation calculation and it never adds up here in CA. Also, remember that not all houses are the same. In CA or NY, you pay a ton for very little house. So how to you work the math out in that? Maybe a per square foot inflation calculation against the other markets in the country. Without giving you solid numbers, from my observation (from being in the market for jobs), I have not seen salaries increase. Salaries have stagnated or worse, gone backwards. The dot bomb phenomena hit CA very badly. Wages rose to the very top during the 1999-2000 period and then fell terribly. Almost all recruiters I've talked to have told me that wages have deceased at least 20% from their peak. So why are houses going up that high? Greed being a big factor. Greed of course is uncalculable with numbers on a calculator. But, it is a factor that drives it all up. People tried to buy and then flip their homes for a profit. Each wanting to make $50-100k more than their buying price. So home prices rose and rose like the Nasdaq in 1999-2000. However, reality is, how far will these prices fall? Despite the bursting of the real estate bubble now, prices are still high. OK, so a house's price has been slashed from $650k to $620k...well, hello, it's still very high. I doubt it will drop to the $200-300k range where it realistically should sit (adjusted for inflation). Therefore, I think the situation here is really messed up.

Originally Posted by Need_affordable_home

Adjusted for inflation, houses were definately cheaper years ago. My dad paid $67k for his first house back in 1980 and that house is now easily quadriple the price. Inflation at 3% for those 26 years would be 2.15x making the house worth $144k. Lets factor in 5% annual appreciation for 26 years. The house would then be $238k. Doing my math, this has appreciated 5.5% to end at $270k. Lets see how much that $270k house would be at 5% annual appreciation(which by the way is a normal healthy market) at $270k today and 5% appreciation, it would be worth $716k 20 years in the future. Inflation at 3% would inflate $270k to $488k. Thats 1.47x higher than inflation. And salaries arent even quite keeping up with inflation! What would happen? Already we are seeing more and more homeless and those who use their car as a house!