Want to move to CA (lived there before), but see people leaving (Los Angeles: apartments, for rent)

[Tom63376]

I just moved to Orange County and I must say that many people here
are sacreing potential new comers off. If you are single and make 90k to
110k a year then Orange County will be a breeze... You can not buy a
house here but you can rent for less than the TAXES there people pay
on their million dollar 2 BR tiny houses... I got a nice 1 BR w/Garage
for $1615 a month.. BTW- No one can afford the houses here if you
are a newcomer so don't even worry about it..

[Need_affordable_home]

Originally Posted by 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.

The situation in many places is messed up. If it keeps getting worse in the long run, there doesnt need to be a bubble, as long as houses appreciate faster than inflation(about 3% inflation, if houses appreciate more than that) and as long as salaries cant keep up, the affordability crisis will worsen. Here in south Florida, I read an article that said 90% of people can NOT afford a house. I even made a poll in another thread and only 2 people voted that they could afford >$325k house. The rest can afford much less. Thats why those who arent rich or at least upper middle class are moving out of expensive areas. You can get a very nice house in Texas for $100k to $150k but here in south Florida, youll be lucky to get a 1 bedroom worn down shack for that. In California, that gets you a mobile home and you have to pay lot fees as you dont even own the land!

Originally Posted by Tom63376

I just moved to Orange County and I must say that many people here
are sacreing potential new comers off. If you are single and make 90k to
110k a year then Orange County will be a breeze... You can not buy a
house here but you can rent for less than the TAXES there people pay
on their million dollar 2 BR tiny houses... I got a nice 1 BR w/Garage
for $1615 a month.. BTW- No one can afford the houses here if you
are a newcomer so don't even worry about it..

That is a good price for rent. But would you rather move to Texas or somewhere that you can own the american dream for a low price and build equity instead of renting for life?

[shannon94]

Originally Posted by Need_affordable_home

The situation in many places is messed up. If it keeps getting worse in the long run, there doesnt need to be a bubble, as long as houses appreciate faster than inflation(about 3% inflation, if houses appreciate more than that) and as long as salaries cant keep up, the affordability crisis will worsen. Here in south Florida, I read an article that said 90% of people can NOT afford a house. I even made a poll in another thread and only 2 people voted that they could afford >$325k house. The rest can afford much less. Thats why those who arent rich or at least upper middle class are moving out of expensive areas. You can get a very nice house in Texas for $100k to $150k but here in south Florida, youll be lucky to get a 1 bedroom worn down shack for that. In California, that gets you a mobile home and you have to pay lot fees as you dont even own the land!

In California it's less than 10% that can truly afford a home there. Crazy isn't it. It won't last, it won't last, it won't last.

[speedoflight]

As mentioned several times here, you can still buy a home here - disclaimer: DEPENDS on what you mean by "home". 1 bedroom 1 bath, 500 sq ft condo or a 3 bedroom 2 bath, 1500 sq ft home? MAJOR difference between those two. Now, if you are single, sure, that 1 bedroom 1 bath condo is OK. And BTW, not in the most upper class neighborhood. But if you had kids, it'd really be hard to cramp them all into that 1 bedroom 1 bath condo. In fact, I think your HOA might have something to say. BTW, here, the HOA fees are about an average of $300-400/month. I have a friend who owns a townhouse who pays $350/month. On a 2 family income of about $150-160k here in CA, you will still have a very hard time being able to afford that $600k home if you factor in all your daily/monthly expenses. The average household income per capita in most Northern CA counties is about $75k (not taking the super high or the super lows which are not true reflection of what is going on), with some counties reporting slightly lower income. You can do the math and you can see that it's tough for most families to afford a decent home. So, they end up buying a very small place and cramping everyone in. Oh BTW, there aren't that many mobile homes communities in the urban areas. For some reason, Californians are not that pragmatic about them and there seems to be a stigma attached to living in one. In TX, I know of people who have bought 1-2 acres of land and a mobile home and voila, they have a nice home with lots of space. One person I know there saved up enough money that way and has ordered a custom 3000 sq ft house to be built on her land.

A NY Times article recently came out where they basically said that it's not advisable to buy in areas like NY, CA where the rent : buy ratio is so enormous. They said you're better off renting a very nice place for a decent price and stashing your money into an investment account. In the end of the day, in reality, we are all renting. It just depends on who you're cutting your check out to - your apartment management company or the bank/finance company. Until you truly pay off your house or are very near to paying it off, you really don't own it. Ideally in the most optimum circumstance, although one has taken out a 30 year mortgage, you should have a house that you know you can easily pay off in 10-15 years. It's not really that possible to pay off a $600-800k house with all the interest stashed up in 10-15 years. I don't have the numbers in front of me but I believe that for the first few years, you're only paying off the interest, not even touching the principal, which makes you even far less of a "home owner". If you do buy here in CA, your debt to income ratio is extremely high - hence the risks I told you about regarding bankruptcy. You are truly a liability all around - to yourself and your lenders. Your credit is so maxed to the limit that you have a really tough time even being able to afford to buy a new car. So you drive that old thing and pray that it doesn't die on you. And remember that all this doesn't even begin to quantify the enormous amount of stress you have in your life.

The crisis will continue to worsen in CA, NY, FL as things are rising faster than inflation and salary increases. There's a cost of living table on the Web that gives you numbers like you need to make like $250-300k per person, not combined income to live in CA. Well, I know of CA CEOs in smaller companies who don't even make that kind of money. Have you ever been to Tokyo and Hong Kong? It's EXTREMELY expensive to live there (to their cost of living standards, i.e. salaries). I have friends in HK who have lived there for generations and they don't own, they rent TINY places for a ton of money. VERY common to see a 5-family member cramped into a studio/utility apartment size and they all sleep on bunk beds. Most people don't own a car either. They take the bus, subway or cabs. In fact, lots of people don't even have a driver's license - why have one when you won't be driving.

Originally Posted by Need_affordable_home

The situation in many places is messed up. If it keeps getting worse in the long run, there doesnt need to be a bubble, as long as houses appreciate faster than inflation(about 3% inflation, if houses appreciate more than that) and as long as salaries cant keep up, the affordability crisis will worsen. Here in south Florida, I read an article that said 90% of people can NOT afford a house. I even made a poll in another thread and only 2 people voted that they could afford >$325k house. The rest can afford much less. Thats why those who arent rich or at least upper middle class are moving out of expensive areas. You can get a very nice house in Texas for $100k to $150k but here in south Florida, youll be lucky to get a 1 bedroom worn down shack for that. In California, that gets you a mobile home and you have to pay lot fees as you dont even own the land!

[jay20]

Originally Posted by shannon94

In California it's less than 10% that can truly afford a home there. Crazy isn't it. It won't last, it won't last, it won't last.

Where did you get his number from? I don't think its correct. I think more people own their own home than 10%.

[Need_affordable_home]

Originally Posted by jay20

Where did you get his number from? I don't think its correct. I think more people own their own home than 10%.

I think what he meant is first time buyers would be priced out. I read an article that said only 5% would be able to afford a $500k house and you dont get all that much house for half mil! Those who own the house, many bought many years ago when adjusted for inflation, prices were lower. The others who own are rich or two-three families share a house!



[quote=speedoflight;117464]As mentioned several times here, you can still buy a home here - disclaimer: DEPENDS on what you mean by "home". 1 bedroom 1 bath, 500 sq ft condo or a 3 bedroom 2 bath, 1500 sq ft home? MAJOR difference between those two. Now, if you are single, sure, that 1 bedroom 1 bath condo is OK. And BTW, not in the most upper class neighborhood. But if you had kids, it'd really be hard to cramp them all into that 1 bedroom 1 bath condo. In fact, I think your HOA might have something to say. BTW, here, the HOA fees are about an average of $300-400/month. I have a friend who owns a townhouse who pays $350/month. On a 2 family income of about $150-160k here in CA, you will still have a very hard time being able to afford that $600k home if you factor................(quote too long)[quote]


How much would said 500ft studio or small 1/1 condo cost? probably around a quarter million. I guess if you have a good professional job paying $80k plus a year, its doable. The median salary is $60k a year if I stand correct. Not bad thanks to lots of high paying professional jobs. But with the prices of houses, even condos, youd need two or more incomes to afford. This means sharing it with a roomate or your spouse. Want kids? Thats more $ to feed more mouths and a big enough house would be well out of your price range. I can see why many middle class people are forced to leave California and move into affordable places where they can get a big house and start a family. Cali may be good for the rich single professor or upper class family.

Why are HOAs so much? Funny thing is they are about that much in my neighboorhood but thats because they waste money on things no one needs. They want to build a wall that costs $100k and if the vote goes ahead, we split the costs! When I buy a house, it will be in a neighboorhood without HOAs! With $150k dual family income(four people working) they shouldnt overextend themselves for a $600k house. $400k house is more reasonable. There are some cheaper areas, especially in northern Cali where you can get a nice 3/2/1 house for $400k. Convert the garage to a 4th bedroom and youll have space for two families. Each family has 2 beds, 1 bath to use and may use either bathroom if the other is occupied. Husband+wife share one bed, the children share the other bed. Ditto for the second family.

As for mobile homes, I saw many in the online listings in Cali. Forget the stigma, you can get a nice 3/2 mobile for $100k plus $700-1000 lot fees in a nice mobile park. If thats all you can afford, go for it! The other option is move out of Cali. I could afford a mobile home in Florida but id rather move out and buy a big nice house instead!


Lots of people do rent. Good if houses arent going up in value. If they are, buy instead! Personally, id rather move out of Florida and buy a house than rent in Florida, especially since its much, much cheaper to buy elsewhere than rent in Florida!

You dont need to make $300k to live in Cali. $100k is enough to get you a 1 bedroom condo there. When you take a loan, you pay both principle and interest unless interest only loan(bad idea)

Tokyo has seen falling house prices for 17 years! In some areas, houses fell 80%! I bet houses are fairly cheap by now!

[shannon94]

Originally Posted by jay20

Where did you get his number from? I don't think its correct. I think more people own their own home than 10%.

People who can afford a home at TODAYS prices!!! By the way..NAH...I'm a she not a he!! lol

[shannon94]

Originally Posted by Need_affordable_home

I think what he meant is first time buyers would be priced out. I read an article that said only 5% would be able to afford a $500k house and you dont get all that much house for half mil! Those who own the house, many bought many years ago when adjusted for inflation, prices were lower. The others who own are rich or two-three families share a house!

NAH...now dont forget the people in those 500k homes that got in with creative financing.......it's not just the rich or multiple families living in these homes.

[Need_affordable_home]

[quote=shannon94;118080]

Originally Posted by Need_affordable_home

I think what he meant is first time buyers would be priced out. I read an article that said only 5% would be able to afford a $500k house and you dont get all that much house for half mil! Those who own the house, many bought many years ago when adjusted for inflation, prices were lower. The others who own are rich or two-three families share a house!


NAH...now dont forget the people in those 500k homes that got in with creative financing.......it's not just the rich or multiple families living in these homes.

In other words, they could not afford that $500k house and had to use tricks to swing that way and end up house poor with risk of forclosure. Interest only loan doesnt count as affording to own a house, its alot like renting.
ARM loans once they reset will cause tons of forclosures because those people bought houses they couldnt really afford!

[speedoflight]

A 1/1 condo is listing near the $300k range in a mediocre suburb/neighborhood. They can get higher if the condo is newer and in a very nice neighborhood. Probably like $350k for some of these. As said, you must factor in the HOA dues. There are many high paying professional jobs here but...many are with start ups. The SF Bay Area where I am is more start-ups, small-to-medium size biz based than Fortune 500 large corps. If you've ever worked in a start-up and/or small-to-medium size biz, you'd know that many are kinda quirky, not that stable, often involved in an M&A. Translation = you may have a high paying job today but can easily lose it tomorrow. I've seen too many friends undergo that, including myself who has ridden on that roller coaster. It's not an easy life. It's very exciting to work in a young upstart. The adrenaline rush is definitely there but there's a price to pay for it. Nothing is free in life, there's always a catch. It's OK if you're renting for at least you only have your job to contend with, not a job + your home. If you have a home, you definitely need a very stable company. May not pay as much though as a startup though.

Why are HOA dues to high here? You tell me. They don't really do more than the basics like taking care of the yard, pool area, etc. They ask for that much for they know they can. My friend says that you can count on the fees rising every year. Her HOA dues are not abnormal. Most townhouses I've seen list with HOA dues at $350-400. The cheapest I've seen was at about $250.

How much house for $600k? About a 1200 sq ft house (3/1 or 3/2 depends on neighborhood) and built between the 1950s - 1970s. They have a small living room, small kitchen and that's about it. You won't have such things like formal dining room, den, etc. etc. Do NOT expect them to be a looker that you'd write all your friends about. They're just very basic tract houses with nothing to write home about. The $600k price is NOT for the city of SF. In SF, it's about close to $800k for a (2/2) and that is in a mediocre neighborhood within the city. To illustrate how bad it is here: I saw a 1200 sq ft 3/2 tract house that was built in the 1970s that looked terrible inside. It had never been upgraded since the day it was built. The garage door looked like it was about to fall off, the kitchen looked old, bad and very small, the bathrooms needed major remodeling, the living room's design is old. Basically, the overall house design was so old and the house was located right next to the 880 highway separated by a sound wall. You could hear the hum of the highway right next to you. 880 is a very busy 5-6 lane freeway. They wanted $640k for that house. You would have to take out a loan for another $100-150k to fix it up to look decent.

I've actually gone to see most of the mobile home parks in the SF Bay Area. On what is called the East Bay - there's a handful of them and they aren't that nice. Not that cheap either for the lot rent. If you can put in about 20% down, you end up paying about $1600-1800 for lot rent + loan for an older home. A lot more if you buy a newer one for mobile homes aren't cheap anymore. Most of the ones I've seen listed are older and very blah looking ones, not the very cool and nice looking ones that they sell from Clayton Homes or Fleetwood. Most of these mobile home places also have HOA dues, btw. So, all in all, you're looking at close to $2000-2200 for the mobile home each month. The bad thing about mobile homes is they depreciate in value. They are like cars. So, if you buy one, it's hard to sell and be prepared to take a loss on it. Mobile home parks here aren't as nice as they are in other parts of the country. I've seen lots of mobile/RV parks that are nice and large with lots of amenities in other states - Nevada, Arizona, Texas, etc.

How much would said 500ft studio or small 1/1 condo cost? probably around a quarter million. I guess if you have a good professional job paying $80k plus a year, its doable. The median salary is $60k a year if I stand correct. Not bad thanks to lots of high paying professional jobs.