Is California worth it? (San Diego, San Jose: middle-class, real estate market, 2009)

[sonoranrat]

Many decades ago CA was indeed a paradise. With a long Pacific Ocean coastline and generally great weather and also being (hard to believe now) cheap to live in compared to the East Coast, it was indeed a great place to live and raise your family.

But now it is overcrowded and congested. Cost of living is one of the highest in the nation with housing being especially out of line (and that's before the housing bubble even). Many parts of the state have decayed into urban slums as poor economic migrants overwhelm the state. The state's finances and economics are in a shambles and I believe the state (and also our nation as a whole) is bankrupt. CA is also dreadfully awaiting the BIG ONE any time soon.

I myself worked and lived (as a renter) there in Silicon Valley for many years and also regularly visit the LA area as well. But when I realized that I could only afford a house if I either lived in the slums or live as far away as Gilroy or beyond and have to take out suicide loans to do it I refused. I knew many people throughout the state who commuted 50 miles or more a day with 1-2 hour commutes each way and I just wouldn't do it just to own a house. So I decided CA just wasn't worth the paying the premium (in cost of living and long commutes, etc) just to live there.

CA might be great for those who are now retired and bought cheap houses decades ago and are grandfathered-in with Prop 13's low taxes. But that means that we the current working class are subsidizing them and I refuse to do that either. (I think Prop 13 needs to be abolished and the whole state taxing structure thoroughly reformed but that's another thread).

Now with the housing bubble popping, housing prices are coming down from insane to absurdly high and I have thought about MAYBE coming back. But even with this happening, I still wonder if CA is still worth it?

[Charles]

Originally Posted by sonoranrat

I have thought about MAYBE coming back.

Under what cirumstances? Be as exact (but non-personal) as possible.

[jaynetarzana]

Great thread! I think that many of us grapple with this very question. We are planning a move back to CA in a few months and I have been asking my friends how I am going to get used to struggling financially again. We lived and loved CA for 13 years and recently moved to Evanston (Chicagoland) after selling our house in Santa Cruz and consequently losing everything we had. We are renting a very nice (albeit small) place now for $1600 a month including utilities. We were also able to sell one of our cars because of the good public transit here so that has simplified things. But we are Californian's at heart and therefore miserable in Chicago. I've been looking in Scotts Valley (Santa Cruz area) for a rental and I can't seem to find anything decent for under $2600 (most being in the high $2000's & $3000's) and most of these don't include utilities. If we wanted to buy a house, we'd be looking at a mortgage of over $4K and we cannot afford that.

But it comes down to weather, scenery and a need for like minded people for us. If you could tell us where we could find a place with great weather year round, safe, clean neighborhoods (read: no gang or drug activity), clean air (Central and Northern CA both get high marks), good public schools (you have to look, but you can find them in CA), like minded (read: liberal) people, close proximity to health food stores (Trader Joes, Whole Foods) we're there (assuming we can afford to buy a home in this imaginary place in the $400-$550K range). But believe me, we are going to have a REALLY hard time accepting the fact that we will be broke again with no discretionary income to speak of. It is a trade off that is for sure. Why can't there be another California without all if it's problems and high cost of living? We could call it Calitopia!

Where did you go when you left California?

[goodbyehollywood]

Yep, people talk about cultural opportunities, diversity, scenery, etc., but it usually comes down to weather. Weigh 72 degrees and sunny against wind chill and snow and it's easier to think about living with less.

The kicker is, while the media keeps proclaiming how much real estate has fallen in CA, it just hasn't fallen that much in the more desirable areas. If you're willing to live in the IE or out in the desert, you can probably score a deal (relatively). But if you're looking to be anywhere near the coast, income and prices are still way, way out of whack. Maybe 2009 will change that. Or not. I've given up trying to guess while I watch and wait.

[NewToCA]

Well, it still has the coastline and weather, however it wasn't cheap to live here as compared to the east coast.

I had a possibility of transferring from Washington DC to San Diego in the early 1980's, and the housing cost in San Diego was a little higher than DC, which is a high cost real estate market. Likewise, even inland areas like Sacramento were higher than equivalent homes in Philly or Baltimore, even 30 years ago.

[sonarrat]

If you're obsessed with status or with feeling like you're getting ahead, California will make you feel poor. $200,000 will get you a lot of house in St. Louis. In San Jose, it'll get you this: 1475 Bal Harbor Way, San Jose, CA 95122 Alum Rock MLS# 80849992 - Property Details Now, you might think by looking at that, OK, it's a contractor's special. You can finish it up and you'll have a nice house in a nice neighborhood, and you'll have paid a lot less than you could have. Nope! It's in one of the worst parts of town.

But even that house, right where it is, has so much to offer.. the sunshine and palm trees, the shopping, the great food, and a short drive to a staggering number of major employers. And unlike the fancy areas that highly educated outsiders aspire to for whatever reasons, areas like that one are actually affordable to real, middle-class people on real incomes - the native Californians. So there is a genuinity to them. They're not full of picky folks who want to be insulated from the reality of the area.

[Ultrarunner]

Originally Posted by sonoranrat

CA might be great for those who are now retired and bought cheap houses decades ago and are grandfathered-in with Prop 13's low taxes. But that means that we the current working class are subsidizing them and I refuse to do that either. (I think Prop 13 needs to be abolished and the whole state taxing structure thoroughly reformed but that's another thread).

Proposition 13 BENEFITS EVERY PROPERTY OWNER.

I can't emphasize this enough. Prop 13 is a Grass Roots Voter Initiative, passed by the people to give some predictability to property taxes.

Maybe you don't remember the many Homeowners waiting to open their tax bills wondering if they would be able to keep their homes another year pre Prop 13?

I live in Oakland, and the Citizens of Oakland have approved many tax increase above and beyond Prop 13 limits for schools, police, fire and libraries. A simple 2/3 majority is all that is required to override Prop 13 limits.

The Seller of the home I bought paid $1200 a year property tax... I pay $9,300. I don't begrudge them one bit. They built the home in 1955 and I bought in 2005.

Good friends of mine live in Seattle Washington and saw their property tax increase 30% in one year just because someone from CA moved into the neighborhood and paid an outlandish price for a home down the street. Washington HAD a Prop 13 till the WA Supreme Court through it out...

I'm thankful everyday that the Voters of CA approved Prop 13.

[Sassberto]

Originally Posted by Ultrarunner

I live in Oakland, and the Citizens of Oakland have approved many tax increase above and beyond Prop 13 limits for schools, police, fire and libraries. A simple 2/3 majority is all that is required to override Prop 13 limits.

It works fine for Oakland, but conservative cities like San Diego will never voluntarily vote to increase their taxes.

[ferretkona]

Originally Posted by Sassberto

It works fine for Oakland, but conservative cities like San Diego will never voluntarily vote to increase their taxes.

I thought Mello Roo's were the norm in San Diego.

[Sassberto]

Originally Posted by ferretkona

I thought Mello Roo's were the norm in San Diego.

Only in the newly constructed suburbs. San Diego is one of the oldest cities in California.