California's future? (on the verge of bankruptcy) (San Jose, Sacramento: sales, rental)

[Ludachris]

My wife and I are planning on moving back to northern CA in about a year. We figured that with the current housing crisis we should be in a good position to get a good deal. We sold our home in San Jose and left back at the top of the market in late '05. We're now looking at the Granite Bay area just northeast of Sacramento.

The concern I have though is California's financial mess. How will the state recover from this? I've seen tough times through the years having grown up there, but I don't remember it ever being this bad. I just heard today that the state will be putting tax returns on hold. With taxes already being so outrageously high and housing prices still way above the national average, where is CA going to get more money to get out of this mess?

Arnold stepped in and made huge cuts years ago to get things turned around - that obviously hasn't helped. I just don't see the light at the end of the tunnel there. We made a great move by leaving CA when we did and coming here to CO - we took our equity and put it into a market that hasn't dropped much, if at all. I would hate to go back just to have to have the state go into bankruptcy after making such a good move.

What do you guys see happening in CA? Do you see it as being a smart move?

[pll]

We are in the same situation as you only we're coming from Idaho. We've done well since we left Cali many years ago. We want to return because the housing is more affordible we are just worried about all the unknown expenses we are going to run into.

[EscapeCalifornia]

Why do you want to move back? You're making a good case for staying far, far, away from the HMS Cali-tanic. As far as getting a deal on a house now, only time will tell. But the consensus is that the crash isn't close to being over and without crazy financing to create another bubble, you could be upside down or break even for years if you bought today.

[BennyPhoenix]

This problem will clear up eventually.
Either the state will have to stop funding a lot of things or raise taxes or both.
Some people will leave(some people who hate the taxes and some welfare deadbeats) and things will eventually return to some balance.
Expect it to take at least a couple of years to calm down.

[Ludachris]

Originally Posted by EscapeCalifornia

Why do you want to move back? You're making a good case for staying far, far, away from the HMS Cali-tanic. As far as getting a deal on a house now, only time will tell. But the consensus is that the crash isn't close to being over and without crazy financing to create another bubble, you could be upside down or break even for years if you bought today.

Not looking to buy today - most likely will be in a year. We want to be closer to the family and friends we left behind when we moved out of state. I know there's a risk in buying a house out there, but there are risks buying houses in most places at the moment. It's all the other issues that worry me - like even higher taxes, declining quality of life due to more budget cuts, school performance going down, fewer amenities due to businesses going under, etc.

I love California having grown up there, but when we left it was sort of like a big sigh of relief. Though we're making plans to return, I obviously don't want to make a huge mistake for my family. We might actually just rent for a little while to see how it goes before making the risky investment.

I'm planning on being self employed, so I won't necessarily be dependent on the local job market. But that doesn't mean it won't have some effect on me.

[OC Investor2]

Originally Posted by EscapeCalifornia

Why do you want to move back? You're making a good case for staying far, far, away from the HMS Cali-tanic. As far as getting a deal on a house now, only time will tell. But the consensus is that the crash isn't close to being over and without crazy financing to create another bubble, you could be upside down or break even for years if you bought today.

HEH!

[NorthernCalifornia]

California has been "on the verge of bankruptcy" for 30 years. what else is new?

[Charles]

Originally Posted by Ludachris

We sold our home in San Jose and left back at the top of the market in late '05.
We made a great move by leaving CA when we did and coming here to CO - we took our equity and put it into a market that hasn't dropped much, if at all.

Originally Posted by Ludachris

We want to be closer to the family and friends we left behind when we moved out of state.


I love California having grown up there, but when we left it was sort of like a big sigh of relief.

I obviously don't want to make a huge mistake for my family.

You and we have quite a bit in common. My wife and I both grew up in the SFV and Thousand Oaks. We sold in TO in June 2006 at the peak and move to Colorado then Huntsville and like you saw very little depreciation (housing is actually increasing in Huntsville with the 10,000 jobs coming here in the next few years.) And, like you, we are a bit homesick and we both have elderly and cancer stricken parents by themselves in CA. So the guilt continues. But, again like you, we see California as very unstable, even for engineering these days. And, like you, we read about housing dropping over the next few years. Finally, like you in Lone Tree - a great place out there near Highlands Ranch and the Denver Tech Center - we live in a nice place with amenities, no traffic, affordable housing, good schools, and lots and lots of jobs. Very stable.


How big is California's budget hole? Try these numbers on for size

I guess one thing I would write is time is on your side. No rush.

"Home values in [Huntsville] Madison County rose by 3.23 percent, the association reported. That's a stark contrast to the rest of the nation, which logged an 18 percent drop in selling prices, according to the Standard & Poor's/Case Shiller Home Price Index released this week, which tracks home prices in 20 metropolitan areas across the country."

from

Huntsville Home Values Increase - Huntsville Times

10,000 Jobs coming to Huntsville - Huntsville Times

[FresnoFacts]

Don't forget that in 1991 California had a budget deficit of $14 Billion out of a $56 Billion total budget, a 25% deficit.

This year the estimated budget deficit is roughly 30%, up from previous estimates due to the delays in acting.

But this year's deficit is still not much more on a percentage basis than has been faced before .

California survived 1991's deficit. The key is for action from the legislature.

[DezertGirl]

Arnold's big "cuts" were shot down by the unions. His "I will get ahold of spending in Cali-Fornia" plan has not been realized. Too bad. A victory for the Girlie Men.
California has the highest sales taxes and state income taxes in the nation and the legislature wants to tax us some more to make up a deficit they created by spending out-of-control. In the last 8 years or so, California state government has grown to almost double in size, primarily under the governorships of Davis (D) and Arnie (R?D?L?G?C?S?). We pay huge DMV fees, high gasoline taxes, insane building permit fees, recycling fees, CRV fees, impact fees, we pay almost $300/year for one kid to ride a schoolbus to PUBLIC school, pay to enter state parks (public lands), luxury taxes and more...much more.
And they can't get a handle on spending. There's plenty of revenue...just no control.
The hospitals are collapsing under the weight of people who cannot afford to pay. At this time, many doctors are not getting re-imbursed from MediCal. The welfare system is handing out money to people who don't deserve it. CalTrans can barely get motivated to fill potholes, let alone really, truly maintain the roads, highways and freeways. They can plow a mean snow road, though . It has been suggested that the state cut the school year by 5 days this year to save millions of dollars and the teacher's union screamed, "No way...what about the CHILDREN??? The potential damage!!" Listen, my 11-grader would love a couple extra days off...no damage done. It's not about the children...it's really about the union. Then there's talk of supplying prisoners yoga lessons and increasing the prison landscaping so the inmates won't have to look at the razor wire fences! Huh? I could go on and on (sorry).
What do I, JoAnn Taxpayer, actually get for all the taxes and fees I already pay? In my locale, raunchy roads in need of real repair, emergency rooms with an 8-hour wait, schools filled with thieves and the spawn of tweekers with many teachers that couldn't give a flip and administrators that are way overpaid, high insurance rates, and not enough cops and firefighters, to name just a few examples.
California cannot be beat for natural beauty, climate, diversity, cultures, history and all round awesomeness! Too bad the state government is ruining things so well.
I have a really, really nice picturesque view bungelow on 5.25 acres, fenced and cross-fenced for horses, 2 wells, several outbuildings, a windmill and a rental mobile home. I'd let it go for $275,000 Or maybe I can interest you in the cute cottage on 2.5 acres in a gated equestrian and airplane park community. Same price
We're heading for Oregon...