How in the Heck does Anyone Afford to Live in California? (San Diego: for rent, crime rate)

[Lovehound]

My only excuse for staying is that I was born here and haven't left yet. I'm workin' on it.

[Charles]

Originally Posted by jkbatca

3) Bought a house 30 years ago in a dumpier area and kept "buying up" as each house appreciated in value tremendously

Number 3 is a myth as described. It isn't possible. The only way you move up is if you make more money or interest rates go much lower or you inherit or acquire money or you spend a long time (like 20 years) building equity in principle (not appreciation) or you didn't buy the most you could afford in the first place (but you would be buy buying up).

Why? Because if your house appreciates then the house you are moving to appreciates - you can't move up. In fact, appreciation makes it hard to even move sideways because taxes are higher and there are costs associated with moving.

[Ultrarunner]

Originally Posted by Charles

Number 3 is a myth as described. It isn't possible. The only way you move up is if you make more money or interest rates go much lower or you inherit or acquire money or you spend a long time (like 20 years) building equity in principle (not appreciation) or you didn't buy the most you could afford in the first place (but you would be buy buying up).

Why? Because if your house appreciates then the house you are moving to appreciates - you can't move up. In fact, appreciation makes it hard to even move sideways because taxes are higher and there are costs associated with moving.

No... not exactly and here's why:

Myself and several of my friends in our very early 20's all decided to buy homes in the SF Bay Area... all that we could afford starting out were homes that really could have been condemed... but that's another story. My friend's home had a skylight where the roof had rotted away which also caused the floor to rot.

His 2 year old daughter thought everyone could see stars at night from the bedroom

Anyway... it took him 5 homes to make it to his home in the Montclair District of the Oakland Hills... every home was dump that he rehabbed nights and weekends while going to school with a wife and infant and later during his summers off from his Oakland Public Schools job as a teacher.

Come to think of it... he still owes my a weekend of work from the time we reshingled his third home in Maxwell Park

I did the same thing, only I kept the homes when I moved out and rented them... so did my youngest brother.

It's the working man's way move up the ladder of Home Ownership... kind of a pay as you go plan...

Almost all of these homes were on the MLS... so anyone could have found them... many had started with much higher asking prices...

Sheetrock, 2 x 4 lumber, nails and paint really don't cost much when not counting the labor of friends and family. The homes just need to be clean, safe and sanitary...

I remember doing an entire kitchen including Magic Chef Applicances, Cabinets, Formica Counters, Designer Solarium Floor and a Garden Window for under 2k in materials... that home has changed hands twice since I had it and it still had the exact kitchen!

Another brother asked if I could help him keep his kitchen costs contained... I think he paid 2k just for the material to tile the floor... anyway his kitchen turned out very nice for 16k in material...

[gypsystar]

Originally Posted by Austin83

Yeah I wanted to address the comments by "The Floridian". You must work with the state tourism agency or for Charlie Crist because Florida is a joke. Before you discredit me though, I currently live in Florida, have lived in Florida for 4 years now, and am looking to get out with California being where I am focusing my energy on.

First of all, Erin is exactly right in her comments. People in Florida are just as materialistic as California and 10x more fake than California. Everyone comes to Florida expecting to live the "Florida lifestyle", even though no one here has a clue what that is. Everyone for whatever reason thinks that they can move to Florida, never work again, and just drink margarita's on the beach all day, and are shocked when they get here. Also, if you live in Florida you better have either a New York/Boston accent or be of Cuban/Puerto Rican descent, or you will not fit in at all. People in Florida are shallow, mean, and stay in their little clique of friends and never try anything new. A lot of the older people here in Florida are not happy and try to do a very bad job at hiding it. They don't call Florida "death's waiting room" for nothing.

In terms of the economy and jobs (since you will need one to afford to rent or pay a mortgage which are not that much better than California), if you don't have anything lined up you will be selling t-shirts or dealing with rude guests working at a hotel for minimum wage. There are RN's here that only make $11-$12 an hour and hotel managers that only make $13-$14 an hour, that should tell you something.Compared to Florida, California is such a progressive state, there is a greater variety of things to do (if you don't like the beach, fishing, or golfing there is absolutely NOTHING to do in Florida), more opportunities in a variety of economic sectors, and the people are nicer and more open. Nevermind California weather is a lot better (in Florida you do not want to leave your house from early May to the end of September), the beaches are much more beautiful, and you have the advantage of being close to the beach and the mountains (closet mountains to Florida are 8 - 10 hours away in Georgia/North Carolina). Diversity is a big joke as well, California has a lot of different cultures that mix together and a variety of groups, activities, and restaurants to enjoy. The biggest decision you will make in Florida in terms of variety is Walmart vs. Target or Olive Garden vs. Carrabbas.

"The Floridian", I am glad you enjoy Florida, but do not disrespect California or other states. Florida wishes it had half of the economic opportunities and half of the natural wonder that California has. Unless you enjoy the beach, golfing, or fishing, Florida is boring and the cost of living in Florida is not that much better than California. Nevermind that Florida might soon have a state income tax, which would eliminate the only real advantage Florida has over California. I'll take California over Florida anyday. I am attempting to get out to California sometime this year if all works out. I am just keeping my fingers crossed.

I don't agree with this at all! I live in and love L.A., but I also love Florida. I am always torn between the two places, and each have their own unique things to offer. You can't just say that "California is better than Florida" when they are both unique in their own ways. It is just ridiculous to say one place is "bad" while the other is "good!" I love CA and FL for everything that they have to offer, but I don't compare the two places. FL has so much to offer in the way of nature and beaches that many residents put up with the heat and humidity happily. And some actually PREFER humidity to bone dry air - I know I do!

[Charles]

Originally Posted by Ultrarunner

we could afford starting out were homes that really could have been condemed...

every home was dump that he rehabbed nights and weekends

Sheetrock, 2 x 4 lumber, nails and paint really don't cost much when not counting the labor of friends and family.

OK. I agree. This is a means I missed. However, it is not an appreciation that took place. It is an improvement. The homes you fixed up didn't appreciate - they transitioned from undervalued to market value. You applied material and labor to bring something that was below market value to market value. So, while I missed this method of "moving up" it still is not a "buy up due to appreciation" path.

It is almost the equivalent of working a second job to save more money for higher down payment - a means I did mention.

[Soccersupporter]

Originally Posted by Charles

Number 3 is a myth as described. It isn't possible. The only way you move up is if you make more money or interest rates go much lower or you inherit or acquire money or you spend a long time (like 20 years) building equity in principle (not appreciation) or you didn't buy the most you could afford in the first place (but you would be buy buying up).

Why? Because if your house appreciates then the house you are moving to appreciates - you can't move up. In fact, appreciation makes it hard to even move sideways because taxes are higher and there are costs associated with moving.

So true. Many times we looked at moving in CA but realized that you just end up with a higher mortgage, taxes, longer commutes, etc.. We stayed in one place, added to the home, sold and went to TX where the homes were 1/4 the cost. High property taxes, but with no mortgage payment we can live with the taxes.

[Axxlrod]

Originally Posted by jkbatca

Here's my experience on how people afford the astronomical housing prices in CA:

1) Have lived in California for greater than 40 years where housing prices were a tenth or less of what they are now

2) Have parents who lived in California for greater than 40 years and either inherit or they sell the house to you for way under value

3) Bought a house 30 years ago in a dumpier area and kept "buying up" as each house appreciated in value tremendously

4) Have lots and lots of money to begin with

5) Go into astronomical amounts of debt

In 2009, (5) isn't working anymore, (4) are kind of still here, but some are leaving, (3) have left or thinking of leaving the state, which leaves (1) and (2) remaining here...

So every homeowner in CA either inherited money or is just plain rich? Please. That's ridiculous. You sound jealous and/or disgruntled.

I've lived in CA my whole life, and have owned 3 homes so far; I bought my first one at age 28. No I don't live in the central valley. I live on the coast.

All of our friends and acquaintences are home owners (typical homes, not mansions), and none of us fit your descriptions you noted. We aren't "rich" by any means. But did go to college and have good careers.

Seems like many of the people whining about not being able to afford owning a home are people who didn't take their education seriously, meaning a high school diploma was enough for them. And now these people think they should be able to own a nice home just like the people who put in the extra effort to provide themselves a career, not just a job.

Owning a home is not a right or a given. Its only for those who create the means for themselves to truly afford one.

[Charles]

Originally Posted by Axxlrod

So every homeowner in CA either inherited money or is just plain rich? Please. That's ridiculous. You sound jealous and/or disgruntled.

I've lived in CA my whole life, and have owned 3 homes so far; I bought my first one at age 28. No I don't live in the central valley. I live on the coast.

All of our friends and acquaintences are home owners (typical homes, not mansions), and none of us fit your descriptions you noted. We aren't "rich" by any means. But did go to college and have good careers.

Seems like many of the people whining about not being able to afford owning a home are people who didn't take their education seriously, meaning a high school diploma was enough for them. And now these people think they should be able to own a nice home just like the people who put in the extra effort to provide themselves a career, not just a job.

Owning a home is not a right or a given. Its only for those who create the means for themselves to truly afford one.

I think timing has a lot to do with it. We paid $330K for a brand new 2200 sqft ($150/sqft) home in an excellent section of Thousand Oaks in 1997.

[jkbatca]

Originally Posted by Charles

Number 3 is a myth as described. It isn't possible. The only way you move up is if you make more money or interest rates go much lower or you inherit or acquire money or you spend a long time (like 20 years) building equity in principle (not appreciation) or you didn't buy the most you could afford in the first place (but you would be buy buying up).

Why? Because if your house appreciates then the house you are moving to appreciates - you can't move up. In fact, appreciation makes it hard to even move sideways because taxes are higher and there are costs associated with moving.

Worked for me. Bought a condo around 1990, sold it at 2004, the appreciation difference allowed us to qualify for a loan on our current house (which we shopped around for and got a good deal). Without this appreciation, there's no way on this planet we would have qualified for the full price of the house (unless we took one of those ARMs ). It's all about when to buy and sell... Our net loan on our current house wasn't much more than the loan on the previous house.

[jkbatca]

Originally Posted by Axxlrod

So every homeowner in CA either inherited money or is just plain rich? Please. That's ridiculous. You sound jealous and/or disgruntled.

Um, I think you're reading a bit more into my post than what I was thinking at the time. I know people who I run into on a weekly or daily basis (including myself) which is an example for every item on my list.

Jealous or disgruntled? I don't know. I'm at peace with myself and all of those I know who fit into all of the other categories and are friends with them. I realize some are in the right place at the right time and some worked for it, whatver. I'm happy for what I have.

Originally Posted by Axxlrod

I've lived in CA my whole life, and have owned 3 homes so far; I bought my first one at age 28. No I don't live in the central valley. I live on the coast.

All of our friends and acquaintences are home owners (typical homes, not mansions), and none of us fit your descriptions you noted. We aren't "rich" by any means. But did go to college and have good careers.

You ought to go to places around the country, who would think Southern California is much richer than they are. For how much my house is worth right now, I could buy a huge house and property in western Pennsylvania, for example.

Originally Posted by Axxlrod

Seems like many of the people whining about not being able to afford owning a home are people who didn't take their education seriously, meaning a high school diploma was enough for them. And now these people think they should be able to own a nice home just like the people who put in the extra effort to provide themselves a career, not just a job.

Owning a home is not a right or a given. Its only for those who create the means for themselves to truly afford one.

Some people's perspective are a product of what they have experienced in life. I notice people who only lived in Southern California think the rest of the country is just like here, because this is all they know. They think $400K homes are nothing, $40K cars are typical, etc. while many other areas in the country think that's rich.

I think I'm extremely lucky and fortunate to live where I currently live, based on what I see when I go to places like my home town in western PA. But I'm not deluding myself into thinking that it was just because of my hard work.

I'm doing great, and I'm not bitter at others who either worked or "fell into" fortune, but there are people who do great, work hard, and yet cannot afford a typical house in Southern California due to circumstances beyond their control. I thought that was the point of this thread...

By the way, with regards to my education, use your reading comprehension skills you've supposedly picked up in college and read my posting history before you make any conclusions about me...