Leaving California (Sacramento, Oakland, Compton: renting, condo, credit)

[graffixjones]

Hrm... I'm not hanging out here trying to tell everybody how "bad" California is.

People get rose-colored glasses every time they think of moving to California, and I'm just telling them that unless you have the money, and can deal with the problems associated with living down in L.A., they should give it some serious thought.

That's all I'm saying.

[Ultrarunner]

Graffixjones...

I appreciate your comments. One of the reasons I like to read City-Data is because of the diversity of posters and ideas.

I had an economics professor who repeatedly said the markets are always moving towards equilibrium... hey, my physics professor said that about the universe too. Anyway, my point is that we are all looking for balance in this very competitive society.

With competition, comes the realization that some people are willing to sacrifice more and put a higher priority on Home Ownership. For others, the importance of owning the roof over their head is more of a liability instead of an asset.

I have experienced 3 Real Estate Market reversals over the last 30 years and every time the market has come back stronger... only to hear people reminiscings about the "Good Old Days" ;-)

[PinkPoppy]

We moved away from SF/Marin County in 2003. I grew up in San Jose, CA and always wanted to move from the Bay Area. Now, in Seattle, and I can't stand the winter weather. I'd like to move back home but can't see how we can afford it. I've started dreaming about Hawaii, Mexico, California. I'm really cold up here all the time. Too many clouds, too much rain.

We moved because we wanted to buy a house and we got one just as prices were going up and up. Everything is good except the weather, the 7 months of crappy, cold, wet, miserable weather.

[graffixjones]

Ultrarunner,
Thanks for being kind in replying to my post.
Since you seem to have an understanding of economics, you can see that Prop. 13 is essentially a form of "rent control", which does not allow the market to reach equilibrium.

Any time you have any type of price floor or ceiling in a market, it becomes inefficient rather quickly. You remove the incentive to be efficient when markets are either guaranteed a minimum price on a good, or a maximum price a good can attain.

I also understand what you posted about competition in the market, and unfortunately I didn't get into the California RE market in time. I also believe that there's thousands (if not millions) of others like me that are going to start to look elsewhere for both employment and as a place to own a home.

That's unfortunate, because California is going to lose it's middle-class citizens. On one end you'll have the eternally "working poor" renters, and on the other you'll have professionals who have no problem affording a home... there really won't be much room for those in the middle.

Thanks again for not ripping me a new one... I can see both sides of the coin, but I happen to be on the one that landed "down".

PinkPoppy,
Don't consider this a "promotion" of one state over another, but we're currently looking at Texas as a place to move. Everything else immediately surrounding California has already become "Californicated" (to use a term I found here at City-Data). You'd be amazed what you can buy for the money.

[NYSD1995]

Originally Posted by graffixjones

That's unfortunate, because California is going to lose it's middle-class citizens. On one end you'll have the eternally "working poor" renters, and on the other you'll have professionals who have no problem affording a home... there really won't be much room for those in the middle.

Personally I think this is the direction that the entire country is facing. Middle-class jobs have been disappearing for a long time, especially in low-cost housing markets like the Midwest. Wherever there are job centers there will be dramatic wage/housing multiples, and the middle-class will be forced to either adapt, commute, or learn to live with less.

Living with less seems antithetical to most Americans - the middle class is drowning itself in low-grade consumer goods at the expense of home ownership, investment, and savings. Even the housing market is affected as people chase 700k mcMansions all over Southern California with easy loans and big risks.

The question is: where do you want to be? We've had energy, medical, and education expenses skyrocket and now housing. We're about due for wage inflation and only the people at the top are going to benefit this time around.

[Ultrarunner]

I lived through the Oakland/Berkeley Firestorm that wiped out over 3000 homes. A number of "Burnt Out" homeowners chose to take the cash and start over instead of rebuilding.

Several of my friends/acquaintances choose Sun Valley Idaho as a relocation destination. They bought beautiful spacious homes for cash. Many are still quite happy there and others remain only by default.

The problem is that once you leave a high priced state like California, it is darn near impossible to come back to what you had. Those that did come back bought much more modest homes... there was no way they could afford the same square footage and neighborhoods as before... they were priced out of the market and they were no longer earning California wages.

The same is true with the early Texas migration in the 80's. For those that are Texan's at heart, it was the best move they ever made. For those wanting to return, they soon became very frustrated seeing the homes they sold now going for 3 to 4 times more.

Prop 13... In some ways, I see a similarity to Prop 13 and the way California taxes automobiles.

When I buy a car, I pay a tax and registration fee based on the sales price. I recently sold a car that I owned for many years and over time, I had restored it to like new condition.

When I bought the car, I paid $1000 for it and my registration last year was around $50. The man I sold it to paid 10 times what I paid for it and as a result is also paying more than 10 times the sales tax and many times the registration fees. He did not have to buy it... but he did knowing that he would be paying many times more the amount I did for the identical car.

Houses appreciate and the owner reaps the rewards... Well, from reading City-Data it seems there are just as many people that believe the market is long over due for a crash, homes are grossly overpriced and there will be blood in the streets when it happens (I added the last part)

Tax laws favor home ownership. Somewhere, a long time ago, it was decided that home ownership should be encouraged. My econ professor said Real Estate, specifically home ownership, is the single greatest asset most people have in their estate and homeowners as a group look less to the government in their golden years only because of the nest egg their home has become.

We are supposed to have a government for the people and by the people. The people used the initiative process to get 13 on the ballot and the people voted for it. In my city, the people have continued to approve every school bond or school/parks special assessment district on the ballot. The only thing prop 13 really does is prevent the government from independently increasing taxes above 2% a year without taking it to the people. And by people, that includes homeowners and renters.

At the time Prop 13 passed, my Grandparents had a small 800 square feet rental attached to their home and rented to a student. They passed the prop 13 savings onto her by lowering the rent by the amount they were saving.

California Homes... I still am amazed that people can come to this country with nothing, from Asia, South American and Mexico and in 10 years own several properties, again starting with nothing. Maybe this is the "New" middle class in the making?

If anything, Prop 13 certainly rewards homeowners who stay put and don't move around. Just think, if you were to buy today and live in your home 40 plus years... you would still be getting the benefit of prop 13 long after the elderly of today are long gone.

[Californiaguy2007]

I used to live up in Washington State and the weather up there is lousy :-(

If I still lived up in Washington,I would be a very depressed person,and I wouldn't have enjoyed all the fun i've had in Southern California.

Hopefully you will be able to move someplace where your happier.

Originally Posted by PinkPoppy

We moved away from SF/Marin County in 2003. I grew up in San Jose, CA and always wanted to move from the Bay Area. Now, in Seattle, and I can't stand the winter weather. I'd like to move back home but can't see how we can afford it. I've started dreaming about Hawaii, Mexico, California. I'm really cold up here all the time. Too many clouds, too much rain.

We moved because we wanted to buy a house and we got one just as prices were going up and up. Everything is good except the weather, the 7 months of crappy, cold, wet, miserable weather.

[da jammer]

My son bought his first house when he was 22 in Beaumont. Nope note the most glamorous place but it got his foot in the door. Two years later he sold it for $160,000 profit and built a beautiful new house for him and his new bride in Tomball TX for $250,000. He just landed a system admin job in Houston @ $45 an hour and they are some happy young campers. The foot in the door is the key as I have never known anyone (other that Paris Hilton) that started out the game at the TOP of the mountain. I'm a believer that anybody can get where they want to be in this awesome country the question is are they willing to sacrifice and start out at the bottom rung of the ladder.

[graffixjones]

Originally Posted by da jammer

My son bought his first house when he was 22 in Beaumont. Nope note the most glamorous place but it got his foot in the door. Two years later he sold it for $160,000 profit and built a beautiful new house for him and his new bride in Tomball TX for $250,000. He just landed a system admin job in Houston @ $45 an hour and they are some happy young campers. The foot in the door is the key as I have never known anyone (other that Paris Hilton) that started out the game at the TOP of the mountain. I'm a believer that anybody can get where they want to be in this awesome country the question is are they willing to sacrifice and start out at the bottom rung of the ladder.

I completely agree... however, the ladder in California is missing all the bottom rungs, and doesn't really start until the middle. Now I guess you could try to shimmy up either side to reach that middle rung, but it's much easier to find a new ladder.

[da jammer]

Originally Posted by graffixjones

I completely agree... however, the ladder in California is missing all the bottom rungs, and doesn't really start until the middle. Now I guess you could try to shimmy up either side to reach that middle rung, but it's much easier to find a new ladder.

That is what is so fabulous about this great country of ours. If you can't make things work your way where you are, there are millions of options in the good ole US of A. I have a good buddy that is married, has a great job, and wifey was expecting (this was about 18 months ago). They were paying $1500 a month for a tiny apartment in San Diego. They loved it there and it was close to work but they really wanted a house. He makes a very good income as a Caterpillar heavy machine mechanic but had no money for a down payment and was concerned about his less than stellar credit. He, his wife and some friends of mine in the real estate and mortgage field got together over dinner one night and put together a game plan. Just about two years later they have over 100K in equity in their home....how else are you gonna make that kind of money by just paying the bill to live under your roof?. Yep, he had a much longer drive to work and the house is only 1500 sq ft (twice the size of their apt tho) and it wasn't exactly where they wanted to live but they got their foot in the door, rebuilt their credit to darn near excellent and plan to sell the house next spring and add to their family. I just cannot see how anyone in this country, if they are willing to do what it takes, won't succeed and achieve their dreams.