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Old 07-29-2012, 01:41 PM
 
Location: SoCal
559 posts, read 1,075,297 times
Reputation: 612

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Prop 13 has had a side effect of allowing housing prices to balloon since higher prices produce less of a property tax hit than in other states. If capital gains were taxed at the same or higher rate as income, there'd be less incentive to flip. There should be no tax breaks on second homes since many houses are being bought as investment by foreigners or others who have no interest in living in the community. Those folks pay cash and can outbid any young family looking for a place to settle down. What's the free market solution to that? And of course, there was the loosening of banking regulations which incentivized the frenzied speculation and subprime lending.

LA is built out. There's not much in the way of empty lots other than on hillsides. And contrary to popular image, LA is not a sea of tract homes on big lots but small houses on small lots mixed with a huge number of two story apartments and duplexes. Higher density housing is being built. Even during the recession I was surprised to see the number of apartments being built in South Central along several of the north-south arteries. Paradoxically, replacing single family residences with apartments will decrease the stock of the highly desired SFRs, making them even more valuable. The days of cheap houses with a yard in the LA basin are long over. This is earthquake country, so naturally our building codes have to be tougher, increasing cost. Finally, LA is notorious for its lack of greenspace. Should we pave over and build housing on all our parks?

There is a small national trend toward very tiny dwellings, which I applaud but I'm a bit worried about their execution. I read that some of these were built somewhere on the westside but they were priced starting around a quarter of a million. I'd like to see small, cheap housing built using fire and earthquake-proof shipping containers but who knows if that'll ever happen.

In some ways, there is a reverse trend. The Aliso Village housing projects were replaced by the Pueblo del Sol complex with a net loss of low income housing units. Pueblo del Sol looks like something that wouldn't be out of place in Irvine but it doesn't help the housing crunch.

Unless there is some heavy and unpopular government intervention (like rent control), I don't see how housing prices can be lowered.
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Old 07-29-2012, 05:23 PM
 
71 posts, read 104,449 times
Reputation: 96
It's called 'sunshine wages' because everyone wants to live here. They will take low paying jobs and pile into units with multiple tenants to share the rent. If that's for you, welcome to L.A.!
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Old 12-03-2012, 05:29 AM
 
10 posts, read 9,298 times
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banks cant actually print houses because they are tangible. So what they do is give somebody a loan which will take approximately your entire life to pay off. This way the bank is the actual owner of the home and your still a slave. it is overpriced because very few homes are not mortgaged. Basically they own it all and charge you whatever they want. But you cant blame them if you owned most real estate you would overcharge too. It does seem funny though how homeowners think of themselves as homeowners, actually most people think they own that new car they bought till they miss a few payments and figure out who the real owner is.

In a true supply and demand market you would be competing against other people but in reality the other person is approved for loan money so your competing against the bank. Which requires you to take a loan because you might not have 600k cash so really theres no competition because the bank owns it either way. Its whoever they loan more money to that ends up living there.

Apartments will not lower in cost because unless they see at least 70% vacancy rate. 10 years ago a studio on the beach cost $500 today 1500$ so if you were a landlord with 10 units you used to collect 5k a month now it tripled to 15k ...even if half the tenants moved out your still at a win because thats 7500k with 50% empty apartment thats 2500$ more then 10 years ago with 100% full. The banks have strict rules in place preventing landlords from lowering rent to make matters worse. A new spin on this situation is obama. Now that more and more americans become government dependant landlords are turning to section 8 and hud programs. This keeps rent high by even distorting the supply and demand issue more.

I really dont see how suppy and demand is a major factor in rental rates or home prices.

To me it seems more of a monopoly deal and the game is won but you cant stop playing because its real life monopoly game.
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Old 12-03-2012, 12:05 PM
 
Location: Los Angeles (Native)
24,147 posts, read 13,668,407 times
Reputation: 11353
Not too sure about this number...a studio on the beach was $500..what beach? Where?

I agree about section 8 , but section 8 and hud has been around for decades...way before Obama..so I wouldn't go on blaming him...plus the crazy loans to people were done until Bush's watch...not Obama.

Also that is true if you don't make a payment for something the bank would take it back..but what do you expect them to do?

The banks can "charge you whatever they want"? How can they charge you whatever they want? They were telling people what they were going to charge and people didn't care..I'm not sure if you are talking about adjustable rate mortgages..all that info was in the paperwork...but people thought they were going to get a promotion, or win lotto or that their home would be worth more by that time and they could just sell it for millions.

Supply and Demand is a major factor in everything.

It sounds like you are arguing for renting but at least with buying you do have the potential to sell down the line. If you rent a place for 30 years you can't sell that place.

So you are a slave if you have a mortgage...what if you are renting? You can't do anything without checking with the MASTER first..the master has control of whether you will continue to live in that place.

That said people shouldn't buy just to buy and you should make sure you will want to stay in that neighborhood/city for a long time. I think renting does make sense if you aren't settled...but "a year or two" often turns into 5 years, then 10, then 20 ,etc.
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Old 12-03-2012, 06:28 PM
 
Location: Boulder Creek, CA
9,197 posts, read 13,462,583 times
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Quote:
Originally Posted by jm1982 View Post

It sounds like you are arguing for renting but at least with buying you do have the potential to sell down the line. If you rent a place for 30 years you can't sell that place.
If you go underwater on that place you bought, like so many have in the last decade, you lose everything.
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Old 12-04-2012, 02:20 AM
 
10 posts, read 9,298 times
Reputation: 15
Quote:
Originally Posted by jm1982 View Post
Not too sure about this number...a studio on the beach was $500..what beach? Where?

I agree about section 8 , but section 8 and hud has been around for decades...way before Obama..so I wouldn't go on blaming him...plus the crazy loans to people were done until Bush's watch...not Obama.

Also that is true if you don't make a payment for something the bank would take it back..but what do you expect them to do?

The banks can "charge you whatever they want"? How can they charge you whatever they want? They were telling people what they were going to charge and people didn't care..I'm not sure if you are talking about adjustable rate mortgages..all that info was in the paperwork...but people thought they were going to get a promotion, or win lotto or that their home would be worth more by that time and they could just sell it for millions.

Supply and Demand is a major factor in everything.

It sounds like you are arguing for renting but at least with buying you do have the potential to sell down the line. If you rent a place for 30 years you can't sell that place.

So you are a slave if you have a mortgage...what if you are renting? You can't do anything without checking with the MASTER first..the master has control of whether you will continue to live in that place.

That said people shouldn't buy just to buy and you should make sure you will want to stay in that neighborhood/city for a long time. I think renting does make sense if you aren't settled...but "a year or two" often turns into 5 years, then 10, then 20 ,etc.


1998 studio near any beach was 500 i rented a 2 bedroom in west hollywood for 700$ in 1997

10 years later 2000$

Are you telling me the banks dont control the home prices and its supply and demand? Thats stupid banks print money which causes inflation and when they direct the new money as home loans then housing inflates more then other commodities

If banks stopped loaning can you imagine how much a house would be worth? Well they wouldnt be a million cause i doubt many people have 1million cash?

Also imagine if they loaned 10million per house? Wouldnt houses raise to 10million? (90year loan?)

So im pretty sure housing price has more to do with banks and less to do with supply and demand
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Old 02-01-2013, 12:16 PM
 
18 posts, read 29,903 times
Reputation: 10
Home price, insurance, and property taxes are higher than it was 15 years ago. Population increased due to echo boomers and immigrants. Los Angeles is a great place to work and live, expecially for the younger generation.

Last edited by sstevo2012; 02-01-2013 at 12:39 PM..
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Old 02-01-2013, 12:25 PM
 
Location: Los Angeles (Native)
24,147 posts, read 13,668,407 times
Reputation: 11353
Take a look at big foreclosure markets like Las Vegas and Phoenix.. many of the houses have gone up significantly in a short amount of time... This isn't because banks were lending money for people to buy these homes..actually it's rather the opposite. These properties were mostly sold CASH only. Prime example of supply and demand.

It is crazy how prices have gone up as you mentioned by the beach and in West Hollywood....incomes haven't gone up

If you study the prices of apartment buildings in L.A the prices have gone up a lot! A lot more than rents. So as time goes on and those buildings change hands. The new owner of the building by the beach or in West Hollywood can't afford to rent at those prices anymore.

I read that in Downtown L.A building prices have gone up as much as 7 times since the early 2000s...thats a 700% increase! Meanwhile rents haven't gone up THAT much at all.

Also in general I think rents in L.A are lower than similar cities like SF, NYC and some other big cities. Mostly because there is a lot of supply compared to some of these places .
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Old 02-01-2013, 12:50 PM
PDF
 
11,386 posts, read 9,848,968 times
Reputation: 6580
Quote:
Originally Posted by jm1982 View Post
Take a look at big foreclosure markets like Las Vegas and Phoenix.. many of the houses have gone up significantly in a short amount of time... This isn't because banks were lending money for people to buy these homes..actually it's rather the opposite. These properties were mostly sold CASH only. Prime example of supply and demand.

It is crazy how prices have gone up as you mentioned by the beach and in West Hollywood....incomes haven't gone up

If you study the prices of apartment buildings in L.A the prices have gone up a lot! A lot more than rents. So as time goes on and those buildings change hands. The new owner of the building by the beach or in West Hollywood can't afford to rent at those prices anymore.

I read that in Downtown L.A building prices have gone up as much as 7 times since the early 2000s...thats a 700% increase! Meanwhile rents haven't gone up THAT much at all.

Also in general I think rents in L.A are lower than similar cities like SF, NYC and some other big cities. Mostly because there is a lot of supply compared to some of these places .
Rents do seem much lower in LA compared to NYC. Not a huge difference, but by a couple hundred bucks and that makes a difference to someone really on a budget.

Maybe it's because everyone wants to live in Manhattan. No matter where you go in Manhattan things are expensive. Different story for LA.
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Old 02-01-2013, 01:00 PM
 
Location: Los Angeles (Native)
24,147 posts, read 13,668,407 times
Reputation: 11353
NYC especially manhattan seems a lot higher than L.A . Much more than a couple hundred dollars... I was kind of surprised to find rents pretty high in Long Island City Queens too..but makes sense since its close to Manhattan.

One big thing in Manhattan is the savings from not having a car..i think metro pass is like $100 mo?

I think 75% of people in NYC dont have a car (or maybe 75% in Manhattan) if you add up car payment,gas,insurance,maintenance ,registration that adds up to quite a bit.

Also many people are living there under rent control /stabilization they've been living there for a long time and their rents are lower. In this case they can afford to live in a place that their salaries wouldn't otherwise pay for. This is generally how older NYC residents can afford to live there.

I have heard some of this is going away though as well.
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