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Old 03-02-2012, 06:07 PM
 
21 posts, read 17,922 times
Reputation: 13

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Land is a finite resource. The reason it is more expensive in California than Iowa is because there is a greater demand for it. That demand can be enhanced because of things like higher paying jobs, quality of life, etc.

I am not sure I follow you on Real Estate being "very highly" regulated.

There are protections offered to the buyer in the law but they seem practical. It really has no effect on the value of Real Estate.

If I want to sell you a house, we can draw up a contract, do a title search and no one can impede us under normal circumstances.

The rest of your post sounds more like a conspiracy theory than actual economics.

Quote:
Originally Posted by Cletus Awreetus-Awrightus View Post
It is "supply and demand", however, the forces of supply and demand in real estate/mortgage markets are extremely complicated. Real estate is a very, very highly regulated market.

Rents are high because the mortgage payments are high for owners.

Mortgage payments are high for owners, because land is overcapitalized.

Land is overcapitalized because it (more or less) constitutes the assets on which the U.S. dollar is valued in the first place; we typically expand the monetary base in this country by bidding up the price of land.

TL;DR - Our monetary system drives up land prices and rents. This is not an LA thing, although LA is expensive -- this happens across America, and any other countries whose monetary systems are similar in structure to the U.S. (look at rents in Australia, NZ, the UK, Netherlands, etc.)
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Old 03-02-2012, 06:07 PM
 
6,474 posts, read 10,046,628 times
Reputation: 6325
Quote:
Originally Posted by thethinkman View Post
Studio for $600 sounds like 1990s prices I doubt this. I've seen studios 1200 and one bedroom $1500 only affordable option now for a grown man with a job is roommates . Unless you owned the house prior to the "bubble" or have rent control. Which I had but too many law suits made it unafordable and had to move. So if they reallybwant you out of rent control you'll be out depending on the landlords legal team.
It depends on where you want to live.

Certain parts of downtown LA have these especially near MacArthur Park and Koreatown. Some may have kitchens and some may not.

Even with singles or bachelors for $500 or more, there will still be several people sharing a floor to sleep on cause most of the wages in LA are very low. Just a couple of dollars above minimum wage even for some office positions.
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Old 03-02-2012, 06:34 PM
 
672 posts, read 1,791,591 times
Reputation: 873
Part of the high price of property in center Los Angeles has to do with the way population has grown and spread out.

In my lifetime, the population of state of California has doubled. It was about 20 million in 1970 and it is close to 40 million now.

But during the same time, the City of Los Angeles's population has been much more stable, because the city is mostly built out. It has increased from about 3 million in 1970 to about 4 million now.

If the growth in housing units in Los Angeles had doubled in the last 40 years to keep pace with the growth of the state as a whole, I think rent would still be affordable. But if it had, traffic would be unimaginably bad, I think.
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Old 03-02-2012, 11:09 PM
 
17 posts, read 27,865 times
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Even though Idaho is cheaper then la it has still more then doubled for example if you buy a house in a la it used to cost 300,000 now cost 900,000 house in Ohio used to cost 50,000 now cost 150,000 they still doubled but 150,000 sounds cheaper then 900,000. I wonder if the supply has been fixed and if pretty much everyone needs a bank loan to buy a house. Who really owns the house? Bank or person?
15 years ago I remember houses in Victor ville and Ontario etc for 50-70,000


Population growth could be a reason but I don't think most of this growing population really has nowhere near enough money to buy a house especially the illegal growing population. How could them showing up raise a price of something they weren't gonna buy " unless you factor in the home loans for illegals"

Last edited by thethinkman; 03-02-2012 at 11:23 PM..
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Old 03-02-2012, 11:18 PM
 
17 posts, read 27,865 times
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For some reason I've come to the conclusions that the banks are responsible for for price.

Think about it. What cause the latest " real estate bubble"? Banks over loaning money and loaning money to people they knew wouldn't pay the mortgage for the long run. They loaned a bunch of money and raised the price if they loaned people a billion I'm sure houses would cost a billion. It's not hard to see the money trail everyone is broke so where is their money going? Well most everyone I know pretty much pays the landlord everything and landlord pays the banks. So landlord is basically a proxy for the bank with good credit.
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Old 03-03-2012, 01:15 AM
 
25,870 posts, read 49,775,165 times
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Of course "Easy" money combined with desire causes prices to increase.... add speculation and you're building a bubble.

I heard many times a few years ago... "Today's high price will be tomorrow's bargain"

The people that bought into that were looking to score or thinking it was their last chance to own...

It wasn't that long ago a person needed 3 years of employment history... two years on the same job, 20% cash down, 6 months reserves in the bank plus closing costs... and the home had to appraise and have termite clearance...

Rent is high because by hook or crook... people are willing to pay rather than leave...

The more desirably the area the more people willing to beat out the next guy by paying more to live there...

Add the restrictions on supply... mostly on lack of build able land, zoning, environmental and the desirable becomes exclusive based on affordability

There area some alternatives... mobile home parks and jobs that have a housing allowance... like resident manager or apartment maintenance jobs or caretaker positions... and don't forget about all the in-law and pool houses in the affluent neighborhoods too.
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Old 03-03-2012, 01:26 AM
 
25,870 posts, read 49,775,165 times
Reputation: 19318
Quote:
Originally Posted by thethinkman View Post
For some reason I've come to the conclusions that the banks are responsible for for price.

Think about it. What cause the latest " real estate bubble"? Banks over loaning money and loaning money to people they knew wouldn't pay the mortgage for the long run.
I don't know if banks really knew or cared if folks couldn't repay... most got paid for making the loans and then packaged and sold them...

I've bought, moved in and fixed-up a fair number of distressed properties... sometimes the property was so decrepit... the only way to get it sold was for cash or for the seller to carry the loan...

Several sellers banked on me to keep my side of the deal and carried the mortgage... I have one right now that I bought near the peak of the bubble that is worth a third less than what I paid for it...

Each month I still make my payment... the elderly couple trusted me and I wouldn't go back on my promise to them...

On the other side of the coin... Banks were under tremendous pressure to open lending because they were seen as keeping people from realizing the dream of home ownership... the community reinvestment act is a big part of the change in lending...

I'm not a fan of banks... but, I can see both sides... they were criticized for not making loans to people of marginable resources and now for being to liberal by making loans based on little more than a promise to pay...
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Old 03-03-2012, 01:28 AM
 
Location: CA
1,139 posts, read 2,066,891 times
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Quote:
Originally Posted by thethinkman View Post
Seems cost of living is so high now but income is so low...
Income is so low? Not for all fields.
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Old 03-03-2012, 06:03 AM
 
3,458 posts, read 2,993,707 times
Reputation: 1527
Quote:
Originally Posted by dallasdan View Post
Land is a finite resource.
Sure. So is iron ore, or gold, etc.. many resources are finite.

Quote:
The reason it is more expensive in California than Iowa is because there is a greater demand for it. That demand can be enhanced because of things like higher paying jobs, quality of life, etc.
Sure. That is one very small piece of the puzzle.

Quote:
I am not sure I follow you on Real Estate being "very highly" regulated.
the banking system , the tax code, the government-run mortgage system, all of these things influence real estate supply and demand. over 95% of mortgages today are backed by the taxpayer.

Quote:
The rest of your post sounds more like a conspiracy theory than actual economics.
ok. you want to read actual economics on the subject, knock yourself out, dallas dan. >>> Scribd
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Old 03-03-2012, 09:04 AM
 
355 posts, read 1,061,574 times
Reputation: 271
Quote:
Originally Posted by thethinkman View Post
Most of your answers cant make sense. Because if it were really a supply and demand issue. Why more rent signs I've ever seen ..obviously more supply then demand yet at triple the cost......used to live in Venice and now I'm back. Basically all old neighbors are gone. Anyone who used to own houses is gone and replaced with people paying extremely high mortgages to the bank and it seems like the bank owns the whole city. "I guess if I had a money printing machine I would buy the city too" it almost seems like a slave labor situation. Ill explain. 70% of income for a 30 year mortgage. " graduate college 25 retire 55" which is basically your entire working life. Is 70% of your income " or more" for your entire working life slave labor? Well I guess you do get a roof over your head.

Also think about this . When you buy a house you go to the bank for loan. What if bank says they will give you a billion dollar loan. Then tell the next he gets a billion too and everyone gets a billion. Wouldn't home prices just got a billion dollars. Also lets take the opisite in account. What if all banks stopped loaning. What would the house be worth? Probably what people can actually afford. And I don't check everyone's bank account but I doubt any middle class family has 1million for a house. So maybe the houses real value "without the home loan system" would be 30,000 or 50,000 like it used to be.

Am I wrong here or are we basically no different then Chinese. Just work all day and then
At the end of the day get a roof over your head and bank takes everything because they printed the money and loaned it to you. I guess there are perks involved when you print money. Like being able to buy the world. "If the worlds currency happens to be the money you print" does this money really have value other then foolishly trading it amongst each other?
LOL millions of people all over the world live paycheck to paycheck. Even those who make a decent living. By driving up the prices for basic needs; eye-glasses, medical care, education, housing, food/water, it decreases the middle class by far. The elite (or whatever you want to call them) wants to make a new system where only the very rich and the very poor exist. They are trying to get rid of middle-class. What is happening in Cali will eventually spread throughout the US.

Just to move in a decent one bedroom apartment (where there isn't drug /gang infestation) in L.A., it cost an arm and a leg. Plus, prices will always go up if their is a huge amount of transplants dying to live there (same thing with New York). Think of the millions of people who are flocking to LA to become the next singer or actor.

And you are right. Most of the properties and homes in LA are owned by the bank, not people. If they were owned by people, they lost them due to foreclosure and high taxes. If these bank owners were not so greedy, they could triple the money the money they bring in from rental properties by actually lowering the cost of the rent by a little. More people would be able to afford to move in the properties AND they would be more likely to STAY, which means long-term income for bank/property owners....but noooooooooooooooo
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