NY Times article: California Dreams Settling for 1 Bdrm apt (San Diego: middle-class, real estate)

[MItoBH]

This is an interesting New York Times article about how extremely high the cost of living is in California and that some families have to pile into a one bedroom apartment because they can't afford 2 bedrooms.

I can't wait to move to California, and as a single person, I know I will do fine. But it is a trip to read over and over again how the middle-class and below are being squeezed out of the California dream. You're considered upper middle class in Michigan if you earn $80,000+, but in California, that will barely make you middle class based on rent/mortgage alone.

Do you know of anyone who is in a similar situation in the LA area, or in other parts of CA? How can people justify remaining in a state living like this when they can live much better if they moved away to another state? I know, that's easier said than done, but when a 30 year old man has to still live with his parents and share the 1 bedroom with his 12 year old brother, something's wrong.

[UKWildcat1981]

A one bedroom apartment in San Diego can run 3500-4000 in a nice area.. sweet.. sign me up.

[Ceece]

There are plenty of places in CA that are affordable, they just aren't where "ca dreaming" people want to live. If you stay away from beach communities, LA and Bay Area/Silicon Valley you have practically 2 other states worth of real estate to live in.

[RudyOD]

I definitely think there is an issue of affordability in California, BUT the way you describe it (OP) and the article, it makes it seem like doomsday. That's not the reality on the ground (not yet).

The 30 year old man is living with his parents and sharing a bedroom with his 12 year old brother because he chooses to. He could, like you mentioned, move to a state like Colorado or Texas where there plenty of jobs paired with cheaper/more affordable housing. I mean, there are three working age adults in his household, and all they can afford is a 1 bedroom? really? My roommates and I live in a better area (not luxurious or anything, just better), pay more rent as we are renting a 3 bedroom, and we don't even have high paying jobs. Their situation seems to come from being incapable to take the steps to improve their lot in life.

I do agree that homes have skyrocketed to ridiculous prices. In some areas (San Gabriel Valley) up to 1/3 of homes are being bought in cash by foreigners (mostly Chinese) while natives are out-priced. It's only going to get worst in California, honestly.

[RudyOD]

Originally Posted by Duck King

California attracts dreamers, it always has.

Tons of people head west thinking they're going to make it big, their life will magically change overnight, etc. Most last anywhere from six months to a couple years before they head back home.

I think the city's pretty much reached it's apogee, population growth in LA is virtually zero, it's no longer expanding.

Contrast that to places like Arizona, Texas, Florida, Virginia, the Carolinas, etc., they're all growing out of control, strong economies, low unemployment, ridiculously cheap housing, etc.

There's also a huge demographic shift underway, white flight has been going on for decades, largely unskilled latino immigrants have taken their places. Also, you have you understand a ton of those people sharing apartments also collect welfare/SSI/etc. and work cash jobs.

How much longer will any of this last? Who knows? Look at what's happening to Chicago at the moment, MASSIVE population declines, there's a HUGE exodus from the city. It's imploding.

Decades ago if you said Chicago would collapse, people would assume you're mentally insane. It was such an important city (just like Detroit, the "Paris of the West").

Actually, data shows that a lot of people moving out of California are low income, low skilled, with lower educational attainments, and more often than not, also Latino. More than any other state, except possibly New York, California is seeing a rise in the migration of educated people with incomes of +200k.

All in all, it's not really white flight, as much as it is low to middle income flight of all races/ethnic groups for which California is no longer the land of the American Dream.

[MItoBH]

Originally Posted by RudyOD

I do agree that homes have skyrocketed to ridiculous prices. In some areas (San Gabriel Valley) up to 1/3 of homes are being bought in cash by foreigners (mostly Chinese) while natives are out-priced. It's only going to get worst in California, honestly.

I agree with you. I'm researching homes/condos via trulia.com and redfin and the prices are crazy, but it's all relative. And prices are going to continue to go up. I want to buy in areas like MDR/Venice/Bev Hills, etc., it is my mission in life to buy a home in one of those areas. In LA County by 2025, it's going to be totally different - but I do value diversity and I hope LA doesn't loose too much variety of folk from all walks of life.

[majoun]

Originally Posted by Duck King

I can't see LA becoming a playground for wealthy individuals, there are soo many other places in the world who do that exceptionally well: New York, Paris, London, Tokyo, Hong Kong, Singapore, etc.

Yet, that is happening. Maybe not the city of LA as a whole but Beverly Hills, Santa Monica, Malibu, and Manhattan Beach have become playgrounds for the wealthy. And certain neighborhoods within the city of LA.

[RudyOD]

Originally Posted by Duck King

Where is the data to back that up? Also, taking nominal income into consideration without adjusting for local purchasing power is quite deceptive. Of course CA/NY are going to have the "highest earners" due to the astronomical cost of living. The reality is $200k in Manhattan is equivalent to $75k in TX.

At the end of the day, California has the highest poverty rate in the entire country: Fool

I can't see LA becoming a playground for wealthy individuals, there are soo many other places in the world who do that exceptionally well: New York, Paris, London, Tokyo, Hong Kong, Singapore, etc.

Forbes does a good job of breaking down the numbers: Jobs Aren't Leaving California For Texas, But People Are - Forbes

[Tulemutt]

Originally Posted by Duck King

Right, and that's in a similar light to say Mexico City. One can point to San Angel, Polanco, Las Lomas, Jardines del Pedregal, Santa Fe, etc. and say el D.F. is a playground for "the wealthy".

Meanwhile, in the rest of the city, 25% of people are living in shanty towns. It boasts one of the world's largest concentration of homeless children, is highly polluted/congested/etc.

Established types aren't flocking to LA, it lacks the sophisitcation/culture/history of true world class cities. There's a handful of arriviste garbage along the coast, the usual suspects: real estate, entertainment, etc., aside from that it's largely a service industry / working class environ. Who wants to be an island in an ocean of dysfunction and misery? Relegated to a tiny enclave? That's no different than modern-day Boer in South Africa.

Hey Duck King. How you doing? Listen, we could use some of your erudition over in the "Dog poop in my trash can thread". How bout it?

[simbared]

Originally Posted by Ceece

There are plenty of places in CA that are affordable, they just aren't where "ca dreaming" people want to live. If you stay away from beach communities, LA and Bay Area/Silicon Valley you have practically 2 other states worth of real estate to live in.

Exactly. My son and his wife just bought a nice house in Anaheim, and they are far from wealthy. There are still plenty of opportunities to make good money AND find a decent place to live in SoCal.