Can anyone make a bullish case for SoCal real estate? (Los Angeles: for sale, foreclosed)

[Parker501]

Originally Posted by NyWriterdude

So who do you think is subsidizing Amazon if it isn't profitable, and how can they afford to do that without any return on their investment? The money for them to operate has to come from somewhere.

Amazon is actually very profitable, particularly it's cloud computing. Companies like Netflix rent out space on Amazon's servers. Even the CIA has a cloud computing deal with Amazon. Of course they reinvest this money is expansion, and they deliberately move into new sectors.

Amazon as it gives out so much business to shipping companies also gets bulk rates.

Uber is not public, so you can't invest in them. Amazon will do just fine without your investment.

Uber is planning its IPO and has lots of private investors. You can invest if you have a lot of money - but they won't be upfront with their profits or balance sheets... interesting that they are hiding financials from investors.

Amazon just announced a $5 billion share buy back. Seems the only way to lure in investors is to prop up their stock price. Invest away if you like... good luck.

[Hwnwbrwncw]

Originally Posted by NyWriterdude

Amazon does accounting fraud. Clearly they are not losing money as the company has been around since the 90s. They take their profits and reinvest them in expanding in new sectors until they have huge marketshares in those sectors. All while they get to declare losses and this helps the company when it is time to pay taxes.

Corporate Accounting 101.

What company doesn't try to maximize their losses? My tiny company does the exact same thing.

[thelopez2]

When there is a recession and depression, where will people go? Where will they live/rent? So Cal isn't bubble proof, but I'd rather be in a larger city then smaller one. When a bubble does burst, large cities will have high unemployment because more people will come looking for jobs. Small towns will have tons for foreclosures. As a previous poster has said, they still need to rent.

[jm1982]

Originally Posted by thelopez2

When there is a recession and depression, where will people go? Where will they live/rent? So Cal isn't bubble proof, but I'd rather be in a larger city then smaller one. When a bubble does burst, large cities will have high unemployment because more people will come looking for jobs. Small towns will have tons for foreclosures. As a previous poster has said, they still need to rent.

True.
That's what happened the last time around too. All those new suburb developments had a ton of foreclosures.
They were far from jobs,etc. People mostly bought there because they wanted to own a home and it's where they could afford to live.

Big trend for people to want to live near work - which is why we see Downtown areas being revitalized.
The good thing about real estate though is that you can rent it out. There are multiple ways to rent it to. If you are in a vacation or city with a lot of tourists like L.A you can even rent by the night if you want on AirBNB and get a higher return. Sure not everyone wants to do that..but at least it's an option.

There are other options too like renting out your house for filming,etc. Sure again not everyone will do it , but at least it's a option.

You can't do that with a stock.

[jm1982]

Originally Posted by Parker501

Uber is planning its IPO and has lots of private investors. You can invest if you have a lot of money - but they won't be upfront with their profits or balance sheets... interesting that they are hiding financials from investors.

Amazon just announced a $5 billion share buy back. Seems the only way to lure in investors is to prop up their stock price. Invest away if you like... good luck.

Yeah of course the time to invest in Uber if one was an accredited investor would have been a while back. Even if one can get in the IPO it's a risk as a lot of IPO's have tanked below their initial price for these tech companies.

There are apparently leaked documents showing they lose money.
If they were actually making a bunch of money wouldn't they be bragging about it?
Uber's revenue, profit and loss - Business Insider

[Astral_Weeks]

LA is not immune to downturns. The region got hit bad in the early 90's when we were over concentrated in defense/aerospace. Home price declines were evident in the first half of the decade (roughly 91 to 95). Those high paying jobs never came back. Our tech neighbors to the north have a much higher octane economy with a much higher GDP per capita. Would be nice if LA could find some new niches....

[jm1982]

Originally Posted by Astral_Weeks

LA is not immune to downturns. The region got hit bad in the early 90's when we were over concentrated in defense/aerospace. Home price declines were evident in the first half of the decade (roughly 91 to 95). Those high paying jobs never came back. Our tech neighbors to the north have a much higher octane economy with a much higher GDP per capita. Would be nice if LA could find some new niches....

Yeah I agree. Wages do seem considerably higher in the Bay Area. Sure it's going to be expensive to live right in San Francisco , but there are going to be cheaper options.
It's just like living right in Santa Monica by the beach is going to be more expensive than living further away.

It seems that in L.A the economy has increasingly been turning into one where lower paid service industry workers are catering to wealthy clients.
Restaurant workers, personal assistants, drivers, gardeners,etc

There seems to be a lot of churn. L.A seems to have a lot of young people , but do they really have any assets or staying power? How many younger people can afford a modest home...even with that college degree?
How many people move to L.A work in a restaraunt or as an assistant at a film studio trying to break into the industry and then leave?

Of course this nonstop revolving door of dreamers also gives L.A it's uniqueness.

A city of huge contrasts. Unbelievable wealth, luxury with an equally unbelievable amount of poverty.

[Parker501]

Originally Posted by jm1982

Yeah I agree. Wages do seem considerably higher in the Bay Area. Sure it's going to be expensive to live right in San Francisco , but there are going to be cheaper options.
It's just like living right in Santa Monica by the beach is going to be more expensive than living further away.

It seems that in L.A the economy has increasingly been turning into one where lower paid service industry workers are catering to wealthy clients.
Restaurant workers, personal assistants, drivers, gardeners,etc

There seems to be a lot of churn. L.A seems to have a lot of young people , but do they really have any assets or staying power? How many younger people can afford a modest home...even with that college degree?
How many people move to L.A work in a restaraunt or as an assistant at a film studio trying to break into the industry and then leave?

Of course this nonstop revolving door of dreamers also gives L.A it's uniqueness.

A city of huge contrasts. Unbelievable wealth, luxury with an equally unbelievable amount of poverty.

Average Millennial in LA makes less than $34000/yr. I was sort of shocked when I saw this. I have no idea how anyone can have a comfortable life in LA with this income, and no idea why you would be hanging onto LA... I would be reluctantly planning a move to a more affordable part of the country.
With that income they can afford a $111K house; nowhere to be seen.
Hard to see how the current economy can keep chugging along at this rate.

Los Angeles Millennials Can Afford to Spend $111k on a House - Unaffordable Housing - Curbed LA

[jm1982]

Originally Posted by Parker501

Average Millennial in LA makes less than $34000/yr. I was sort of shocked when I saw this. I have no idea how anyone can have a comfortable life in LA with this income, and no idea why you would be hanging onto LA... I would be reluctantly planning a move to a more affordable part of the country.
With that income they can afford a $111K house; nowhere to be seen.
Hard to see how the current economy can keep chugging along at this rate.

Los Angeles Millennials Can Afford to Spend $111k on a House - Unaffordable Housing - Curbed LA

I agree. I'm towards the end of the " millennial group " but I bought a home in 2010 .
Luckily I was making a bit more than 34k at the time ..
But , if I didn't own a home now where my payment is less than most people pay in rent for a 1 bedroom , I'm not sure if I would still be in LA
I might be too frustrated since I wanted to own property .
Some people don't care though and they are happy renting .
I was born in LA and I enjoy the city but I've seem it increasingly be more a place that caters to the wealthy or high income .
I can't say for sure that I'll be in LA or CA forever .

[Parker501]

Originally Posted by jm1982

I agree. I'm towards the end of the " millennial group " but I bought a home in 2010 .
Luckily I was making a bit more than 34k at the time ..
But , if I didn't own a home now where my payment is less than most people pay in rent for a 1 bedroom , I'm not sure if I would still be in LA
I might be too frustrated since I wanted to own property .
Some people don't care though and they are happy renting .
I was born in LA and I enjoy the city but I've seem it increasingly be more a place that caters to the wealthy or high income .
I can't say for sure that I'll be in LA or CA forever .

You're lucky you bought when you did. Good job.