Can anyone make a bullish case for SoCal real estate? (Los Angeles: violent crime, student loans)

[thelopez2]

As far as being bullish, I think the high amount of equity can stability the market a bit.

2015 Year-End Home Equity and Underwater Report | Newsroom and Media Center

[NyWriterdude]

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

More affordable parts of the country are more affordable because there are FAR fewer JOB opportunities, among other issues. You get what you pay for. A few years ago you could have bought a house in a crime ridden part of Detroit with no police or fire department projection for $2000 or so. But there are obvious reasons why the house was so cheap.

Ever been to rural Mississippi. It's cheap alright. There's no public transportation and you may have to drive a couple of hours to get to medical specialists, an airport, or certain other services that you want or need.

Lastly people who just graduated high school or college are living with either roommates or family.

[NyWriterdude]

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.

Major cities like NYC and LA do have churn.

But for those who come and get stable jobs and buy property and all. There are reasons why they are able to find better jobs than working as assistants or working in restaurants. They have good educations. And I don't mean a run of the mill college degree. In major cities to earn well you increasingly need graduate or professional degrees.

And despite all the stories people have of their poor friends moving away, obviously there are people doing well and buying these expensive properties. Some people on this forum might explore why they aren't doing so well in their own careers.

[MordinSolus]

Originally Posted by NyWriterdude

More affordable parts of the country are more affordable because there are FAR fewer JOB opportunities, among other issues. You get what you pay for. A few years ago you could have bought a house in a crime ridden part of Detroit with no police or fire department projection for $2000 or so. But there are obvious reasons why the house was so cheap.

Ever been to rural Mississippi. It's cheap alright. There's no public transportation and you may have to drive a couple of hours to get to medical specialists, an airport, or certain other services that you want or need.

Lastly people who just graduated high school or college are living with either roommates or family.

There's also the fact that this forum really has no understanding of how much it costs to live in Los Angeles. Everyone here seems to think it requires a 6-figure income just to pay rent but that is demonstrably false. I know a lot of people making $30,000 or less and doing just fine. My last girlfriend had a full-time job in the industry and half a dozen side projects but only pulled down about $36,000 iirc. She managed to eat out pretty much every day, maintain a vegan diet, explore the city all the time, go out with friends almost every week, and lease a car. She had a roommate(in a 2-bedroom apartment) but no debt outside of minor student loans.

[Ultrarunner]

I'm around a lot of seniors that prepared well... no debt, own their home and car and typically have a total income of 30 to 40k... they live simple lifestyles... get together with friends to go out once or twice a month... have hobbies like gardening and simply don't burn through a lot of money...

Since there homes are paid for... they are sitting on a lot of equity too.

[CA4Now]

Originally Posted by MordinSolus

There's also the fact that this forum really has no understanding of how much it costs to live in Los Angeles. Everyone here seems to think it requires a 6-figure income just to pay rent but that is demonstrably false.

Exactly.

[CA4Now]

Originally Posted by Ultrarunner

I'm around a lot of seniors that prepared well... no debt, own their home and car and typically have a total income of 30 to 40k... they live simple lifestyles... get together with friends to go out once or twice a month... have hobbies like gardening and simply don't burn through a lot of money...

Since there homes are paid for... they are sitting on a lot of equity too.

Most of my parents' generation was that way.....up until a few years ago. Now most of them have used that equity to pay for the costs of their retirement communities.

People on this forum seem to assume that most of L.A. seniors are sitting in houses that will be handed down to the next generation. I've lived here most of my life and have seen exactly one (1) case of this happening. People are living a lot longer than one might expect, and it requires a considerable amount of $ to do so in one's advancing years.

[jm1982]

Originally Posted by MordinSolus

There's also the fact that this forum really has no understanding of how much it costs to live in Los Angeles. Everyone here seems to think it requires a 6-figure income just to pay rent but that is demonstrably false. I know a lot of people making $30,000 or less and doing just fine. My last girlfriend had a full-time job in the industry and half a dozen side projects but only pulled down about $36,000 iirc. She managed to eat out pretty much every day, maintain a vegan diet, explore the city all the time, go out with friends almost every week, and lease a car. She had a roommate(in a 2-bedroom apartment) but no debt outside of minor student loans.

Yeah I do know what you mean. There are also a bunch of free or cheap things to entertain oneself in L.A too. A ton of museums, cheap or sometimes free live theatre , comedy shows, concerts.

These are some good sites to find stuff to do for free or cheap
http://www.experiencela.com/calendar
https://www.goldstar.com/los-angeles

Food can be expensive, but there are more cheaper options in L.A than in most smaller cities or towns I would say.
I remember running into a girl on the subway in NYC and she was from L.A originally and she mentioned she missed the "cheap eats in L.A"

Sure if you want to own or even rent a new luxury apartment, and drive a brand new luxury car and go out all the time to the most expensive places you will need six figures or more...but you'll need that in any city , whether it's Houston or Phoenix or NYC or whatever else.

I do see how an individual or family these days feels like they need six figures income if they want to buy a property in L.A and live in a decent (lowish crime or at least low violent crime, good amenities) area.

[Parker501]

Originally Posted by NyWriterdude

More affordable parts of the country are more affordable because there are FAR fewer JOB opportunities, among other issues. You get what you pay for. A few years ago you could have bought a house in a crime ridden part of Detroit with no police or fire department projection for $2000 or so. But there are obvious reasons why the house was so cheap.

Ever been to rural Mississippi. It's cheap alright. There's no public transportation and you may have to drive a couple of hours to get to medical specialists, an airport, or certain other services that you want or need.

Lastly people who just graduated high school or college are living with either roommates or family.

That study quoted in the article I linked included 34 year olds... not just people who recently graduated high school/college.
I guess I wouldn't consider a $30k/year job 'an opportunity' or reason to hang around. No offense to anyone; I just make quite a bit more and I'm still hesitant to buy a house and feel like its expensive here.

[NyWriterdude]

Originally Posted by Parker501

That study quoted in the article I linked included 34 year olds... not just people who recently graduated high school/college.
I guess I wouldn't consider a $30k/year job 'an opportunity' or reason to hang around. No offense to anyone; I just make quite a bit more and I'm still hesitant to buy a house and feel like its expensive here.

It might be a 20k job in these magically cheap parts of the country. In much of the nation a standard low level office job pays $10 an hour.

Lastly there are people who remain lifelong renters, and not just in SoCal. Even in rural Mississippi not everyone owns property.