If L.A. Sucks Why is housing expensive (Los Angeles, San Diego: rental, lease)

[coldwine]

Originally Posted by deeptrance

Such will be the turning of the tide in Los Angeles and other CA cities. When? It's all speculation, isn't it... But one thing's for sure, there's a lot more built-in natural scarcity in CA than there is in TX. So it will continue to be among the highest priced places in the world. If climate changes or the government collapses or something, then all bets are off. But ceteris paribus prices are going to rebound within a few years. And not just because of "stupid greedy speculators." Some people, like you and me, kinda like the place. It doesn't suck to have nice weather all year, be able to go to the beach, have every imaginable culture at your doorstep, and see those dramatic mountains (when it's not fogged or smogged in). I dunno. Just chit chat, don't take me so seriously, OK?

Move here to Detroit. It's the only city in America that homeless hookers from post-Katrina NO said "I can do better" to. You can buy a four bedroom, three bath, two-kitchen, dining/library/whatever room for ~$250k. Probably less.

I'm interested in seeing where California goes. It's really a place that should only ever have allowed apartments, not the sprawling 400 acre mansions that waste space. If it wants to grow as a city, it just has to get rid of these houses.

[Need_affordable_home]

If someone is rich enough for a mansion in CA, why not? If you think its a waste of land, then dont buy in CA, buy where land is a few thousand an acre and build your own mansion.

Deeptrance, ive been reading your posts! You stand correct that substitutes exist. Oregon, Washington, Texas and the midwest are where many Calfornians are relocating to. Florida is losing people to Georgia, NC and TN. You have to be rich to play the game so many others play. Everyone seems to want CA so prices are insane and few can afford it so they dont buy in CA, thereby reducing demand and probably reducing prices or no houses can sell.

[jlrobe]

Originally Posted by Ponderosa

But it's not growing in the same way it used to. The only growth in LA county anymore is from foreign immigation and births - though there is strong growth in Riverside Co. It seems from over here in AZ that everyone is leaving LA. The people in Idaho, Oregon, Nevada and other places get the same impression. The CA home price boom is fueling our own price boom in these states, but when it pops in LA it's gonna pop here too. I need to time my exit from AZ while the market is still inflated by California migration. So I guess my question is how long can the prices in CA hold up with the exodus that is taking place? Or is there really no exodus, just the illusion that everyone is leaving?

I was in the Bay Area for a long time. Eveyone kept leaving the Bay Area due to high housing costs, and it was mostly the white people that were there for 20 years, or poor minorities who couldnt afford it. People left places like SF, SJ, Fremont, etc. and moved to Sac, stockton and fresno. My parents INCLUDED! When they leave Sac, stockton and fresno, they eventually leave the state, which my parents might do soon. THe Bay area population had a HUGE turnover in the last 15 years, similar to the turnover happening in LA now. For the bay area, the population was replaced by Vietnamese, Hispanic, Filipino, Japanese, and Tawainese people, and people from other countries.

The question is who is moving into LA. You are right, people who have been here for 10+ years are moving out as has happened in the Bay Area, but who is moving into their place? THat is the real question. In the Bay Area people didnt move because it was burning in flames. Many people left for different reasons. Some because the neighborhoods became worse, others because of cost of living. I live on the west-side and PROFESSIONALs are replacing the people who have cashed out, not illegals.

Places like Venice and Culver has gentrified fairly well, so obviously the former residents of Culver and Venice have moved to greener pastuers while professionals have replaced them.

As a renter, I hope LA's housing pops, but on the west side, I doubt it will ever happen unfortunately.

[jlrobe]

Originally Posted by Need_affordable_home

If someone is rich enough for a mansion in CA, why not? If you think its a waste of land, then dont buy in CA, buy where land is a few thousand an acre and build your own mansion.

Deeptrance, ive been reading your posts! You stand correct that substitutes exist. Oregon, Washington, Texas and the midwest are where many Calfornians are relocating to. Florida is losing people to Georgia, NC and TN. You have to be rich to play the game so many others play. Everyone seems to want CA so prices are insane and few can afford it so they dont buy in CA, thereby reducing demand and probably reducing prices or no houses can sell.

I really hope you are right. If LA were 20% cheaper, I would buy a place tomorrow.

[fairweathergolfer]

Originally Posted by hllnwlz

I grew up in the OC. My parents bought their house (a 2-bedroom in a nice, no-frills, no-association neighborhood in South County) for $190K in 1991. Now it's about to sell for nearly a million and they're taking that cash straight to Hawaii. (Dad's a surfer, mom's a beach bum -- but not here. She hates the beaches here. Guess she was spoiled by their life on Kauai, pre-me.)

I agree with other posters that this is simply the law of demand at work. However, we have a serious problem on our hands. I'm a teacher, employed in Anaheim, and I make **** fine money for a twenty-something. Mmy husband and I together make about $120,000 a year. And yet we CAN'T AFFORD A HOUSE.

We aren't in debt. We have two car payments (necessary, since I commute to OC and he commutes to Marina Del Ray from the South Bay), but other than that, our net income could go straight to a mortgage. Last time I checked, the most we could qualify for (without one of those retarded I-have-to-have-this-house-even-though-I-really-can't-afford-it mortgages concocted by lenders who smilingly collect their commissions and then say, "Hey, it was all in print on the contract you signed. Boo-effing-hoo," when the interest rates take a tiny upward hop and the payment leaps $1000 skyward) was $450,000.

Now, I don't know where y'all are looking but there are no houses (except in sketchy neighborhoods) I'd want to raise kids in for that dollar amount available. I imagine there will be at some point in the next few years and maybe that's reason enough to stay. But why would the prices drop significantly when -- as many of you have pointed out -- there are plenty of people here who are dumb enough to pay $600,000 for an ugly 900 sq. ft. two-bedroom condo in Redondo? (Oooh, that rhymed!) Oh, and then pay the $300 association fee that goes with that condo?

So, I'm supposed to raise my two kids and our dog (and my husband) in a condo, with no yard for them to play in and probably not enough room for each of them to have their own bedroom when they reach puberty? If we do somehow miraculously manage to get hold of a house in an okay neighborhood, it will be a major fixer-upper, and I'll have to use all my skills from growing up a contractor's daughter and being a good reader of how-to manuals to piece together a home out of that. In my parent's house, that process has taken 12 years of near-constant renovation.

Ummm... no thanks.

As if the schools we have down here don't suck enough already, what's going to happen when the older teachers who own homes now retire and the newer ones realize that on their salaries, unless they marry extremely wealthy individuals, they will never own a home? If they're smart enough, and if they like snowboarding and mountain-biking (and realize that there's a requisite three-hour drive to get to a mountain through LA traffic) more than they like surfing (like I do), they're getting the hell outta here.

It's either Tahoe or Denver, mes amie. Yes, I'll take a $9000 pay hit, but a 5 bedroom, 3 bath, 2300 square foot house in Denver costs, oh, $275,000. My kids will have grass, and other kids who will play with them in the neighborhood streets, where it will be safe for them to have a game of roller hockey or ride their bikes without fear of being run-down by some poor road-raging schmo who just spent two hours on the freeway trying to get home the 17 miles from Santa Monica to the South Bay.

So guess what that leaves all of the parents that are still here? Junk public schools with dumb "I'm-doing-my-job-and-my-job-only" teachers.

What about new cops?

And firefighters?

What about the architects and the engineers and the interior designers who ONLY make $80,000 (boo-hoo) a year?

What about the nurses?

The General Practitioners?

The accountants?

How the heck are they going to afford to live their lives here?

Bottom line, ladies and gentlemen, I have NO IDEA. If anyone can explain this to me, I'd be glad to hear it.

Sounds to me as though you are a lady that needs no explanation. I think you got it clearer then most and state it straight up (as well as with a great delivery and sense of humor ). I think you are right. It is time to go where your hard work and family can enjoy the fruits of their labor without having a second full time job as a friggin' contractor, architect, builder, interior and exterior designer. Yep. I think your off time is much better spent hittin' the slopes and tearin' up (figuratively of course) the bike paths! I'd jet too.

[Need_affordable_home]

Originally Posted by jlrobe

I really hope you are right. If LA were 20% cheaper, I would buy a place tomorrow.

May I ask whats your budget on a house in LA? 20% cheaper is still expensive!

[fairweathergolfer]

Originally Posted by deeptrance

Oh, my bad! I got a different impression. Yes, you might be right about the length of the downturn, that's a very tough call because of the number of unpredictable factors weighing on the market.Alright, kiddo.... you asked for this one!

I was born in Santa Barbara in 1956 and have pleasant memories of stopping at that country store in Thousand Oaks in our old Woody station wagon. It was a long drive through the countryside to get to Los Angeles. And my goodness, those sparkling new freeways with their fancy interchanges! Of course half the freeways weren't there yet but to us they were amazing, and I'll never forget seeing TRAFFIC at ELEVEN AT NIGHT! My goodness, we were all home watching Father Knows Best by 8 PM in Santa Barbara!

And the surfing scene, well, it was pretty small and laid-back. Nobody had wet suits yet, they roughed it. But they had the waves to themselves, no need to fight all the other people trying to catch the same wave.

Driving north to San Francisco was awesome. The 101 was so empty between SLO and Salinas, I recall going 5 minutes at a time without seeing another car! And the San Marcos Pass, it was a windy old road and we'd wave to the few people we saw, we'd also have to honk at the blind curves on the one-lane stretches to make sure we didn't run into an oncoming car.

It was paradise. You're right, it's not what it used to be. You should hear all the locals griping about how Austin has changed, you'd think everyone would be leaving but property values are skyrocketing here because sometimes change isn't all bad, and certainly not to those who don't know what they missed "back in the good old days."

Now, go get yer slippers on and give yer momma a kiss goodnight before I read you a bedtime story, you young whippersnapper!

Deeptrance, you MUST write!! I love this. I want to see it up on the big screen, my friend. Let us have it !! Please, please . No good keeping those images, stories, time and locations to yourself. Now that's just selfish.

[fairweathergolfer]

Originally Posted by hllnwlz

I will say that I'm very torn though. Mostly, if I'm honest, it's because I'm ubercompetitive. I want to be "as good" as the cute blonde with the implants in the Benz convertible next to me, and if living in SoCal is the measure of that, then I've failed. My imagination -- and I do have a wild one, so please feel free to correct me if I'm wrong -- tells me that that's what bums so many of us out. We've been sold this idea that the beautiful and successful (I'm both, but apparently not a powerful enough combination of the two ) can make it here, if only because they're prettier and smarter than everyone else. It's Hollywood BS, which we (and everyone else with access to cable) have been eating up since the 20s. So somehow, if you can't make it here, you're less than good.

I effing hate losing.

Then again...

If I get to snowboard every weekend, trail run every morning, ride horses in the afternoons when I'm not mountain biking (or planning lessons or grading essays -- 200 of which I'm currently ignoring in order to read your posts and rant -- ARG!) and raise my kids where the schools are good, where there are only 23 students to a teacher (imagine a high school classroom with less than 35 students in it. "Ha! Impossible!" you say. Yet, I wonder if you all even know that's what our classrooms look like. Oh, nevermind. Better not go down that road...), where my kids can play in a front yard with friends from the neighborhood (why doesn't that seem to happen here?), and where our mortgage doesn't preclude them from having their own bedrooms, playing league ice hockey or softball or going to summer soccer camp, then I'd say that's a durn fine trade-off. (And a durn long sentence! But, grammatically correct. Don't worry; I checked.)

At the end of this long post (bless you, those of you who managed to hang on this long), I think my kids deserve better than what I could give them here, even if it means I don't get to stare down the Barbie next door when she throws her new boobs and her diamond in my face while making a mental checklist of the reasons I'm as good as she is.

But still, can't I be effing p.o.ed that $120,000 isn't enough to live in the state where I was raised?! That a person entrusted with the education of the children who live here can't afford to live here?! That a girl with a Masters (in Literature, not Education -- puh-leeze) who went to Oxford University and got her masters from the University of California didn't have the foresight to make a ton of money in tech instead of doing something for someone other than herself?

Eff it.

I guess we'll just have to content ourselves with the surf at Kalaheo and the freshies at Vail.

hllnwlz (I won't even ask about your screen name. You're so darn crazy I know it is not obscure without reason ),

If I wasn't married and a heterosexual, I would have to say I am in love. Where did you come from? You are fantastic! Shi-, with you around I AM going to have to check my grammar and well, I am the queen of long sentences (I try to double check though ). You too must write. Please. I see this as an opening chapter and just think of the audience--all those heading out! It will be something to read by their new pool or fire, or as they head out with the U-Haul behind them.

I think you are right on about that feeling of losing and where it comes from. God, no one has even mentioned this. I am so in awe that you went there and with such flair. Great insight.

[fairweathergolfer]

Originally Posted by deeptrance

My obviously silly exaggeration was based on a global survey of where people in OTHER countries would live if they could live anywhere, not a survey of just the people you happen to know. I bet 300 mil is probably accurate but it's really pointless because they can't get here and the don't know what they'd find once they got here, it's all based on the allure of Hollywood and surf and Disneyland, etc.Right. Same thing that happens in every hot real estate market. So the market corrects itself. Kinda like how Google and Yahoo and Amazon have all recovered in the wake of the shake-out, so the CA market will shake out, but again I'm making BAD ANALOGIES as you pointed out so well below:And for many more reasons, my analogy to a store was absurd.

However, the differences are somewhat telling in that a store usually carries things for which there are many substitutes. I agree with your analysis, in the short run, about price elasticity of demand in California and that it's in a relatively elastic phase, but it won't bend too much. CA real estate, far from being a commodity, is extremely scarce relative to its long term supply and demand. In the short run, you're correct, there's an over-supply. But this is very typical if you look at any housing cycle, whether national or local. When I moved to Austin in 1990 it was just coming out of its 4-year bust during which it held the top spot in the nation for those "see-through" office buildings with over 50% vacancies. They rushed things. Now look at Austin. Every new highrise is pre-sold before they get the cranes in place. And prices are shooting up. I never foresaw this because I looked around me and saw nothing but endless Texas sky and land as far as the eye could see. In other words, no scarcity. Yet to be in CENTRAL Austin is now scarce and in high demand.

Such will be the turning of the tide in Los Angeles and other CA cities. When? It's all speculation, isn't it... But one thing's for sure, there's a lot more built-in natural scarcity in CA than there is in TX. So it will continue to be among the highest priced places in the world. If climate changes or the government collapses or something, then all bets are off. But ceteris paribus prices are going to rebound within a few years. And not just because of "stupid greedy speculators." Some people, like you and me, kinda like the place. It doesn't suck to have nice weather all year, be able to go to the beach, have every imaginable culture at your doorstep, and see those dramatic mountains (when it's not fogged or smogged in). I dunno. Just chit chat, don't take me so seriously, OK?

So I guess if your analogy about a store was BAD, my one about the prostitute, probably didn't shine as much as I had thought earlier. Face it ALL analogies and metaphors are off, they just offer the closest thing to, well, an analogy. If they were perfect we would be talking about the real deal now wouldn't we? But once again, I digress . . . Moderator, I was just thinking about why L.A. Sucks and Why Housing is Expensive, I assure you I am and I think it is expensive because L.A. is L.A. and irreplaceable (probably a good thing). So how is that for staying on topic .

[SandyCo]

I was wandering through the Internet, trying to find a statistic for how many renters there are in Los Angeles vs. homeowners. 61% renters is what I found.

I also found, in a separate report from 2004, a blurb that says housing construction continued to lag behind housing demand. This demand was the direct result of population growth. There were 350,000 housing permits issued from 2000 to 2004, but the population increased by 1.6 million in the same time period! I'm not sure if this was for the entire Southern California region (L.A., Riverside, San Bernardino, Orange, Ventura, San Diego, and Imperial counties).

So there you have it. Population growth. Generated by... jobs? The lure of the weather? Conditions in another country?