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The numbers you are citing are national numbers, we are talking about California. Furthermore, it makes no sense to take national numbers and then use them in a local context. For example, Hhere $100,000/year is in the bottom ~40% or so, not the top 10%. So why would one expect housing here to reflect the national numbers?
Higher housing costs are correlated with higher local incomes. This goes back to people thinking they should be able to afford whatever they want... A family making $100,000/year is going to be able to easily afford a nice place in the vast majority of the state, there are only a few select communities where they will have trouble finding housing in their price range. But.....they went to college, they make "six figures" so they should be able to afford anything...right?
Note, the above wasn't true of home buying during the housing bubble, but those days are gone.
Anyhow, a 4-person family in California that is finding it hard to make it on $100,000/year is doing something seriously wrong...
Those national figures are from the same source Montclair quoted on page 1 of this thread, and he specifically pulled California numbers:
Quote:
Originally Posted by 18Montclair
According to the 2010 Census:
Californians Individuals(persons employed age 16+) Earning $100,000+ Annually: 14.6%
As far as the largest CA cities...
Employed residents earning $100,000+ Annually:
San Francisco 24.6%
San Jose 23.0%
Oakland 15.7%
San Diego 14.6%
Los Angeles 11.6%
Long Beach 10.1%
Sacramento 8.6%
Anaheim 8.4%
Fresno 7.7%
Santa Ana 3.5%
Like I said, this is using AGI, and we all know that can be manipulated. I have no doubt that more people are making $100,000 a year than is indicated above. But I don't think it's as common as some people are making it sound.
Yes, there is money in California. But I don't think the majority of folks are making all that much more than their counterparts in less expensive areas. So I call BS on higher housing costs being justified by higher incomes.
I know I'm like a broken record on the housing thing, but it's because that's the main reason for the large COL differentials we touched on a few pages back.
I pulled the numbers from a company that frequently transfers employees between the Phoenix-Mesa-Scottsdale AZ MSA and the Los Angeles-Long Beach-Glendale CA MSA and the current numbers (updated quarterly) indicate someone transfering from AZ to CA would need a 35% increase to maintain the same standard of living. The company offers an automatic 5% COLA adjustment, anything more would have to be negotiated for, and 10% is the maximum allowed.
Those national figures are from the same source Montclair quoted on page 1 of this thread, and he specifically pulled California numbers
And to say it again, looking at large aggregates (national, state or even county level if the county is large) here makes no sense, you have to look at the local numbers....when you do you see strong correlations between local incomes and housing costs. The expensive areas of California are almost always the areas with high local incomes.
Quote:
Originally Posted by Axiom
But I don't think the majority of folks are making all that much more than their counterparts in less expensive areas.
Okay, then what you think is wrong. The median household income in California is 20% higher than the national median, the median household income in California is around 60~80% higher than the median household income in most Southern states.
But housing costs in relation to incomes have always been somewhat higher in California than other states, this is partly due to prop 13 and the large amount of wealth in the state. But still, within California (and that is what I was talking about), local incomes are highly correlated with local housing costs.
Quote:
Originally Posted by Axiom
from AZ to CA would need a 35% increase to maintain the same standard of living.
In AZ, because its largely butt ugly and filled with cheap land to develop on, you can get a large 3,000 sqf home for cheap....so then these sorts of comparisons ask how much a big stucco box costs in some area of California where the homes are largely smaller...and oh gee, its a lot more! So then they make some gibberish calculation about how much you'd need to maintain the "same standard of living" (i.e., how to afford the same ugly stucco box) while completely ignoring the differences between the two areas.
I lived in a low cost area for years before I moved back to California, my costs didn't go up 30%....not even close. Why? Because I adjusted by style life to match the local flora and fauna.
I don't believe that "Engineers don't understand...", etc. But certainly most product development requires both engineering and design.
I said that humanities are a waste, not the arts.
Coming back to this, here's what Steve Jobs himself said on the day of the launch of the iPad 2:
"It's in Apple's DNA that technology alone is not enough. We believe that it's technology married with the humanities that yields us the result that makes our heart sing."
You may agree or disagree, but certainly Apple has been successful as a company by taking this approach.
Or another example: I'm a software engineer working with GPS systems. Among other things, we work on the digital road maps that are behind those systems. Now I can make the computer do whatever I want but in the end the map has to be correct. And it takes knowledge of geography to ensure that. Geography is a humanity.
Knowledge of history (just as one example) is empty? It lacks intellectual content?
Yes, history at the face of it is just memorization....and when you start to talk about historic analysis you are fronted with the vacuous methodologies.
Quote:
Originally Posted by EdJS
Coming back to this, here's what Steve Jobs himself said on the day of the launch of the iPad 2:
"It's in Apple's DNA that technology alone is not enough. We believe that it's technology married with the humanities that yields us the result that makes our heart sing."
The word "humanities" has multiple meanings, I'm talking about humanities programs in US universities. I have no idea what Jobs means with the above quote, but I doubt he is referring to the academic programs.
Location: San Luis Obispo and Santa Barbara Counties
6,390 posts, read 9,679,297 times
Reputation: 2622
Remember folks, User id will argue with you, he does not care which side he winds up on, he will take the opposite from you. His lack of knowledge is exceeded only by his desire to be oppositional.
Pretty funny, he says geography is not a humanity, Oh duh, geography is the science of humans and landforms.
Note that inhabitants are humans, just in case anyone is unclear
Quote:
Geography (from Greek γεωγραφία - geographia, lit. "earth describe-write"[1]) is the science that studies the lands, features, inhabitants, and phenomena of Earth.
And to say it again, looking at large aggregates (national, state or even county level if the county is large) here makes no sense, you have to look at the local numbers....when you do you see strong correlations between local incomes and housing costs. The expensive areas of California are almost always the areas with high local incomes.
Okay, then what you think is wrong. The median household income in California is 20% higher than the national median, the median household income in California is around 60~80% higher than the median household income in most Southern states.
From the US Census Bureau:
Median household income
2009
US $51,190
CA $60,198
approx 15% higher in CA
2010
US $50,046
CA $57,708
approx 14% higher in CA
I just gave a quick glance, but Arkansas certainly looks to be on the low end of the spectrum.
2010
$38,307
so CA would be approx 33% higher
Want to share where you're getting the numbers you're throwing around?
Quote:
Originally Posted by user_id
But housing costs in relation to incomes have always been somewhat higher in California than other states, this is partly due to prop 13 and the large amount of wealth in the state. But still, within California (and that is what I was talking about), local incomes are highly correlated with local housing costs.
Actually if you look at historical data it hasn't always been more expensive to live in CA. But you're right, begining in the 80's there was a price disconnect.
Believe me I can give you a mountain of data that disproves your contention that local incomes are highly correlated with local housing costs though.
Do you really think all the people being foreclosed on suffered some tragic death, medical misfortune, divorce, job loss, decrease in income, etc?
Most of them likely couldn't legitimately afford the house in the first place and/or they could afford it when they bought it, but then they HELOC'd themselves into oblivion.
Hopefully with prices correcting and sensible lending standards returning incomes are more in line with prices now, although one could argue that has less to do with stable or increasing wages (we are talking about CA) and more to do with artificially low interest rates.
Quote:
Originally Posted by user_id
In AZ, because its largely butt ugly and filled with cheap land to develop on, you can get a large 3,000 sqf home for cheap....so then these sorts of comparisons ask how much a big stucco box costs in some area of California where the homes are largely smaller...and oh gee, its a lot more! So then they make some gibberish calculation about how much you'd need to maintain the "same standard of living" (i.e., how to afford the same ugly stucco box) while completely ignoring the differences between the two areas.
I lived in a low cost area for years before I moved back to California, my costs didn't go up 30%....not even close. Why? Because I adjusted by style life to match the local flora and fauna.
If you're willing to adjust your standard of living downward of course your costs won't vary widely. But the whole point of cost of living/salary comparisons is to determine what it would take to maintain the same standard of living.
Oh duh, geography is the science of humans and landforms.
Umm......are you serious? Geography, as if the "geo" didn't make that apparent, is not the "science of humans". There is a "science of humans" though, its called anthropology. Neat how it starts with "anthro" huh?
But nice attempt to equivocate matters after I clearly defined what I was talking about.... Heck you deserve two stars for including the ad hominem.
2009
US $51,190
CA $60,198
approx 15% higher in CA
2010
US $50,046
CA $57,708
approx 14% higher in CA
I just gave a quick glance, but Arkansas certainly looks to be on the low end of the spectrum.
2010
$38,307
so CA would be approx 33% higher
Umm.....huh? The first is 17.6% higher, the second is 15.4% higher and the last is 51% higher. You appear to be taking the two numbers as ratios....but that isn't how you calculate this.....
I was looking at older numbers, but the point is the same, incomes in California are much higher than cheap areas of the country.
Quote:
Originally Posted by Axiom
Believe me I can give you a mountain of data that disproves your contention that local incomes are highly correlated with local housing costs though.
I don't believe you and you can't because it doesn't exist, home prices are correlated with local incomes. But I imagine you are interpreting "correlation" to mean something else....
Quote:
Originally Posted by Axiom
Do you really think all the people being foreclosed on suffered some tragic death, medical misfortune, divorce, job loss, decrease in income, etc?
Umm.....no? When did I suggest this?
Quote:
Originally Posted by Axiom
If you're willing to adjust your standard of living downward of course your costs won't vary widely. But the whole point of cost of living/salary comparisons is to determine what it would take to maintain the same standard of living.
Yes...and as I stated previously, the problem is defining "same standard of living". How do you compare areas that are distinctly different? The cost of living comparisons just look at some particular material good and/or service and ask about its cost between two areas. That makes no sense....
For example, does the family living in AZ in a 3,000 sqf stucco box have a higher standard of living than the family living in a 1950's built home in Burbank that is 1,200 sqf? How exactly does one determine who as the higher standard of living?
Regardless, I'll say it again, if a family of 4 can't make it on $100,000 they are doing something seriously wrong. Despite making much more, I personally spend around $45~$50k/year for 2 people and some spoiled pets for the basics and my "standard of living" is just fine.....spending money on "stuff" does nothing for me. I'm not even sure what people spend their money on, a lot seems to be spent on bad restaurant food, crap that will be in the trash in a couple of years, etc. Oh and cars...
Last edited by user_id; 11-22-2011 at 10:38 PM..
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