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Well Sacramento does have a river that is useable and quick access to better skiing.
What does LA have to offer? traffic, dirty beaches and a few crummy amusement parks?
IMO SF, LA and NYC are places people try hard to BS themselves into thinking this is where it's at, that they made it.
I find people like you, who actively hope that hundreds of thousands of people lose their jobs, their homes and their savings, are pretty boring.
Live your life, save your money, be conservative and it will work out. If you need others to fail, so you can feel successful, that's pretty boring.
As far as the original topic, the answer is who knows. If you look at cities like HK, Singapore and London as far as prices per Sq ft and as a multiple of Median Income, both SF and LA have a lot more room to go.
SF, specifically is driven up by very strong demand which is met by utterly restrictive building policies. The city is tens of thousands housing units short, due to policies that restrict building heights and limited land. i.e. SF is 7x7 sq. miles and you are only allowed to build up in 1 area of the city. It is not massive demand that has driven prices up. It is lack of supply.
If you analyze the previous bubble, the way things unraveled are
- Bad borrowers were given mortgages they couldn't handle
- Houses were being bought with zero downpayment
- This created a lot of demand for existing housing, so people started building even more houses
- As these bad borrowers became unable to keep up with their payments they started listing their houses, so they could get out
- Since these buyers were no longer looking to buy, sales started to flatten out
- At the same time all these newly built houses became available, flooding the market with even more houses competing for now fewer buyers
- Then foreclosures started to occur and EVEN MORE supply appeared chasing even less demand, which lead to prices crashing
So here we are now.
What's different this time
- Credit requirements are very strict. My wife and I have amazing incomes and work history, but when we bought 2 years ago, we couldn't out less than 20% and we had to jump through a lot of hoops
- There is a lot less leverage on family balance sheets
- The subprime borrower currently does not exist
- The people buying the houses are usually qualified and have big incomes
- despite what fargobound's personal opinion is, SF and LA ARE considered world cities with proximity to world class universities such as UCLA, Stanford, Cal, Pomona, Cal Tech etc. all places that the Chinese aristocracy wants to send their children. They are buying houses and they have a LOT of money
- In cities like SF, there is just very little new supply coming in
What's NOT different this time
- SF is very levered to tech and healthcare. If Tech falters, which it definitely will at some point, (although the magnitude is unclear) prices in SF will come down. How much, I don’t know. However, tech will rebound. All the technology of the future will be built in SV, there is zero doubt about that. If you think about it, the tech “bubble” in the bay area has never burst. Since the 60s, it has only grown
- LA counts even more on Chinese money, because unlike SF, which is the most educated city in America, LA county is actually very uneducated with a lot of poor immigrants and blue collar workers
- If tech falters, LA will get hit much harder than SF, because it lacks critical mass
- Also, areas that are most susceptible to price tanking will be areas like OC, where new construction is more available
- San Diego, Inland Empire and less desirable suburbs of LA will get hammered first and harder, just like last time
Anyway, that's just my $0.02. Like everyone else on this thread, I am guessing, but I have tried to put some thought in my guessing
I know on cyber, people like to exaggerate. I had a tenant who was CEO a couple of years ago with similar salary and he bought a house in 2013 with that exact salary. His wife didn't work and he bought a nice but not luxurious home. I'm sure today you can buy something but not in super expensive area.
The standard in parts of the US will have to change to condos, like in Europe. Or apartment rentals. I wonder how they keep rents stable over there, in areas where there's an economic boom. Most people in Europe rent their apartments. But the standard, according to many people on the Europe forum, is 300-500 sq. feet. In the US, those are considered micro-apts.
But yes, in the Bay Area there are a few places left with relatively affordable housing, but as Jade said, you can't always get a good school district with that, OR you have to live far out where it's very hot, and deal with a very long commute. And as she said, the infrastructure can't handle that; there's no more room on the highways or the public transit systems, for more commuters. And there's no room to build more lanes or special rail lines, or anything like that. This level of growth was not anticipated or planned for.
I find people like you, who actively hope that hundreds of thousands of people lose their jobs, their homes and their savings, are pretty boring.
Live your life, save your money, be conservative and it will work out. If you need others to fail, so you can feel successful, that's pretty boring.
As far as the original topic, the answer is who knows. If you look at cities like HK, Singapore and London as far as prices per Sq ft and as a multiple of Median Income, both SF and LA have a lot more room to go.
SF, specifically is driven up by very strong demand which is met by utterly restrictive building policies. The city is tens of thousands housing units short, due to policies that restrict building heights and limited land. i.e. SF is 7x7 sq. miles and you are only allowed to build up in 1 area of the city. It is not massive demand that has driven prices up. It is lack of supply.
If you analyze the previous bubble, the way things unraveled are
- Bad borrowers were given mortgages they couldn't handle
- Houses were being bought with zero downpayment
- This created a lot of demand for existing housing, so people started building even more houses
- As these bad borrowers became unable to keep up with their payments they started listing their houses, so they could get out
- Since these buyers were no longer looking to buy, sales started to flatten out
- At the same time all these newly built houses became available, flooding the market with even more houses competing for now fewer buyers
- Then foreclosures started to occur and EVEN MORE supply appeared chasing even less demand, which lead to prices crashing
So here we are now.
What's different this time
- Credit requirements are very strict. My wife and I have amazing incomes and work history, but when we bought 2 years ago, we couldn't out less than 20% and we had to jump through a lot of hoops
- There is a lot less leverage on family balance sheets
- The subprime borrower currently does not exist
- The people buying the houses are usually qualified and have big incomes
- despite what fargobound's personal opinion is, SF and LA ARE considered world cities with proximity to world class universities such as UCLA, Stanford, Cal, Pomona, Cal Tech etc. all places that the Chinese aristocracy wants to send their children. They are buying houses and they have a LOT of money
- In cities like SF, there is just very little new supply coming in
What's NOT different this time
- SF is very levered to tech and healthcare. If Tech falters, which it definitely will at some point, (although the magnitude is unclear) prices in SF will come down. How much, I don’t know. However, tech will rebound. All the technology of the future will be built in SV, there is zero doubt about that. If you think about it, the tech “bubble” in the bay area has never burst. Since the 60s, it has only grown
- LA counts even more on Chinese money, because unlike SF, which is the most educated city in America, LA county is actually very uneducated with a lot of poor immigrants and blue collar workers
- If tech falters, LA will get hit much harder than SF, because it lacks critical mass
- Also, areas that are most susceptible to price tanking will be areas like OC, where new construction is more available
- San Diego, Inland Empire and less desirable suburbs of LA will get hammered first and harder, just like last time
Anyway, that's just my $0.02. Like everyone else on this thread, I am guessing, but I have tried to put some thought in my guessing
I am not sure what you mean by "If tech falters, LA will get hit much harder than SF, because it lacks critical mass" but I will add some comments about LA.
Los Angeles does have a more varied economy than some people realize. Aside from its emerging tech scene, which is really growing..
L.A. County has a larger GDP than the countries of Belgium, Saudi Arabia, Norway and Taiwan.
About 40% of all containerized goods entering the U.S. pass through L.A., the largest seaport in the Western Hemisphere. International trade is the largest industry in Los Angeles by employment
L.A. County is the largest manufacturing center in the U.S., with more manufacturing jobs than the state of Michigan.
L.A. is a world leader in aerospace, clean technology, entertainment, fashion, healthcare, and tourism.
Los Angeles is home to some of the finest research institutions/facilities and teaching hospitals in the nation, including UCLA Medical Center, USC's Keck School of Medicine, Cedars-Sinai Hospital, the House Ear Institute, Good Samaritan, Children’s Hospital Los Angeles, California Hospital Medical Center, and the Doheny and Jules Stein Eye Institutes
The creative industries in Los Angeles are a major player in the regional economy, generating nearly 1 million jobs and over $100 billion in sales revenue. And the creative economy in Los Angeles goes far beyond the world-famous film and entertainment industries, encompassing a range of creative fields and disciplines that make L.A. the creative capital of the United States
I am not sure what you mean by "If tech falters, LA will get hit much harder than SF, because it lacks critical mass" but I will add some comments about LA.
Los Angeles does have a more varied economy than some people realize. Aside from its emerging tech scene, which is really growing..
L.A. County has a larger GDP than the countries of Belgium, Saudi Arabia, Norway and Taiwan.
About 40% of all containerized goods entering the U.S. pass through L.A., the largest seaport in the Western Hemisphere. International trade is the largest industry in Los Angeles by employment
L.A. County is the largest manufacturing center in the U.S., with more manufacturing jobs than the state of Michigan.
L.A. is a world leader in aerospace, clean technology, entertainment, fashion, healthcare, and tourism.
Los Angeles is home to some of the finest research institutions/facilities and teaching hospitals in the nation, including UCLA Medical Center, USC's Keck School of Medicine, Cedars-Sinai Hospital, the House Ear Institute, Good Samaritan, Children’s Hospital Los Angeles, California Hospital Medical Center, and the Doheny and Jules Stein Eye Institutes
The creative industries in Los Angeles are a major player in the regional economy, generating nearly 1 million jobs and over $100 billion in sales revenue. And the creative economy in Los Angeles goes far beyond the world-famous film and entertainment industries, encompassing a range of creative fields and disciplines that make L.A. the creative capital of the United States
What I want to know... How do people afford to live in California?
I recently just had another CA job opportunity- Long Beach, CA, starting salary $75-85K. From what I can see on Zillow - a decent house in the area STARTS at $500K, and it would be better to pay $600K+ WTF!?!?
I just..... don't get it. There's no way I can make that move, even though it would be a "step up" in my career. I currently make $51K and my mortgage costs me $900 right now - 36% of my net income. If I blanked out my savings and begged for help from my and my wife's family, we could come up with the $130K for 20% down on a $600K house... but our mortgage would still be 2400 - about 52% of net take home off of an 80K salary. I would have to pray that my wife got a great job just to get back to the place we are right now.
The way I calculate it, even if they offered me the high side of their starting salary range, I would be taking at least a 12% pay CUT, possibly 15-18%, AND I would have to blank out my savings.
What I want to know... How do people afford to live in California?
I recently just had another CA job opportunity
The way I calculate it, even if they offered me the high side of their starting salary range, I would be taking at least a 12% pay CUT, possibly 15-18%, AND I would have to blank out my savings.
That is just the price you have to pay to live in CA, home of the worlds finest beaches, nice weather, tasty fish tacos, Mongolian art museums, and interracial dating.
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