"There is no housing bubble in California", change my mind. (moving, stone)

[expatCA]

Originally Posted by Peasy973

This is one of the comments from the article that iExtrapolate posted by way of Jon Lasner (I dunno who that is). I thought it was pretty good assessment of housing in California, how the Chinese and Fed affected housing prices and affordability for both renting and buying.

Don't ask me about the comment. I'm just a messenger delivering the goods.

There is no bubble. The prices are simply set by demand.

IF rates went up a LOT then sales would maybe slow and then again maybe not, if enough people had ..... cash. Rates mean nothing to cash buyers. I bought a house when rates were well above 8% and this was long before I make what I do now and it did not bother me. The last "bubble" was set by their stupid laws passed by the Govt to allow people to buy what they could not afford, greedy and stupid banks and financial institutions that gave loans to people with no real verification they could afford it and stupid people buying way beyond their means.That drove prices up. When they could not afford the loans it tanked.

Those conditions do not exist today. Demand is far beyond supply and that drives prices up, but not beyond what the buyers can afford. IF prices dropped there would be even fewer houses on the market. The current owners/buyers are not hurting as so many were who bought beyond their means in the last real Bubble. Housing prices are not liable to drop significantly at all, just stabilize at best and potentially rise even more if fewer were available. Remember rising rates do not hurt the owners, just the new buyers needing loans.

Don't expect home prices to drop to where someone who can't buy now can, as too many people with more money would still outbid them driving prices up. The only way prices would drop would be: A. either a World Wide recession or B. a huge amount of homes being built by builders who don't want to make any money. The first would not help and the second is not going to happen.

[CaliRestoration]

Originally Posted by sdlife619

At the end of the day it comes down to greed. No property owner HAS to charge what the market rate is. They charge the most, because they want too.

Of course.

So you're saying if you owned a 3 unit complex where rents per unit were going for $4000 a month per the market (meaning you could have 3 renters paying you $4,000/month as soon as you put the units on the market), you wouldn't charge $4,000? You would charge less because you aren't greedy?

[CaliRestoration]

Originally Posted by basehead617

The stupidest comments I see on the internet about this topic are about how it’s a bad omen that prices are hitting what they were in the 2006/2007 peak.

You mean 11-12 years ago??

I’d be more worried if they HADN’T hit that price point by now.

Exactly. Over a decade of inflationary rise, and people think "Well, you should be able to buy a house in prime areas of SoCal for $300,000 like in 1991."

Really? That's why I think Economics should be REQUIRED course work for K-12 education, and even as a breadth requirement for universities.

[JGC97]

From the horse's mouth this morning, the CA Realtors Association. There is no bubble. It's simply a lack of available housing and people (with money) who are paying over asking price. They seem to be setting the prices and the rules and we all know the golden rule. Whoever has the gold, makes the rules.

[1AngryTaxPayer]

Any new housing is luxury condos here in San Diego.

[Peasy973]

expat,

Look at my past comments. I never said there was a bubble and I said those comments were not mine as well.

[expatCA]

Originally Posted by HereOnMars

From the horse's mouth this morning, the CA Realtors Association. There is no bubble. It's simply a lack of available housing and people (with money) who are paying over asking price. They seem to be setting the prices and the rules and we all know the golden rule. Whoever has the gold, makes the rules.

Well the expression "The Golden State" has taken on a different meaning now.

[CaliforniaGal]

I have been noticing a lot of homes being flipped here in Wiseburn where we reside. Lots of retirees selling out - moving away. A big house being built up the street from us. I just hope these homes are not being used to house addicts (rehab). Los Angeles County has been known to do this. We are in Unincorporated - use Hawthorne zip code.

[HappyinCali]

Originally Posted by sdlife619

At the end of the day it comes down to greed. No property owner HAS to charge what the market rate is. They charge the most, because they want too.

They don’t care if raising the rent by a couple hundred dollars affects a family. Not saying all property owners are like this, but for the most part they are. What I’ve noticed locally in the more older dense urban areas of San Diego, is that it seems that many of the original property owners have sold their apartments/rentals to investment groups, which in turn do some fixing up and jack up the rents to cover the cost, or to just remove undesirable minority tenants. In this process it has cause gentrification to accelerate rapidly here.

SD’s urban areas isn’t that large in comparison to other big cities, so gentrification affects people here faster, and has reduced the more affordable locations for people to live because almost every neighborhood in SD is gentrifying. I think this has had serious consequences as our homeless crisis has exploded in the last 2 years.

San Diego has the 4th worst homeless population in the nation right behind Seattle.

At least in L.A. it will still take many many years until gentrification hits the entire region, in SD is more like within the next 10 or less.

As much as we all like to talk about a housing crisis, it could be affordable if greed wasn’t in the way.

That’s such a ridiculous point of view. So the landlord charging $3k is greedy. But the person who wants to live in a nice apartment, by the beach, with amenities, good schools, walkable things to do etc. and only wants to pay $800 is not greedy? Explain how that is the case.

It is like me wanting to drive a ferrarri and complaing that the manufacturer is too greedy because they charge me $150k and not the price of a Civic. How am I not greedy?

[aslowdodge]

Originally Posted by sdlife619

At the end of the day it comes down to greed. No property owner HAS to charge what the market rate is. They charge the most, because they want too.

They don’t care if raising the rent by a couple hundred dollars affects a family. Not saying all property owners are like this, but for the most part they are. What I’ve noticed locally in the more older dense urban areas of San Diego, is that it seems that many of the original property owners have sold their apartments/rentals to investment groups, which in turn do some fixing up and jack up the rents to cover the cost, or to just remove undesirable minority tenants. In this process it has cause gentrification to accelerate rapidly here.

SD’s urban areas isn’t that large in comparison to other big cities, so gentrification affects people here faster, and has reduced the more affordable locations for people to live because almost every neighborhood in SD is gentrifying. I think this has had serious consequences as our homeless crisis has exploded in the last 2 years.

San Diego has the 4th worst homeless population in the nation right behind Seattle.

At least in L.A. it will still take many many years until gentrification hits the entire region, in SD is more like within the next 10 or less.

As much as we all like to talk about a housing crisis, it could be affordable if greed wasn’t in the way.

The problem is you seem to think all the landlords pocket the money and when they raise rents they pocketbthe extra.
The truth is many landlords don't. Metro California is one of the hardest areas to even break even in real estate. Many won't make any money until many years later when the property is paid off.
For example I had a rental house I paid $600k for. I put down $200,000 and my monthly mortgage was $2000 a month. The market rent was $2000 a month so I broke even on that. However I have to pony up $8000 a year out of my pocket plus any repairs to cover insurance and taxes.
So if I could have raise rent $200 a month I still would have lost money, it's not greed, it's just trying to break me .
That's just the way California real estate is. Until I looked at other states I never realized that you could buy a rental property and actually break even.

So in a sense some of those greedy property owners are actually subsidizing the renters.