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Back to the topic of cars, we stayed in Calabasas. We ate at King's Fish House and leaving there and walking from there, in front of Starbucks, over to the grocery store, there was BMW after Mercedes after Jaguar after you name it as we passed by. There was not one just normal car along that whole string of parked cars. I almost took a picture; wish I had, but I didn't. We have BMW, Mercedes, Jaguar, etc. in Kansas City. But they are here and there, not every single car!
Yes, exactly. This is what I notice everytime I'm in the affluent parts of LA/OC. Like 70-80% of the cars are luxury. I have never seen this, anywhere else on the planet.
No, I don't know you but I frequent sites like Jalopnik and local performance forums and people with manual transmissions as a whole tend to look down on those of us that don't have them, regardless of whether or not we possess the skills to do so.
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Median home price in Chicago is like 200k, so no. Chicago real estate is pretty cheap. You can buy something nice, in a great neighborhood, for 400k.
And the other poster was wrong about LA, too. Most people living in Van Nuys and the like are not paying 550k for a home. That's ridiculous. LA actually has a pretty low median income, and most people are renters, not homeowners. And most of the homeowners bought long ago, so current valuations are irreverent (either they bought cheap long ago, or the price increase are meaningless, because they already own, so can buy and sell with their equity).
Well glad to see you're agreeing with some of my comments!
I agree that a lot of people are rich on paper because they bought cheap and now own something that's worth more however these houses are still selling for these prices. The average price for a 3 bedroom home in Van Nuys is $500,000. Van Nuys isn't considered high end by any stretch of the imagination. My point was more that even those that buy in a "meh" neighborhoods are people that can afford a half million dollar home and for a person like that a car is often proportionality irrelevant. Well, not entirely but let's look at it this way.
If we pick a so-so suburb of Chicago, let's say Des Plaines. That's the equivalent of Van Nuys. It's not great. It's not terrible. It has really crappy parts and really decent parts. The average price of a 3 bedroom home is 250k, half of Van Nuys. So while Jim in Illinois and John in California are living in the same house in the same type of neighborhood, John in California needs to be wealthier on paper (or a good saver) to achieve the same lifestyle as Jim in Illinois. In other words, John either needs to be making a lot more money than Jim or needed to have saved a lot more money than Jim. Either way, assuming both are buying the most house they can reasonably afford, John needs to be making more money.
Now as a portion of his income, a leased Mercedes might be a much easier expense to swallow for the guy in California than the guy in Chicago because the price of a Mercedes stays fixed and the guy in California needs to make exponentially more than his Chicago counterpart to live the same lifestyle. And this is why in LA I think we still see really nice cars in neighborhoods that aren't so nice.
To put things into perspective, the average price of a 3 bedroom home in Van Nuys is still more than that of Barrington, Lincolnshire, Long Grove, etc in Illinois. It matches Hinsdale, one of Chicago's most expensive suburbs. These aren't just middle class suburbs. They are very high end. I don't think people realize just how well you have to be doing to live in even an "entry level" area out here.
Median home price in Chicago is like 200k, so no. Chicago real estate is pretty cheap. You can buy something nice, in a great neighborhood, for 400k.
And the other poster was wrong about LA, too. Most people living in Van Nuys and the like are not paying 550k for a home. That's ridiculous. LA actually has a pretty low median income, and most people are renters, not homeowners. And most of the homeowners bought long ago, so current valuations are irreverent (either they bought cheap long ago, or the price increase are meaningless, because they already own, so can buy and sell with their equity).
The average person looking for a 550k home is not going to buy in some semi-slum; LA is expensive but not that expensive. High values in places like Van Nuys are because these homes are used by investors as rental properties for immigrants.
The thing in L.A is that prices have risen even though the areas haven't changed at all or sometimes even get worse.
Also regarding investors renting out houses to immigrants , it doesn't make sense to buy a house for 550k to rent out as you'll likely be losing money. Rents are high in L.A but not that high. Unless you are talking about landlords/investors that bought a long time ago for much cheaper prices .
But even then it's not a great return to rent something out for like $2500 or less that is worth $550,000.
They could get much higher returns elsewhere.
older i am, less i care about cars. mine is paid for. why plunk down 50k or more on a depreciating asset to drive around southern california. i'll drive mine until it falls apart. you may think i'm poor, but i'm far from it. i come home, look at my beautiful home, enjoy the view, drink my wine...and could care less what kind of car i drive.
The thing in L.A is that prices have risen even though the areas haven't changed at all or sometimes even get worse.
Also regarding investors renting out houses to immigrants , it doesn't make sense to buy a house for 550k to rent out as you'll likely be losing money. Rents are high in L.A but not that high. Unless you are talking about landlords/investors that bought a long time ago for much cheaper prices .
But even then it's not a great return to rent something out for like $2500 or less that is worth $550,000.
They could get much higher returns elsewhere.
In certain parts of town, they divide the house so that they can cram 30+ people into it. They rent by the bed (they call it "bedspacers.") You can see ads hanging outside some grocery stores advertising bed space for $400 or so. When you are renting out 30 beds at $350 a pop, that's $10,500 a month -- or more than enough to pay the mortgage plus.
Location: West Los Angeles and Rancho Palos Verdes
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Quote:
Originally Posted by Monkeymike
Now as a portion of his income, a leased Mercedes might be a much easier expense to swallow for the guy in California than the guy in Chicago because the price of a Mercedes stays fixed and the guy in California needs to make exponentially more than his Chicago counterpart to live the same lifestyle. And this is why in LA I think we still see really nice cars in neighborhoods that aren't so nice.
Reminds me of this...
Around 20 years ago I went on a band audition that took me to the South L.A. area. I was concerned that I was getting into an area of the city in which I was not comfortable, though at one point I saw a late model Mercedes in a driveway and thought to myself that this neighborhood can't be too bad if somebody here drives a late model Mercedes. However, a moment later I noticed bars all over the home of the driveway in which the Mercedes was parked, and realized it was parked in the driveway of a crack house.
And for the record, it was probably an automatic so the driver could drive with one hand and deal crack in the other. So I guess that's another good reason for a DCT.
Yes, exactly. This is what I notice everytime I'm in the affluent parts of LA/OC. Like 70-80% of the cars are luxury. I have never seen this, anywhere else on the planet.
When I first started visiting So California in 2004, coming from Michigan (Ford, GM, Chrysler land), I was amazed by the countless numbers of high end foreign cars, and the proliferation of Toyotas everywhere. I'm used to it now, and when I move there, I'll have to get up to speed, quick.
We used to have cool cars and rented our home. We ended up living in an apartment to save money to buy a home. We also ended up selling off the cool cars.
We now have a beautifull home and a 2003 Chevy Astro Van and a 2011 Honda Accord.
We have some friends that have a small car collection. Mostly made up of classic cars. If you go to their home the two of them have 8 beautifull rides. They rent their home.
Funny thing is that now my wife and I have the home we want we plan on getting the cars we want later on so we can have it all. LOL
We used to have cool cars and rented our home. We ended up living in an apartment to save money to buy a home. We also ended up selling off the cool cars.
We now have a beautifull home and a 2003 Chevy Astro Van and a 2011 Honda Accord.
We have some friends that have a small car collection. Mostly made up of classic cars. If you go to their home the two of them have 8 beautifull rides. They rent their home.
Funny thing is that now my wife and I have the home we want we plan on getting the cars we want later on so we can have it all. LOL
That's great! I'd also pick owning a home versus owning cool cars. I'd bet on real estate appreciating before cars do.
Although I have heard of some classic cars that have appreciated pretty significantly. Maybe your friends with the 8 classics know something we don't.
That's great! I'd also pick owning a home versus owning cool cars. I'd bet on real estate appreciating before cars do.
Although I have heard of some classic cars that have appreciated pretty significantly. Maybe your friends with the 8 classics know something we don't.
Generally speaking, new cars go way down in value. Older cars it all depends. With the right car and if the numbers match you may have a home run. Still markets can go soft. That is the same with housing as we all learned back in 2007. (Hard to believe that is has allready been almost 8 years, in our area anyway, that the housing market came tumbling down.)
Here is what we want to do. We own our home and are working at paying it off early. We also invest in our retirement and savings. We are also improving our home a little each year, as it was built in the early 60's and needed to be refreshed. At the same time I love cars. Had a Porsche and loved it and would love another one. We also want to do a frame off restoration of a car some day. Something from the 50's thru 60's. Just need to find the right ride. What ever that ride will be it will need to have the power to pull an old camping trailer from the 50's - 60's era. A neighbor restores them and we decided that we want to own one of them in our retirement years. What ever we do it will be with cash as debt is not in our future.
I have a lot of friends that have some cool rides. Not all are ride rich and house poor. Many have both a nice home and a nice ride. A close friend always leases his Mercedes E class but also has a Ferrari in the garage. Another friend owns a Porsche 911 that is always kept show ready, as well as a couple daily drivers. Him and his wife own a beautiful home. Plenty of other people that are just getting by but have the need to own a BMW or some other car. Around here BMW has become such a common car. Our office coordinator who happens to live with her mom drives a late model 3 series. Plenty of other people around here own BMW's, Mercedes, Lexus, and other brands and many of these people are just getting by with life. For some reason they need to have a big car payment and are willing to share a place or live in a small place so that they can have a nice ride.
Something that I learned a long time ago is that you can find some very nice older cars around this area, meaning between Orange county on up to Santa Barbara County, that are well taken care of and cost a lot less than a new car. I have seen Rolls Royce cars for sale that you could pick up for the same price as a Honda Accord. I am just thinking that the Rolls will maintain that value as long as you take care of it while the Accord will decrease in value.
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