California real estate prices, how do you stand it? (Los Angeles: renting, insurance)

[SportyandMisty]

Originally Posted by gentlearts

It seems like most of the TV shows about real estate are based in California. Right now, I'm watching a young couple with 4 kids and a $750k budget looking for a house. All three choices are total dumps with cheap finishes, 1 bathroom, no yard, and on noisy highways. How did this happen and why do Californians put up with this?

It seems to me. if people refused to pay these prices, the prices would come down.

$750K is very inexpensive. What do you expect for mere $750K?

[Big L]

Originally Posted by Mr_Geek

The prices are what they are because of supply and demand not because people put up with it.

Exactly. In most cases, there aren't multiple listings on one block like you see in some parts of the country.

[V8 Vega]

I saw in the paper recently that the median price in Porter Ranch is $710,000, Porter Ranch is a nice place. Other good neighborhoods in the valley nice good size houses can be had for $500,000.

[pwright1]

Originally Posted by BGS91762

Yes LA real estate is cheap compared to NYC and most world class cities. Also LA has the IE which is relatively affordable and has some good train links into LA and OC.

But many like myself would never live far-out like that for the sake of being a homeowner. I've been a homeowner and have no desire to own a home in southern California. For me I like apt living in LA, close to great restaurants, cultural amenities, markets, shopping, public transportation, professional sports, the beach etc.

[nightlysparrow]

Originally Posted by 13Bulldog

The South is the new cool.

Mosquito land? Zika

and today...Yellow Fever, it's baaaack
https://www.washingtonpost.com/class...f93_story.html

[mysticaltyger]

Originally Posted by gentlearts

It seems like most of the TV shows about real estate are based in California. Right now, I'm watching a young couple with 4 kids and a $750k budget looking for a house. All three choices are total dumps with cheap finishes, 1 bathroom, no yard, and on noisy highways. How did this happen and why do Californians put up with this?

It seems to me. if people refused to pay these prices, the prices would come down.

It's all about lack of supply and high demand. California has a lot of restrictions on development, which limits supply, yet there is still demand to live here....so home prices and rents go up. Existing homeowners like it that way. They support the restrictions on development because it's good for their pocketbooks.

[jm1982]

Originally Posted by gentlearts

It seems like most of the TV shows about real estate are based in California. Right now, I'm watching a young couple with 4 kids and a $750k budget looking for a house. All three choices are total dumps with cheap finishes, 1 bathroom, no yard, and on noisy highways. How did this happen and why do Californians put up with this?

It seems to me. if people refused to pay these prices, the prices would come down.

True if people refused to pay, the price would come down...but at least for now people aren't refusing to pay.
Also real estate is 'cool again'.
Take a look at what homes in the same area as that 750k home were selling for back in 2009-2012 or so..Most likely a lot less.

So right now since the media and everyone is pumping real estate as a solid investment (again) people are jumping in , overbidding....and perhaps overpaying for homes.
One thing for sure if you look at historical prices, this is the height of the market.

The reason that I bought a home in 2010 is because I saw how high prices had been and viewed it as an opportunity that might not last long. Although there were talking heads saying real estate would be bad for much longer , I saw that investors were buying up foreclosures and that once those dried up, prices would go up. That is exactly what happened.

I also looked at rents and saw they were higher than the mortgage payment and other expenses so it made sense.

A lot of the reason people got in trouble and 'lost' their homes or investment properties is because they were buying on speculative versus fundamentals.
They were paying for example a $3,000 mortgage for a house that might rent for $2500 or less.

They were just betting that the prices were going to keep going up and up and up.

Today things are a bit different since loans are harder to get and government put more regulation in place.
But, that doesn't mean there would be another housing crash.
Nobody knows for sure what could happen.

[jm1982]

Originally Posted by mysticaltyger

It's all about lack of supply and high demand. California has a lot of restrictions on development, which limits supply, yet there is still demand to live here....so home prices and rents go up. Existing homeowners like it that way. They support the restrictions on development because it's good for their pocketbooks.

Yeah I don't totally get this. I understand if people are protesting against public or low income housing, but when they protest luxury condos in their neighborhood?

I live in an ungentrified area and I heard about a small lot development that is being planned. The project is going to take over a warehouse and some other buildings. It's in an industrial type area. I think this is good because even though the homes will be under 500k..which is low for L.A , that means there will be a higher income group that will be in the area.
for someone to get qualified for a home around 500k they have to have pretty decent income.
This means that there is the potential for businesses in the area to also improve.

Retail options for low income people just renting run down apartment units is pretty low.
It's going to be check cashing, auto title loans, liquor stores. At least this is what I see now.

The article that I read about this development also mentioned a new Starbucks opening up, the neighborhood doesn't even have a Starbucks now..
Sure that doesn't mean it's going be the next West L.A or Los Feliz or whatever...but I think that type of development is a step in the right direction.

And because it's taking over commercial space, nobody can complain that poor people were 'displaced'.
Also means the developers don't have to fork out thousands in payoffs to tenants too.

[AnthonyJ34]

Originally Posted by gentlearts

It seems like most of the TV shows about real estate are based in California. Right now, I'm watching a young couple with 4 kids and a $750k budget looking for a house. All three choices are total dumps with cheap finishes, 1 bathroom, no yard, and on noisy highways. How did this happen and why do Californians put up with this?

It seems to me. if people refused to pay these prices, the prices would come down.

Prices are insane throughout Southern California, save for some of the desert areas and pockets of the deep Inland Empire areas. So. Cal has many positives, and the weather and occupational opportunities are strong attractions for many, so it's no shock that many people choose to live here (and pay the rents). But, with so many other large, urban metro areas in other states, viable occupational opportunities exist in places that, while probably having more severe weather, allow for a higher standard of living for a fraction of the cost. I have family in Colorado and Oklahoma, and both those states have much cheaper housing, lower gas prices, and cheaper insurance rates. Oklahoma specifically, which is in the top five of the cheapest states in which to live. A large metro area like Tulsa has plenty to offer, and the housing prices there are cheap relative to the LA/OC area. But of course, Tulsa has more extreme weather, no oceans or mountains, and not as many trendy, hip places to venture to as does So. Cal.

[murfslaw]

I recently sold my home in the West LA area before it went on the MLS for more than I was asking, with an all cash offer and a 14 day escrow. The young couple who bought it had two pre-school aged children. I couldn't imagine having that kind of money when I was in my twenties. Property taxes alone are over $50K a year.