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Pj737 - I don't consider a lot of the govt-issued figures because they can be very misleading. CPI, for example, excludes housing prices.
OpenD - The Bureau of Labor would disagree: “The indexes for gasoline, shelter, and food all rose in April”
Pj737 - I stated housing prices, not shelter. Shelter does NOT include real estate values. Yes, it includes rents but that is very different from housing prices
OpenD - Also incorrect. The CPI algorithm for shelter includes both typical rentals and privately owned residences, expressed as rental equivalence.
pj737 - Wrong. CPI only includes rent of primary residence and owners' EQUIVALENT rent. There is zero inclusion of property VALUATIONS.
OpenD - Of course not. It's an index of costs, not investments.
So first you say I'm wrong and it's included. Then you say it's not because it's an investment and not a cost. Which one is it?
Anyway, this is precisely WHY I said it's misleading. Why should real estate prices be excluded? Because it's viewed as an investment?? Trying to justify a broken economic barometer by saying real estate valuations shouldn't be included because it's an "investment" and not a cost is ridiculous.
Question - what previously-established data is particularly useful to economic forecasting if we are in a constantly changing world (economically/socially/etc) that nobody can accurately predict?
Data from the previous 20 or so years worked for me. I've had enough regression analysis courses over the years to know how to create decent forecasting models.
If you're lazy or don't know how to create a decent forecasting model, there's always software like GMDH Shell that can do the job.
Anyway, this is precisely WHY I said it's misleading. Why should real estate prices be excluded? Because it's viewed as an investment?? Trying to justify a broken economic barometer by saying real estate valuations shouldn't be included because it's an "investment" and not a cost is ridiculous.
Nope, not at all. It's quite pragmatic. When anyone is comparing Cost of Living between two places, what they are primarily concerned with is the the COST of LIVING... i.e., what they HAVE to SPEND out of present income to have the lifestyle they desire. Lots and lots of things are not considered in this calculation because they are not necessities. Investments are key among those. So real estate valuations are not directly included, while the cost of living in typical properties is figured in. The median is what is reported... the value in the middle... not the average, which can be skewed by outliers.
Here's the bottom line for me... you said that LA is just as expensive as Honolulu, while I said, based on solid, objective information that Honolulu is 24% more expensive than LA, and that the difference is significant enough to need to plan around. Let's say the OP buys into your wholly subjective personal opinion, and sets sail for a new position in the islands only to discover that he's struggling to make ends meet and needs to cut back somewhere, and he says...
Quote:
Holy Ukulele, the rent is more expensive here in Honolulu than I expected (and the places are smaller), and the food is more expensive, and entertainment is more expensive, and gas is more expensive, and utilities are more expensive, and now that I think about it, EVERYTHING is more expensive... Why, oh why didn't somebody warn me? Wahhhhh!
Nope, not at all. It's quite pragmatic. When anyone is comparing Cost of Living between two places, what they are primarily concerned with is the the COST of LIVING... i.e., what they HAVE to SPEND out of present income to have the lifestyle they desire. Lots and lots of things are not considered in this calculation because they are not necessities. Investments are key among those. So real estate valuations are not directly included, while the cost of living in typical properties is figured in. The median is what is reported... the value in the middle... not the average, which can be skewed by outliers.
Here's the bottom line for me... you said that LA is just as expensive as Honolulu, while I said, based on solid, objective information that Honolulu is 24% more expensive than LA, and that the difference is significant enough to need to plan around. Let's say the OP buys into your wholly subjective personal opinion, and sets sail for a new position in the islands only to discover that he's struggling to make ends meet and needs to cut back somewhere, and he says...
What will you have to say then?
You're missing the point. The government lumps real estate in with stocks, bonds and life insurance; there is a problem with that. If you can't see how real estate is very very different from stocks, bonds and life insurance I can't help you.
Instead of outright telling the OP it's 24% more expensive to live here, wouldn't it be prudent to ask WHERE in LA he is moving from? If you weren't aware, LA is 10X the size of Honolulu and houses 10X as many people. Coastal communities in LA can be MUCH more expensive to live in than, for example ,El Segundo. If you subtract utilities and rent, it's pretty much the same cost across the board in Honolulu as it is in much of LA. And there are many areas in LA that rent for more than areas in Honolulu. So putting a blanket 24% "premium" on Honolulu over LA is not helpful to anyone. Sorry to burst your intense research bubble but it's not providing any value to most of those seeking advice here on these forums. A bit of advice - ask more questions first before regurgitating data that is more than likely not applicable to them.
Coastal communities in LA can be MUCH more expensive to live in than, for example ,El Segundo.
Let me give you a piece of "anecdotal evidence"...
The last time I drove through El Segundo on my way to LAX, it was a "coastal community" in L.A. County.
Quote:
Originally Posted by pj737
If you subtract utilities and rent, it's pretty much the same cost across the board in Honolulu as it is in much of LA. And there are many areas in LA that rent for more than areas in Honolulu. So putting a blanket 24% "premium" on Honolulu over LA is not helpful to anyone. Sorry to burst your intense research bubble but it's not providing any value to most of those seeking advice here on these forums. A bit of advice - ask more questions first before regurgitating data that is more than likely not applicable to them.
There are many areas in L.A. where the rent is way cheaper than anything in Honolulu. Ever hear of Watts, "South Central," Compton, Harbor Gateway, Huntington Park, Hawaiian Gardens, Carson, Lennox, Lynwood, Bell, Bell Gardens, and East L.A.? In general, the parts of L.A. that have gang activity and higher crime rates tend to have lower rents.
Let me give you a piece of "anecdotal evidence"...
The last time I drove through El Segundo on my way to LAX, it was a "coastal community" in L.A. County.
There are many areas in L.A. where the rent is way cheaper than anything in Honolulu. Ever hear of Watts, "South Central," Compton, Harbor Gateway, Huntington Park, Hawaiian Gardens, Carson, Lennox, Lynwood, Bell, Bell Gardens, and East L.A.? In general, the parts of L.A. that have gang activity and higher crime rates tend to have lower rents.
My bad. I have family that lives in east El Segundo but I think it's technically Inglewood. In any case, rents are dirt cheap in that area and no it's not rife with gang violence. I definitely don't consider their house "coastal LA" but geographically, yes... it's pretty close. Maybe if you pretend the roaring jets constantly overhead are waves crashing on the shore.
My bad. I have family that lives in east El Segundo but I think it's technically Inglewood. In any case, rents are dirt cheap in that area and no it's not rife with gang violence. I definitely don't consider their house "coastal LA" but geographically, yes... it's pretty close. Maybe if you pretend the roaring jets constantly overhead are waves crashing on the shore.
El Segundo is bordered by the Pacific Ocean on the west, Hawthorne and a small portion of Lennox to the east, Westchester and Playa del Rey to the north, and Manhattan Beach to the south. Technically, LAX lies within Westchester. And, Inglewood lies to the east of Westchester. All of these areas are within seven miles of the ocean. Fortunately, the overt gang activity in many of the more affordable parts of L.A. has decreased somewhat because many of the gang members and their families moved to areas that have even cheaper housing, such as Lancaster, Palmdale, and Moreno Valley.
El Segundo is bordered by the Pacific Ocean on the west, Hawthorne and a small portion of Lennox to the east, Westchester and Playa del Rey to the north, and Manhattan Beach to the south. Technically, LAX lies within Westchester. And, Inglewood lies to the east of Westchester. All of these areas are within seven miles of the ocean. Fortunately, the overt gang activity in many of the more affordable parts of L.A. has decreased somewhat because many of the gang members and their families moved to areas that have even cheaper housing, such as Lancaster, Palmdale, and Moreno Valley.
Yeah, I think it's right between El Segundo and Inglewood if that's even possible. They are close to the airport, I believe to the east or southeast of the airport. It sounds like Ewa Beach over there... even louder. Thanks for the explanation.
I guess living in Hawaii my entire life when I hear of communities more than a mile or two from the beach I don't consider them coastal. 7 miles seems ridiculously far from the beach to be considered coastal but yes I agree... considering the size of California (and the entire US for that matter) 7 miles is a stone's throw to the beach.
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