Millennials simply can't afford to live in OC (Orange, La Habra: calculator, law)
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Maybe millennials and future young americans need to understand that in order to live in a desirable area, you need to be motivated in getting an education to prosper in life. Not to expect affordable housing and government handouts. I'm quite satisfied when non-contributing members of society get priced out. They are an inconvience to be around.
Are you serious? What if you are motivated and educated and still can't swing a ranch style house that costs $600,000 that the prior owners who were there for 50 years paid $30,000 for? Total ignorance when it comes to the cost of housing in expensive areas.
Are you serious? What if you are motivated and educated and still can't swing a ranch style house that costs $600,000 that the prior owners who were there for 50 years paid $30,000 for? Total ignorance when it comes to the cost of housing in expensive areas.
Some people just won't learn so... what can you do.
Are you serious? What if you are motivated and educated and still can't swing a ranch style house that costs $600,000 that the prior owners who were there for 50 years paid $30,000 for? Total ignorance when it comes to the cost of housing in expensive areas.
But 50 years ago $30,000 would be like making $300,000.00 today. Those who are doing so have no problem just as the ones 50 years ago did not.
The problem is that more younger middle class people were making a good salary then, unlike now. Many of the middle class jobs have gone overseas or been driven out of CA. Now you better have a degree and not just any degree but one in a good field AND have done well above average. Oh and have done it with minimal college debt. That college debt today is making it harder for Millennials to afford to buy a home as well.
I got my 1st job in OC when I got out of HS and helped support me and my mother. Never had a problem finding a job and each job paid more. Huge variety of jobs and many do not exist in CA today. No degrees, just graduated from HS. I was able to get married and rent a nice apt a few years later and still help my mother financially with no real issues.
Life around the US has changed and in OC (Other areas of CA as well) you better make a LOT of money or you can't buy and even renting will be hard. In the future it will only get worse as the vast majority of new jobs will be either service industry or specialized jobs requiring a good degree and in limited numbers. There is no way to compare the past with today as everything has changed a LOT. OC is now a target for those well above middle class and that will not change. The Millennials will have to do what many of their contemporaries are doing, live somewhere else. No one has a right to live in OC, they just have a right to try.
Not a direct correlation to Las Vegas specifically, but Chapman's study indicates 50% of migrations out of Orange County are millennials (doesn't necessarily mean migration out of CA, just out of OC).
In 2000 the median age in OC was 33 years old, by 2010 it was 36 and the 2016 estimate was 37.
The OC Workforce Indicators Report says current demographic trends in OC estimate that by 2060:
- Children 17 and under will drop from 27% of the population in 2010 to 17% in 2060.
- Adults 55 and older will grow to 40.7% of the population in 2060 from 22.5% in 2010.
- Adults 25-54 (peak working adults), will drop to 34.1% of the population in 2060 from 43% today.
County is experiencing negative domestic migration since 2002, but enough international migration and natural births to grow slightly.
Between 2016 and 2026 though, OC school enrollment is expected to drop 47,008 students.
75% of owner occupied housing is owned by people between the ages of 45 years old and 85 years old. 6.2% of owner occupied housing is owned by somebody less than 34 years old, which is actually slightly higher than the 6% of homes owned by somebody between 35 years old and 44 years old. I was surprised that even the 35 to 44 year old co-hort has such a low percentage of owner occupied housing in the county and is vast majority renter.
As a millennial who is in the unique position of not being priced out of Orange County:
1. Whining about the housing situation doesn't help you. The world is the way it is. Some things about it can be changed, most cannot. The key to living a happy and prosperous life is to operate as well as you can in the world as it is, not as you think it should be.
2. It is significantly harder for this generation to purchase homes than for previous generations. It is not equally hard. A 20% downpayment on a median home is $150K. A downpayment on a relatively cheap condo is $80k. A typical income in the county is $60k and is taxed. Typical rent is $1800 a month to keep a roof over your head while you save for the downpayment. A house that costs $750k is not typically extravagant. Anyone who believes that it was similarly difficult to make that purchase in previous years is engaging in magical thinking and probably also walked uphill both ways when going to school.
3. Orange County housing is not significantly overvalued. The value of an asset is determined by what it can earn you. A bubble can be detected by comparing earnings to asset prices. This technique would have revealed both the dotcom and housing bubbles. Applying this to the city of Irvine reveals that the total housing payment (including everything) with 20% down for a typical house is about 10% more than it could rent for which is the long term historical norm which indicates a fair valuation for current market conditions.
4. The Orange County housing market is unlikely to suffer a 2007 style collapse. If interest rates went up significantly, house prices would drop, but it would still be expensive to buy them. You would paying less for the house, but more for the loan. In the case of a foreclosure crisis, banks now use loan modifications to delay foreclosures so they enter the market at a slow trickle preventing a foreclosure glut from lowering housing prices and putting their borrowers under water (which could cause them to walk away from the house). If the prices dropped 10%, they would be at rental parity and investment firms would buy them up keeping them from falling any farther.
5. The housing shortage the causes the prices to be so high is caused by California government policies. Housing is created at about half the rate necessary to support the rate of population growth. Despite this, many large housing developments are knocked down or reduced for trivial reasons. When a developer wanted approval to build a large apartment building in Huntington Beach, they were only approved for half the apartments they wanted to build with no real justification from the city. When a developer wanted to build a large housing development at Bannon Ranch in Newport Beach, legal action was taken and the presence of a burrowing owl at the site was used to legally strangle the project into extinction. Bannon Ranch is an abandoned is an abandoned oil field covered with old oil equipment. The fact that every project must be approved, on a case by case basis, is not efficient and creates an artificial shortage. This artificial shortage drives up prices and as the shortage increases in magnitude year after year, the prices will continue to be driven higher. The government control over what individuals do with the land they own is not the free market, it is socialism. It always makes me laugh when I listen to an older Orange County resident tell me there needs to be less regulation in the market and that socialism is evil and then shows up at one of these city council meetings to argue that the government needs to intervene stop a builder from constructing a place for somebody to live. So it's not right to use the government to feed the homeless, but it is to keep them from having homes? Makes sense...
As a millennial who is in the unique position of not being priced out of Orange County:
1. Whining about the housing situation doesn't help you. The world is the way it is. Some things about it can be changed, most cannot. The key to living a happy and prosperous life is to operate as well as you can in the world as it is, not as you think it should be.
2. It is significantly harder for this generation to purchase homes than for previous generations. It is not equally hard. A 20% downpayment on a median home is $150K. A downpayment on a relatively cheap condo is $80k. A typical income in the county is $60k and is taxed. Typical rent is $1800 a month to keep a roof over your head while you save for the downpayment. A house that costs $750k is not typically extravagant. Anyone who believes that it was similarly difficult to make that purchase in previous years is engaging in magical thinking and probably also walked uphill both ways when going to school.
3. Orange County housing is not significantly overvalued. The value of an asset is determined by what it can earn you. A bubble can be detected by comparing earnings to asset prices. This technique would have revealed both the dotcom and housing bubbles. Applying this to the city of Irvine reveals that the total housing payment (including everything) with 20% down for a typical house is about 10% more than it could rent for which is the long term historical norm which indicates a fair valuation for current market conditions.
4. The Orange County housing market is unlikely to suffer a 2007 style collapse. If interest rates went up significantly, house prices would drop, but it would still be expensive to buy them. You would paying less for the house, but more for the loan. In the case of a foreclosure crisis, banks now use loan modifications to delay foreclosures so they enter the market at a slow trickle preventing a foreclosure glut from lowering housing prices and putting their borrowers under water (which could cause them to walk away from the house). If the prices dropped 10%, they would be at rental parity and investment firms would buy them up keeping them from falling any farther.
5. The housing shortage the causes the prices to be so high is caused by California government policies. Housing is created at about half the rate necessary to support the rate of population growth. Despite this, many large housing developments are knocked down or reduced for trivial reasons. When a developer wanted approval to build a large apartment building in Huntington Beach, they were only approved for half the apartments they wanted to build with no real justification from the city. When a developer wanted to build a large housing development at Bannon Ranch in Newport Beach, legal action was taken and the presence of a burrowing owl at the site was used to legally strangle the project into extinction. Bannon Ranch is an abandoned is an abandoned oil field covered with old oil equipment. The fact that every project must be approved, on a case by case basis, is not efficient and creates an artificial shortage. This artificial shortage drives up prices and as the shortage increases in magnitude year after year, the prices will continue to be driven higher. The government control over what individuals do with the land they own is not the free market, it is socialism. It always makes me laugh when I listen to an older Orange County resident tell me there needs to be less regulation in the market and that socialism is evil and then shows up at one of these city council meetings to argue that the government needs to intervene stop a builder from constructing a place for somebody to live. So it's not right to use the government to feed the homeless, but it is to keep them from having homes? Makes sense...
I remember Bannon. People went berserk over it and protested, picketed. And screamed bloody murder till they won
As a millennial who is in the unique position of not being priced out of Orange County:
1. Whining about the housing situation doesn't help you. The world is the way it is. Some things about it can be changed, most cannot. The key to living a happy and prosperous life is to operate as well as you can in the world as it is, not as you think it should be.
2. It is significantly harder for this generation to purchase homes than for previous generations. It is not equally hard. A 20% downpayment on a median home is $150K. A downpayment on a relatively cheap condo is $80k. A typical income in the county is $60k and is taxed. Typical rent is $1800 a month to keep a roof over your head while you save for the downpayment. A house that costs $750k is not typically extravagant. Anyone who believes that it was similarly difficult to make that purchase in previous years is engaging in magical thinking and probably also walked uphill both ways when going to school.
3. Orange County housing is not significantly overvalued. The value of an asset is determined by what it can earn you. A bubble can be detected by comparing earnings to asset prices. This technique would have revealed both the dotcom and housing bubbles. Applying this to the city of Irvine reveals that the total housing payment (including everything) with 20% down for a typical house is about 10% more than it could rent for which is the long term historical norm which indicates a fair valuation for current market conditions.
4. The Orange County housing market is unlikely to suffer a 2007 style collapse. If interest rates went up significantly, house prices would drop, but it would still be expensive to buy them. You would paying less for the house, but more for the loan. In the case of a foreclosure crisis, banks now use loan modifications to delay foreclosures so they enter the market at a slow trickle preventing a foreclosure glut from lowering housing prices and putting their borrowers under water (which could cause them to walk away from the house). If the prices dropped 10%, they would be at rental parity and investment firms would buy them up keeping them from falling any farther.
5. The housing shortage the causes the prices to be so high is caused by California government policies. Housing is created at about half the rate necessary to support the rate of population growth. Despite this, many large housing developments are knocked down or reduced for trivial reasons. When a developer wanted approval to build a large apartment building in Huntington Beach, they were only approved for half the apartments they wanted to build with no real justification from the city. When a developer wanted to build a large housing development at Bannon Ranch in Newport Beach, legal action was taken and the presence of a burrowing owl at the site was used to legally strangle the project into extinction. Bannon Ranch is an abandoned is an abandoned oil field covered with old oil equipment. The fact that every project must be approved, on a case by case basis, is not efficient and creates an artificial shortage. This artificial shortage drives up prices and as the shortage increases in magnitude year after year, the prices will continue to be driven higher. The government control over what individuals do with the land they own is not the free market, it is socialism. It always makes me laugh when I listen to an older Orange County resident tell me there needs to be less regulation in the market and that socialism is evil and then shows up at one of these city council meetings to argue that the government needs to intervene stop a builder from constructing a place for somebody to live. So it's not right to use the government to feed the homeless, but it is to keep them from having homes? Makes sense...
To Some extent you are right. However even if denser housing was approved, the remaining land was build on, etc, housing would eventually still be a problem. There is a limit to what can be built. The wise approach is to live somewhere else if you can't afford it in OC. Remember even when they build apts/condo's etc., in areas that were once single family, the prices do not drop. No developer is going to build cheap housing in this market. Yes the cost of a house was less expensive per income years ago in OC. However there was more land and fewer people living in OC. Now that has changed and a person can either afford it or they can't.
Why should someone be helped to buy a house just because the Govt feeds the homeless? A vastly different financial level with housing. Now if the Govt helped buy one, but kept the full equity until it was paid for in full, in other words if the one receiving help wanted to sell, he only gets the equity his payment covers, not the growth in value, and all aid was payed back also, then that might be OK. There are plans now in other States where low interest is given on loan to assist buying, but if you sell early you owe a higher amount than just the remaining mortgage because of the help. Free lunch OK, free house, no way.
To Some extent you are right. However even if denser housing was approved, the remaining land was build on, etc, housing would eventually still be a problem. There is a limit to what can be built. The wise approach is to live somewhere else if you can't afford it in OC. Remember even when they build apts/condo's etc., in areas that were once single family, the prices do not drop. No developer is going to build cheap housing in this market. Yes the cost of a house was less expensive per income years ago in OC. However there was more land and fewer people living in OC. Now that has changed and a person can either afford it or they can't.
Why should someone be helped to buy a house just because the Govt feeds the homeless? A vastly different financial level with housing. Now if the Govt helped buy one, but kept the full equity until it was paid for in full, in other words if the one receiving help wanted to sell, he only gets the equity his payment covers, not the growth in value, and all aid was payed back also, then that might be OK. There are plans now in other States where low interest is given on loan to assist buying, but if you sell early you owe a higher amount than just the remaining mortgage because of the help. Free lunch OK, free house, no way.
My statement wasn't that the government should reach it's hand into the market to "help" people buy a house, it was that the government should stop reaching it's hand into the market. Let the builders create a sufficient supply to meet demand. Stop stopping them.
If more housing is allowed to enter the market, but not at a sufficient rate to meet demand, prices will continue to rise, just not as quickly as they would had that additional supply not been created. Just because prices went up after new housing is created does not negate the relationship between the rate of increase in the supply and the rate of increase in house prices.
New housing is typically at the higher end of the price range because it is more desirable than the old/used equivalent. The wealthier house hunters typically choose the new housing over the old. If that newer housing was never created, those wealthy residents who would have bought the newer houses will instead compete with less affluent buyers for the older housing pushing up the price of the older housing making it less affordable than it would otherwise be. The introduction of new housing at the higher end of the economic ladder puts downward pressure on housing prices across the board. The introduction of new luxury housing, if supply is not being added at a sufficient rate overall to meet demand, will not cause prices to go down, but it will decrease the appreciation rate.
This makes sense to ameliorate some of the housing price pressures, but there is a problem in that OC is largely built out. Are you referring to in-fill or tear down projects? This could be a great thing especially in older North OC.
My statement wasn't that the government should reach it's hand into the market to "help" people buy a house, it was that the government should stop reaching it's hand into the market. Let the builders create a sufficient supply to meet demand. Stop stopping them.
the people who can't afford the area... should have moved out of the area to a different area, that's what the market would be telling them...
why aren't they listening and insisting that the govt help them stay in an area they can't afford?
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