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Old 06-28-2011, 09:15 PM
 
Location: Las Flores, Orange County, CA
26,338 posts, read 93,582,688 times
Reputation: 17830

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Quote:
Originally Posted by Mach50 View Post
I make exactly the same in Denver(Aero/Software Engineer) as I did in California, and pay approximately half of what I did for housing. Most of the other costs are also lower: car insurance, gas, preschool, private school etc...

So far I am loving Denver, almost a year here and still not missing CA.

I believe you. I know abouts where you live. I used to live in the Colorado Springs area and we traveled into Denver a lot.
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Old 06-29-2011, 01:10 AM
 
Location: Chandler, AZ
5,800 posts, read 6,551,835 times
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The #1 reason why the cost of living in California is so high is due to the fact that we have the most expensive dirt/land in the country, and that's been the case for two or three decades, thanks to environmentalists.
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Old 06-29-2011, 06:34 AM
 
Location: Las Flores, Orange County, CA
26,338 posts, read 93,582,688 times
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Originally Posted by Marv101 View Post
thanks to environmentalists.
You're welcome.
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Old 06-29-2011, 08:13 AM
 
575 posts, read 1,775,670 times
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Quote:
Originally Posted by Marv101 View Post
The #1 reason why the cost of living in California is so high is due to the fact that we have the most expensive dirt/land in the country, and that's been the case for two or three decades, thanks to environmentalists.

I wouldn't dispute the fact that environmental regulations increase the price of housing. I guess whether that increase is worth it or not depends on your perspective.

You state that the added cost due to environmental regulations has been in play for two or three decades. OK, but between 2000 and 2006 house prices in California increased 135%. Price to income ratios in Orange County fluctuated between 4.0 - 4.1 throughout the 90's; so above the national norm, though I would say not prohibitively so, but hit 8.6 in the mid 2000's.

Side note: honestly, how in the world does anyone justify taking out a loan for more than 8 times yearly income? And don't even get me started on the crooks approving and underwriting that kind of nonsense.

So unless a huge stack of new regulations was passed 2000-ish, the arguement that housing prices have been/are/will be higher because land is more expensive due to environmental regulations doesn't explain the current state of the housing market.

I contend that free flowing financing does though. My opinion is that there was an unsustainable price bubble that had/has to deflate at some point. When that happens prices generally overcorrect to the downside.

Of course continued government intervention and/or possible innovative new financial products are the wild cards. But hopefully there will be a return to sound lending practices, and with that a return to sane prices.
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Old 06-29-2011, 10:26 AM
 
Location: Conejo Valley, CA
12,460 posts, read 20,031,549 times
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Quote:
Originally Posted by Axiom View Post
Of course continued government intervention and/or possible innovative new financial products are the wild cards. But hopefully there will be a return to sound lending practices, and with that a return to sane prices.
I don't think this is so much a wild-card, the government is very likely to prevent any large nominal decline in real estate prices and they will also slowly reduce subsidies over many years.

At this point most of the correction is going to be in inflation adjusted terms, that is the real price will decline over many years with stable nominal prices or slightly increase nominal prices.
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Old 06-29-2011, 11:12 AM
 
575 posts, read 1,775,670 times
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Quote:
Originally Posted by user_id View Post
I don't think this is so much a wild-card, the government is very likely to prevent any large nominal decline in real estate prices and they will also slowly reduce subsidies over many years.

At this point most of the correction is going to be in inflation adjusted terms, that is the real price will decline over many years with stable nominal prices or slightly increase nominal prices.
Yea, I don't think the government will be completely pulling out any time soon either.

I do find it interesting to watch how varied the correction has been from location to location. I think prices in Orange County have held up surprisingly well... but then there is that prevailing "it's different here" attitude.

The California RE exuberance that spilled over to both Las Vegas and Phoenix certainly didn't have the same staying power.

Maybe you're right, maybe there will be a prolonged flattening while inflation rights the balance. Personally I think there still has to be some price deflation, especially at the high end, but that's just my opinion.
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Old 06-29-2011, 11:58 AM
 
2,654 posts, read 5,453,425 times
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Quote:
Originally Posted by Axiom View Post
Yea, I don't think the government will be completely pulling out any time soon either.

I do find it interesting to watch how varied the correction has been from location to location. I think prices in Orange County have held up surprisingly well... but then there is that prevailing "it's different here" attitude.

The California RE exuberance that spilled over to both Las Vegas and Phoenix certainly didn't have the same staying power.

Maybe you're right, maybe there will be a prolonged flattening while inflation rights the balance. Personally I think there still has to be some price deflation, especially at the high end, but that's just my opinion.
Just wait til the new, lower conforming loan limit kicks in. I believe it will be $625k ish? After that everyone tryng to buy a home with mortgage over $625k will have to pay jumbo rates - and cough up an additional half point to point in interest. With affordability already so bad, that extra cost is going to come right out of the price of the home. All those home that are sitting at $675-$800k - - the heart of the move up market for the middle & upper middle class in OC - are going to get hit hard. Those price declines will pull down the $900k-$1MM market with them.

Flat pricing is a rosy outlook to have at this point, IMHO.
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