FINALLY - rents coming down, big time. (Los Angeles, Long Beach: for sale, foreclosure)

[Calix]

Originally Posted by CAVA1990

I've heard that "new pardigm" stuff about CA real estate for the past 40 years and it never comes to pass. For every liquidating retiree there's always some starry-eyed Easterner/Mid-westerner coming in right behind him with cash in hand.

Except that's the point you are missing. Every generation has had higher standards of living than their parents except now that is shifting. In the future, there won't be the hordes of "starry-eyed" Easterners flocking to CA. CA used to be a major job creation center, now it is shedding many high paying jobs. The list of major corporation fleeing CA is long. So don't think that the last 40 years will in any way equate to the next 40.

Recession generation? Young adults brace for simpler lifestyle - USATODAY.com

Also read the book Fewer: The coming generational storm
The Coming Generational Storm - The MIT Press

In 2030, as 77 million baby boomers hobble into old age, walkers will outnumber strollers; there will be twice as many retirees as there are today but only 18 percent more workers. How will America handle this demographic overload? How will Social Security and Medicare function with fewer working taxpayers to support these programs? According to Laurence Kotlikoff and Scott Burns, if our government continues on the course it has set, we'll see skyrocketing tax rates, drastically lower retirement and health benefits, high inflation, a rapidly depreciating dollar, unemployment, and political instability. The government has lost its compass, say Kotlikoff and Burns, and the current administration is heading straight into the coming generational storm.

[CAVA1990]

Well considering my kids and the fellow members of their generation are about 20 times smarter than we were I seriously doubt there'll be the decline in living standards you seem to relish. I'll put my money on them knowing that the sooner we hand them the keys to the place, the better off we'll be.

[GoldenZephyr]

Originally Posted by CAVA1990

Well considering my kids and the fellow members of their generation are about 20 times smarter than we were I seriously doubt there'll be the decline in living standards you seem to relish. I'll put my money on them knowing that the sooner we hand them the keys to the place, the better off we'll be.

Yes, but if you read the USA Today article, it notes that standards of living are ALREADY DOWN, as in currently happening. Also, reading the other link Calix posted is that there will be less of "them" to take our place. Whereas when we were growing up, there were more young families than seniors, that won't be the situation in the future.

I have to agree also with the fact that most of the homes in OC are owned by BabyBoomers who are woefully ill prepared for retirement and are banking on their home equity to fill the gap. Seems to me that it is likely that there will be LOTS of homes being liquidated over the next 20 years, the question is, will there be enough WELL HEELED young people to buy up all the overpriced track homes in Aliso Viejo, Ladera Ranch, Lake Forest, etc, etc, etc.

From the USA today article:

Jim Cullen, author of the 2003 book The American Dream: A Short History of an Idea That Shaped a Nation, says he expects long-term attitudinal changes prompted by what he calls "structural changes in the global economy."

"Jobs will be less secure. Our way of life is going to become more expensive. We will be paying more for the things we've had all along," he says. Except CAVA thinks that inflated CA RE prices are immune, cause everyone is loaded and 20 times smarter and wages in CA are immune to the exogenous factors of globalization.

"We will see recovery, but in some sense, I feel like the hard work of changing our values has barely begun. I don't think people have any idea about what they're really going to have to do." Except people like CAVA think that 2 million dollars for a 3/2 fixer in Laguna Hills will be the dream of zillions of starry eyed midwesterners earning their 50K wage.

[CAVA1990]

Originally Posted by GoldenZephyr

Yes, but if you read the USA Today article, it notes that standards of living are ALREADY DOWN, as in currently happening. Also, reading the other link Calix posted is that there will be less of "them" to take our place. Whereas when we were growing up, there were more young families than seniors, that won't be the situation in the future.

I have to agree also with the fact that most of the homes in OC are owned by BabyBoomers who are woefully ill prepared for retirement and are banking on their home equity to fill the gap. Seems to me that it is likely that there will be LOTS of homes being liquidated over the next 20 years, the question is, will there be enough WELL HEELED young people to buy up all the overpriced track homes in Aliso Viejo, Ladera Ranch, Lake Forest, etc, etc, etc.."

The eternal limitation of man: looking at tomorrow through today's glasses. You either weren't around in the 70's or weren't paying attention. Remember Stagflation? The Great National Malaise? People thought we were on an irreversible downward spiral then. People who couldn't envision a PC, Silicon Valley or the internet. I lived on the South Coast then and heard the same doom and gloom. Check back here in five years and folks will be decrying the high real estate prices and all the newcomers crowding in. It's a never ending cycle.

Remember the Population Explosion?

[5star]

Originally Posted by killer2021

I usually check craigslist apartment section to see what rentals are going for. Mainly 1 to 2 br units. Back when i started looking in 2006, rents for 1bedroom was about 1,300. Lowest I could find. Now I see a bunch of the similar apartments going for 800-900$. Thats fantastic!

You see places for 8-900 here.ROTFLMAO.

[albinoazian]

Rent falling? Where? Not in HB. At least not in South HB/Downtown HB. I am paying $1,555 for a 1br with a garage. Needless to say after the recent hike I have been searching CL for 3 months. $900 might get you a roach infested studio. Hell $1,300 is an old crappy apartment, with no insulation, old carpet, old cabinets, no updates whatsoever. We aren't talking about nice modern clean places.

[EscapeCalifornia]

Originally Posted by albinoazian

Rent falling? Where? Not in HB. At least not in South HB/Downtown HB. I am paying $1,555 for a 1br with a garage. Needless to say after the recent hike I have been searching CL for 3 months. $900 might get you a roach infested studio. Hell $1,300 is an old crappy apartment, with no insulation, old carpet, old cabinets, no updates whatsoever. We aren't talking about nice modern clean places.

You got your rent raised recently? Man that sucks. Even the Irvine Company is lowering rents. I know someone who lives in an IAC unit and they were shocked to get a rent reduction at their renewal within the last year. I agree that $900 still sounds way too cheap for anything half way decent that's not in Santa Ana. I'm paying $1350 for a 2/2 just south of South Coast Plaza. This place is historically cheaper than other nearby complexes but I haven't checked around recently. I've been here a year and a half and been paying the same all along.

[user_id]

I was just looking at rents in Irvine, etc yesterday and they have definitely come down in price. You can now find 2b/2 bath in Irvine between $1500~$1600 where as 2 years ago they were at least $1,800.

Late 2008 and last year they started to offer a lot of promotions, now it seems they've realized they have to reduce rents.

Anyhow, declining rents will put further downward pressure on home prices.

[user_id]

Originally Posted by Calix

Except that's the point you are missing. Every generation has had higher standards of living than their parents except now that is shifting. In the future, there won't be the hordes of "starry-eyed" Easterners flocking to CA.

Yeah, California 30~50 years ago was such a different place than it was today. Back then it was very affordable, the job markets were hot and there was massive growth.

California is now an estimated state and I don't think a lot of residents have come to grips with what that means. The "starry eyed" youth are now flocking to the hot and affordable areas of today, namely places like Texas, NC, Virginia, etc.

[user_id]

Originally Posted by EscapeCalifornia

Why should this correction bring prices down to affordable levels when the last three haven't?

House prices were reasonable in comparison to local incomes before this real estate bubble. My siblings had no trouble buying a decent home on a single income in the late 90's.

Prices adjusted to affordable levels after the last bubble, no reason why they won't this time either. For some reason people were expecting (err..hoping) it would occur over 1-2 years, but it took a good 6 years for prices to bottom last time.

Originally Posted by CAVA1990

How can you say that? It's a free market where buyers and sellers are free to transact at what they believe is a fair price. It might be too expensive for a lot of people but it's not overpriced.

The idea that the current market is a "free market" is just laughable. There are numerous federal, state and even local measures that are distorting the markets right now. I mean c'mon, the fed is purchasing 1.2 trillion mortgage securities to keep mortgage rates low.