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Old 01-21-2010, 05:33 PM
 
Location: Conejo Valley, CA
12,460 posts, read 19,989,062 times
Reputation: 4365

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Quote:
Originally Posted by CAVA1990 View Post
But isn't it true that the area along the coast is pretty much built out?
Not really, plenty of vacant land between San Diego and South Orange County. Not to mention the central coast. The coast in itself does not make a community expensive, a home right by the ocean in Oceanside is less than one in Irvine. There are a number of wealthy communities in Los Angeles that are not on the coast. Also, "the ocean" is not the only geographic feature people find attractive.

Quote:
Originally Posted by CAVA1990 View Post
That seems to me like it's going to lead to ever higher prices, even with normal population growth, particularly with the coming onslaught of virtual workers.
Prices cannot increase beyond people's ability to pay them, that is the whole problem in Southern California. The increase in home prices have outstripped increases in income (which have been pretty flat over the last 10 years). But, people seem to believe there is some phantom wealth in the area that is not showing up in any data.

Rents over the last 6~8 years increased more than incomes by around 15~20% as well, that is why they are now starting to crash.

To me the big question is whether rents and house prices are going to keep decreasing in real terms for decades. More people are already leaving California than coming in, the population growth is almost entirely due to births. If the population starts to decline, California is finished. It will resemble the rust-belt in 2~3 decades. Actually, even stagnant population growth could kill the state due to the ponzi like state financial management.
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Old 01-21-2010, 05:52 PM
 
Location: RSM
5,113 posts, read 19,681,943 times
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Quote:
Originally Posted by user_id View Post
Not really, plenty of vacant land between San Diego and South Orange County. Not to mention the central coast. The coast in itself does not make a community expensive, a home right by the ocean in Oceanside is less than one in Irvine. There are a number of wealthy communities in Los Angeles that are not on the coast. Also, "the ocean" is not the only geographic feature people find attractive.
Proximity to jobs is what makes the coast so expensive because it is #1 or #2 on the list of most desirable areas(with mtns/hills generally being the other) for those with cash. The only reason Oceanside is cheaper is because the lack of jobs making money like those that can be had in LA and OC. And most of the coastline around there is military or state property anyways. They aren't going to let you put a house up next to a nuclear reactor.
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Old 01-21-2010, 06:28 PM
 
Location: Everywhere and Nowhere
14,129 posts, read 31,113,429 times
Reputation: 6920
Quote:
Originally Posted by user_id View Post
Not really, plenty of vacant land between San Diego and South Orange County. .
Wow, so where all these big tracts of buildable land unencumbered by Federal, State or local restrictions?
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Old 01-22-2010, 05:17 AM
 
Location: Conejo Valley, CA
12,460 posts, read 19,989,062 times
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Quote:
Originally Posted by bhcompy View Post
Proximity to jobs is what makes the coast so expensive because it is #1 or #2 on the list of most desirable areas(with mtns/hills generally being the other) for those with cash.
In most cases the coastal cities are further from job centers than areas that are much cheaper. The expensive coastal cities are expensive for much the same reason a Bentley is expensive. There is no consistency in terms of proximity to job centers, etc. Why is Lajuna Beach more than Seal Beach? The latter is closer to jobs.


Quote:
Originally Posted by bhcompy View Post
The only reason Oceanside is cheaper is because the lack of jobs making money like those that can be had in LA and OC.
This is not the only reason, Carmel also lacks jobs yet the homes there are rather expensive. But my only point was that the ocean in itself does not make an area expensive.
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Old 01-22-2010, 05:24 AM
 
Location: Conejo Valley, CA
12,460 posts, read 19,989,062 times
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Quote:
Originally Posted by CAVA1990 View Post
Wow, so where all these big tracts of buildable land unencumbered by Federal, State or local restrictions?
No, there are undoubtedly restrictions. After all, state and local politicians need some sort of carrot to bribe builders, etc into giving them money. But these sorts of games can only inflate house prices so much, at some point people leave.
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Old 01-22-2010, 05:57 AM
 
Location: Everywhere and Nowhere
14,129 posts, read 31,113,429 times
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Isn't it mainly the folks in the IE and less desirable spots who are leaving? Is there really an exodus from the coast? Used to be the coast would receive migrants from those inland counties but I think now more of the coastal immigrants are from other, more affluent, parts of the country. I don't see that changing, particularly with the growth in remote work environments. Basically it will be a two tiered market with super expensive coastal zones and depressed inland areas. This is consistent with the growing income inequality of the U.S. where the upper and upper middle classes are so much wealthier than the working and lower middle classes.
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Old 01-22-2010, 03:57 PM
 
Location: Conejo Valley, CA
12,460 posts, read 19,989,062 times
Reputation: 4365
Quote:
Originally Posted by CAVA1990 View Post
Isn't it mainly the folks in the IE and less desirable spots who are leaving? Is there really an exodus from the coast?
That of course depends what you mean by "coast". I doubt there is an exodus from actual coastal communities (i.e., you can walk to the beach). But there is certainly an exodus out of SD, LA, Orange and Ventura counties. The exodus started before the recession even hit and is likely to build even more momentum now.

Quote:
Originally Posted by CAVA1990 View Post
I don't see that changing, particularly with the growth in remote work environments.
I don't know why you keep mentioning this, the wealthy are already likely mobile. They are generally not tied to a particular job in a particular community, this applies to skilled middle-class jobs. But most of the California coast (the actual coast) near work centers is already out of the range of the middle-class and has been for years. In terms of of SD, LA, Orange and Ventura counties in general...why is a telecommuter going to move there instead of somewhere much cheaper? What's so great about these areas? Contrary to your suggestion, telecommuting is going to put negative pressure on California real estate rather than positive pressure. It will allow people to work for a company in California while avoiding the higher cost of living. Its a win-win.

Quote:
Originally Posted by CAVA1990 View Post
Basically it will be a two tiered market with super expensive coastal zones and depressed inland areas.
Again, what is meant by "coastal zones"? There are already super expensive coastal cities, they are typically the most isolated ones that are reasonable close to work centers. Unless every person with wealth in the world decides to move to the California coast there is no way the entire coast is going to become "super expensive". I really have no idea why people speak as if everyone dreams of leaving on or near the California coast.

In terms of growing income equality, if that continues the US will resemble a 3rd world nation . But really, absent a more militarized government I don't see this happening. At some point the working class will rebel, I think they are starting to do just that.
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Old 01-22-2010, 04:02 PM
 
Location: Everywhere and Nowhere
14,129 posts, read 31,113,429 times
Reputation: 6920
Quote:
Originally Posted by user_id View Post
In terms of growing income equality, if that continues the US will resemble a 3rd world nation . But really, absent a more militarized government I don't see this happening. At some point the working class will rebel, I think they are starting to do just that.
I'm not seeing that at all. If anything it's going the other way. The Repubs have the lower classes convinced that they may someday be rich so they better support their low-tax, less regulated corporatic philosophies. Just look at how the health care bill is falling apart.
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Old 03-19-2010, 11:39 PM
 
Location: Sputnik Planitia
7,822 posts, read 11,708,343 times
Reputation: 9044
I just got my lease renewal notice and my rent has increased by 17% Of course a year ago the rent did come down by 21% but now it is gone back up, that's ridiculous!
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Old 03-22-2010, 11:09 PM
 
Location: Los Angeles, Ca
2,883 posts, read 5,866,508 times
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I think eventually it will *all* get back in line with income. I don't see how home prices, or rents can stay above income forever.

-Two major areas have distorted things since the 80's and 90's (when everything was more in line with income).

Schools, which have collapsed at almost a 90 degree angle for the last 30 years (thus driving up prices in the remaining 20% of la which is good).And infrastructure which hasn't kept up at all with population growth (thus driving up areas close to jobs).

If there was decent infrastructure, many of these areas would even out.

-I think so cal real estate in the 80's and 90's was a hand off between baby boomers and the middle class. At the bottom of the market in the 90's, the baby boomers passed their real estate to other middle income earning boomers.

Who are they going to pass it off to in 2010-2020??!!? There's no one to pass the ball to. Indebted gen y'ers?!? These $600-800 k homes are going to keep declining, maybe for decades in real terms. Unless every millionaire in the world suddenly decides to come here and support prices in real terms.

Home prices cant keep increasing beyond the income or skill of the homeowner. Its going to take 10-15 years to completely unwind the 02-06 bubble.
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