Housing insanity, Bay Area, CA....

[Ron M.]

We sold our little 1278 sf, three bedroom house in San Jose for $655K in 2014...latest estimate is over a million! Current residents are paying almost $10K in property taxes...when and if that bubble bursts, it will make Hurricane Harvey look like a spring shower...all those new buyers will be underwater...I moved for health reasons (atrial flutter) which went away after I retired and got out of Dodge...could have been wealthier...or possibly very ill..decisions, decisions...I'll take good health for $1000, Alex.

[StakeOut]

So,a lot of folks are not moving out and staying in California.

I've noticed a lot of cars in my area of Texas this year with New York and California plates.Oh,maybe they're just visiting.

[DWalt]

Several years back I had a friend who was transferred to the SF bay area, in a reasonably well-paying job. He made a comment I still remember, to the effect of "I can't afford any house I'd want to live in, and wouldn't live in any house I can afford." He ended up renting an apartment.

[Sevens]

Originally Posted by Ron M.

We sold our little 1278 sf, three bedroom house in San Jose for $655K in 2014...latest estimate is over a million! Current residents are paying almost $10K in property taxes...when and if that bubble bursts, it will make Hurricane Harvey look like a spring shower...all those new buyers will be underwater...I moved for health reasons (atrial flutter) which went away after I retired and got out of Dodge...could have been wealthier...or possibly very ill..decisions, decisions...I'll take good health for $1000, Alex.

Have you always lived in California?

Much of the rest of the USA views quite a lot of everything associated with California as "insanity." I spent a quality 45 minutes last week chatting with a former San Joaquin valley/Stockton area cop who retired to Ohio and he couldn't possibly be any happier. He still visits California (and can carry under LEOSA) but he's well aware that it's very nearly a foreign land to the rest of the American population.

The housing market is merely one part of California insanity.

[Ivan the Butcher]

There is a lot to be said for getting away from the crowd! Yesterday I talked with a long time friend that is just short of retirement. When that day comes, first thing is the tract house is for sale! He is already looking for a 10 to 20 acre parcel in the sticks of Ohio, Kentucky or Tennessee. Florida was high on the list, but was scratched off recently! (wonder why?)

Here in central Ohio, the taxes have exploded! They are now valuating unused farm fields at 20k per acre. 5 acre field lots are asking priced at 100-150K, wooded lots with rolling terrain are 200+K! Our nice 1700 SF condo is up $40,000 in 2.5 years. A nephew that makes 100k as a research scientist, has to be helped with the rent on his 2 BR apartment!

Half Million dollar house are popping up like weeds, My wife keeps asking :"Who is buying all these expensive homes!" I come back with "Who is buying their old place? You know they can't afford two mortgages!"

The next "Bubble" to burst will be commercial/office property! We already have large office complexes and 5 or 6 shopping centers, sitting empty! Just to tear them down will cost $Millions! and yet I am reclaiming old industrial sites and dumps to build more shopping retail centers!

I don't think the answer is to regulate new construction as they do in Germany: Easy to remodel or replace, but nearly impossible to make completely new houses! Common sense needs to break out!

Ivan

[Ron M.]

Originally Posted by Sevens

Have you always lived in California?

Much of the rest of the USA views quite a lot of everything associated with California as "insanity." I spent a quality 45 minutes last week chatting with a former San Joaquin valley/Stockton area cop who retired to Ohio and he couldn't possibly be any happier. He still visits California (and can carry under LEOSA) but he's well aware that it's very nearly a foreign land to the rest of the American population.

The housing market is merely one part of California insanity.

I have lived in CA since I was 4 years old, moved from Massachusetts with my parents (another lost cause state) but wife and I moved up north in CA to live in the Sierras, where neighbors know each other and respect each other. My current neighbors wave when we drive by...at the old place, the local residents just drop their heads and move on. Cultural shift, most homes being bought up in the old neighborhood by non-assimilated folks. Graffiti all over the place. Local liquor store a meeting place for gang bangers and thugs. They can keep it.

[ChattanoogaPhil]

Parents bought in Walnut Creek back in 1967. 2k sqf rancher $32k. Having lived in the bay area, you likely know what real estate values are like today in the prime areas of Walnut Creek by Mt Diablo. Proposition 13 locked in everyone's property taxes back in the late 70s. My mother still lives in that home and pays less in property taxes than I do here in Chattanooga. As older middle class folks have been dying or moving out after retirement, wealth has been moving in. It's been a long gradual process so I don't see it as more of an issue today than it was in the housing bust several years ago. Folks panicked when their homes dropped below a million . Now they're back up and then some... so goes the economic yo-yo of capitalism.

Yeah, selling a house for $600k... then just three years later seeing it valued over $1M ain't an easy pill to swallow. We've all been there in one way or another. If I could reach back and re-do some of my financial decisions... oh well...

[italiansport]

I live in Scottsdale Arizona in a house worth about $450K. Not cheap but one that most middle class people can afford. My property taxes are around $2,500 a year. We moved here from Illinois 20 years ago from a house with a similar valuation but with no city services. The property taxes on it were around $12,000 a year the last time I looked! That was ONE of the reasons I mover out of Illinois.
The scary thing to me is I'm seeing a LOT more California plates on cars in my area. I don't mind people moving here as long as they leave bizarre beliefs such as those found in California behind!
Jim

[LEO918]

I was born in California and escaped in 1952. My folks thought it was bad then. Can't imagine what they would think of California now.

[CATI1835]

I have one thing to say...

[Ron M.]

Originally Posted by italiansport

I live in Scottsdale Arizona in a house worth about $450K. Not cheap but one that most middle class people can afford. My property taxes are around $2,500 a year. We moved here from Illinois 20 years ago from a house with a similar valuation but with no city services. The property taxes on it were around $12,000 a year the last time I looked! That was ONE of the reasons I mover out of Illinois.
The scary thing to me is I'm seeing a LOT more California plates on cars in my area. I don't mind people moving here as long as they leave bizarre beliefs such as those found in California behind!
Jim

You need more bike trails, walking paths, commuter lanes, Section 8 housing, rent control...then it will be Paradise! The majority of CA residents leave the cesspool they created, and go on to re-create the same thing in their new digs..."You will be assimilated, resistance is futile...lower your shields and surrender to us..."

[Bajadoc]

Stuff is always worth exactly what people are willing to pay for it. Things are not worth "too much" or "too little." The market sets the price. The price of anything is determined by what people are willing to pay. No more, no less.

[Ron M.]

Originally Posted by Bajadoc

Stuff is always worth exactly what people are willing to pay for it. Things are not worth "too much" or "too little." The market sets the price. The price of anything is determined by what people are willing to pay. No more, no less.

The infrastructure of San Jose and Silicon Valley in general was not designed to support over one million people. Highway 237 heading from Milpitas to Mountain View becomes gridlocked from 7 a.m. to 10 a.m. Almost every section of land is now becoming multi-family town houses with virtually no parking. Our old neighborhood is a parking nightmare with several families (and their cars, lined up along the street) inhabiting a single family home. Just my observation, I lived there.

[mojave30cal]

Also noticing more California license plates in my neighborhood and on the streets of Northwest Las Vegas, NV. Thinking seriously selling my house and moving to Southwest Utah.

[Wyatt Burp]

A couple years ago I saw a like new $2,800 800 lb. Patriot gun safe listed for sale in the Santa Clara area for $300. I snagged it and bought it from a guy who lived ten minutes from Microsoft and was moving having just sold his tiny house. No wonder he was unfazed giving the safe away!

[LDM]

Before the CA real estate financing implosion I was visiting family in SoCal and crawling along I-5 noticed billboard for a mortgage broker that started, "Buy the house you want not the one you can afford!" An open invitation for people to overbid and start underwater on their houses. And since assessments were based on sale prices, they were also stuck with grossly inflated property taxes. Hence the default epidemic when the market crashed. But nobody there learned their lesson and the insanity continues

[427mach1]

I spent almost half of 2014 working at two of the wind tunnels previously run by NASA-Ames. I worked with a lot of engineers that run the facilities and the thing I noticed immediately was they all drove very nice cars - BMW, Mercedes, Volvo, etc. but not one of them owned a house. They all rented apartments as none of them could afford a house. These people all had good paying jobs but could not afford to buy a house. I loved the bay area but I would never live somewhere that I couldn't afford housing.

[Bajadoc]

Originally Posted by Ron M.

The infrastructure of San Jose and Silicon Valley in general was not designed to support over one million people. Highway 237 heading from Milpitas to Mountain View becomes gridlocked from 7 a.m. to 10 a.m. Almost every section of land is now becoming multi-family town houses with virtually no parking. Our old neighborhood is a parking nightmare with several families (and their cars, lined up along the street) inhabiting a single family home. Just my observation, I lived there.

When it is no longer worth it, people will stop paying. All of those people keep moving there and are waiting in gridlock because it is worth it to them. They are getting something out of it or they would not be there. The market determines who is there, who waits in gridlock, how much to pay for a house, how many houses are built and how much people are willing to put up with. Supply and demand rules the day.

[Bajadoc]

Originally Posted by LDM

Before the CA real estate financing implosion I was visiting family in SoCal and crawling along I-5 noticed billboard for a mortgage broker that started, "Buy the house you want not the one you can afford!" An open invitation for people to overbid and start underwater on their houses. And since assessments were based on sale prices, they were also stuck with grossly inflated property taxes. Hence the default epidemic when the market crashed. But nobody there learned their lesson and the insanity continues

Mortgage brokers exist to lend people as much as possible at the least favorable terms as possible for the highest fees possible. It is the buyers responsibility to take care of their financial well being. "Caveat emptor" is one of the most important concepts one can learn.

[pawngal]

1st, no, I have never lived in CA, never will but most of my family does or has lived in So.CA. One sister has been in Burbank since the early 50's. They paid $17k for their house in 1955. Value now, close to $1 million. Thanks to Prop 13 they won't be moving. My other sister has been in CA since 1979 so missed the cutoff for that. They have to total of 8 children, guess where they are? 4 in Arizona and 1 in Oklahoma.

My now SIL has his Masters in Computer Science, graduated Magna cum Laude , Was offered jobs with Microsoft in Seattle and Google in CA, turned down both because of the high cost of housing.

[pharmer]

Don't matter where you live, when it "busts" head for the lifeboats. My 4/3 house was built in 2005 and sold to a young family for $325K They lost it in the "bust" ($3200/ mortgage mo) and I bought it in 2009 for $160K. It ain't where it was $$$ wise but I'm sure glad the taxes went from $3700/yr to $1750. My mortgage was about $1K/mo but I paid it off when I sold my old house. So when it busts again (it will) the house might be worth less than I paid for it and that's OK, I'm going out of this one in a box. The folks who need the .gov for help are gonna get hit hard seeing how $10 TRILLION was given away over the last 8 years and everything (infrastructure; roads, bridges, water tx, etc) are still falling apart. Maybe print up $20 trillion more this time, $10T didn't get it, although the lines will be longer this time. Joe

[arjay]

Rented a little 900 sq ft house next to the foothills in Boulder,co back in 1980.Decided to buy it.Landlord wanted $81k so I started negotiating.My lovely missus was offended at the price and we ended up buying elsewhere.That house is worth $900k now ��

[Farmer17]

The salaries are usually higher in the high cost of living areas so having a five thousand dollar a month house payment might not be a big deal to many of them. The problem is, if you loose your job that 5 grand per month will then seem like a LOT of money and you could loose your life savings and ruin your credit if you don't change something pretty quickly.

[427mach1]

Originally Posted by Farmer17

The salaries are usually higher in the high cost of living areas so having a five thousand dollar a month house payment might not be a big deal to many of them.

The salary differences I have seen are not enough to cover the difference. My company has plants in Georgia, Texas, and California, each with their own salary ranges for various engineering levels. I've seen the salary ranges for each region and the California ranges are not high enough to justify moving there.

[chaparrito]

My property has few neighbors, but one of my pastures adjoins a road for a few hundred yards. Across that road is a house on only a few acres. It was for sale some years ago.
It was spring and kidding season was almost over. I was out doing some fence work and all the goats were out with their newborns milling around me.
A fancy new BMW SUV pulled up with CA plates and a fancy couple and their spawn got out and started walking around the house for sale, looking it over.
Then they looked my way and the guy stomped over. Not a hi how are you or hello I'm so and so or nothin'. He just comes to the fence and says "do you always have this many sheep?"
I said "well for starters, they're goats and no, I don't."
He says "oh well that's good".
I said "yeah, this year I only bred half my does, next year I'm breeding them ALL."
He stomped off and they left and didn't come back.

[Ron M.]

Originally Posted by chaparrito

My property has few neighbors, but one of my pastures adjoins a road for a few hundred yards. Across that road is a house on only a few acres. It was for sale some years ago.
It was spring and kidding season was almost over. I was out doing some fence work and all the goats were out with their newborns milling around me.
A fancy new BMW SUV pulled up with CA plates and a fancy couple and their spawn got out and started walking around the house for sale, looking it over.
Then they looked my way and the guy stomped over. Not a hi how are you or hello I'm so and so or nothin'. He just comes to the fence and says "do you always have this many sheep?"
I said "well for starters, they're goats and no, I don't."
He says "oh well that's good".
I said "yeah, this year I only bred half my does, next year I'm breeding them ALL."
He stomped off and they left and didn't come back.

I'd have told that moron that the pigs would be NEXT year as well, glad that the owner of the house for sale let you use his property as a manure dump, but in the summer, phew.....just saying. Yeah, city folks just don't always cotton to critters wandering about...

[johngalt]

Housing is expensive because there is high demand there. There is high demand because that is where the opportunity is. I visited San Fransico one summer, the weather there is fantastic.

[TAROMAN]

Unfortunately increasing numbers of them sell out and move here to Oregon.
And, they're not looking for freedom.
Instead, most of them seem to want to turn Oregon into another California, with their social engineering concepts and total contempt for the Second Amendment.

[chaparrito]

They move to all the western states. Don't forget there are 60 million of them. Plenty to go around for AZ, Oregon, WA, Montana, Utah etc. etc. We all have cheaper property, lower taxes and fewer regs. Soft targets all.

[ddixie884]

I hope they don't affect them like they did Colorado. The second amendment took a hit there. I guess the locals clawed some of it back, but we don't need any of that California change here in Tx...

[LVSteve]

When i moved to the US in 1997, I sold my provincial row house for 50,000 Sterling. By mid 1999 it was worth an estimated 125,000 Sterling. 2.5X in 24 months? Insanity, but it was WORSE in the London area. Small wonder when the bust came things got ugly.

In 1999 an ex sister in law and her then husband were looking for a house near the Bay. They were shown a house listed for about $425k, but the realtor said that the state of the market was such that they needed to offer at least $440k or the owner might take umbrage.

Is the financial industry that dumb to allow this to happen again? Yes, I think they are. Everybody in upper middle management got used to making the "killer deal" and retiring at 43 with a lifetime pension. Trouble is, the current economy cannot support another go around with that nonsense.

I think that slower growth is the new normal, and I'm not against that. It gives us a chance to see what is going on and prevent another financial disaster, IF we have the moral fiber to withstand the siren voices of the "growth at any cost" gang.

[DWalt]

I remember reading something several years ago about the teacher situation in the Silicon Valley area. The local school districts were in a quandary because they couldn't hire teachers because no teacher's salary would come close to allowing them to buy a house or rent something in the area. I remember the school districts were talking about building houses and apartments and renting them at affordable rates to teachers, sort of a subsidized housing plan. I don't know if that ever happened.

[YogiBear]

Howdy,

Glad we were able to sell our house in Hawaii and Move to Texas.

We are absorbing as much of the Pro 2A culture as we can.

Making up for the anti 2A we gladly left behind.

We are in the process of buying 10+ acres with a home.

Enough for us to shoot on and get an Ag Exemption.

The cows come with the acreage, the neighbors have goats & cattle.

Told we have deer passing thru too.

We're in "town" so to speak.

Within 5 miles of town, hospital, HEB and Walmart.

Life is good.

[jag312]

I sold my house in the Willow Glen area of San Jose. The Silicon Valley millionaires were throwing buckets of money at people to buy their houses for demolition to build a McMansion. The house next to me was sold for demolition to build a McMansion. The McMansion sold for $1,500,000. The house next to that was also sold for demolition to build another McMansion. That one sold for $1,700,000.

When I sold my old house on a 8,750 sq.ft. lot, They paid an insane amount, cash, and they demolished my house to build another McMansion. I bought a 3,400 sq.ft. house (4 bedrooms, 3 bathrooms) on 9.7 acres. I paid a fraction of what my Willow Glen house sold for. It was like winning the lottery.

Now for a good laugh, the Silicon Valley millionaires who built their McMansions in Willow Glen are complaining that Willow Glen is losing it's unique charm because the old historic houses are being demolished to build McMansions. I miss the Santa Clara Valley I knew as a child. I do not miss Silicon Valley.

[rwsmith]

Our area is rapidly growing. Many plants have moved here and there are more to come. Problem (besides overcrowding) is that the value of real estate compared its price is really low.

[charlie sherrill]

I know several retired LAPD guys who sold small houses in the LA area and moved to Mississippi. Upon arrival they bought large lakeside houses for less than what they sold their small houses for in California. Their pensions are twice what I was making working full time. One of the guys brought his airplane with him and bought a house with enough land for a private airstrip and hangar. Taxes here are low. With homestead exemption and senior discount I pay only $400 a year for my house and 20 acres. Plus, the state of Mississippi doesn't charge income tax on pensions.

[BearBio]

Born in SoCal in 1950, parents died there. Worked in real estate for 25+ years, went back to school and entered Federal Service upon graduation. Two brothers. I moved in 2000 to Norcal and on to WA in 2002. Been here since then.

We used to discuss buying a home in SoCal. No way that we could afford it, even with VA. Norcal (Yuba City) was possible but we didn't stay long before I transferred. Cali is a growth based economy. It will only last (and values increase) as long as people keep coming and the population grows. It also has a 10% state income tax.

Here in Washington, we have a 4 bedroom, 1950's house, with 2 fireplaces, a family room and living room on almost a 1/2 acre. Lowest utilities in the nation (PUD is publicly owned and owns 3 dams on the Columbia). Salmon in the River, elk and deer all over. Waterfowl throughout the season, with quail and pheasants. Excellent medical care. I will be retiring in 2 more years with about 100K per year between the wife and I. No state income tax and sales tax is about 7%. I'll have Blue Cross (partially paid) and Medicare. Fifteen minutes and I'm in the forest, or on the River. Another ten and I can be in the most beautiful desert ever.

My brother owns property in SoCal but moved to the desert to find something he could afford. Has to go 50-75 miles to the VA for treatment (I could but don't), pays higher taxes and basically lives on Social Security and his wife's retirement as a teacher. He could sell his place in Victorville and buy a place here in the Cascades or TWO places further out in the desert. Go figure!

[Xfuzz]

With hurricane's pounding coastal areas they are
still building near 750K-1 million dollar homes fast as
they can on Galveston Island.
In 90' I paid 43k for my little beater with a great view.
Thought I was nutz.

Because of the unobstructed view and only 50 yards from
the beach it would sell at $300K according to he real estate
folks.

As stated..insanity.

[jscheck]

North Carolina has become the retirement/go to mecca for the northeastern United States lately. I wondered why I was seeing so many New York, New Jersey, Massachusetts, etc. plates all of a sudden, then was told someone was advertising big time to "Move on down to North Carolina" because the land and beaches are beautiful and the cost of living is cheap. I have moved out of the county I work in because I can't afford to live in the safe areas on a LEO's pay. Apartments and town homes have become the norm there. Prices are getting higher all the time. Sad.

[codenamedave]

Yep, I can't resist clicking on the recurring articles about comparing real estate prices. You know, here's a $1.5 mill house in Wyoming, and here's a $1.5 mill house in the SF Bay Area. The Bay Area one always looks like the owners of the other one wouldn't use it to house their servants.

A good indicator is that here in Contra Costa Co, quite a ways from SF and the rest of the immediate Bay Area, $52,000 a year is considered low income and qualifies for public housing.

It might just be getting older (and wiser? eh...) but I am definitely ready to live somewhere cheap and be happy with less stuff. Take guns for example: As I've been selling mine off, I realized there were several that I've had for years and never shot, and I'm not talking about rare and valuable stuff, I mean like a Big 5 Mosin-Nagant.

[Nevada Ed]

Lived in SF.........
moved to Marin County in Mill Valley.....

when that got to high, I moved to Nevada.

When you can't keep up with the tax's, have a place to park on the street
park a boat or RV in front of your house due to zoning or it takes
two hours to commute to work.........

it is time to move on.

If you can remember.......
the Calif. clan in the 90's made the move to Oregon and Washington getting big $$ for their homes and buying cheap
in their new locations.

Do you know what a NY flat is going for right now ?
Go ahead, guess............

[ladder13]

Originally Posted by Nevada Ed

Lived in SF.........
moved to Marin County in Mill Valley.....

when that got to high, I moved to Nevada.

When you can't keep up with the tax's, have a place to park on the street
park a boat or RV in front of your house due to zoning or it takes
two hours to commute to work.........

it is time to move on.

If you can remember.......
the Calif. clan in the 90's made the move to Oregon and Washington getting big $$ for their homes and buying cheap
in their new locations.

Do you know what a NY flat is going for right now ?
Go ahead, guess............

My cousins daughter is paying $3500 a month rent for a 300 sq ft apt down near Wall St.

My friend sold a small, old, 2 bedroom condo in Brooklyn that he paid $175G"s in 2010 for 800G's last year. He moved to Murrells Inlet SC.

Both bargains.

I've heard of 500 sq ft million dollar condo's near the Barkley Center.

[codenamedave]

Y'all've probably seen this already in the news, but I just had to update my mention of a $1.5 mill comparison with one for $2.5 mill.




So how much would this house go for in your town?

Sunnyvale

ETA: Asked the wrong question, shudda been what $2.5 million would buy in your area.

[Xfuzz]

Originally Posted by codenamedave

Y'all've probably seen this already in the news, but I just had to update my mention of a $1.5 mill comparison with one for $2.5 mill.




So how much would this house go for in your town?

Sunnyvale

Houston/Harris County.....$235-245K

[codenamedave]

Okay, I've had my coffee, I think I should've asked what $2.5 million would buy in your general area.

Originally Posted by Xfuzz

Houston/Harris County.....$235-245K

So Cali is times 10, that sounds about right. Although, not to make light, I bet there are some cheap houses in the Houston area today.

A while back I looked up the average income to average home price for CA v. TN. IIRC TN was 1:5, CA was 1:15.

[HOUSTON RICK]

"So Cali is times 10, that sounds about right. Although, not to make light, I bet there are some cheap houses in the Houston area today."

Nope, the houses to which you lightly refer will be mostly purchased by you and I via FEMA (or the Army Corps of Engineers) and bulldozed or built up on higher foundations, the remainder will go up significantly in price after any needed repair. The unaffected houses will increase even more. Thank you for your contribution.

[Doug M.]

I was in the Bay Area recently for personal reasons. I can't imagine living there, for many reasons. And we have a lot of trouble with the imported stupidity ... most of the continent within 50 miles east of I5 from Blaine to San Diego needs to be cut off and pushed into the Pacific. *retch*

[pawngal]

Originally Posted by codenamedave

Y'all've probably seen this already in the news, but I just had to update my mention of a $1.5 mill comparison with one for $2.5 mill.




So how much would this house go for in your town?

Sunnyvale


ETA: Asked the wrong question, shudda been what $2.5 million would buy in your area.

The house next door to me just sold for $205K, more square footage, right at 3000 sq ft. 4 bedroom 2 1/2 bath.

BUT.............
If it were on 100 foot lakeshore lot you could put a 1 in front of that price. LOCATION LOCATION LOCATION