real estate LA - banging my head against the wall

RedDuke · Sep 21, 2006

No conspiracy, 1% rate and "smart" financing created this situation among other things. Very interesting how this whole thing will turn out. But that's few years into the future.

Pabst · Sep 21, 2006

Quote from NasdaqTrader:

5-10 years ago, almost any Joe Schmoe would have been able to afford places like NJ/NY. Factory workers are living in upscale towns in NJ. Now, you need to be a daytrader or a successful hedge fund manager to live in these towns. Wages haven't really gone up over the past 5 years to warrant such an increase in price. I think the young people are really screwed by not being able to afford to live in the same places where they grew up and where their parents currently are. It's a shame that most young people will have to relocate to cheaper places leaving their friends and families behind.

Sometimes I think that the past 5 years was a big conspiracy theory among appraisers, realtors, and the towns to artificially inflate the prices, so the realtors can make more money on commissions and the towns can get away with charging higher property taxes.

Any thoughts?

How many zilliion dollar hedge fund guys now compared to a generation ago?

How many children on average did those presumably Catholic "factory workers" bring into this world? A few, eh? And has the amount of available NY/NJ housing multiplied by three? By two? At all? Where did the factory workers themselves grow up? Probably Newark, the Bronx or Brooklyn. So that generation fled to suburbia leaving the core (outside of Manhattan) to the blacks, Ricans and immigrants. Now suburbia is built out, only a few gentrified pockets remain in the boroughs and Manhattan has seen relatively little condo construction in decades. What happens when tens of millions chase several million properties? All of sudden even Queens starts looking pretty good.

There's an economic evolution that's little talked about. We migrate. People come to America and then in turn native American's roam this vast nation in search of affordable housing, better jobs and safe neighborhoods/schools for children. Those misplaced New Yorkers will instead become happy homeowners in Charlotte or Stuart or even Pittsburgh. And someday if the stock and bond markets ever rupture like in the 70's they'll be able to move BACK to their friends and family in New York. My guess though? Once they leave they'll never look back. Just as their parents are over the trauma of leaving Pelham.

fletch2 · Sep 21, 2006

Quote from jasonjm:

Hey all... I moved to los angeles in 2003

So I finally got my life in a groove and decided maybe now I should look at buying a house for the first time

So i first thing i did was went to a financial calculator, and worked out how much I should spend on a house if I was sane.... which I am

so i put in my income of 200k, put in i was willing to put in 200k for a downpayment, and it said I should buy a house that costs NO more than

$783 000

now i know that very few people in my area earn what I earn and even less have 200k for a downpayment

I dont even think a house exists in my zip code for 783 000 (zip code 90025) - and this is not a bel air zip code BTW. And BTW I dont consider anything less than 3 bedrooms, 2000 sqft+ and decent condition a house.

I just dont get it, if i cant afford a house, who the hell can in my zip?

this is just retarded

Marry an equal earner, double buying power. Next question?

Fletch

QuoteBoy · Sep 21, 2006

Quote from Pabst:

How many zilliion dollar hedge fund guys now compared to a generation ago?

How many children on average did those presumably Catholic "factory workers" bring into this world? A few, eh? And has the amount of available NY/NJ housing multiplied by three? By two? At all? Where did the factory workers themselves grow up? Probably Newark, the Bronx or Brooklyn. So that generation fled to suburbia leaving the core (outside of Manhattan) to the blacks, Ricans and immigrants. Now suburbia is built out, only a few gentrified pockets remain in the boroughs and Manhattan has seen relatively little condo construction in decades. What happens when tens of millions chase several million properties? All of sudden even Queens starts looking pretty good.

There's an economic evolution that's little talked about. We migrate. People come to America and then in turn native American's roam this vast nation in search of affordable housing, better jobs and safe neighborhoods/schools for children. Those misplaced New Yorkers will instead become happy homeowners in Charlotte or Stuart or even Pittsburgh. And someday if the stock and bond markets ever rupture like in the 70's they'll be able to move BACK to their friends and family in New York. My guess though? Once they leave they'll never look back. Just as their parents are over the trauma of leaving Pelham.

pabst you hit it, nail-on-the-head. I traded NY to Charlotte and I see it all the time. Young people who can't scratch 2 nickels together and get a dime who are from Boston NJ, NY and others, regularly show up to get their feet on the ground. Maybe its a temporary thing, but many of the people just aren't gonna go back to wherever they came from. Same is true w/ Atlanta, Tampa, Nashville etc. all over the South.

drsteph · Sep 21, 2006

Quote from NasdaqTrader:

5-10 years ago, almost any Joe Schmoe would have been able to afford places like NJ/NY. Factory workers are living in upscale towns in NJ. Now, you need to be a daytrader or a successful hedge fund manager to live in these towns. Wages haven't really gone up over the past 5 years to warrant such an increase in price. I think the young people are really screwed by not being able to afford to live in the same places where they grew up and where their parents currently are. It's a shame that most young people will have to relocate to cheaper places leaving their friends and families behind.

Sometimes I think that the past 5 years was a big conspiracy theory among appraisers, realtors, and the towns to artificially inflate the prices, so the realtors can make more money on commissions and the towns can get away with charging higher property taxes.

Any thoughts?

Actually, the young people really aren't screwed. Yes, young people who have been misled into paying through the nose for a property that isn't worth it, particularly one with all the bells and whistles of a lifestyle they can't afford, yes - they're screwed.

But most younger people (particularly the young young 21-27) are infinitely mobile and go where the jobs are - the good jobs for the future. Consider demographic migrations for new england vs. the sun belt. I can assure you that NY state is NOT gaining population. (c.f. American Demographics Magazine)

The younger set migrates out of the old population centers of the northeast, mid-atlantic, and midwest to the new growth centers of the pac nw, southwest, and new south. These new population centers, in general, have less infrastructure, less social welfare, and lower taxes than the places these people are migrating from.

Which raises an interesting point - who will pay for the generous social programs and aging infrastructure of the old population centers once the wage earners at the bottom of the age ladder have taken off for greener pastures? And what, do you think that will do to housing prices in these areas?

Here's my longer term prediction: Cities that fail to re-invent themselves, and more importantly, the suburbs of those cities, will be the Flint Michigan of the 21st century. Demographics all but assures it. The only way out is immigration into these areas, but that seems stalled lately....

The higher property taxes are a nice bonus to local government, further elevating overall tax burdens in these areas, and making it most likely younger people will leave for greener pastures.

JamesVU2000 · Sep 21, 2006

I think it is important to keep in mind that over the next 15-20 years 80 million people are going to be net sellers of assets. financial, real estate, whatever. The wealthiest generation in the world is going to retire and its going to bring new challenges and opportunities. As for real estate, its a mania pure and simple. Hype created by more hype. I think the spread of information makes everything travel at warp speed. Can anyone tell me what is a good longterm investment for the next 20 years? No, because it is impossible to predict. If your under 40 buy a house that you can afford. Treat it as house not an investment and you will turn out fine.

Trader KGB · Sep 22, 2006

Quote from Pabst:

What happens when tens of millions chase several million properties? All of sudden even Queens starts looking pretty good.

Hit the nail on the head, Queens is great. Bought my first place in Forest Hills not too long ago, most beautiful part of Queens. Best investment of my life..

CowboyBlue · Sep 22, 2006

I do not understand this at all, now keep in mind I am a piker from Saskatoon (which 99% of you dont even know where it is) but how the hell do ppl afford these places???? i was watching CNBC the other day and they were saying houses in compton cost 400K. Now how the hell does a person working (and im being benecicial) a factory job at 40$/hour afford a 400k house? plus 40$ per hour is not even realistic, you must know its a bubble when probably 95% of the population cant even afford a house, but then the question is who the hell is buying them?? cause if you cant rent it, at what its costing you in morgtage payments whats the point? who is eating this expense??? I know goddamn well Bill gates aint buying up property in compton......

this is also saying that a guy is making 40$ in a warehouse per hour which is not realistic. So you just live with 19 people in your house?

Quote from jasonjm:
Hey all... I moved to los angeles in 2003

So I finally got my life in a groove and decided maybe now I should look at buying a house for the first time

So i first thing i did was went to a financial calculator, and worked out how much I should spend on a house if I was sane.... which I am

so i put in my income of 200k, put in i was willing to put in 200k for a downpayment, and it said I should buy a house that costs NO more than

$783 000

now i know that very few people in my area earn what I earn and even less have 200k for a downpayment

I dont even think a house exists in my zip code for 783 000 (zip code 90025) - and this is not a bel air zip code BTW. And BTW I dont consider anything less than 3 bedrooms, 2000 sqft+ and decent condition a house.

I just dont get it, if i cant afford a house, who the hell can in my zip?

this is just retarded

otcstockfund · Sep 22, 2006

Quote from NasdaqTrader:

5-10 years ago, almost any Joe Schmoe would have been able to afford places like NJ/NY. Factory workers are living in upscale towns in NJ. Now, you need to be a daytrader or a successful hedge fund manager to live in these towns. Wages haven't really gone up over the past 5 years to warrant such an increase in price. I think the young people are really screwed by not being able to afford to live in the same places where they grew up and where their parents currently are. It's a shame that most young people will have to relocate to cheaper places leaving their friends and families behind.

Sometimes I think that the past 5 years was a big conspiracy theory among appraisers, realtors, and the towns to artificially inflate the prices, so the realtors can make more money on commissions and the towns can get away with charging higher property taxes.

Any thoughts?

yes there is rampant appraiser/lender negligence, it should shake out in the years to come

otcstockfund · Sep 22, 2006

i live in orlando and i got a friend who works as a server at a restaurant like olive garden his wife works part time for about $12 an hour a 2 yr old and 50k in student loans and just bought a 20 yr old house in the burbs for 280k...now that is loose lending standards there if i ever saw it