if things proceed as planned, I think what will happen in CA is similar to what is happening at the national level, but even more intense…..
The middle class will erode away in CA and CA will consist of either people within the top 1% who can afford to live here without blinking, and the other extreme folks who can enjoy all the entitlement benefits without having to pay…
The middle class that doesn’t really do that well and yet need to pay for all these entitlement benefits will get the shaft and figure to go elsewhere.
But then again, IF we have a housing recovery, I think a lot of issues go away…One thing is once people start paying their property taxes again, at least at the local level, more dollars come in…
It will be interesting to see in the next couple of months what will happen.[/quote]
flu, you forgot all the “older workers”, new retirees and seniors who are NOT in the 1% but have paid-for homes and a (public or private) pension coming in or soon to come in. Many of these residents have property taxes which are protected by Prop 13. These millions of longtime residents can stay in CA indefinitely, IMHO.
There really is something to be said for living frugally over decades and “paying your dues.” I really feel like more of the “middle class” young families COULD remain in CA if they adopted the values of more “stable” generations. Too many have succumbed to “easy credit” for “instant gratification” which, in any case, was not even available to previous generations. In short, most of their “expectations” are far too high when taking into account their actual work experience and current “station” in life. Most younger “Gen X” and “Gen Y” just seem to just want to skip over their first, second and third (all used) vehicles paid for with cash and a first home in a “starter” neighborhood in favor of 60-72 month car payments and heavily-taxed new construction. They “have to have” at the age of +/- 30 what people in my generation didn’t get until 10-20 years later, that is, if they EVER really aspired to these things.
In addition, if you will carefully study young immigrant families or families headed by young native Californians who live near more-established relatives for moral support and childcare purposes, you may notice that their values are more in line with reality as they try to emulate the ways of their more stable elders. For instance, when older relatives find them a good used vehicle to buy or a nearby house to rent or buy (and sometimes pool their funds to help with the downpayment), these young families don’t whine about the house not being “perfect,” they just take it, fix it up with help from family and move forward, happy to have found a suitable house near family. Most of these young families could be considered lower middle-class to middle class and they will NOT be moving anywhere! And CA’s cites, suburbs and rural areas are FULL of them.
I think some here may be imparting their own unrealistic values on how life SHOULD BE in CA for their families in contrast to what they can realistically afford, given their work experience and current “station” in life. Perhaps most of this group are actually transplants from other states/countries with no long-established family here (whom they didn’t move here themselves).
And you may be ROTFLYAO when I mention “station” in life, here. The fact is, if you have fixed expenses every month for any or all of these things: diapers, formula, childcare, preschool, lessons, sports, braces, school trips, private school, tutoring, college, etc, THAT is your current (chosen) “station” in life. It is what it is and if it costs you $800, $1000, $1500 or $2000 month or beyond, THAT is what it costs. Whatever the cost of a homebuyer’s current “station” in life, lenders (and often the buyers themselves) don’t really take all this into account when they decide how much they can borrow for a house, often loaning them way too much money. The young buyer borrows this amount because they (or their spouse) can’t stomach buying a property they can actually, realistically afford, given their current “station” in life.
It has ALWAYS cost more for housing in coastal CA counties than most other locales in the US. This has always been an accepted fact by all adult residents who were born here or came here before the age of five and never left and will never change. Why it this a surprise and why should it be different now?
