Housing bubble bloodbath

[an]

DaCounselor, I agree with you completely. I don’t see how starting your own company any different in the west coast compare to east coast. I know plenty of people starting their own business in Cali and are doing very well, despite all the franchise around them.

[sdrealtor]

“I don’t quite get the attempted distinction between East and West Coasts.”

I lived both places for a long time each. They are very very different in that respect.

AN,
Unless you grew up and lived there a long time there is no reasonable expectation that you would understand the difference. The difference is out West many people are starting businesses while back East there are TONS of family owned very successful businesses that have been around for 50 to 100 years. Out here most of the communities havent existed that long!

The example I provided was but one. I could sit here all day and write similar stories.

[DaCounselor]

“I don’t quite get the attempted distinction between East and West Coasts.”

I lived both places for a long time each. They are very very different in that respect.
_____________________________________

Uh, I lived on the East Coast for 25 years. All my family and old friends live back there. I travel to and do business on the East Coast 4-5 times a year.

In your original post you cited one family-owned business where the kids went to college for kicks and then were hired by the family business as stock-boys for $100K/year. The insinuation was that this arrangement is somehow commonplace on the East Coast. I couldn’t disagree more. I believe such an arrangement is highly uncommon.

Regardless, it really is pointless to debate which coast has a higher percentage of family-owned businesses with certain longevity figures. At the end of the day it’s about making coin, regardless of who your employer is. There has been and continues to be tremendous opportunity in SoCal to make money. Lots and lots of people making lots and lots of money.

This is kind of a “so what?” thread, isn’t it?

[an]

sdrealtor, your examples are referring to OLD money. What does old money have anything to do with the average guy? I’m not disputing that East coast have more old money than West coast. After all, West coast started much later than East coast. The same families who start their business now in the West coast, in 100-200 years, it’ll be just like how the East coast is now. So I still don’t see the point you’re making.

Bottom line is, there’s not much differences between East coast and West coast for an average Joe middle class who’s trying to move up. I would love it that my family have been here in the US for 50-100 years but the fact is, my family have only been here for a little over 25 years. So your examples does not apply. That’s what many who are trying to break out of the middle class aspire to. Become old money and make life easier for our kids, grand kids, etc. But that can only happen with time. If I have that kind of money, I would hope my kids aspire to more than just going to college for kicks and be a stock-boy after college. It would be much better if they went to college, make big bucks in somewhere else, hire a manager for $40k and take that $60k as a family profit.

[Anonymous]

Hey, BostonAndOC_RE, it’s time for you to move from Boston and back to SoCal, where the real action is happening: “…For the first year ever, (venture) capital investment in Southern California surpassed the total amount invested in New England in 2006…”

http://www.ey.com/global/content.nsf/US/Media_-_Release_-_01-22-07DC

The movement from Boston to SoCal is probably due to those ridiculous software engineer salaries that you cite. Time to move from the soon-to-be-countryside/sticks/veritable West Virginia back to where the action is happening, guy.

[sdrealtor]

Clealy my point has been missed. I have lived in one of the wealthiest suburbs of SD for almost 15 years and most of the businesses I frequent are owned by national entities. Finding a quality locally owned business is a rarity and when I am lucky enough to find one here, I generally become a loyal customer. Where I used to live and visit often, people rarely step into national companies because the locally owned companies are much better. Rather than being staffed by $40K managers with college degrees who are resume building, they are staffed by family members who started at the bottom knowing they would definitely rise to the top by starting at the absolute bottom , working the butts off and truly learning the business. The quality of service and knowledge of most retail/service employees around here is abysmal.

OLD money is not just Vanderbilts and Rockefllers, it can be found in every community that I have seen back East in tire stores, plumbing firms, exterminators, pet stores, jewelers, bakeries and yes even paint stores. It is as common among so called average joes as it is the upper crust.

[BostonAndOC_RE_perspective]

Hey JG,
That figure combines LA, OC, and SD. The NE figure is just the city of Boston and suburbs. So it took this long for the 15 Million-person strong SoCal region to finally surpass 1 Million-person Boston in VC$$ investment. Congrats.

The SoCal figure still pales in comparison to the Bay Area ($8 Billion in 2006). Also, the majority of the investment in SoCal is medical/biotech. These are lab type jobs, not software or silicon architects who make way more.

What do you do? I’m in sales, and Boston is a much richer Fortune 500 high tech sales environment than SoCal will ever be. Besides, where else can you make $250K and buy a house in an upscale area for $500K-600K?

Sorry, but high tech salaries in Boston and the Bay area will always be higher than SoCal. No one moves to SoCal for the money. Ask anyone in high tech.

[Anonymous]

B&OC, yeah, The Bay Area is bigger than us, but we’re bigger than you!

Lab type jobs? I’m CFO of a VC-backed medical device company. We have a handful of techs (akin to lab types), and they are are well paid. The average outlay for salary, bonus, benefits, and taxes per employee at our company is over $125K. And, we’re right at median with other life science companies, because I keep close tabs by participating in annual salary surveys.

Enjoy your $500-600K home, ’cause you can’t sell it for that, today. But, you’ll be able to sell it for $300K in a few years, given that Boston/MA is one of the few areas to have a bigger bubble than SoCal.

Yeah, your football team beat ours. But, our coach doesn’t look like he needs Prozac. And, I heard something on the radio this morning about a lawsuit coming his way from a jilted mistress.

Enjoy your time in “Backwater by the Bay.” When you come back to SoCal, expect a close look over, because coming from such a relatively economically distressed locale, we may end up treating you like an illegal alien (TB tests and the like).

[(former)FormerSanDiegan]

sdr –

Clealy my point has been missed. I have lived in one of the wealthiest suburbs of SD for almost 15 years and most of the businesses I frequent are owned by national entities. Finding a quality locally owned business is a rarity and when I am lucky enough to find one here, I generally become a loyal customer. Where I used to live and visit often, people rarely step into national companies because the locally owned companies are much better.

Maybe the issue is that you live in a suburb. It seems that suburbia is always dominated by chains and franchises.
However, if you lived in Ocean Beach, for example, they protest any franchise that moves in (e.g. Starbucks), and the area is dominated by family owned shops and businesses, not franchises.

[BostonAndOC_RE_perspective]

JG,
I would wager that the life sciences salaries at the hot startups and established firms in Cambridge and vicinity are mich higher than SD. For christ sakes MA General and Harvard Medical School are here! Boston is THE place anywhere in the world for life sciences. Why isn’t your firm here, recruiting all the hot talent from Harvard and MIT????

My home is worth maybe 20%-30% more (baked into the range I gave) than when I bought it 4 yrs ago, looking at recent comp sales. The bubble happened in very low income areas and the super snooty inside 128 suburbs ($1M-up). I live in a more “modest” area that still sports 65% of all residents 25 and older with a minimum of a Bachelor’s degree, so it’s a commuter suburb for professionals. And you know what? I laugh to the bank every month with my $1500 mortgage payment. Guess what salary/price ratio I used when buying it? A lot less than the average SD/OC/LA’er. The damn house could go to zero and I’d be fine, as it is a cheap, nice place to live that puts me squarely within the third best job market (after NYC and SF/SJC) in the country. That is my point. And I don’t need to worry about selling it; my company has a gold-plated relocation package.

Tongue in cheek comments aside, SD is the place that looks economically distressed given the RE bubble bursting. The Boston job market is sizzling currently, and I’ve never known it to have much of a percentage dedicated to RE, especially compared to SoCal.

It looks like you were able to escape the grind of a Big 5 accounting career and land a CFO role. Good for you. Accounting is a crappy career. I know other guys that did that – some had to get the MBA, some not, but all of them couldn’t wait to get out of public accounting. I am very fortunate that my job is a blast.

I’m no Pats fan, but it was damn funny watching the Charger faithful’s looks of disbelief in that game. I grew up in L.A. and have always been a Raider fan, which means that both of our teams got screwed by New England and Brady in recent years (the Tuck rule?)

So I’ll enjoy my time here. It’s been great professionally and fiscally. Sadly my next gig will likely take me to the Bay Area, where you’ll still struggle to find anything decent for under $1M in a nice town.

[an]

OLD money is not just Vanderbilts and Rockefllers, it can be found in every community that I have seen back East in tire stores, plumbing firms, exterminators, pet stores, jewelers, bakeries and yes even paint stores. It is as common among so called average joes as it is the upper crust.

That’s exactly what I meant. When I say old money, I don’t mean Reckerfellers and the like. I mean the people who have 4-5 generations to build up family wealth. So that’s why I say east coast have more old money, because most people on the west coast have not been living here for 4-5 generations. Come back in 4-5 generations and I’m sure west coast will have plenty of old money just like the east coast. It just take TIME. Most people in Cali are 1st or 2nd generation immigrant who did quite a good job for the time they have. Give them 4-5 generations and their heirs will probably be in the same boat as the stock boy you’re referring to. Oh, and I know many people who live in Cali and own small businesses. So I still don’t get your point.

[blahblahblah]

It looks like you were able to escape the grind of a Big 5 accounting career and land a CFO role. Good for you. Accounting is a crappy career. I know other guys that did that – some had to get the MBA, some not, but all of them couldn’t wait to get out of public accounting. I am very fortunate that my job is a blast.

Make sure to tell your accountant how crappy his career is when he does your taxes this year. I’m sure he’ll appreciate it. While you’re at it, tell your friends over in Accounts Payable and Receivable that their careers are crappy too.

[sdrealtor]

AN,
Looks like we are pretty much in agreement on this one. After getting thoroughly diluted by a circular arguement going nowhere my original thought was lost. here’s my original thought. There is much less of a bubble on the east coast because prices are lower and people there tend to have higher incomes, greater assets and more stable employment situations. I guees I got lost trying to make that point.

[an]

sdr, I don’t know much about the market condition over there so I’ll just take your word for it. Looking at the prices in Boston and etc, it still is relatively cheap compare to here, so I think you’re right. It probably won’t crash like it is here. Also, income is around 10-15% higher over there than here. So that alone would warrant a 10-15% higher in housing prices. How much price will fall over there is just as an unknown as it is here.

[Author]

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