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September 7, 2016 at 9:40 AM #801012September 7, 2016 at 10:27 AM #801013The-ShovelerParticipant
Not all American suburbs are created equal.
for SoCal most Suburbs within an hours commute of the major cities usually continue to grow into major cities themselves (100-300K population) and create Jobs and new suburbs.
I don’t see that trend slowing at all at least for SoCal.
I can never find a parking space for either the Carlsbad or Temecula Costco no matter what time of day I go there.
Here is my pick for the next surprise growth story.
“OceanSide”
OK laugh if you want but you heard it here first LOL.
anyway IMO.September 7, 2016 at 11:12 AM #801014FlyerInHiGuestShoveler, true, in Cali, the county equals the metro area.
As long as we attract foreign and domestic inmigrants and the population grows we will have high prices.Zoning restrictions will continue to push sprawl. I can see Ikea opening a store in temecula/Murietta to support all the new housing along the 215 (I regret not buying during the Great Recession). Ikea could not expand the SD store and had to setup an offsite warehouse.
Sure, each market is different, but we are speaking very broadly about the suburbs here. I can see Costco closing some stores in other parts of the country as people move to online shopping.
September 7, 2016 at 11:28 AM #801015EscoguyParticipantxbox
We pay $80/month for 4 lines with t-mobile and don’t have a land line.
In the 1980s, I often paid more per month for international calls which are now free with Skype. While I may upgrade my iPhone 6S in two years, from a technical perspective, it should last at least 4 years. So the upgrade is discretionary.We pay $12/month for netflix and don’t have cable, plus $46/month for internet.
This is about $20/more than a basic cable package 15 years ago. Again, this is a choice to add more channels.Solar panels can be leased for less than $100/month. I’ve put them on five properties and while I paid cash, financing still allows a zero down user to realize over 50% reduction in utility bills.
I drive for Uber part time and usually earn about $300/week for about 10 hours of part time work and can definitely say that passengers are thrilled with the lower cost of transport. My car gets 50+ Mpg so the benefits get spread around.
As far as losing my Uber job, if they can make transportation cheaper than it currently is, then I’d benefit from that as well as I might not need two cars any more or 3 or 4 when my kids start driving. Most drivers do this part time as a side job. So don’t really see that being a huge drag, plus it would be phased in over a few years at least.
So the points I’ve outlined if done correctly would allow a family to save several thousand dollars/year if the right choices are made. With interest rates as low as they are, I currently pay 12K/year on a 417K loan (30yr fixed at 3.1%).
So while I appreciate the counter points, perhaps I should qualify it by saying a family that makes deliberate choices to realize the savings potential can more easily fund a home purchase with savings from these items.
Good luck
September 7, 2016 at 2:32 PM #801016poorgradstudentParticipantUniversity towns are notoriously tough to get jobs in unless you work for the University. That’s part of what keeps housing in many university towns somewhat reasonable.
September 7, 2016 at 2:42 PM #801017spdrunParticipantUniversity towns are often near cities and other job concentrations.
Nothing wrong with working for a university — not everyone needs to teach. There are a lot of peripheral jobs.
Third option is: students often have parental units with deep pockets. Start or buy a business catering to them.
September 7, 2016 at 4:10 PM #801018XBoxBoyParticipantEscoguy. I won’t disagree with your premise that if a family makes frugal choices they can then spend more for a home purchase. The issue as I see it is that most people don’t make the frugal choices that you and your family are making. Thus most people can’t easily spend more on housing.
Mind you I don’t think we’re really in disagreement here. It more a case that I don’t think the points you made will make much of an impact. However, the bottom line is that due to low supply and peoples strong desire to live in places like San Diego home prices are probably not going down but up. I just think it’s straightforward lack of supply coupled with low interest rates. (Which of course you mentioned right off the bat in your original post.)
September 7, 2016 at 6:02 PM #801019flyerParticipantLooking at the debt-to-savings ratio in this country, as well as the retirement savings stats I posted earlier in this thread, it’s clear that most people are not leaning toward making frugal choices in life.
These stats seem to infer that many prefer living beyond their means, and they may be able to float their preferred lifestyle during their working years, but they may find their overspending strategy does not work out well later in life.
That’s why I have to agree that low interest rates, lack of building, and high employment rates are still the most decisive factors fueling the continuing housing boom, vs. other reasons for the rise in prices.
It will be interesting to see what happens if/when any of these elements noticeably fluctuate.
September 7, 2016 at 6:19 PM #801021FlyerInHiGuestPeople are putting their retirement into their houses.
When they need to access the money, they will need to sell. Not a bad deal if buyers continue to come.
That’s also why there’re not too many San Diego natives except for families who lived within their means. Over the years, I have seen many families move away. Kids grow up and move first.September 7, 2016 at 6:57 PM #801022svelteParticipant[quote=njtosd][quote=FlyerInHi]
Again, it depends where. Educated people and immigrants want to be in and around coastal gateway cities.
[/quote]
Brian – I just shouldn’t read stuff you write because my blood pressure spikes every time one of your ridiculous statements dribbles onto one of these threads. [/quote]
haha, I thought the same thing. what a ridiculous statement! Educated people and immigrants want to be in coastal gateway cities. WTF?
September 7, 2016 at 8:16 PM #801024EscoguyParticipantxbox,
Thus the value of the discussion. Forums like this remind me that perhaps only a few households make decisions in the manner I think is rational in today’s environment.
I.e. when times are good, everyone spends money, when times are bad, people cut back. Ideally, more would do the opposite to even out cyclical movements in the economy and create more balance.
So it’s really a shame that frugal behavior isn’t more widespread. Or that more stretched households don’t pay down debt when times are good.
If there is a downturn, a shift in consumption patterns may provide a buffer for those willing to make moderately tough choices.
So back to the premise, if the majority are not frugal today, frugal behavior may not be driving prices higher but if there is a slowdown, switching to a more economical consumption pattern may help mitigate against a downturn (assuming of course employment levels aren’t seriously affected).
On balance, I think that the rapid rise in real estate prices would be a strong incentive to not have to be forced to sell in a future downturn (whether by short sale or foreclosure).
I’d like to think that after the pattern of the last ten years, that new buyers would do “whatever it takes” to not lose their now larger down payments. Because there could be a strong recovery again and it would be hard to get back in.
September 7, 2016 at 11:48 PM #801035njtosdParticipant[quote=FlyerInHi]njtosd, I was making a broad statement. University towns are included in what I mean by desirable cities.
In fact I have a cousin who works at Indiana university. And I know that cook engineering is there. It’s an ok town. Very boring! But guess what? University towns are expensive![/quote]You didn’t say desirable cities. You said “coastal gateway cities”. By gateway I assume you mean major arrival departure points. Other than Chicago, the places that I mentioned really don’t qualify.
Re: Bloomington being expensive – it sounds horrible with a cost of living 7.9% below the national average: http://www.forbes.com/places/in/bloomington/ and a lower than average crime rate. Or University towns generally – speaking of the MM house in another thread at 850,000 – this house in AA looks like a steal, especially when you figure in the quality of the schools and the classmates that inhabit them: http://www.zillow.com/homes/for_sale/Ann-Arbor-MI/24702999_zpid/8097_rid/4-_beds/42.289858,-83.756987,42.278126,-83.772436_rect/15_zm/0_mmm/
Your “oh, I have a cousin” comment reminds me of a line from Holidays in Hell by PJ O’Rourke. Cab occupant in Lebanon says “why are they leveling an anti-tank gun at us?” to which the cab driver responds “Oh yes, I have a cousin in Detroit!”. Same level of responsiveness. So I will say it again – have you actually spent any time in any of the places that you so quickly dismiss?
September 8, 2016 at 1:18 AM #801036flyerParticipant[quote=FlyerInHi]People are putting their retirement into their houses.
When they need to access the money, they will need to sell. Not a bad deal if buyers continue to come.
That’s also why there’re not too many San Diego natives except for families who lived within their means. Over the years, I have seen many families move away. Kids grow up and move first.[/quote]Don’t know any financial pro who would suggest that, unless you plan to leave CA, and no one we know (including us) is depending on the equity in our home(s) to fund our retirement.
True, if kids relocate, some may wish to join them elsewhere, but, other than that, imo, it’s not a good plan if you have to give up your dream home or sell to survive. If so, that may indicate you spent your life living beyond your means.
September 8, 2016 at 9:00 AM #801045FlyerInHiGuest[quote=njtosd] So I will say it again – have you actually spent any time in any of the places that you so quickly dismiss?[/quote]
I know Bloomington, Indianapolis and Columbus, OH pretty well. Columbus, IN has some nice architecture.
Those cities are doing pretty well because they attract people from other smaller cities that are doing badly. it I had to live there, I could make it work.
As far as housing, it depends where you want to live in those cities. The university towns are substantially more that surrounding areas.Sorry that I can’t qualify everything I say. But I will say it again, as a general rule, savvy educated people and immigrants prefer coastal gateway cities.
Detroit has a major airport. But it’s not a gateway city. Chicago qualifies, but it’s not that desirable. Nearby Toronto is more on the level of LA and NYC as a desirable city.
While I’m at it I will qualify and say that Houston, Dallas, Austin, Atlanta, Phoenix, Las Vegas are doing well in attracting population. Housing is reasonable.
Washington DC metro is now a gateway city. Portland, OR is small, not quite a gateway city, but very desirable.
San Diego is a gateway city because of the border and proximity to LA.
Maybe I should say “glamour city” for desirable city that attracts population willing and able to pay for expensive housing.
September 8, 2016 at 9:26 AM #801047FlyerInHiGuest[quote=flyer][quote=FlyerInHi]People are putting their retirement into their houses.
When they need to access the money, they will need to sell. Not a bad deal if buyers continue to come.
That’s also why there’re not too many San Diego natives except for families who lived within their means. Over the years, I have seen many families move away. Kids grow up and move first.[/quote]Don’t know any financial pro who would suggest that, unless you plan to leave CA, and no one we know (including us) is depending on the equity in our home(s) to fund our retirement.
True, if kids relocate, some may wish to join them elsewhere, but, other than that, imo, it’s not a good plan if you have to give up your dream home or sell to survive. If so, that may indicate you spent your life living beyond your means.[/quote]
You know, in Vegas, there are countless california “refugees”. They have nicer homes in Vegas but they would rather live in lesser homes in Cali if they could. The demographic changes speak for themselves as far as people selling and moving away.
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