Prop 30 money sold as funds for schools – watchdog reveals something else

[SK in CV]

[quote=no_such_reality]However, my point was to counter the ‘everybody will come crawling back to SD meme'[/quote]

Point taken. People leave for a lot of reasons. I left and it had nothing to do with taxes. I’m quite content but still expect I’ll be back some day.

[no_such_reality]

[quote=SK in CV][quote=no_such_reality]However, my point was to counter the ‘everybody will come crawling back to SD meme'[/quote]

Point taken. People leave for a lot of reasons. I left and it had nothing to do with taxes. I’m quite content but still expect I’ll be back some day.[/quote]

Probably when you retire and have amassed a nicer nest egg than is possible in California.

As someone else said, California’s real problem is the out migration of the $75K-$200K crowd. The people that make lots of bank but in Coastal California are just getting by.

[bearishgurl]

[quote=no_such_reality]…Friend #2, moved to Austin 6 years ago. No longer stressed, feeling broke and living in a nice house on an acre instead of scraping by in a one bedroom apartment in beach town.

Friends #3, went St Louis 6 years ago. Happy, job is good, lots of opportunity. Has a 15 minute commute instead of an hour plus from the IE to the coast…[/quote]

NSR, based upon the info you gave us, I’m going to take “umbrage” with the “not-so-hidden” but nonetheless “real” reasons your “friends #2 and #3” defected from SoCal.

Reread my previous post on this thread about the “disconnect in the mind” about what particular properties “should sell for” in CA coastal counties and what they actually sell for. Those transplants that can’t get a grip on this phenomenon more often than not leave 1-5 years after arrival.

I’ve posted this several times on this forum and even stated a few times that the “housing expectations” of most transplants (even if assisted with their move by an employer) have to be carefully “managed” by their agent/broker assisting them in their search or hundreds of hours will be wasted by all with no sale.

Friend’s #2 and #3’s REAL issue was that they couldn’t obtain the “lifestyle” (read: size and/or location of housing) in So Cal that they saw others own and fantasized about owning themselves. Perhaps it was because they entered SoCal at a time when they watched a lot of “pretend” homeowners who used “funny money” to purchase their properties and home “equity” to live off of live the life they wanted.

The truth is, Friend #2 didn’t want to leave his/her “beach area” OR was renting a luxury apt/condo elsewhere in SD. They didn’t want to pay LESS rent and save MORE for a downpayment for a house because they couldn’t stomach leaving their beach locale or luxury unit for lesser local digs while they saved. Why am I saying this? Because they managed to purchase a house on an acre in Austin ($275K – $375K). So that person moved to Austin in 2006 and then purchased a property which may or may not (more likely not) be worth any more today or even tomorrow.

Friend #3’s housing disconnect is even MORE pronounced. They bought/rented in the IE all the while knowing they were working “on the coast.” Therefore, they never really assimilated into the coastal area where they were working (SD County?). All during their residence in the IE until the time they left in 2006, they likely coveted a home closer to work but refused to pay the price (they could have rented). Their self-imposed road warrior lifestyle was entirely their choice. They didn’t like what was on offer to rent or buy in the area of or an adjacent area to their employment so moved out of county and commuted daily.

Had either Friend #2 or #3 just “hung on” in SoCal three more years (to 2009), they would have very likely been able to buy better (and closer) digs then what they were living in. Instead, they sought employment elsewhere and left when a job was offered to them.

I don’t buy that your “friends” were taxed out of CA. All five of them don’t sound like they were in a “category” to pay very much in taxes.

They just suffered from good old “CA housing disconnect” which is incurable. In CA coastal counties, RE buyers must accept what is on offer, rent or leave.

It’s ALWAYS been this way and will never change.

[bearishgurl]

[quote=no_such_reality][quote=SK in CV][quote=no_such_reality]However, my point was to counter the ‘everybody will come crawling back to SD meme'[/quote]

Point taken. People leave for a lot of reasons. I left and it had nothing to do with taxes. I’m quite content but still expect I’ll be back some day.[/quote]

Probably when you retire and have amassed a nicer nest egg than is possible in California.

As someone else said, California’s real problem is the out migration of the $75K-$200K crowd. The people that make lots of bank but in Coastal California are just getting by.[/quote]

What about all the Asian and East Indian immigrants who came to CA to go to school, graduated and then got jobs here in tech, medicine and law? They make “bank” and aren’t hankering to move to St Louis … that is, unless a random headhunter taps them with a more lucrative job offer elsewhere in the country.

They’re paying massive payroll taxes and not leaving by choice or because they have a “housing disconnect.”

The “housing disconnect” occurs primarily in American citizens who can’t accept that the calibur of the house they grew up in will never be theirs, likely because their parents sacrificed far more than they are willing to in order to keep it while they were growing up. It also occurs in the transferred-in employee who is “used” to more space and a newer, larger home out of state. It is very, very hard for these incoming transferees from the flyover states (ESP for their spouses) to “envision” themselves living in a circa 1961 remodeled 2150 sf 4/2/2 in Clairemont (92111) on a 6500 sf lot in order to be close to their new job in LJ.

These are the ones who tend to defect to lizardland and the IE to even get a semblance of the housing that they and their families were “used-to” in less-populous, less-desirable states, turning the transferee into a “road warrior.” The whole family tires of his/her “road-warrior” lifestyle and transfers out within five years instead of finding a place closer in.

[sdduuuude]

[quote=no_such_reality][quote=SK in CV]
So none of them actually left because of the tax increase on very high income taxpayers.[/quote]

They left because of high taxes on them!
[/quote]

That’s a great answer.

[no_such_reality]

BG, I know plenty of those Asian and East Indian immigrants. Many are in debt up to their eyeballs. And that’s inspite of both of them being highly educated, highly employed and frankly, they’re wondering how to get off the financial treadmill too.

I also know plenty that are working their backsides off scraping to build wealth and get enough capital to open that 2nd franchise or buy the next rental.

BTW, have been to fly-over land lately? Asian and East Indian immigrants are common.

Negative connotations aside of your post, you make our point, you need to down-grade your material lifestyle or make $200K plus to be in the good parts of Cali. And unless someone left you a house, $100K in Cali is lower middle income existence and it just gets worse as you go down from there. And I’m OC/LA where the housing and expense issue is even more pronounced than SD.

Regarding friends #2 & #3, yes, friend #2, was single making $100K+ and basically feeling poor. To get a house he’d have to stretch to buy crappy and in a crappy hood.

Friends #3 same, she was making $100K and hubby another $50Kish. Ironically, making more now in St. Louis.

the 8% plus sales taxes, the 9.3% income tax, just extra kicks in the shins.

And yes, all five of them where in the $100-$300K range. Elsewhere, that’s really good money. In SoCal, that’s comfy with trade offs.

[SK in CV]

[quote=no_such_reality]BG, I know plenty of those Asian and East Indian immigrants. Many are in debt up to their eyeballs. And that’s inspite of both of them being highly educated, highly employed and frankly, they’re wondering how to get off the financial treadmill too.

I also know plenty that are working their backsides off scraping to build wealth and get enough capital to open that 2nd franchise or buy the next rental.

BTW, have been to fly-over land lately? Asian and East Indian immigrants are common.

Negative connotations aside of your post, you make our point, you need to down-grade your material lifestyle or make $200K plus to be in the good parts of Cali. And unless someone left you a house, $100K in Cali is lower middle income existence and it just gets worse as you go down from there. And I’m OC/LA where the housing and expense issue is even more pronounced than SD.

Regarding friends #2 & #3, yes, friend #2, was single making $100K+ and basically feeling poor. To get a house he’d have to stretch to buy crappy and in a crappy hood.

Friends #3 same, she was making $100K and hubby another $50Kish. Ironically, making more now in St. Louis.

the 8% plus sales taxes, the 9.3% income tax, just extra kicks in the shins.

And yes, all five of them where in the $100-$300K range. Elsewhere, that’s really good money. In SoCal, that’s comfy with trade offs.[/quote]

The guy making $100K wasnt paying 9.3% if he was married. Even if was single, his taxes would have been closer to 6%.

When I left CA, i was living in Carmel Valley (I think that’s a pretty good part of CA). I lived pretty well, in fact very well, spending no more than if I was making $150K a year AND I had two kids in college I was paying for out of that money. I really wonder sometimes what people think a middle-income lifestyle should look like.

[bearishgurl]

[quote=no_such_reality]BG, I know plenty of those Asian and East Indian immigrants. Many are in debt up to their eyeballs. And that’s inspite of both of them being highly educated, highly employed and frankly, they’re wondering how to get off the financial treadmill too.

I also know plenty that are working their backsides off scraping to build wealth and get enough capital to open that 2nd franchise or buy the next rental.

BTW, have been to fly-over land lately? Asian and East Indian immigrants are common.

Negative connotations aside of your post, you make our point, you need to down-grade your material lifestyle or make $200K plus to be in the good parts of Cali. And unless someone left you a house, $100K in Cali is lower middle income existence and it just gets worse as you go down from there.[/quote]

Yes, I’ve been to several hospitals in “flyover land” in recent years visiting relatives and noticed that nearly all the new resident/interns as well as many physicians and PAs are of Eastern Indian descent.

And when I was researching the effects of fracking on water quality here a few weeks back, I noticed that most of the petroleum engineering students (and some teachers) at OU were of East Indian descent.

I don’t think most of these immigrants grew up with a “silver spoon.” And many of their parents obviously sacrificed mightily to send them to college in the US. They will go wherever the best opportunities for themselves are. They don’t have a “need” to live close to a coast. Any place in America is better than their homeland, due to the better economic opportunities they present. Economic opportunity is the only reason most of these immigrants sought permanent residency in the US after graduation, IMHO.

Contrast the immigrants to an American Gen X/Y who had their own horses in TX … while growing up in a 4400 sf home on daddy’s ranch (that their dad and other relatives built on land long-owned by family members). That individual (even if only a HS Grad) is NOT going to be happy with what they can “afford” to live in in SD, no matter HOW much they and/or their spouses make. Even as a military spouse stuck in SD Navy Housing or Camp Pendleton, my experience was that these “silver-spoon types” typically hate the lifestyle here, whether living in military quarters … or not.

The CA coastal housing disconnect is not fixable because it is part of the transplanted resident (or soon-to-be transplant who may or may not take the transfer on offer due to this “disconnect”). It is psychological but I will stop short of saying it’s a “problem.” It’s only a “problem” for those who are chronically disenchanted with the tradeoffs they must make to live in a particular locale. Since it’s a “free country,” they are free to leave (as the OP is finally doing here). And agents/brokers are free to see thru this “disconnect” early on and fire these “buyer” clients, freeing them up to find someone else to help them find what they are looking for in their price range, lol.

[earlyretirement]

[quote=SK in CV]
So none of them actually left because of the tax increase on very high income taxpayers.[/quote]

I know many people that have moved out of San Diego. Most of them were former college classmates. But quite honestly none of them moved out of California due to the high taxes. They moved out because they couldn’t find a good job where they could make as much as other places. I’m quite sure they would have stayed had they been able to find decent jobs for their experience/education.

And I have to say that most of them were living way above their means for many years. Many of them took out equity of their homes (using them as a virtual ATM machine) and eventually lost their houses.

But high taxes didn’t have anything to do with it.

[bearishgurl]

[quote=earlyretirement][quote=SK in CV]
So none of them actually left because of the tax increase on very high income taxpayers.[/quote]

I know many people that have moved out of San Diego. Most of them were former college classmates. But quite honestly none of them moved out of California due to the high taxes. They moved out because they couldn’t find a good job where they could make as much as other places. I’m quite sure they would have stayed had they been able to find decent jobs for their experience/education.

And I have to say that most of them were living way above their means for many years. Many of them took out equity of their homes (using them as a virtual ATM machine) and eventually lost their houses.

But high taxes didn’t have anything to do with it.[/quote]

I agree with you than pay scales in SD are an issue when compared with other large cities in CA and elsewhere.

ER, are you originally from SD or another part of CA?

[scaredyclassic]

Managing exPectations is vital for all areas of life.

[bearishgurl]

[quote-no_such_reality]….Negative connotations aside of your post, you make our point, you need to down-grade your material lifestyle or make $200K plus to be in the good parts of Cali. And unless someone left you a house, $100K in Cali is lower middle income existence and it just gets worse as you go down from there. And I’m OC/LA where the housing and expense issue is even more pronounced than SD….[/quote]

IIRC, you are a SD North County resident, NSR. Let’s assume your grandmother on your mom’s side with whom you spent many weekends swinging on her tree swing as a child enjoying the view and good family times and remember them fondly, has recently died. She was widowed at 44 and you just found out she has left you her home and adjacent lot, free and clear with Prop 13 “protection” on it. Taxes are currently $505 annually, per SD Assessor.

http://www.sdlookup.com/MLS-120046895-932_W_2nd_Ave_Escondido_CA_92025

Would YOU live in it? Would YOU move your family into it? Would you do repairs/improvements on it? Would YOU live there for the rest of your life in order to pay NO MORTGAGE and LOW TAXES and live “stress-free” in Cali (with lots of discretionary income)? OR would you immediately mortgage it and invest in the stock market or buy another rental and/or vehicles and bling. Would you rent it out and keep paying your current mortgage? OR would you immediately sell it and lose the Prop 13 “protection” on it forever?

The truth is that the vast majority of these “heirs” who were fortunate enough to be “left a house” in CA moved into it before or shortly after the death of the owner and will live out the rest of their lives in residence and perhaps even pass it on to their children. They weren’t “picky” about anything regarding the property, i.e. location, size, condition, etc. They simply did as much work they could afford to do on it when they took title of it (or did NO work if they couldn’t afford to at the time) and moved in. They don’t have a “glamorous lifestyle” but can live, eat and pay for their utilites (often at “lifeline rates”).

MOST of these heirs didn’t mortgage their “inherited” properties to death to buy vehicles and bling. And many of the ones who did lost their longtime family homes to foreclosure.

So, what would YOU do, NSR??

And where do you consider to be the “good parts of Cali?”

[Coronita]

Gotta pay to play…

[no_such_reality]

BG, again, you’re missing the point. Taxes are high and are one component of the high expenses it takes to live here. Meanwhile opportunities are falling and the Gen-Y you like to rail against in Cali has lower expectations than their parents. We’ve had that discussion before, areas where the up coming generations have lower expectations than the current generation stagnate and decline.

Housing and other expenses attribute greatly to the housing disconnect and the general dissatisfaction with SoCal once people are done with their single years.

There is a continued pressure on the upper middle class that influences out migration of that critical tax and consumer base. As people begin to look elsewhere, they are seeing more opportunity, less government interference, less expenditures and equal quality of life issues.

California, through tax policy, regulation and good fortune is accelerating the income divide between the haves and the have nots with the the middle ground disappearing. We as society in California will not survive the continued drain on quality jobs and lowered quality of life expectations for middle income $50K-$150K people and people starting out from college.

When I say good areas, I mean desirable. IOW, coastal. In LA/OC that’s west of the 405. In OC, almost all SFRs sub-$400K are in neighborhoods that are either bad as in dangerous or have a high concentration of one ethnicity. OC is fairly self segregated. As you move inland, particularly, the IE, I see no reason not to move to Phoenix, SLC, Denver, Texas. You’ve got the same climate and you’re two hours from the beach anyway.

Here’s a nice little house. Only $380,000 for 1100sf and 3/1.75.

To buy it you need what? A $100K income if doing a 3% FHA loan, PITI will then be about 27% of your gross.

That neighborhood? Not horrible, not great. Renting though, is even more expensive. And that’s now, it was even worse over the last decade.

As for the Escondido house, think about the economic advantage of not having rent, what’s that? $1400-$2200 a month they’re not forking over? That’s if they could live in Escondido. If not rent it. As for fixing, well, rent to repairs is a pretty solid repair schedule. Imagine how poor their life would be if they weren’t left the house.

[Anonymous]

Ya know, I’ve noticed fewer large companies running headquarters in CA. It wouldn’t surprise me if higher-income folks were to flee, as well.

It’s not only getting too expensive to live here, but it’s becoming too expensive to do business as well.

[Author]

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