San Diego drastically outperforms Bay and LA on rents

[sdrealtor]

Friend left NYC /brooklyn for Dallas. House was supposed to be ready in February. He moved into his new McMansion two weeks ago.

[sdrealtor]

[quote=EconProf][quote=gzz]Metro Dallas prices are up 25% YoY and inventory down 67%.

https://ntreis.net/download/may-2021-monthly-market-indicators/?wpdmdl=8305

While a big outperformance of national prices would feel good, a national boom is more sustainable and lets our prices grow without hurting our competitiveness.

Longer term, I think Prop 13 and the lack of developable land make SD a better investment than places like Dallas and St George. At some point construction parts and labor will get more reasonable and housing prices there will decline to marginal cost + a fairly small location premium.[/quote]

I agree with you that the lack of developable land in San Diego raises prices and rents. Add to that the influx of people from the even worse-run cities in the Bay area and LA, and San Diego prices and rent will benefit. But San Diego is tied to CA, which competes for worst-run state with the likes of New York, Illinois, New Jersey, etc. For years, CA ranks as most business-unfriendly, highest percentage of people in poverty (despite lavish welfare programs), and is tied with NY for highest taxes. Example: We have, by far, the highest gas tax and are tied with Rhode Island for worst roads in the US.
So as the new exodus from CA (Census Bureau) continues, San Diego will always have its ocean, mountains, and weather to benefit real estate investors. But these benefits could be outweighed by other factors. People can vote with their feet.[/quote]

People vote with their lifestyles. Check back in with us after five years of empty staring at the same desolate mountains and landscape

[EconProf]

sdr, I totally agree with you. Regarding lifestyle, it is totally different in St. George, which is what is attracting people from CA. So it is not only the cost of living (perhaps half or two-thirds that of San Diego), it is the lifestyle as well.
And those darned mountains to look at. Always the same. Except they are snow-capped in the winter. So boring.
BTW, why did your friend move from NYC to Dallas (your previous post)?

[Coronita]

Games

G48…

BINGO!

[Escoguy]

[quote=Coronita]http://coa.washco.utah.gov/st-george/activities/games/

G48…

BINGO![/quote]

The seven hour jigsaw sessions are clearly the best bang for the buck!

[gzz]

I would think an EconProf would be proud that CA wasn’t afraid to implement an unpopular pigovian tax on gas. I want it to be even higher personally so people switch to less polluting transport, and we stop the awful arms race of bigger and bigger vehicles to see over and feel safe around the other bigger and bigger vehicles.

Our income tax on the other hand I would like to see cut. May happen given how big the surplus is, $70 billion!

What specific “lavish welfare” program is it you think California has? California was late to mostly abolish its state cash welfare program, called general assistance. But in nearly every county it is gone, and it wasn’t lavish.

The main welfare programs in the USA right now are medicaid and SSDI/SSI, which are mostly and entirely federal funding.

[sdrealtor]

He moved for better weather, a nicer bigger home for his family and I think he was also tired of the crowds in NYC and lower taxes. In case you are wondering he doesn’t care about politics only money. I know he hated Trump because his stupid trade wars and tariffs that did not work and cost them millions.

[flyer]

We’ve seen various people move out of CA and other locations for various reasons–finances, kids can’t afford to buy a home, family ties, politics–etc., etc.

In EP’s case, he and his family lived the good life in CA for more years than most people ever will, so I don’t think he should have any regrets about his move at this point in time. He’s been here, done that.

Now, for those who need, or say they choose to leave, or check out permanently in their 30’s, 40’s or 50’s–the good life was cut short– so, no matter how they rationalize, they might, if they’re honest with themselves, still have regrets–if, in fact, they’re still among the living.

Personally, we, including extended family, would never be interested in leaving CA completely, for any reason, but if it works for others, hopefully, they’ll be happy with their choices.

[sdrealtor]

Of course no regrets but stop with the CA bashing. He probably owes everything he has to this great place. Take your money and quit whining

[EconProf]

[quote=sdrealtor]Of course no regrets but stop with the CA bashing. He probably owes everything he has to this great place. Take your money and quit whining[/quote]

Once again sdr, you misinterpret my message. In comparing housing costs, living expenses, quality of government vs. taxes paid in CA vs. the states people are moving toward is, in your words, “California bashing”, I call it bringing facts to the table. Sorry if that offends you.
Based on your Piggington entries, you move in a fairly select group of buyers and sellers of mostly high-end, coastal properties. The wealthy will usually pick a La Jolla over a Scottsdale, but the working class, those with growing families, children they want in school, renters who want their own house and yard, etc., will increasingly learn the facts and make the move.

[Coronita]

G40

BINGO!

[flyer]

A friend forwarded this to me from Dr. Housing Bubble. I have no opinion on it one way or the other, but, I guess only time will tell if he’s right, and at the very least, it’s entertaining:

As Housing Prices Peak Zero Down Mortgages are Back: No Down Payment Loans Available up to $1.25 Million.

“The attention span of people is slightly above that of a cat thanks to social media platforms that rewire the brain for instant gratification, including on the financial front (think of all of the meme stocks and Robinhood). All the cheerleading that is happening for real estate is largely socialism for real estate. That is, a Fed that is pumping easy money artificially into the market to inflate prices for those that already own. So not a shocker that 2.3 million California “young adults” are living at home and many are waiting until their Taco Tuesday baby boomer parents take a dirt nap from one to many street tacos until they can inherit the home. Don’t believe this? Go read some forums and you will be surprised what this distorted market is doing to people. But don’t worry! Help is on the way. As housing prices reach a peak, our good old friend, the no down payment loan is showing up to the party with a bit more alcohol and financial meth to keep things going.

Housing History Amnesia

I know 2007 to 2009 must seem like ancient history to some. 7+ million foreclosures (with only about 1.5 to 2 million foreclosures happening due to funky loans) and the majority of people that lost their homes last time happened to those with boring traditional 30-year fixed rate mortgages. Because when you lose a job, it doesn’t really matter what kind of mortgage you have if you can’t pay the monthly nut. Today, we still have millions in forbearance and other millions of renters on moratoriums. All of this seems slated to end in the fall.

Housing is so hot that it is forecast to get hotter (because you know, momentum):

So we are still likely to see higher home prices because of this:

Wait, doesn’t economics tell us that rising demand and prices would add more supply? Yes, in a truly capitalist market. But housing humpers don’t want to admit that real estate in the US is one giant socialistic operation between banks and the Fed (and this is strictly from a non-political definition). How so? First, the market is artificially depressed – forbearances and moratoriums for example. You also have the Fed with an unlimited debt printer so interest rates are incredibly low. Then all of the tax breaks given to homeownership. So with all of that, builders are building much more rental housing because they know Millennials are deep in debt and unlikely to buy in numbers like their baby boomer parents. Also, builders do have a memory of 2007 to 2009 unlike most housing cheerleaders.

So this leads us all to zero down mortgages baby!

“(OC Register) Now, even first-time buyers without a down payment can get in on the action. That means no skin in the game — just like the good old Great Mortgage Meltdown days.

No down-payment loans are available for up to $1.25 million so long as the primary wage earner has at least a 700 middle FICO credit score.

Should you not show enough income from your day job or your self-employment income to qualify, you can document your income with bank statements, averaging the most recent 24 months of personal bank statement deposits.”

That is correct. Instead of looking at things deeper for the causes, we are trying to juice this party even more. It is worth noting that lenders are competing for the razor thin inventory sales so guess what? Now that zero down is back in the market other creative instruments are only a short duration away.

And you are seeing booms and busts again. Bitcoin hit close to $65,000 this year – it is now down to $33,000. This isn’t some meme play here. This is an asset class valued at $626 billion (was over $1 trillion). Or to frame it differently, Bitcoin at its peak was valued at the total auto debt market of the US.

So going back to housing, zero down is back. Lenders are getting more creative because capital is cheap. But what happens when all of the Fed juice starts slowing down in fall? This time is different of course. In one year, the median home price in LA (with a major homelessness crisis) will be $1 million because you know, this time is truly different!”

[sdrealtor]

Dr Housing Bubble is a doomer that was mostly wrong. He’s trying to be relevant again. He’s almost as bad as Mark Hanson

[sdrealtor]

[quote=EconProf][quote=sdrealtor]Of course no regrets but stop with the CA bashing. He probably owes everything he has to this great place. Take your money and quit whining[/quote]

Once again sdr, you misinterpret my message. In comparing housing costs, living expenses, quality of government vs. taxes paid in CA vs. the states people are moving toward is, in your words, “California bashing”, I call it bringing facts to the table. Sorry if that offends you.
Based on your Piggington entries, you move in a fairly select group of buyers and sellers of mostly high-end, coastal properties. The wealthy will usually pick a La Jolla over a Scottsdale, but the working class, those with growing families, children they want in school, renters who want their own house and yard, etc., will increasingly learn the facts and make the move.[/quote]

Once again you are wrong. I work all over at all levels.

You made money here you never would have made in any other state. This is the Golden State for a reason. The best and brightest aspire to be here and flock here. The great advances happen here while you are gonna ride out your California winnings playing bingo and doing crossword puzzles. The demise of this great state has been incorrectly predicted fur decades. You economists have accurately predicted 55 of the last 8 recessions. Enjoy your life in quiet Utah with franchise restaurants and no real ethnicity or diversity which is the secret sauce on the world’s prosperity.

The great irony is you just moved to a massive welfare state with little private industry. Look at the top employers where you just moved. Almost all public sector. Far worse than here with the lowest school funding in the country. It’s a good thing you brought California money

G56!

[Coronita]

Wait, did I hear G56????

BINGO!!!!

[Author]

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