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bearishgurl
Participant[quote=SK in CV][quote=bearishgurl]Again, folks … “salaries” (in relation to price of housing) only matters in *some* CA markets. In well-established areas, a much larger percentage of buyers use all cash or mostly cash for purchase money. Buyers utilizing 1031 exchanges typically don’t have to come up with very much cash because they trade “like for like.” Also, it is not uncommon in well-established areas for longtime neighbors to pay cash for a nearby prospective listing for a residence for other family members or gift a large downpayment to the buyer (typically a relative) OR tell distant relatives who will be cash buyers of a nearby prospective listing (before it is put on the MLS with the commensurate price increase). This can only happen if the listing agent/broker goes door to door telling neighbors of the listing before it is actually marketed (again, this is common practice in well-established areas).
[/quote]
Can you name a single market where salary (or income) doesn’t matter because most homes are purchased for cash that is other than the very top end of the market? (it may be true in RSF. I doubt it’s true in LJ.)[/quote]
I don’t know about LJ (since there are so many condos and PUDS in and around it) but it is true in typical “working class” areas of SD county where a large portion of longtime (30+ yr) owners are still in residence. For example, Lemon Grove, El Cajon, Chula Vista, National City and even popular SD areas such as Allied Gardens and San Carlos.
In these areas, a longtime former rental SFR could have been found in recent years for $200K to $300K and perhaps $350K now. These houses are typically 1100 sf to 2200 sf and vary wildly in condition. The “public” often never learns about them because they “sold” before being placed on the MLS (as “traditional sales”).
You might be shocked as to how many households have $300K+ lying around earning next to nothing.
I’ve stated it here several times. You can’t judge a book by its cover, its house or the car it drives :=]
If you never leave your “planned development” except to go to work in your “planned office park” and shop in your “master-planned strip mall,” you’ll never be able to see up front and personal how the (gritty?) “real world” operates :=0
bearishgurl
ParticipantAgain, folks … “salaries” (in relation to price of housing) only matters in *some* CA markets. In well-established areas, a much larger percentage of buyers use all cash or mostly cash for purchase money. Buyers utilizing 1031 exchanges typically don’t have to come up with very much cash because they trade “like for like.” Also, it is not uncommon in well-established areas for longtime neighbors to pay cash for a nearby prospective listing for a residence for other family members or gift a large downpayment to the buyer (typically a relative) OR tell distant relatives who will be cash buyers of a nearby prospective listing (before it is put on the MLS with the commensurate price increase). This can only happen if the listing agent/broker goes door to door telling neighbors of the listing before it is actually marketed (again, this is common practice in well-established areas).
In *newer* areas (attractive to worker-bee buyers who will typically get a PM mtg for 75%+ of the purchase price), the combo of HOA/MR can EASILY come to $500-$1500 mo OVER AND ABOVE PITI. THIS is what causes the out-of-pocket unaffordability to these buyers who are also paying high monthly PITI often IN ADDITION to simultaneously attempting to raise minor children.
It is the *newer* areas (built ~1993 or after but more likely those built after 2000) which will undoubtedly suffer price declines if fixed MIR’s go up significantly as the vast majority of the would-be sellers in those areas are in no position to carry a PM mortgage for a buyer who can’t qualify for a mortgage on the open market to pay them what they want for their properties. Higher MIR’s will affect the more established areas (in SD County, 20-90 yrs old) very little, if at all.
These are the two sides or “factions” of CA housing. The “truly haves” reside in the established areas and the “have-nots” who are “giving the appearance of having” reside in the *newer* areas …. by CHOICE. In doing so, they are CHOOSING to own in areas where their future property values depend on many more factors out of their control then the owners who reside in the established areas.
bearishgurl
Participant[quote=AN]…Income went up 145% between 1970-1980. Income went up only 85% between 1980-1990. Income went up only 55% between 1990-2000. Income went up 19% between 2000-2010…[/quote]
[quote=AN]…Housing went up 53% between 1960-1970 and 266% between 1970-1980 in CA…[/quote]
I have a few questions for which I will need to do some “data mining” to answer. Maybe you can beat me to the punch, AN. For starters:
1. Did income go up 53% between 1960-1970 and 266% between 1970-1980 in CA? If not, how much did income actually go up in CA during these decades?
2. Did (nationwide) housing prices actually go up 19% between 2000 and 2010?
My hunch is that (nationwide) housing prices were less, on average, in 2010 than 2000 in most major markets.
bearishgurl
Participant[quote=AN]Here’s the historical data from the census:
1990 14,387
1989 14,056
1988 13,123
1987 (21) 12,391
1986 11,670
1985 (20) 11,013
1984 10,328
1983 (19) 9,494
1982 8,980
1981 8,476
1980 7,787
1979 (18) 7,168
1978 6,455
1977 5,785
1976 (17) 5,271
1975 (16) 4,818
1974 (16)(15) 4,445
1973 4,141
1972 (14) 3,769
1971 (13) 3,417
1970 3,177
1969 3,007
1968 2,731
1967 (12) 2,464Look at the per capita income in the 70s, it seems like a consistent 10% increase every year. So, what some people said about their salary in the 70s wasn’t the exception. Income went up 145% between 1970-1980. Income went up only 85% between 1980-1990. Income went up only 55% between 1990-2000. Income went up 19% between 2000-2010.[/quote]
AN, are these numbers nationwide statistics or for SD County? And what do the numbers in the parentheses mean?
All by themselves, these numbers really mean nothing unless you put the average SFR sold prices for that year next to them. Then list the average size family in that locale during that year. (Remember that the “avg family-size” was larger 40+ yrs ago.) And, just for fun, list the average prevailing (conventional) 30-yr fixed interest rate for that year next to each year.
I maintain that at all times, the AVERAGE price paid for a SFR in a given area was 4-6 times the total gross household income for that area, depending on locale.
And this is still true today in all but the most expensive locales (SD County not being one of them).
It didn’t matter what the prevailing mtg interest rate was or is or whether gas was .34.9 or $3.95.9.
With this census data, are you attempting to infer that life in the US was easier for the “average” parents in the ’60’s thru ’80’s or that the “avg” buyer could buy more house in those eras than you or I could buy today?
bearishgurl
Participant[quote=Jazzman]BG said “In a nutshell, today’s family-raising buyer’s “expectations” are w-a-a-a-y too high for life’s little realities, IMO. Those soaring “expectations” have kept more than a few prospective buyers perpetual renters.”
You make it sound like renting is a bad thing? Not everyone is fated to be a home owner. If memory serves, only 50% of LA residents are home owners. If you are disappointed because your expectations are not being met, might it be that “life’s little realities” are at fault, not your high expectations? I like to think of my expectations as being rooted in higher standards, which is not always synonymous with higher prices.[/quote]
Completely agree that not everyone is “fated” to be a homeowner, Jazzman.
However, I was dicussing a handful of Piggs who posted here for months or years that they wished to buy a local home for their families but didn’t end up doing so, even during the 3+ years while the barn door was left open for them. So many of us Piggs tried to coach these posters and assist them though multiple threads and yet they never managed to be able to seal a deal. Or if they did, they never posted here that they finally bought.
Perhaps these supposedly-qualified-to-buy posters really didn’t want to be homeowners but initially thought they did. Who knows? I just think that if parents residing in CA coastal counties have a stable local job(s) and minor children in school or headed in that direction that they would make a much more stable life for their children by buying a home for them to grow up in. But that’s just me.
As for “my own (homeownership) expectations,” I never hesitated to purchase a home when I needed one and so they have always been been met. I’ll be right behind you in seeking to purchase a place to “retire” in, Jazzman. And in that search, I will be entirely realistic 🙂
August 26, 2013 at 12:26 PM in reply to: OT: On the killing floor; immigrations impacts on wages #764805bearishgurl
Participantdumbrenter, the (mostly dilapidated) rural farmhouses most of these workers rent is the best they can do for the money. There ARE many older (some dilapidated and some fully-restored) large homes with basements in the city (Greeley) but a good portion of them are zoned commercial (medical, dental, counseling, social svcs, etc) and another good portion are rented out to UNC students by the room (similar to the “mini-dorms” near SDSU). Another smaller portion are rented out as frat and sorority houses.
Rents are double or more in Greeley for the same-sized house as those in nearby rural areas.
Also, in some instances, it is likely cheaper to get a propane tank occasionally filled and a septic tank/leachfield occasionally serviced (or the LL pays for these svcs) than to have to pay monthly gas and sewer bills.
In the winter, those high plains have a very high wind-chill factor because the mtns are too far away to hold it back. Thus the 4′ long icicles sealing screen doors and the snow piling up over the eves and freezing solid :=0
August 26, 2013 at 11:58 AM in reply to: OT: On the killing floor; immigrations impacts on wages #764804bearishgurl
Participant[quote=dumbrenter][quote=bearishgurl]
Actually, I AM supportive of US wages not being driven to the ground by (skilled) H-1B workers and the like. HOWEVER, $11.75 – $13.95 IS a bit higher than Colo min wage AND there are likely 2-4 adult workers (full or PT) living in every rental farmhouse we’re talking about here.
[/quote]Then you are supporting movement of jobs away from US to China/India/Others.
You can’t have it both ways.
I would import doctors in thousands to drive down the medical costs. But that’s just me, nobody seems to want it.[/quote]Actually, no. My support for curtailment/elimination of work visas to work in the US has nothing to do with “offshoring.” The H1-B jobs that are left here will likely never leave the US. I’m supporting employers hiring well-qualified AMERICANS for these jobs which they are giving to H1-B holders.
You would be SHOCKED at how many well-qualified boomers are currently unemployed or under-employed (and not by choice)! I’m not saying that small biz should offer them all FT jobs and pay their humungous medical-plan premiums. (I realize small biz’s dilemma and am so over that now.)
But I AM saying that they could hire them at least PT or on a job-sharing basis (ex: 2-20 hr emps) to fill one FT position and let them get coverage on the state exchanges. This would enable a LOT of unemployed boomers to actually pay the balance of their monthly healthcare premium after their tax credits kick in. As we all know, the premiums on the state exchanges are quite a bit higher for this population than they were for the fittest boomers under the old plans.
Employers are idiots to just let this older-but-still-fit highly-experienced workforce just sit idly by while hiring the younger (inexperienced) worker and H1-B workers instead, both groups of whom boomers could likely work circles around while handcuffed.
Age discrimination in the US has had the effect of forcing a lot of us into the gym over the last decade. Sure, we’re now the fittest we’ve ever been but you can only spend so many hours a day being a “gym rat” :=]
For example, there are a LOT of tech positions in the US filled by H1-B workers as well as foreign workers here on other programs. Uhhh, HELLO-O-O-O out there …? There are PLENTY of qualified boomers to take these jobs.
I know you techies don’t want to believe it but your boomer-brethren REALLY HAS and CAN obtain updated skills to work in today’s tech jobs. It isn’t that hard for them to obtain updated certifications because many of them have worked in tech since the mainframe and punch cards were in use by biz and govm’t. Believe it or not, they WROTE THOSE PROGRAMS back then and understand everything … perfectly.
There is too much employment-related age discrimination going on the US and part of the reason is the amount of foreign skilled labor allowed to work here indefinitely. Gen X and Y doesn’t want to support American boomers with early SS and other public aid and they wouldn’t have to if many boomers could delay their “retirements” until age 70 or so if they actually had a paying job.
You can’t have it both ways.
August 26, 2013 at 10:31 AM in reply to: OT: On the killing floor; immigrations impacts on wages #764800bearishgurl
Participant[quote=no_such_reality]BG, good to see you are supportive of a modest proposal.[/quote]
Actually, I AM supportive of US wages not being driven to the ground by (skilled) H-1B workers and the like. HOWEVER, $11.75 – $13.95 IS a bit higher than Colo min wage AND there are likely 2-4 adult workers (full or PT) living in every rental farmhouse we’re talking about here.
The problem is that, unlike the immigrant kid with farmworker/meat-processing parent(s), the kid with “American” parents and grandparents graduating from local HS’s in NE Colo have MANY CHOICES in life. UNC, CSU and CU AREN’T “impacted” like our systems in CA are. Therefore, a “solid-B student” can actually get admitted as a freshman (at least to UNC and CSU)! In addition, there are MANY other smaller public four-year colleges in CO who will admit them. They have never had to take meat-processing/packing jobs and aren’t going to.
The area’s longtime residents, for the most part, are “well-heeled,” most of them having several land holdings which were passed down through their families. If they wish to partially support this population by way of philanthropy because they are grateful that the plant remains in Colo … then so be it. Far be it from us to judge. This plant doesn’t and won’t have to pay higher wages because multiple safety-nets (both public and private) exist in the region for their employees.
This isn’t a “new phenomenon” for this region. “Chicanos” as they are called there, are often second, third and fourth generation immigrants whose parents and grandparents migrated northward for work as early as the late 1950’s. They didn’t just drive from TJ to Carlsbad (50 mi) last week to spend part of the year cultivating flowers, only to return home for weekends and longer stretches and return to work. The Colorado workers are there for keeps, occasionally traveling back home for holidays, weddings and funerals. They HAVE TO BE as the majority of CO’s original immigrant-farmworkers originated from the States of Chihuahua, Coahuila, Nuevo Leon and Tamaulipais, as well as those indigenous peoples who immigrated from points south, all the way down through Central America (1500 – 3000 miles away).
http://en.wikipedia.org/wiki/Indigenous_peoples_of_Mexico
Most of these heads of households qualified in 1986 for amnesty under the IRCA:
http://en.wikipedia.org/wiki/Immigration_Reform_and_Control_Act_of_1986
For the most part, these immigrants working in “flyover states” are not of the same origin as immigrants from Baja CA. Mexico’s citizens are as diverse as the citizens of the US.
It’s not a “transient-worker population” like what we have here in SD County.
August 26, 2013 at 8:43 AM in reply to: OT: On the killing floor; immigrations impacts on wages #764796bearishgurl
ParticipantY’all are also forgetting that these workers undoubtedly get to regularly take home meat that got processed but “doesn’t make the grade” for the plant’s top-flight restaurant-chain clients and also scraps for their dogs. In addition, every time an onion truck stops at a stop sign or RR crossing on a WCR, they inevitably lose a few onions out of the back, which get picked up by the residents. The onions grown there are HUGE, btw!
Farmers markets abound in the immediate area:
http://m.yp.com/kersey-co/farmers-market
Then these workers can drive into Greeley and pick up baby formula and other commodities they need from food banks.
I would bet marbles to chalk that these workers store MORE FOOD in their deep freezes that we in SD have EVER stored.
August 26, 2013 at 8:20 AM in reply to: OT: On the killing floor; immigrations impacts on wages #764795bearishgurl
ParticipantActually folks, most of these “old farmhouses” are situated on at least 3 AC (that their LL isn’t using for range and farming leases), have a detached 1-2 car garage/workshop (might not have roll-up door) and have 3-6 bdrms because they have basements. They’re by no means fancy, having ancient fixtures and missing floorboards here and there. But nothing that can’t be fixed with plywood and a rug. A (K-12) school bus usually picks up within 6-7 blocks of each farmhouse. Also, pets are welcome 🙂
We can’t compare these farmhouses to a typical 550 sf dryrotted, termite-infested (SD?) apt at twice the monthly rent. WHY? Because it is too arid on the high plains for dry rot to set in or termites to survive. But they DO have HEAT and plenty of it as it’s the LAW (habitability issue)!
There’s plenty of room at these farmhouses to park your extra 1960’s-70’s American pickups and various and sundry other vehicles and tractors (running or not). It’s probably not paved, but that’s okay. These hardy folks have plenty of shovels, blankets, rugs and rock salt.
Trust me when I tell you that in spite of having to have a supply of bic lighters handy to melt 4′ long icicles of their screen doors to get into the kitchen six months per year, life is infinitely better for 10-12 (related and unrelated) people to live in one house in and outside of Kersey, CO than SD, CA :=]
bearishgurl
Participant[quote=SK in CV]That was fun! I’m really excited for those kids. Surfer dudes look like my high school basketball team. We all had that same (non)haircut.[/quote]
Awesome. My kid was classmates with 2-3 of the (former Parkview LL) that won all stars… an incredible experience, to be sure. I wish these kids all the luck on their future endeavors!
bearishgurl
Participant[quote=CA renter]BG,
There are plenty of examples of people who did all of the things you’ve mentioned above (low-balling, “shopping” for years in particular areas, refusing to bid against over-eager buyers with low-down mortgages or too much cash, etc.). Many of these posters eventually managed to buy in their #1 areas at, OR BELOW, non/pre-bubble prices that they had been comfortably willing to pay.
The only reason these buyers were able to make these good deals is because they’d spent YEARS studying their target markets, familiarizing themselves with particular properties and areas, and studying the causes/effects of the bubble mentality. It was because they waited for so long that they were able to be the winners instead of the losers in the housing bubble game. They were able to do this because they did NOT listen to the vast majority of realtors out there who were insisting that people buy now, or be priced out…FOREVER!
We are still very much in bubble territory. With interest rates and housing inventory at/near historic lows (with both more likely to go up from here, rather than down), this is NOT the time to buy.[/quote]
CAR, I was referring to self-proclaimed buyers (or, in actuality, “shoppers”) between 2008 and 2011, who, although prices were falling and already fell substantially from the “peak” of 2005 and there was quite a bit of available distressed listings in most zip codes, they just couldn’t seem to make a deal. That was roughly a 3-1/2 year time period … a “window of opportunity,” so to speak.
CAR, do you think prices will ever come back to the late 2008 to late 2011 level in SD County?
I don’t … because the fundamentals which caused the 2004-2007 bubble and subsequent crash (primarily “loose lending”), are long gone.
For all we know, these “prospective buyers” during our market downtown are still renting today. And that’s okay. Perhaps they really just wanted to continue to rent, regardless of their “desires” they posted here. For years, we heard numerous complaints on this board of sewed-up REOs and SS’s that couldn’t be touched by a buyer who needed a 90%+ mortgage … or even in some cases, an 80% mortgage. Where, in many areas of the county, single family homes DID sell traditionally and also with 95% LTV and FHA/VA mtgs during that era. And these homes continue to do so today. Sure, they’re a little more expensive now, but still “affordable.” Most of the distressed properties are now gone, so the SFR market is a little cleaner. For example, we no longer see listings with stripped fixtures and 4′ high weeds. So what if the same type of properties on the market are $30 – $60K higher! The vast majority of the listed SFR stock actually has working appls and fixtures in them now and a cared-for landscaping. You pay for what you get.
I was just referring to the handful of Piggs who missed the boat, complaining of “taking a break” or “suspending their search.” That ship has already sailed and now if they want to become “shoppers” again in SD County, they’ve got to completely change their search parameters or come up with a lot more cash.
Had they been more realistic with their search parameters when many SFR’s were selling at or below land value, they might have been able to strike a deal. But they were too fixated on their “wants” and so those “wants” ended up to be too unrealistic for their available resources.
That was and is the cause of “buyer fatigue,” IMHO, at least in CA coastal counties. As I have posted here before, this phenomenon wasn’t present in previous generations in their prime homebuying years because there wasn’t all the new subdivisions and zip codes to choose from that there is today which are undoubtedly confusing prospective buyers. In addition, work centers were scattered in primarily four places (a) dtn SD; (b) MV; and to a very small extent (c) SV, consisting of one dead-end st; and (d) SR, consisting of one st and one cul-de-sac. In addition, there were more large employers at that time around Gillespie Field (EC) that have since folded or located out-of-state.
The Golden Triangle and Sorrento Mesa had not yet been developed.
I think the MR CFD Act had the effect of creating a dizzying array of choices for SD County homebuyers in recent years and thus many of them were/are confused and have a hard time comparing apples to apples.
Even though some of us here do our best to wade thru the confusion and try to offer down-to-earth advice and suggestions to homebuyers, ESP FTB’s, some of them are obviously so paralyzed by confusion that they can’t make a decision in their family’s best interest and so end up buying nothing.
I think it’s a shame that some qualified buyers with minor children have not yet bought or have decided to leave the local market (but continue to rent) because it is not going to get any easier to buy as time marches on.
Prevailing mortgage interest rates be damned (since history has proven time and time again that they don’t affect pricing in CA coastal counties).
And no, I’m not a CAR/NAR lackey who preaches, “Buy before you’re priced out.” But I think families who NEED a home for their children should buy one and if they have had trouble doing so in the past while being otherwise qualified, then they need to change their strategy. Their kids will grow up right before their eyes as their rent increases almost every year and then they may not need or want a family home anymore.
In a nutshell, today’s family-raising buyer’s “expectations” are w-a-a-a-y too high for life’s little realities, IMO. Those soaring “expectations” have kept more than a few prospective buyers perpetual renters.
bearishgurl
Participant[quote=flu]Welcome to Carmel Valley-ish 08/09 pricing…
….in mira mesa ’13…
http://www.redfin.com/CA/San-Diego/8680-New-Salem-St-92126/unit-145/home/6398469
Must be the lack of walls….
And just came back from bay area.. Where in Santa Clara, a “deal” in the better part (better meaning ok, not the best like Cupertino)… is now $529/sq ft for a 40+year dump…
Makes SD look like a bargain…..
Middle class with no assets/low assets sure seems to getting clobbered with this economic “recovery”, which I think is pretty turning out to be what appears to be a wealth redistribution, which is the opposite of what I think our politicians intended (or claimed it would be about)…..
Afterall, I believe asset accumulation isn’t really happening at the lower echelon of middle class and below….It’s kinda hard to get a low interest/fixed rate lown and leverage up the ying yang if you were leveled during Real estate crash 1.0…..
I suppose though, that people haven’t come to the realization (yet)…Or at least are slowly beginning to realize it.
Corporations + wealth(ier) people: 1
Everyone else: 0[/quote]I’ve been trying to tell Piggs all this stuff on and off since 2008 and was accused of being a rallying bull and/or NAR Lackey by some.
Indecision breeds not having. A few Piggs have decided not to buy, even though they needed houses for their families and were qualified to buy when pricing was much lower than now. This was all due to chronic indecision leading to self-inflicted “buyer fatigue.”
Thanks for your realistic and eye-opening post, flu.
bearishgurl
Participant[quote=Jazzman]
. . . [S]igns of “buyer fatigue.”…
[/quote]
I don’t understand the term, “buyer fatigue.” I had never heard of it until I read the term here.
Let us examine the possible causes of “fatigued-buyer syndrome.”
If they are actually a perpetual shopper who never makes any offers, then they aren’t really a “buyer.” They are a “shopper” who is undoubtedly trying to familiarize themselves with what’s on offer (not using their agent to his/her fullest advantage).
If they are a prospective buyer who makes offer(s) (lowball?) which repeatedly get rejected in favor of other offers offering better terms or more money or both, and they refuse to accept or counter any counter-offers presented to them, then they are undoubtedly “shopping” in the wrong area(s) and wasting their time (AND their agent’s time).
If they are prospective buyers who have not been properly pre-approved for the size mortgage they need which is enough to consummate a deal on any property they make offers on, then again, they have chosen to waste theirs and their agent’s time.
If they are consistently looking at properties and in areas where they know they cannot qualify to purchase in, that is another self-made time waster. If they DON’T KNOW that they are unqualified to make offers in the area(s) they are shopping in, then they (and their agents) have not properly done their due diligence prior to beginning a house hunt and thus, are wasting everyone’s time.
If they have an “accepted” (lol) offer on a SS in which they have been waiting for months to hear if the deal is going to fly, they have consciously chosen to deal with the deadbeats they are dealing with (instead of “traditional” or institutional sellers) and so deserve whatever “fatigue” that comes with that territory. If their offer did not end up being accepted by sellers’ lender(s), then they, at all times, were free to shop elsewhere and terminate the SS escrow at any time so have no one to blame but themselves that they don’t yet have a consummated deal to show for all their “effort.”
And I don’t want to hear the excuse, “I’m `fatigued’ and so will suspend my search for now (or indefinitely) because every property I wanted (to make an offer on) already had all-cash offer(s).”
The key phrase here is “…every property I wanted…”
If all the properties you wanted were sold to all-cash buyers and you didn’t have access to as much cash as they did and/or needed a mortgage for purchase money, then those properties were located in the wrong area for you or their condition was too good for you … or both.
Again, self-inflicted “fatigue” … all just whining.
******
My gut feeling is that “fatigued buyers” (IF they actually exist) create their OWN fatigue. REALISTIC, PRE-APPROVED buyers with extremely knowledgeable agents don’t get to the point where they become “fatigued” because they have already made a deal, likely closed it and moved in.
“Dearth of inventory” be damned.
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