[bearishgurl]

[quote=SD Realtor]SK in the areas you mentioned no way you turn a positive cash flow on a SFH at 20% down. Also I am starting to see gaps in comps. For instance older homes in say Westwood of RB that we selling in the high 400’s and low 500’s are now gapping into the high 500’s rather then ramping. Another thing that has pushed some of the gaps is investors coming in and flipping. A home that sold for 430k in September just closed for 575k in February. Again, not fun being a young couple looking for a home to buy.[/quote]

That “young couple” needs to start shopping Lemon Grove or Chula Vista. I’ve seen some very high-quality flips sell recently in these areas for the $350K to $425K range. A couple of them recently sold VA/FHA so these “flipper-sellers” are accepting offers from buyers who don’t have a huge downpayment.

Yes, I KNOW what the properties were before so these flippers appear to have spent as least $25K in materials on them PLUS labor.

Of course, you’re aware, SDR, that it doesn’t matter what the flippers paid for the former sh!thole that no one but a cash investor would buy.

I think flippers doing good-quality work are actually performing a public service by revitalizing neighborhoods and upgrading and enhancing homes that otherwise would never sell and continue to be rental eyesores.

[bearishgurl]

[quote=FormerSanDiegan][quote=bearishgurl]
I don’t see a terrible catastrophe on the horizon with boomers being able to retire. Like myself, most lived below their means (during some periods of their life FAR below their “means”) in order to amass savings.
[/quote]

I think you might be projecting your own habits and frugality onto the boomer generation.

I seem to remember boomers as the “me” generation in the 70’s and the “greed is good” generation in the 80’s.

From
http://articles.cnn.com/2011-07-29/politics/baby.boomers_1_baby-boomers-sandwich-generation-retirement-age?_s=PM:POLITICS

“Baby boomers — those born between 1946 and 1964 — have been described as “the pig in the python” and the “sandwich generation.”

They lived well, grew up in relative abundance and, some say, expected their Social Security, health care and government support to be there as they grew old.

Baby boomers grew up during relative prosperity, from the economic boom of the post-World War II ’50s to the “Me” generation of the ’60s through the lucrative uptick in the Reagan ’80s. And then there were the budget surpluses they enjoyed during the Clinton ’90s.

As a result, many were able to buy second homes, take out loans at low interest rates, buy cheap gas and pump money back into the economy.[/quote]

FSD, that “me” generation of the ’70’s wore the same 2-3 pairs of levis for 8-10 years (with the worn places patched up and even fabric bottoms sewn on). They didn’t have access to a plethora of “designer jeans” and “electronic gadgets” (with their expensive monthly subscriptions). The cars they put that “cheap” gas in (which they often had to wait in long lines for), for the most part, did NOT have AC or even carpet on the floorboard, much less surround-sound stereo! For the record, I held partially open a two-barrel “Carter” carburetor on my first vehicle (of the “Mopar” persuasion) with a jumbo paperclip and giant hairpin for at least three years until I could rebuild it. And some of my friends had rusted-out fuel openings and emergency brakes and peeling dashes in their cars. And the list goes on.

Gen Y wouldn’t be caught dead driving one of these monstrosities, even if a parent gave it to them for FREE. And Gen Y women wouldn’t be caught dead wearing the often ill-fitting (sized for boys/men) “501/505” dungaree jeans and wearing halter tops we made from tye-dyed sheets with $3 men’s button-front chambray shirts (which we embroidered ourselves) over them and (men’s sized) hiking boots and moccasins.

H@ll, fvcking NO! A lot of girls in HS these days are actually carrying ~$300 Michael Kors bags in lieu of a backpack. Believe it or not.

And the list of comparisons goes on.

And the reason for this glaring division in values between boomers and (primarily) Gen Y? Because Gen Y now has many “choices” in life and obviously more deep-pocketed parents than boomers did. Ask yourself how their parents [the boomers] got that way. The above are just a few of the “choices” most boomers never had while growing up so were “conditioned” to live more “frugally.”

It’s hard to bring up a kid these days with your “frugal” values when “reality TV” and their “peers” are everywhere.

No, boomers, when young, weren’t very “high-maintenance” are most aren’t today. A 3-spd bicycle, a few pairs of jeans, a transistor radio and perhaps a modest backpack is all many of them had while growing up. In any case, many of them (at least the ones I’m acquainted with :)) still regularly wear Levis 501’s and 505’s (now a whopping ~$30) and they will never change!

I even still wear my old-school Levis on occasion and not just for pulling weeds :=]

[bearishgurl]

[quote=SD Transplant]Another reality I caught in the media is that savings rates are low. Well, savings isn’t encouraged by our FED, the savers are punished.
– How did it work out for the folks that saved cash for a full 20% down payment for a house……not so well (specifically when looking at 2012 or 2013 data……). They will never catch up.
– Inflation……yeah, we know how that’s going . . . .[/quote]

It depends on what type of residence the (25-34 yo’s) are trying to buy. If they are focused only on the “move-up” and luxury areas, of course they will never “catch up.” If they are focused on a decent family home in a “decent” area, they will eventually have an accepted offer (perhaps even a “rehabbed flipper”) for a 90% Conv loan (with PMI) or on VA/FHA terms, necessitating much less cash at the time of closing.

“Organic sales” of SFRs in SD County are happening, folks, yes, even in the $300 – $450K range.

In past decades, this is what the 25-34 yo group bought to get their foot on the housing ladder and this is still doable today . . . that is, IF the bulk of Gen Y has the will to do it.

[bearishgurl]

[quote=EconProf]CAR: if they were mostly in bonds, what would their rate of return be? Yes, that would be safer than the risky choices they are now turning to. But by getting only 3 – 5% on these safe investments they would be admitting that their “assumed” rate of 7.75% is phoney. They would be admitting to taxpayers that they are far more underfunded than they claim, and that taxpayers are on the hook for this huge unfunded future liability.[/quote]

I can’t speak for CAR, but she may be intimating here that the (’99 – ’02) CA public pension “enhancements” counted upon the higher, 7.75% return were based upon the funds investing in risky Wall Street “investments.” The “good old days” were before that, when (lower) public pensions were promised or paid out premised upon a much more conservative return based upon the funds investing in “relatively safe” investments. (I belong to a group of public pensioners in the latter-mentioned category).

Had none of the CA public pension plans elected to avail themselves of these risky investments and then simultaneously “promise” pensions based upon more generous formulas (due to the higher projected returns of the “risky” investments), they would not have fallen short of being able to fulfill their (lesser) promised benefits in the first place.

Buenrostro and Villalobos, formerly CALPERS CEO and Board member, respectively, were indicted with accepting bribes from Wall St investment houses in exchange for investing $255 billion in CALPERS employee and employer contributions with same houses and undoubtedly losing a good portion of it. If the charges are proven to have actually happened, these two deserve whatever is coming to them.

I find it a sad commentary that two officers of CALPERS, at least the second of who was voted in by the membership and placed in a position of trust, could grossly and criminally mishandle the funds under their supervision for their own personal gain. Their past actions could seriously jeopardize the pensions that 1.6M present and future CA public retirees and their families are counting on after a decades of faithful hard work.

[bearishgurl]

Throughout history, very few of the 25-34 yo group were in a postion to save for retirement. They were focused on trying to buy a home to start a family in or for a growing family. As it should be. As home prices and interest rates rise (as they did in periods of the past), it is best to get in while the getting is good.

I’m with UCGal, except that she is including some Gen X-coworkers in her post. I don’t see a terrible catastrophe on the horizon with boomers being able to retire. Like myself, most lived below their means (during some periods of their life FAR below their “means”) in order to amass savings. I utilized all of the savings methods UCGal mentioned and more while a FT “worker bee” and still do today. Add to that method cheaper (sometimes MUCH cheaper) ways to get good food (yes, fresh). Suggestions are all over the internet so I won’t mention any here.

With a small DB pension, SS and savings, plus possibly a PT gig for awhile, I plan to do fine in “retirement.”

The elephant in the room for boomers and later generations is catastrophic illness before the age of 65 and having inadequate medical coverage or none at all. I can’t emphasize enough how important it is for all CA adults who can’t qualify for CMS or MediCal to carry at least an HDHP (most of them have preventative-health benefits with zero deductible) if one does not have coverage through an employer, ESPecially if they own real property (which is subject to lien by Medicaid/MediCal without a court filing). And there is something to be said for healthy living. Continually buying a half-dozen supplements at CVS, taking them regularly and buying a gym membership (and using it several times per week) is a LOT cheaper annually then just having ONE non life-threatening medical issue annually that needs to be treated due to NOT doing the above.

Since retirement is either looming nearby or upon them, every boomer will eventually “retire” within their means. If that means living with one of their kids, in a mobile-home park in the nation’s midsection or leaving the US entirely, that is what they will do. In any case, many US-citizen boomers will likely be able to qualify for “lifeline” phones and utilities and tap into their neighbor’s secured router by bartering, etc, to defray monthly expenses.

Re: boomers, I don’t see where all this concern is coming from. Not everybody wants to jet around the country and world and stay at five-star hotels in their “retirement,” even if they could afford to do so.

Who we should be focused on are current under-50 crowd, most of whom have gotten “used to” a particular “lifestyle” which they don’t want to give up in order to save (or save more) for retirement. I feel many, if not most of THEM will end up as indigent retirees seeking social services. THAT’s the mammoth in the room, IMO.

[bearishgurl]

spdrun, along with your snowshoe-in-Central-Park pic,

http://piggington.com/ot_skiing_this_morning

. . . I think this picture is gorgeous! Can you take another one of the same place when those trees start budding and blooming and post it on this thread?

I can see here why the masses like NYC :=]

[bearishgurl]

[quote=Hatfield]I’ve got several friends in the bay area as well as a brother, and they all say tech is going gangbusters. It’s like the late 90s all over again, and they’re having trouble hiring good engineers. The other interesting data point: a friend was looking buying a house or condo or some sort of ski getaway in the Tahoe area, and those prices are getting stratospheric as well. It’s all bay area tech money, apparently.[/quote]Hatfield, you may be aware that South Tahoe was on my retirement “short list.” If this is true, I won’t be able to purchase a place there for at least another year and could very well be “priced out.”

I was looking at 35-55 yo tract houses on generous lots in the middle of town on the busline. In October 2010, these houses were going for $175K to $275K. If the cash-rich “tech crowd” from SV is now interested in these houses, then they may end up being listed at far more than I want to pay.

Hopefully, this younger crowd wants condos in Stateline, NV or the more “luxurious” custom houses at the base of Heavenly or in more “exclusive” areas situated west and southwest of the CA Base.

It will be interesting to see what happens to the previously depressed SFR market in El Dorado County, CA. In any case, I won’t be ready to “retire” for another year to year and a half.

[bearishgurl]

Yikes, that “thing” (what looks like a nondescript PUD on a postage-stamp lot) is actually in Dublin, which is a one-hour trip by car to SF on an extremely bright sunny day (barring any usual-but-unforeseen circumstances).

L@rd, it gets up to 114 degrees there in the summer. How do I know this? Dublin is my “hometown,” back when it had a pop of <5K and shared a zip code and 2-lane "hwy" with its "sister towns," Pleasanton and San Ramon, lol ...

In SD County, this would be an exurb in the stix but alas, the "exurb in the stix" in the bay area is "Tracy," which is that ultra-distressed megalopolis 28 miles to the east of Dublin.

H@ll, what do I know? Maybe that former cow-town Tracy is not "distressed" anymore :=0

I loved looking at the pics of the $1.5M Ratcliff-designed Berkeley Craftsman beauty with the incredible views. Absolutely fabulous property!

Thanks for sharing, Hatfield!

[bearishgurl]

[quote=jimmyle]This is one of the best area of Mira Mesa with quick access to the light traffic Sorrento Valley Blvd to avoid the heavy Mira Mesa Blvd traffic. 3 miles to Qualcomm and the biotech cluster. 5 miles to La Jolla and UCSD. I think it was a great deal. With 20% down, payment is under $1700/month.[/quote]

Agreed, but at the time this was built and originally sold for ~$250K (VERY high for the area back then), there were only jackrabbits and lizards in Sorrento Mesa. I think the higher price was predicated on the future formation of what is nka the “Penasquitos Canyon Preserve” and the hot air balloon show visible from the backyards. And the “Golden Triangle” had gotten started and was expanding :=]

[bearishgurl]

This area has “gentrified” significantly since CALTRANS bought up those hundreds of parcels on each side of “40th St” thru eminent domain. This action, along with the long-planned and successful addition of the I-15 “cut and cover” project and later, EC Blvd “enhancements” made by the City, created all the micro areas which paulflorez speaks of now.

It is exciting to see the changes in these micro-areas, especially the public additions such as parks, swimming pool and ice skate rink. This area has come a long, long way since the ’80’s, IMHO. It is also gratifying to see qualified buyers spend $$ to repair/upgrade these older smallish homes, many of which have notable and important (to SD) architectural features.

SD’s “Mid-City” is beginning to rock!

Strictly by its close-in metro location and lower price point than North/South Park, Cherokee Park and surrounds have nowhere to go but up, in my “expert” option.

Signed,

Former Save our Canyons committee member

[bearishgurl]

Fantastic “snow tour,” desmond! I LUV ATV tours because they show us a part of the world that is invisible from a typical road that a typical passenger vehicle uses.

Also, zk, your “chicken game” with the train (coaster?) was kind of scary. I guess you know what you’re doing but I don’t think I’d want to be your passenger, lol!

[bearishgurl]

WOW, obviously a SS which went way over list but $525K is still a good price. A previous owner (or even the builder, for some of it) appears to have spent $65-$75K on landscaping/hardscaping. A resident can no doubt watch balloons rising from the backyard of this property.

IIRC, I believe this generous lot could have been a model home in the “Porcelain Collection” back in the day. It’s been so long that I toured these models with a friend that I forgot who the builder was.

Yes, the balloons could be viewed at sunset even back then!

Unfortunately, we don’t have AN’s “expertise” to tell us more about the history of his area.

Thanks for sharing, jimmyle!

[bearishgurl]

[quote=spdrun]I think she’s using boomers as a proxy for “smart people who buy below rental parity.”[/quote]

Actually, I’m not, spdrun. I’m using the criteria of “very deep pockets,” from whatever generation they are born in, to decide if one should invest in *distant* small scale rental properties while raising minor children at home.

[bearishgurl]

ER, we’ve discussed this issue in the past. Off the top of my head, here are a couple of threads but there may be more:

http://piggington.com/cross_country_road_trip_anyone?page=4

http://piggington.com/why_is_a_doper_snorting_bath_salts_my_problem?page=1

Certainly, ER, you’re previously having resided in TX … you know the drill. You must have driven between there and here at one point . . .

[bearishgurl]

[quote=FormerSanDiegan]Here’s what I do to cope with BG’s posts (at least in those cases where I decide to read all 5 chapters).

Just imagine the writing in the voice of Andy Rooney.

Better yet, picture Andy Rooney saying these things she writes. It’s much more enjoyable this way.

Here’s an example to help you visualize (or audialize?)

http://www.youtube.com/watch?v=iQr_lu60GbY%5B/quote%5D

Actually, Andy Rooney (I’ve oft referred to him as “Andy Looney”) is my all-time fav deadpan comedian.

Thus, I will consider your comparison of me to him a compliment (even though I look and sound nothing like him) … G@d rest his soul . . .

Thank you, FormerSanDiegan. I am in awe :=}

[Author]

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