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bearishgurl
Participant[quote=flyer]Another interesting turn to this thread.
Agree that many Boomers, and younger people just starting out, will most likely have to leave CA for retirement, employment, housing, and tax purposes, but many, like myself, and just about everyone I know, plans to stay–because (after checking out most of the world), there’s no other place we want to live.
Yes, other less expensive, and more tax-friendly areas such as AZ (where we also have some rentals) and TX, etc., are booming again, and I think they will continue to attract many who are looking for financial relief.
As the current population ages, I think you will see places like those mentioned above continue to flourish. CA, and San Diego in particular, is a tough place to sustain a high standard of living from the working years all the way through the retirement years.
Even those who are making the “big bucks” here today, may not be able to sustain their lifestyles here for the balance of their lives–should they choose to do so. Overall, it will be interesting to see how this all plays out over the years.[/quote]
flyer, I agree with this post. Even though I could afford to stay, I just don’t like what SD County has become. I may very well keep my largish house for a rental for a few years in lieu of selling it, just to make “sure” I do not want to come back here in “retirement.” If I do that, I could still purchase a modest house elsewhere if I wished to do so.
I can keep going indefinitely in SD County because I don’t have a very high “overhead.” Taxes are not a big issue with me.
It’s just that I’ve spent nearly my entire adult life living 1100-1700 miles from most of my family members (excepting those still alive in the SF Bay area). The rest of my family members still alive are now 1500+ miles away. I wouldn’t mind living a little closer to them.
There comes a time when one realizes that life can be short, our daily obligations to others are over with and we are free to do what moves us (literally speaking).
I dream of “retiring” in a mountainous setting near a major ski resort 🙂
Participant[quote=SK in CV][quote=bearishgurl]sdduuuude, McBride’s graph is for SAAR (Scottsdale [AZ] Assn of Realtors), no?
Has there been more building going on in metro Phoenix in recent years than SD County? From his graph, it looks as though there has been.
I can’t understand that since the Phoenix metro area is grossly overbuilt.
[/quote]
Those are national numbers. 2012 was a bit under 400K units nationwide. (I’m not sure why the graph shows a rate of over 400K most every month.)
Believe it or not, homes are being built in Phx. It may have been grossly overbuilt 5 years ago, but prices rose pretty decently last year, and distressed sales of all kinds are on a sharp decline. There’s 700 condo units being built a few blocks away from me, and I have never seen a building go up faster. They’re working 7 days a week. Same developer just broke ground on another 400 units.[/quote]
SK, if there is enough “new household formation” in the PHX area to fill 1100 new units a few weeks/months from now, there must be a lot of companies moving in, no?
Where are all these new residents going to work? I say “new” because how many of the residents filling these *new* units do you think will actually be locals? I could see moving from an apt/condo to an SFR but why move to another apt?
Isn’t apt rent and even SFR rent pretty cheap (by SD stds) in PHX?
Maybe a waitress and a bellhop or two “telemarketers” can easily buy a home in PHX … I don’t know.
Participant[quote=The-Shoveler]Funny, SD and San Jose, are run very similar in a lot of respects, why do you think SJ companies started to move here in the late 80’s early 90’s.
It has more to do with the policies in a very small city really.[/quote]
I have been visiting relatives in SJ since about 1968. Only in the eastern portion of the city (flatland) and a small area in the southern portion that is not open space and abutting Morgan Hill has been filled with residential tracts since then.
Not sure, but I don’t believe there have been any CFD’s formed within the city of SJ. The residential tract construction east of the Capitol Exwy (former avocado groves) was actually “infill.”
The eastern hills overlooking SJ’s eastern flatland (fmr avocado groves) were developed with custom homes little by little in the ’50’s/’60’s.
To this day, these residents are still on septic and the current building code there requires fire sprinklers in every room of the house.
Even though the populations of both cities are similar, SJ’s leaders did NOT give Big Development permission to bulldoze every square inch of their city (as SD’s leaders did). Why? In the first place, they never had the land available for massive CFD formation, due to mtns and abutting other well-established cities.
Those companies branched into SD or moved to SD because there was land available for *new* headquarters (or bigger, newer digs avail for them) and, most importantly, they could get away with paying much less here for the same jobs.
Plain and simple.
Participant[quote=The-Shoveler]Most of todays CA lizard lands become tomorrows Job centers.
I have been around long enough to see it at least in three times in three locals, each further out from the other.[/quote]
I understand, Shoveler. But if those Lizardland Biz Parks didn’t exist because where they sit was still dominated by lizards, then those companies proffering the “new jobs” would have simply stayed in their old digs in dtn SD, Kearny Mesa, SD MV, UTC/Golden Triangle/SV or the urban OC.
Commercial properties in the established biz areas of SD Co/OC were displaced and often left vacant for months/years after local companies moved out to Lizardland en masse.
It’s a case of which came first, the chicken or the egg.
San Mateo and Santa Clara Counties, in the heart of CA’s renowned “SV” are a case in point. Big biz stays put and even expands its local “campus” to take up a good portion of a small city.
This region’s new hires flock around the area of their jobs searching for resales/rentals. Those who are savvy, lucky and can manage their budgets wisely find local housing. Those that have been financially prudent can actually buy a residence. Those that refuse to accept the housing that is there commute long and arduous distances every day and/or leave their jobs prematurely, due to their arduous commutes caused by their non-acceptance of the local housing that is on offer.
I don’t buy a SV new hire’s story (who has just accepted a job in the highest-paying region in the nation) that he/she “can’t afford” to live there. “Suitable” housing is in the eye of the beholder.
With massive natural open space (NOT desert, as in SD County) permanently established several decades ago by their wise PTB, these counties offer a quality of life that is bar none.
All is as it always has been and should be in ALL CA coastal counties.
Participant[quote=sdduuuude]Calculated Risk posts this data, related to new household formation, regularly. It is always interesting:
http://www.calculatedriskblog.com/2013/01/new-home-sales-and-distressing-gap.html
If you assume that the sale of a new home (not a resale home) represents a new household formation, you can see the difference in hew household formation on his graph. New household formation rate is way down from the peak. Even down from well before the peak.[/quote]
sdduuuude, McBride’s graph is for SAAR (Scottsdale [AZ] Assn of Realtors), no?
Has there been more building going on in metro Phoenix in recent years than SD County? From his graph, it looks as though there has been.
I can’t understand that since the Phoenix metro area is grossly overbuilt.
We should never assume that the sale of a new home represents a “new household formation.”
Unless homebuyers move in from out of (SD) county OR, if local, a parent’s back bdrm directly into a local rental home or brand new home community in SD County, there is no “new household formation,” IMO.
If “local” homebuyers move out of a local rental into a brand new home OR resale home which they purchased, they have displaced the rental they were occupying.
In several coastal CA counties, there isn’t any (and hasn’t been for many years) “new home tracts.” So, unless homebuyers in these counties are moving out of local parents’ back bdrms into an existing home which they are renting or have purchased, there is no new household formation.
New buyers/tenants in existing homes are simply replacing the most recent household which occupied the unit. If an existing property is sold or rented and the owner/previous owner then leaves the county, then that is actually a “negative household formation” if the new occupant is moving from another local property.
I really think the term “new-household formation” needs clarifying because “Big Development” and CAR/NAR like to use this phrase to “justify” why CA needs more and more new residential construction.
If there weren’t any new construction for the next 20++ years in CA’s job centers, there will still be plenty of places to live within close proximity to those jobs.
To maintain and increase profits, “Big Development” uses the mantra of “CA is running out of housing” to pander to their “captive audience,” the “lizardland-lifestyle seekers.”
NOTHING could be further from the truth.
Participant[quote=CA renter] … I think the long-term trend of people moving from the interior of the country to the coasts just might reverse over the next few decades as more and more people seek to buy their own homes, but can only do so in these cheaper states. As many have pointed out in other threads, incomes in other areas are about the same, while the cost of living is often substantially lower. If someone doesn’t have family and/or deep roots here, the “sunshine tax” argument becomes less compelling, especially if people are not able to buy their own homes here.[/quote]
I agree here, CAR, and it won’t be just “boomers.” A lot of native Cali recent college grads are no doubt going to have to relocate to find jobs in their fields which pay a living wage … even if just for the first few years of their career. The problem is that (not sure it IS a problem for all) if these recent grads end up staying on these distant jobs and “settling” in a “flyover state” to raise a family there, it is very often too difficult to duplicate the “lifestyle” in CA coastal counties that their families will enjoy elsewhere … even if they get a job in Cali which pays a little more than the one they have.
I myself raised my family in a region (SD) in which I (and my then spouse) had (and have) zero local family-member residents. We/I traveled often to see them and vice versa, but it wasn’t the same lifestyle as my friends and neighbors experience (with family constantly all around them for support). Thus, I’m one of those people (boomers :)) who will have no problem with blowing SD as soon as the last kid leaves the nest …. SOON for me, YAY! Even though I love parts of SD (which I could never afford to buy into by myself), after nearly 40 years here, I’m mainly disenchanted with SD’s unbridled growth (lowering every resident’s quality of life) and in my profession, I’ve seen way more than enough :=0
If I just need a “SD fix” in the future, there’s always friends to stay with and/or the Best Western, lol …
I’ll likely be moving to a town/city (not a “suburb” but semi-rural/rural) with a population of 1K to 50K (leaning towards <20K).
Hopefully, I will be able to find a nice log cabin to buy :=]
Participant[quote=carlsbadworker]CAR, whether baby boomers will be looking at liquidating their houses does not matter. They are switching from one form of housing (owner) to another form of housing (renter). It doesn’t change the overall demand for shelter. Real estate investors as a supply of these shelters (again either in the form of landlord or seller) would benefit if the demand grows.
By default, the demand will grow due to new household formation. Renter affordability will slow the household formation but I don’t see it will reverse the trend.[/quote]I agree with this, except for the part about “baby boomers” selling to become “renters” after living in their “own” homes for nearly their entire lives.
Ain’t going to happen.
They may or may not stay in the same county or state but the majority of them (who DON’T have “artificially-low” property taxes under Prop 13) will likely sell and downsize.
Boomers value home-ownership. They look at buying a primary residence as shelter … NOT as much a “lifestyle” purchase (as younger generations do).
I don’t agree that the majority of boomers won’t be able to buy a (smaller) replacement home with the proceeds of their (often high-maintenance) former “family home” which is no longer needed.
Participant[quote=CA renter] . . . For as long as interest rates are suppressed at these levels, there will likely be fairly strong investor involvement in the housing market. What should be concerning to those who want to see higher housing prices in the future is the 5-7 year disposition plans that these large funds have (and many banks who’ve been holding off on foreclosures). This will also coincide with more Baby Boomers entering a stage where they realize their pensions/retirement accounts won’t be able to sustain them over the years, and they, too, will be looking at liquidating their houses in order to provide cash for living expenses.[/quote]
I agree with this and also agree that there could be a LOT of inventory on the market at the same time equity sellers will be trying to unload. Most of these REITs DO have a ~5-7 year “buy-and-hold” window. HOWEVER, I have no doubt that the bigger ones will be in positions to change their minds and hold out their properties for lease/rent (at least the many that are near job centers) and/or stagger their listings so as to not flood the market (just like the REO lenders did) and thus obtain a higher price for each one.
[quote=CA renter]If interest rates rise, the investors making 5-10% the hard way (and I think they are underestimating what it will cost them to maintain these rentals) will want out of these funds. Will the funds be forced to liquidate their inventory if this happens? All at the same time? With higher interest rates, new owner-occupant buyers will also be willing to pay less for the same properties at the very same time that these investors are looking to exit. Sure, the investors can hold and accept lower than expected/desired returns, but there are weaknesses in these plans that many people aren’t acknowledging, IMHO.[/quote]
Rental properties CAN very well be “labor intensive.” The REITs are no doubt using local property mgmt companies in each area they have a concentration of rental properties. Higher mortgage interest rates are a two-edged sword. Be we must remember that with each mortgage rate hike, another subset of potential buyers remains renting, thus fueling rental-unit demand. In mtg-rate-hike periods of decades past, homebuyers would simply buy a smaller property or a property in a lesser area than they could previously qualify for … or both. Today’s renters who are used to living in a particular area that they are happy with will generally NOT step down in size/location just to become a “homeowner.” Their “lifestyle” is far more important to them than owning a home.
[quote=CA renter]Something for these new landlords to think about are the statistics about the percentage of income renters are already paying for rent. It’s unlikely they’ll see rising rents over the years (assuming foreclosure numbers continue to dwindle to more normal levels) unless the renters start adding more people per unit…which will increase turnover, late payments/no payments, maintenance costs, etc. . . .[/quote]
I don’t know about other states, but in CA coastal counties, three or more salaries per rental household is not uncommon. This could either be one or more of the renters with two paying jobs or three or more adults or young adults (typical children of renters) contributing to household bills. This is the way it’s always been.
If YOU, as a LL, have a rental which rents for $2600 or more per month and are concerned that it will take up too much of a “nuclear” family’s income, then it might behoove you to entertain only the rental applications you receive which use three or more incomes by the tenant group (whether a related family … or not) for rental qualification and thus living expenses. This also cushions against job loss by any of the tenants or loss of ONE job by a tenant who has two jobs.
ParticipantWow, I never would have thunk it! I didn’t know “crafts” was a popular-enough reason to go on a “retreat.”
I guess it’s better than the Lion’s club, community center or rec center, because a participant gets to eat and spend their nights there and so live and breathe their project until it is completed, lol.
Interesting! However, I would prefer to go on a retreat to a “scenic” place more “off the beaten path” than Esco or TV.
ParticipantWhat about a group home? Rehab center … something like that.
They’re allowed to be in residential areas in SD County.
January 24, 2013 at 6:13 PM in reply to: Over 21% of homeowners in SD County have paid off houses #758516Participant[quote=FormerSanDiegan] … I’m pretty sure I wouldn’t do the job that requires walking the streets in the dark/dusk wearing a dress.
(Was that uphill both ways in 10 feet of snow ?)[/quote]
Aren’t you a “former San Diegan?”
Surely if you are you must be familiar with the “gritty city” it once was and know which hills I’m talking about, right?
And you also must be aware that we don’t have any snow here in what we now refer to as “America’s Finest City.” :=P
That’s your bailiwick.
I don’t know how long you’ve been gone but maybe you should give some consideration to coming back to San Diego for a visit so you can take a mental note of everything that has happened downtown in your absence. You might be shocked 🙂
January 24, 2013 at 5:46 PM in reply to: Over 21% of homeowners in SD County have paid off houses #758515Participant[quote=FormerSanDiegan]BG – I agree that for the most part pensions were earned. That was part of the deal, part of the compensation. That’s what people signed up for when they got their job shuffling boxes of papers while they stared at their bosses’ face and spun a dial on a telephone with an eraser.[/quote]
You’re damned right they were “earned” ;=]
January 24, 2013 at 5:44 PM in reply to: Over 21% of homeowners in SD County have paid off houses #758514Participant[quote=sym]BG, I am not saying pensions are an entitlement. IMO pension is just like any other work benefit e.g health/dental/flex/parking… Today some companies provide and many don’t.
Also with passing decades corporate benefits vary, and that is the evolving nature of workplace. Not much to complain about. What was offered as pensions in the past is available for most employees in the form of other retirement benefits.
I don’t have pension, but my Dad has one. I also know my Dad’s pension plan was revised over the years. Would I like one? Most likely. Do I miss not having one? Definitely not.
What bothered me (and perhaps few others) was your reference to people having not worked long enough yet willing to complain about someone with pension benefits 🙂
I don’t see the analogy – why does it matter how many years some one has worked. If one can work less hours and are able to spend more time with family/community work, I say more power to them for effectively managing their time and resources.
CAR, in my mind pensions are employment benefits, just like 401k’s. One can choose to have one or not. If one is enrolled (optionally/not) it is something to use after reaching a predefined age.
I know for a fact 401k balance follows the market, so there is no guarantee one will have the projected nest egg when the age limit is reached. Pensions perhaps predefined, BUT certainly not off limits to market variations.
The one other point I did not follow was the distinction between salaried worker moving to hourly work. If the salaried employee (most like exempt) does not like it, one certainly has the option to change to an hourly work. There is no difference between a salaried worker switching to an hourly worker and one who was initially hired as an hourly worker. The rates are market based, and companies can’t certainly have classifications of exempt, exempt but hourly, or ‘true’ hourly worker.[/quote]
sym, you weren’t the one(s) that said that pensions were “entitlements.”
Perhaps you have not been able to read thru the dozens of “public pension slapfest” threads on this forum. Yes, there are dozens, filled with ignorant posts by uninformed posters. Some of the chief complainants are those whose signature on their college diplomas are still damp (the under-35 group). If they have a Bachelor’s degree, they may have been working FT 3-12 years and if they have a masters degree, they may have been working FT 1-10 years.
The Piggs with doctorates either earned a defined benefit pension themselves, are in the process of doing so and/or have a full understanding themselves as to how defined benefit plans work 🙂
I’m not trying to put anyone down here. The way defined benefit plans are funded and calculated can be very complex and difficult for the layperson to understand.
When I was early-mid career (in whatever peon classification I held), I would never have dreamt of complaining about a pension that a worker 20-40 years older than myself earned throughout their lives! Instead, I occupied my thoughts with how I could earn one for myself.
Every generation has to “support” someone. We supported the millions of “blue-haired ladies” of the Greatest Generation and a few of the WWII Gen. Nearly all of them got their hair and sometimes their nails done every week. They were ALL on SS and the vast majority who were widowed had little more than that or no income whatsoever beyond that. Why did us boomers have to “support” them all? Because 99% of them never held a paying job, or if they did, they were “self-employed” on a farm most of their lives, their job(s) were prior to the SS Act or they did not work long enough for a benefit. By law, they were able to latch onto the work record of a current spouse, deceased spouse or ex spouse to “qualify” for SS, which most collected from age 62 forward. Why so early, you ask? Because they could! If still married to a SS recipient, they took the benefit anyway as OASDI is not based upon “need.” For the many unmarried ones, there was great need. These are the American women who were my mother’s age but mostly my grandmother’s age . . . the Greatest Gen is dwindling fast and the WWII Gen is right behind them.
Not fair. I hope I see even 1/4 of what I have contributed into the bloated “system.” And I’m likely a helluva lot closer to becoming “eligible” than most of you.
As to your comment about `managing one’s time wisely,’ most of the current civilian (and a few govm’t) hourly workforce now has the option of taking advantage of coming into work late, going home early or even working from home.
Workers in previous generations did not have the option to “manage their time wisely.” Of course, most did so while “on the clock,” to produce what was expected of them in their allotted eight hours. This didn’t get them “flextime,” allow them to come and go as they pleased or allow them to “telecommute.” Occasionally, one could earn “comp time” on their paystub (paid at the rate of hour for hour) if they came in on a Saturday for 4-8 hours of “file projects” under the direction of a supervisor, who was present. The M-F choices were either “face time” or “leave time.” IOW, any absences from the office came off the worker’s leave balances, making it impossible for many with impromptu kid or caregiver problems to ever take a vacation, because they were perpetually out of leave. “Work-life benefits” were virtually unheard of.
I think FSD was making a distinction that he/she was unfamiliar with the “hourly-worker world” (which is essentially representative of the vast majority of US workers in conformance with Federal law). FSD alluded that, as a “salaried worker,” he/she was was often at his/her employer’s “beck and call” 24/7.
Everyone has choices and can seek and accept an hourly position over a salaried position. Especially if they feel they have been taken advantage of by employer(s) in the past.
You are correct in your definition of defined benefit pensions and defined contribution retirement plans.
January 24, 2013 at 2:02 PM in reply to: Over 21% of homeowners in SD County have paid off houses #758482Participant[quote=earlyretirement]Fast forward to today’s working environment and for many of us, we are on call 24/7 as someone else mentioned. Back then they didn’t have Blackberries/Iphones/Smartphones where a client might get annoyed if you don’t answer within a few minutes. There was no Internet where things are instantly available. Things took much longer and it wasn’t instant like it is now. The efficiency just wasn’t there which meant they had more down time.…[/quote]
ER, I’ve never had a position for which there was “downtime.” When the mainframe was “down,” it simply meant we had a lot more fancy footwork and phone calling to do until it came back up again.
Have you ever made 400 calls a day on a rotary phone with a pencil eraser??
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