[FormerOwner]

When I lived in San Francisco, I *did* have a car but I only used it occasionally – I didn’t need it to get to work or to do anything that was part of my daily routine. That’s the kind of living I think the US needs to move towards.

If the Peak Oil theory is correct (which I believe it is), oil prices are on a long-term upward trend (exceeding the rate of inflation) as supply will not be able to keep up with worldwide demand. What happens to So Cal home prices when gas is $6 per gallon?

[FormerOwner]

Regarding technical certifications: they are worthless by themselves. Same thing for the non-degree technical schools. There are so many smart people out there with 4 year Computer Science degrees that that’s what you’ve got to have in order to get a job. The exception MIGHT be if you are a self-taught genius and have some work that you can show to back it up and know someone who can put in a good word for you – I worked with people like that in the past. Ideally, in order to land your first job you should have all of the above – a 4 year CS degree plus demonstrable experience of completing a project or two, even if it’s just for fun or unpaid.

I know several people who blew $10,000 or so going to “technical schools” to become Microsoft certified (MCSE) and were never able to get decent jobs in the IT field and ended up doing something else.

Another thing: before getting too far along in school you need to figure out what kind of IT job you want to get:
*Programmer
*Database Administrator
*Network Administrator
*Security Specialist
*Systems Analyst
Also, you have to have an idea of which platforms/languages you are aiming at becoming an expert in. Companies want degreed smart professionals WITH expertise in the technologies they are using. Companies do not want to train newbies. That went away when the dot-com bubble burst. Once you land you’re first job, it gets easier from there.

The reason 4-year CS degrees are valued by employers is that you can’t really get any depth of understanding in a 6 month training program. It really does take a lot of study to gain the neceessary depth and breadth to be successful. Plus, the ability to graduate with a CS degree requires a certain amount of commitment and IQ so employers feel it eliminates a certain amount (but not all) of the fakers.

I was a SQL Server DBA until I got out of IT a few years ago. In 1999/2000, a contract DBA could make 200K year. Companies were going under left and right, but you could always find another job very quickly. In 2001/2002, it got to a point where new contracts were virtually non-existent. The only jobs were full-time positions paying 65K-75K/year and they expected you to work 60+ hours per week and be on call 24/7. That’s when I left the field and never went back. My degree was in something else and I fell back on that and sort of worked my way back up in salary.

[FormerOwner]

Things got really bad in IT in 2001. The low interest rate/high liquidity monetary environment and the real estate boom are the only things prevented a meltdown in the number of IT jobs available. Oh, and the boom in military IT jobs has benifited a lot of folks too.

Overall, the IT field actually STILL hasn’t recovered to where it was in 2000. A lot of people left the field and that helped reduce competition for jobs but the streets are definitely not paved in gold and the risks are high. Entry level jobs are also hard to come by. Most jobs require experience and experience in the specific technologies that that company is using.

If you pick a technology that’s in demand (.NET, J2EE, for example) and you’re really good at it, you can make some good money but you always have to save some of it for when the next downturn comes and you get a pink slip.

So, it’s still a good field but not what it was in the late 90’s through 2000 and the risks are high.

[FormerOwner]

It seems that the old central-city model of urban planning works a LOT better than anything that’s come along since the invention of the automobile.

I agree that metro areas like San Diego will NEVER be able to add enough lanes to make traffic flow smoothly.

I’ve actually thought about moving back to San Francisco due to being able to get around on foot and public transportation vs driving – I find it a lot more enjoyable and less stressful. Now if they could do something about the homeless people asking you for money every 2 seconds, it would be ideal. The new mayor up there has initiated some changes in this regard but I’m not sure how much of a difference they will make.

[FormerOwner]

You might hit it big. Even if you don’t, it was the house’s money anyway and didn’t cost you a dime.

I think most of our economy has been running on this principle for roughly the last decade or so; dot-coms, biotechs, real estate “investors”, small businesses, you name it. Not many people bother trying to make responsible conservative decisions since everything they do is with other people’s money – either banks or investors.

[FormerOwner]

You’re not the only one. This kind of thing now seems to be EXTREMELY common. People are sucking out all all the equity in their homes and then some. Everyone knows the “appraisals” are inflated to begin with and then some banks even have 125% loans. Gee, some people might end up with a 135% loan to value ratio even before the market begins to drop. What a joke!

In the greed to sell more loans, banks appear to have been loaning out as much $$ as possible to as many people as possible. These loans are so crazy, the people at the banks HAD to know the borrowers would end up not paying back the loans. If I’m a responsible bank and I that see a prospective borrower bought a house in 2002 for 500K with zero down, now he wants to refi all the way up to the 900K “appraised” value and suck out 400K from the bank, what are my chances of getting that 900K back. Slim and none! I wonder if most of these people blew that 400K or whatever amount on yellow Hummers and toy trailers or if they still have the cash. I wonder how many of the banks will try to get the money back since these would be non-purchase money loans with recourse. Technically, I think the banks can sue these people. Anyone know how practical it is for the banks to do this?

[FormerOwner]

I wouldn’t recommend most IT jobs for the same reasons as masayako stated about telecom. I used to be an IT contractor and did very well during the dot-com boom but it’s VERY much a boom-bust industry with zero stability.

[FormerOwner]

Here are some careers that I think will have good prospects in the forseeable future:

-Physical/occupational therapist
-Pharmacist (although I’ve heard it’s getting more competitive to find a good job now – not sure if that’s true)
-Doctor
-Nurse
-Radiologic Technician
-IT guy for a hospital (programmer/analyst or database admin)
-Go into the military, get a security clearance and some technical skills, then get out and go work for a defense contractor (probably will take a long time but the military seems to be where a lot of $$ are going to be going)
-Teacher; Temecula and Murrieta teachers make 60K-70K for 9 months/year of work from what I’ve heard.
-Find some field that you know a lot about and become a middleman or broker that finds customers and works with contractors to get the jobs done. Many people make mucho $$ as middleman in various industries – almost every industry has them.

[FormerOwner]

Makes sense. The thing that’s very different now vs. the 70’s is that wages are not keeping up with price increases. I don’t see any way that wages will go up very much for most people any time in the foreseeable future. This means that eventually asset prices will HAVE to come down substantially because no one will be able to pay the prices and banks have pushed lending standards too low already. The purchasing power to pay the current prices doesn’t exist and the prospects for the future indicate a worsening of the purchasing power scenario.

When you look at the younger generations and think about their career/income prospects, current asset prices look even MORE inflated. I too think there’s a high probability of us experiencing a Great Depression II, if not as a result of the current R/E downcycle then at some time in the not too distant future.

I find it funny when all the baby boomers say “my kids won’t be able to afford to live here”. Well, nobody’s kids will be able to afford to live here and that’s why there can’t be any buyers to replace the baby boom generation when their houses come on the market! The house-price problem will take care of itself and it’s started already.

[FormerOwner]

UTC renter, I agree with everything you said. I too used to be a “UTC renter” and I liked it overall (with the same dislikes as you) BUT my wife’s car had all 4 tires slashed for no apparent reason (that we know of) in the apartment’s “secure” parking garage. That combined with a hefty rent increase convinced us to move out and become homeowners. Funny you should mention the Inland Empire, because we bought a hosue in Temecula after leaving UTC. The commute was horrible but I ended being able to work from home some days then getting a job up here (at a lower salary) and things are working out fine. We sold the house early last year with a nice profit and now we’re Temecula renters instead of UTC renters. If I didn’t get the job up here though we probably would be UTC renters right now. The commute is completely insane. I agree that it would be better to leave the state than do that stupid commute!

[FormerOwner]

One other thing about Temecula. Prices have already fallen by 15% in a number of neighborhoods and we’re only at the beginning of the downward spiral so my 50% doesn’t sound as crazy as it did a few months ago. Only 35% to go.

2007 is going to pull the rug out from under this housing bubble due to massive foreclosures and distress sales. I think by this time next year prices overall will be down at least 30% from the peak. But that still won’t be the bottom!

There are going to be possibly > 2,000 houses foreclosing just due to the Stonewood “investment” group alone! Patience!

[FormerOwner]

Temecula (the City proper) is the only part of the Inland Empire that I would even consider living in. The rest of the Inland Empire has nasty smog and many areas have really bad schools and a generally low education level among residents. Traffic is horrible anywhere in the IE, including Temecula, but at least the air is clear and the schools are good. Murrieta is very similar to Temecula but the traffic is worse. French Valley has ridiculous traffic – it’s hard to even get to the mall from there – so no way would I live there.

If you work in Temecula, it’s a nice place to live but I would *NOT* try and do the commute to the OC or even San Diego. You won’t save a dime once you get done paying for gas and buying a new car every few years. Your job performance may also suffer due to the commute. Not worth it.

As far as the market bottom, I think the costs of owning have to fall back in line with rents – that would be about a 50% drop for most tract homes. I think condos will get hammered much worse than single family houses but the same thing applies. It should cost no more to own than rent. If it doesn’t pencil out, just keep on renting. When you do get serious on buying, look for an area with low Mello-Roos if possible. Houses built in the late 90’s probably will not have Mello-Roos and will still be up to the latest construction codes. Anything after say ’99 will probably have a sick tax rate so you’d have to offer even less to make the purchase pencil out. That’s partially why I think condo’s will take a dump – the tax rates are usually high plus you pay a fat HOA fee on top of that. Makes the price you’d be willing to pay even lower. Also, there’s just too many condos around here and most people really want houses. So, buy a condo if you want but make sure it doesn’t cost you more than it would to rent.

[FormerOwner]

Greer Ranch is boring and you have to drive a long way to get anywhere from there – even the mall. Personally, I agree with previous posters that I wouldn’t pay anything over the 200’s for any of the houses in there. I don’t care about the granite countertops and upgraded flooring that a lot of those houses have. Sitting at home marveling at what a nice house you have out in the middle of nowhere is not that much fun. I believe in buying into an area, not a floor plan.

[FormerOwner]

One of the articles indicated there were around 400 “investors” who bought from 2 to 8 houses each, indicating there were anywhere from 800 – 3,200 houses involved.

Also, $1.2 billion worth of property / average value of $525K per property = 2,286 houses – not quite 2,400 as I stated above but close. Even if they bought 3 houses each, on average, that’s still 1,200 houses! I agree, that it’s a significant percentage of the housing stock – around 3.5% if my 2,286 is right. Hopefully, more details will emerge to clear up the #’s.

[FormerOwner]

This thing involves about 2,400 houses! Most likely, all or most of the 2,400 will foreclose or become short sales. Another nail in the housing market’s coffin. I wonder how long it will take before these things really start foreclosing en-masse.

[Author]

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