CA Housing Market?

Agree on most the opinions but $600k to $1mil for a 4 bed/2 bath house in a standard 70s era subdivision seems a bit steep and unrealistic for even an above average 2 salary household. 

Then again, $2,500 for an ATC70 is straight re-tarded too!

 
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I don’t think house prices are going to be coming down.  The government won’t allow it, Tax revenue runs the world and its based on asset values.  I agree with pretty much everything else that’s been written above posts

I’ve been a homeowner since 1991 saved for eight years to get 25% down and still had to get a $10,000 gift from my dad so we could eat and put gas in the car in order to buy a 900 square-foot two bedroom one bath home in the barrio.   Mind you interest rates were 7% adjustable  with two points paid for that privilege. It was every penny we had. We lived where gunshots car break-ins gang members graffiti were all common.  My wife and I both made $12 an hour at the time. After 11 years of waiting for the neighborhood to get better ,( it got worse)we finally were in a position to get out before we got shot. We moved 6 miles away to the next town and had to pay over asking but at least we were out.  The house did appreciate but not nearly as much as if we’d been able to live 6 miles away in the first place.   The reason for the story is people saying they are worried about their kids being able to buy a house.  I didn’t want my two kids to have to go through what I did, so three years ago I bought a second home that’s being paid for from the rent from the first home 100%.   These will be theirs eventually so they will not have to go through what I had to.  If they need to live in the Bay Area for their job they will be able to, and not have to do a 3 hour commute each day or rent a bedroom in a house for $2500 a month or 15 people in a 3 bedroom.    I know this is not the American way, I hope they don’t take it for granted and appreciate what I did for them. History has shown that The sooner you get into the market and the sooner you pay It off the less it’s going to cost you.  
 

Every component that goes into a  house has pretty much doubled in price in the last few years.    As everyone else pointed out The value of the dollar has pretty much decreased in half in the last few years which is basically saying the same thing.  As far as salaries go, moving to a cheaper area might be a viable option right now for In demand skill sets that can be mobile. My wife works for a high-tech company with approximately 10,000 employees. She’s  one  position below vice president level with 30 years experience and has 50+ employees working for her and hiring all the time.  she’s been with this company 2 1/2 years and she’s noticed that the salary levels offered to current new candidates is approaching her  salary for what she would consider junior level people.  She hires people from all over the world. You can work from Florida or Tennessee with only at 10% -15% reduction in salary from what you would get if you lived in the San Francisco Bay Area  some areas in Asia the middle east Switzerland you can actually get paid more.  Just trying to give people perspective of what’s going on  shows how tight the job market really is  

 On top of that you’re not competing against your fellow neighbor for houses anymore you’re competing against institutions like Blackrock hedge funds, private equity, REIT’s Hell even Berkshire Hathaway. They don’t  even really care how much they pay for the houses, just taking one more off the market increases the value of their vast inventory which they are happy to rent back to you at market rate.  The government wants home prices to keep going up,  their tax revenues depend on it.  They don’t actually want any more houses built because then they have to provide more services which cuts into their pile of money that they divvy up for their pension and salaries.   My point is . Home prices now are no longer constrained by  what people can afford.   I don’t see any reason why it wouldn’t continue. 

 
This crap is crazy, I figured 2020 would be the collapse. I was making good money at that point, I decided to pay off house so I could weather the storm of whatever happened. Not so sure if that was the right thing to do looking back on things. Bought a couple cars to unload some money waiting for this to crumble, should have bought a couple houses instead. Waiting for it to slow down so I can buy some commercial buildings is my new goal in life.

 
We're in Norco with 2510sqft on just under 3/4 acre, July 14 2016 we closed and paid $469K(currently owe 269), it's currently sitting @ $913K+... we're getting ready to vacate Ca due to the potential vax mandate for K-12 so I'm happy to see it still being up. Honestly I can't wait to GTFO of Ca.

 
Realbadlarry said:
Smart money is cash out now, and rent until it all collapses..
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yep... thats what my nephew did a year in a half ago.. when everyone said this is the TOP!!  so hes been renting for 1 1/2 years and prices have escalated 30%-50%... with no signs of stopping! He couldnt afford his old house now if he wanted it back!!

If inflation continues.... selling and waiting it out is NOT the answer.

 
marknkidz said:
yep... thats what my nephew did a year in a half ago.. when everyone said this is the TOP!!  so hes been renting for 1 1/2 years and prices have escalated 30%-50%... with no signs of stopping! He couldnt afford his old house now if he wanted it back!!

If inflation continues.... selling and waiting it out is NOT the answer.
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Girl Friends kids are renting and it's not going well for them

Son signed a 1 year lease and at 8 months in they told him no month to month at end of lease and he would need to sign a new lease with a 15% raise in rent.

Daughter #1 & Boyfriend were renting a condo from a private party. The landlord approached them and gave them $4,999.99 to brake the lease and move out.  They could not find anything in that price range and now are living with his parents to save some money to find a house.

Daughter #2 is in the same situation as the son and has been told the next lease is going up and if her and her BF don't get raises at work they can't afford the new lease.

Even the commercial property that my office was in would only take a 3 year lease at a 30% increase, no month to month and no shorter leases available.

 
We bought in St. George, UT in 2018.  New build, did our upgrades that a renter couldn’t destroy easily. (Vinyl plank, cheap carpet).  Had a 5 year plan to exit Cali. In 2019, my mom, only 72, suddenly passed of a surprise illness.  That put life into perspective. Said, what’r we waiting for, love the area, off-road Mecca, great moral compass. Street legal RZR and Quad…. Started moving fall of ‘19… Wife retired her corporate job in January of ‘20.  We’re out.
 

Sold our, built in 1971, 1300 sf. PUD in San Juan Capistrano in May of ‘20 for near $700K.  Felt lucky to get that (pandemic and all)… they’re selling in that ‘hood for closer to $900 now.  And most are ‘70’s stockers, with some white paint.

We are staying in the RV in OC for a few months taking care of older family.  It’s shocking how SoCal has changed in the 2 years of being away. Most things are 30% ++ more expensive than middle America.

It seems now, wealthy and working poor.  Seems Cali has hit 3rd world status. The weather is great though!

 
My parents bought in Arcadia in 1972, ranch style 3 bed-2bath, pool, 4 car detached garage, large yard and paid $42,500.

They thought they were going to eat bread an water for the rest of their lives....what were they thinking spending that much on a house HOLY COW!!!

Dad passed in 2019, Mom sold this year for 1.7m and it needed total updating.

2010, my wife and I bought our home right on the border of Orange and Anaheim for $425K....and thought...OMG what are we doing we're gonna eat bread and water for the rest of our lives,   :lmao:

I guess in another 40 years since we paid 10x what my parents did...does that mean we'll get 10x what mom got when she sold.

$17 million for a 3-bed/2-bath seems really far fetched......but you never know?

It's all relative, however...things are just skyrocketing out of control.

Current Clown in Chief is driving the dollar down so quick, $1m is going to be a big screen TV in a few years.   :bag:

 
Race Face said:
We bought in St. George, UT in 2018.  New build, did our upgrades that a renter couldn’t destroy easily. (Vinyl plank, cheap carpet).  Had a 5 year plan to exit Cali. In 2019, my mom, only 72, suddenly passed of a surprise illness.  That put life into perspective. Said, what’r we waiting for, love the area, off-road Mecca, great moral compass. Street legal RZR and Quad…. Started moving fall of ‘19… Wife retired her corporate job in January of ‘20.  We’re out.
 

Sold our, built in 1971, 1300 sf. PUD in San Juan Capistrano in May of ‘20 for near $700K.  Felt lucky to get that (pandemic and all)… they’re selling in that ‘hood for closer to $900 now.  And most are ‘70’s stockers, with some white paint.

We are staying in the RV in OC for a few months taking care of older family.  It’s shocking how SoCal has changed in the 2 years of being away. Most things are 30% ++ more expensive than middle America.

It seems now, wealthy and working poor.  Seems Cali has hit 3rd world status. The weather is great though!
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I have been looking at St George for awhile, I no longer can afford it, $800k for a tract home now.  The prices there are going through the roof with all the retired Ca folks moving there.  

 
Orange_R said:
We're in Norco with 2510sqft on just under 3/4 acre, July 14 2016 we closed and paid $469K(currently owe 269), it's currently sitting @ $913K+... we're getting ready to vacate Ca due to the potential vax mandate for K-12 so I'm happy to see it still being up. Honestly I can't wait to GTFO of Ca.
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I'd love to buy your house Joe, and we can work your boat into the deal too!!

Unfortunately the jump in house prices has completely screwed me, I'm stuck waiting for it to fall.....

 
Looney Duner said:
I'd love to buy your house Joe, and we can work your boat into the deal too!!

Unfortunately the jump in house prices has completely screwed me, I'm stuck waiting for it to fall.....
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I'll work a little on the price lol... if you want it for 914 i may leave the boat for you 

 
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Cookie said:
I have been looking at St George for awhile, I no longer can afford it, $800k for a tract home now.  The prices there are going through the roof with all the retired Ca folks moving there.  
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Home prices have leveled off the last few months… Other consideration is overall Cost of Living. In our area, Dixie Power is flat, $0.05.8 per kilowatt. Rocky Mountain power is around $0.10.  Isn’t SDGE close to $0.40 now with on-peak higher. (read it’s the highest in the nation)…  Other is water, trash, sewer, never more than $70 a month for all.  Trash in SJC was $65 a qtr. Our water/sewer ONLY in SJC was $120 a month for a postage stamp lawn.  Story I got was, person on the SJC water board of directors, meets once a month, got $100k a year for the trouble.  It’d be nice to get that gig…

 
Cookie said:
I have been looking at St George for awhile, I no longer can afford it, $800k for a tract home now.  The prices there are going through the roof with all the retired Ca folks moving there.  
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We look in Prescott 2017-2019, started looking in Saint George 2018-2020, market was changing so fast we ended buying a tad north a year ago, I was super concerned about loosing value in our home in Ca in the meantime but we just sold it to a friend off market for 100k more than it would of sold a year ago and we are staying here rent free for 6 months... Anywhere within a days drive of Ca is skyrocketing. I can leave my Ut house at 6am and have lunch with my daughter in Pasadena, I think that's the draw.

Where we bought 500K would have gotten you a nice spread a year ago. Not now.

 
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While I see the negative comments and agree they have merit, I want to add some counterpoints. We saw all this in 06, the buildup to the housing crash in 08-09. The realtors all said they weren't making any more land and prices would never come back down. The house I ended up buying was worth approximately $390K in 06. I paid $165K for it 4 years later in 2010. Sure, the subprime market isn't what it used to be but there are still liar loans and seconds out there. There are still people buying way to much house that they can't afford and will lose and there will be more inventory dropping on the market at some point. There is the potential for many people to lose their jobs and ability to pay for that nice shiny new home. Consumer debt has risen to a record 15.6T at the end of 2021. 

  Interest rates will be the biggest driver in the short time I feel.  I checked today and the 30 year fixed is at 4.7%, 2 full points up from where it was last year. That's a $600 change per month on a $500K mortgage. Significant. The FED is raising fed funds rates 7 times. While some of the raises may be priced in to the current rate, I don't think a 7% or 8% 30 year rate is out of the realm of possibility. At 8%, that same 500K loan jumped up $1600 a month from 2.7%. 

  As far as institutional buyers, they need to make a return on investment. I think we will see more follow Zillows lead after the return just isn't there. Home prices have already become stretched so tight I think we will see a breaking point. I think it's already happened. This is purely speculation on my part so don't follow me for advice. There are so many variables and unknowns that anything could happen. I've gambled my nice quiet and comfortable 3 bedroom on it though, and this apartment sucks. 

 
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but for some reason... there are a chit ton of people paying CASH..... mortgage rates don't matter to them... 

 
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