|
| View previous topic :: View next topic |
| Author |
Message |
AY2043
Franchise Player
Joined: 26 Feb 2012
Posts: 10621
|
 Posted: Thu Sep 14, 2017 10:01 pm Post subject: |
|
|
| pmacla wrote: | | adkindo wrote: | | what is rent for like a 2 BR / 2 BA apartment in a decent (clean, lower crime, etc.) area of LA? a 3 BR / 2 Bath house? |
2 br in LA as described 2400+ a month |
That's not even bad. Bay Area is even more expensive, and here in Santa Cruz, it's even worse still. I'm paying 1800 for a 450 sqft studio (900 each b/w me and my gf). The 2br house I rented with 3 roommates during college went for 3100. Insanity.
Can't wait to get out and move somewhere more reasonable. |
|
| Back to top |
|
 |
Goldenwest
Star Player
Joined: 28 Nov 2009
Posts: 2801
|
| Posted: Thu Sep 14, 2017 10:08 pm Post subject: |
|
|
| Ziggy wrote: | | Goldenwest wrote: | | ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.
the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger. |
Depends what parts of L.A. people are looking. Some areas have always been high. My income as a business owner is the lowest it's ever been since I've been owner (around 12 years), as min wage has been steadily increasing over the last several years. My employees have never complained to me about rent. I hear more complaints about our public transportation than rent. I think I've been giving them raises faster than the rate of rent increase, and I'm certain this isn't an isolated case.
My family has been in business for 40 years and we've never seen wage increases like we're seeing now. Typically they raise it 0.25 cents or 0.50 cents every few years. It's been going up $1 annually and will continue to do so until 2020. To be clear, all of my employees make above min wage, but raising min wage means we're just raising the floor, so it affects EVERYONE, even those earning above min wage. I'm already looking to sell my family run business while I can still show a steady flow of income, because I'll be out of business before it hits $15. So something has to give.
My employees have never had a hard time finding an apartment. Once in a while I'll write an employment verification letter and they find a place within a week or two. I'm not saying L.A. has cheap housing. I know it's more expensive here. Just saying that isn't anything new. And squeezing more out of businesses isn't going to change that. It's just going to drive businesses out of california, which is already happening. |
Sure, one can find a reasonable rent in an older building in an ok area of Los Angeles City/County. But in many areas i've seen rents have gone up for say 3 bedrooms homes from 2600-2700 per to 3200-3300 in the same area over a 5 year span. For apartments, the newer buildings are 2800+ for 2 beds. And the home prices in these areas have doubled in that same time span. So an average 3 bed 1600 sf house in a decent family area in the foothills would go from 600k in 2012 to double that today. Its not only the foothills, i'm seeing houses south of downtown double also, from 250k to half a million. And like you said, income has decreased, flat-lined or increased a few percent - at most, while property has skyrocketed since 2012.
What is your product by the way? Are you competing with foreign imports? I agree with you, something has to give. I'm personally an advocate of re-establishing the manufacturing base in the US. I think its the key to just about everything. this global economy is really only helping the very rich get richer. |
|
| Back to top |
|
|
Conker
Franchise Player
Joined: 09 Jun 2010
Posts: 13056
Location: MDC
|
| Posted: Thu Sep 14, 2017 10:46 pm Post subject: |
|
|
(bleep) paying rent.
_________________
(❍ᴥ❍ʋ) ʕʘᴥʘʔ (⌐ ͡■ ͜ʖ ͡■) (┛◉Д◉)┛( ͡° ͜ʖ ͡°) ༼;´༎ຶ ༎ຶ༽ |
|
| Back to top |
|
|
Goldenwest
Star Player
Joined: 28 Nov 2009
Posts: 2801
|
| Posted: Thu Sep 14, 2017 11:44 pm Post subject: |
|
|
| vanexelent wrote: | | Goldenwest wrote: | | ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.
the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger. |
Home ownership is near all time lows, so a bubble is less likely. |
Well, either I'm right, and there will be a market correction or your right and the US will become a third world country were a small percentage of the population owns a vast majority of the country's property and wealth. |
|
| Back to top |
|
|
marga86
Star Player
Joined: 30 Jun 2008
Posts: 3442
|
| Posted: Fri Sep 15, 2017 7:30 am Post subject: |
|
|
| Goldenwest wrote: | | vanexelent wrote: | | Goldenwest wrote: | | ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.
the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger. |
Home ownership is near all time lows, so a bubble is less likely. |
Well, either I'm right, and there will be a market correction or your right and the US will become a third world country were a small percentage of the population owns a vast majority of the country's property and wealth. |
It's not black and white.. I mean the housing market was the hottest its been in 20+ years this past summer, so yea, there were be a correction.
Don't confuse a market correction with a bubble though, when interest rates go up, the housing prices will inevitably decrease because purchasing power will go down.
The monthly payment is what matters most to 99% of buyers at the end of the day. With interest rates being so low, people can afford more expensive homes. If you cant afford a $600k home @ 4% interest, you damn sure as hell wont be able to afford a $500k home @ 5.5% interest. In this scenario, just because prices go down, it doesnt make a home more affordable. |
|
| Back to top |
|
|
splashmtn
Star Player
Joined: 30 Aug 2016
Posts: 3961
|
| Posted: Fri Sep 15, 2017 7:57 am Post subject: |
|
|
| Conker wrote: | | (bleep) paying rent. |
housing prices are skyhigh now too. Lol at what my house would cost right now vs what it was purchased for a few years ago. yeah for me. But I know its ridiculous. |
|
| Back to top |
|
|
splashmtn
Star Player
Joined: 30 Aug 2016
Posts: 3961
|
| Posted: Fri Sep 15, 2017 7:58 am Post subject: |
|
|
| ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
i was about to say...what are these wage increases you speak of?? |
|
| Back to top |
|
|
splashmtn
Star Player
Joined: 30 Aug 2016
Posts: 3961
|
| Posted: Fri Sep 15, 2017 8:01 am Post subject: |
|
|
| unleasHell wrote: | | Buy as soon as you can... |
but you can't because now its too late for that. its too expensive. unless of course you want to go live in a not so hot neighborhood. or just an area with little to no amenities and is far away from everything. but even those home prices are out of wack.
sure you may can afford a 600k home. but what if i told you that 600k home is dead smack dab in a poor part of town or way way out in the boonies. and that same home was purchased for 250k lets say 5 or so years ago.
at this rate we will all be homeless. |
|
| Back to top |
|
|
vanexelent
Retired Number
Joined: 17 May 2005
Posts: 30081
|
| Posted: Fri Sep 15, 2017 11:00 am Post subject: |
|
|
| Goldenwest wrote: | | vanexelent wrote: | | Goldenwest wrote: | | ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.
the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger. |
Home ownership is near all time lows, so a bubble is less likely. |
Well, either I'm right, and there will be a market correction or your right and the US will become a third world country were a small percentage of the population owns a vast majority of the country's property and wealth. |
I'm not sure if we're a 3rd World country, but we've certainly been trending towards a wealthy few owning more than everyone else combined. Millenials can't afford housing and Boomers aren't buying more. Even if they inherit their parents homes, they may not even be able to afford the payments. |
|
| Back to top |
|
|
Laker_Town
Retired Number
Joined: 26 Jun 2006
Posts: 25604
|
| Posted: Fri Sep 15, 2017 11:01 am Post subject: |
|
|
| xxsicrokerxx wrote: | | I honestly believe they are forcing us to move out of California |
|
|
| Back to top |
|
|
LakersRGolden
Star Player
Joined: 13 Jan 2002
Posts: 7921
Location: Lake Forest
|
| Posted: Fri Sep 15, 2017 4:40 pm Post subject: |
|
|
| splashmtn wrote: | | unleasHell wrote: | | Buy as soon as you can... |
but you can't because now its too late for that. its too expensive. unless of course you want to go live in a not so hot neighborhood. or just an area with little to no amenities and is far away from everything. but even those home prices are out of wack.
sure you may can afford a 600k home. but what if i told you that 600k home is dead smack dab in a poor part of town or way way out in the boonies. and that same home was purchased for 250k lets say 5 or so years ago.
at this rate we will all be homeless. |
In that case, the person will take the 3K a month it would take to buy the home, and out bid someone to rent somewhere else. |
|
| Back to top |
|
|
ringfinger
Retired Number
Joined: 08 Oct 2013
Posts: 29418
|
| Posted: Fri Sep 15, 2017 5:17 pm Post subject: |
|
|
| splashmtn wrote: | | ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
i was about to say...what are these wage increases you speak of?? |
Well, wages have gone up. Just not inflation-adjusted wages IIRC. |
|
| Back to top |
|
|
Goldenwest
Star Player
Joined: 28 Nov 2009
Posts: 2801
|
| Posted: Sat Sep 16, 2017 10:42 pm Post subject: |
|
|
| marga86 wrote: | | Goldenwest wrote: | | vanexelent wrote: | | Goldenwest wrote: | | ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.
the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger. |
Home ownership is near all time lows, so a bubble is less likely. |
Well, either I'm right, and there will be a market correction or your right and the US will become a third world country were a small percentage of the population owns a vast majority of the country's property and wealth. |
It's not black and white.. I mean the housing market was the hottest its been in 20+ years this past summer, so yea, there were be a correction.
Don't confuse a market correction with a bubble though, when interest rates go up, the housing prices will inevitably decrease because purchasing power will go down.
The monthly payment is what matters most to 99% of buyers at the end of the day. With interest rates being so low, people can afford more expensive homes. If you cant afford a $600k home @ 4% interest, you damn sure as hell wont be able to afford a $500k home @ 5.5% interest. In this scenario, just because prices go down, it doesnt make a home more affordable. |
It looks pretty black and white to me. And No, interest rates are not what matters most. Good paying jobs - i.e a reliable steady income with periodic wage increases are what matter most. First of all, good paying 'traditional' jobs are further and fewer in between than ever before. Go to your local Starbucks next time and ask how many workers there have bachelors degrees and you'll see what i mean. Second, People are mortgaging themselves to the hilt right now paying 50% or more of their net income on mortgage payments and living paycheck to paycheck. That's why retail is suffering so much, people just can't buy like they used to because their so cash strapped. This just can't sustain itself, just a little downturn in the economy will cause a pretty good rise in short sales and foreclosures, just like before, things are that precarious.
That's why i'm saying there will be a, lets say 'big' correction ok? because house prices have to adjust to meet the purchasing power/income of the average wage earner. right now its out of wack because of foreign money, investors or desperate wage earners but that will dry up for one reason or another and the market will revert back to normal wage earners. And it will revert back big, i would guess -40 to 50% what it is now. Already the rate of buying is noticeably on the decline. This summer has been pretty bad.
Look at the recent history of house prices, big spikes in house prices have always been followed by big declines. And no, its not different this time, its the same foreign investor, or bank bending rule crap (see the rise in 2nd mortgages) that went on before. Its coming back down, big. |
|
| Back to top |
|
|
K2
Franchise Player
Joined: 25 Dec 2011
Posts: 23529
|
|
| Back to top |
|
|
Goldenwest
Star Player
Joined: 28 Nov 2009
Posts: 2801
|
| Posted: Mon Sep 18, 2017 3:56 am Post subject: |
|
|
Those articles sound like they were paid for and endorsed by the association of realtors. Who want people to continue buying and overstretch themselves. If the house prices are 10 times the median income or more people are overstreching themselves. Tech workers and foreign buyers are a nich. They can't sustain these prices by themselves. Unless the job market and wages can keep up with housing everything is fine, but that's not happening. |
|
| Back to top |
|
|
Goldenwest
Star Player
Joined: 28 Nov 2009
Posts: 2801
|
|
| Back to top |
|
|
K2
Franchise Player
Joined: 25 Dec 2011
Posts: 23529
|
| Posted: Mon Sep 18, 2017 7:55 am Post subject: |
|
|
| Goldenwest wrote: |
Those articles sound like they were paid for and endorsed by the association of realtors. Who want people to continue buying and overstretch themselves. If the house prices are 10 times the median income or more people are overstreching themselves. Tech workers and foreign buyers are a nich. They can't sustain these prices by themselves. Unless the job market and wages can keep up with housing everything is fine, but that's not happening. |
In housing market that has low inventory, niche buyers seem to be driving the prices at this time. When cash buyers represent 20% of all transactions, it moves the needle and leaves most of us on the sidelines. Case-Schiller stats notwithstanding, are you anticipating a downturn sometime next year? |
|
| Back to top |
|
|
marga86
Star Player
Joined: 30 Jun 2008
Posts: 3442
|
| Posted: Mon Sep 18, 2017 8:44 am Post subject: |
|
|
| Goldenwest wrote: | | marga86 wrote: | | Goldenwest wrote: | | vanexelent wrote: | | Goldenwest wrote: | | ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.
the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger. |
Home ownership is near all time lows, so a bubble is less likely. |
Well, either I'm right, and there will be a market correction or your right and the US will become a third world country were a small percentage of the population owns a vast majority of the country's property and wealth. |
It's not black and white.. I mean the housing market was the hottest its been in 20+ years this past summer, so yea, there were be a correction.
Don't confuse a market correction with a bubble though, when interest rates go up, the housing prices will inevitably decrease because purchasing power will go down.
The monthly payment is what matters most to 99% of buyers at the end of the day. With interest rates being so low, people can afford more expensive homes. If you cant afford a $600k home @ 4% interest, you damn sure as hell wont be able to afford a $500k home @ 5.5% interest. In this scenario, just because prices go down, it doesnt make a home more affordable. |
It looks pretty black and white to me. And No, interest rates are not what matters most. Good paying jobs - i.e a reliable steady income with periodic wage increases are what matter most. First of all, good paying 'traditional' jobs are further and fewer in between than ever before. Go to your local Starbucks next time and ask how many workers there have bachelors degrees and you'll see what i mean. Second, People are mortgaging themselves to the hilt right now paying 50% or more of their net income on mortgage payments and living paycheck to paycheck. That's why retail is suffering so much, people just can't buy like they used to because their so cash strapped. This just can't sustain itself, just a little downturn in the economy will cause a pretty good rise in short sales and foreclosures, just like before, things are that precarious.
That's why i'm saying there will be a, lets say 'big' correction ok? because house prices have to adjust to meet the purchasing power/income of the average wage earner. right now its out of wack because of foreign money, investors or desperate wage earners but that will dry up for one reason or another and the market will revert back to normal wage earners. And it will revert back big, i would guess -40 to 50% what it is now. Already the rate of buying is noticeably on the decline. This summer has been pretty bad.
Look at the recent history of house prices, big spikes in house prices have always been followed by big declines. And no, its not different this time, its the same foreign investor, or bank bending rule crap (see the rise in 2nd mortgages) that went on before. Its coming back down, big. |
a 2% rise in interest rates reduces your purchasing power by 30%+, of course it's important.
I just attended a presentation done by an economics professor at UCI with a PHD. He talked about the economy and how growing wages is one of the hot trends right now, i'm not sure where you are getting your data from, but given his credentials i have to give him the nod. The working population isn't growing, which has lead to an increase in demand for "working age" people, leading to an increase in wages.
The income gap is getting bigger, not only between the 1% and the rest of us, but also between the peeps who are being paid 6 figures and those earning $30k-$50k a year. |
|
| Back to top |
|
|
Goldenwest
Star Player
Joined: 28 Nov 2009
Posts: 2801
|
| Posted: Tue Sep 19, 2017 11:19 pm Post subject: |
|
|
| K2 wrote: | | Goldenwest wrote: |
Those articles sound like they were paid for and endorsed by the association of realtors. Who want people to continue buying and overstretch themselves. If the house prices are 10 times the median income or more people are overstreching themselves. Tech workers and foreign buyers are a nich. They can't sustain these prices by themselves. Unless the job market and wages can keep up with housing everything is fine, but that's not happening. |
In housing market that has low inventory, niche buyers seem to be driving the prices at this time. When cash buyers represent 20% of all transactions, it moves the needle and leaves most of us on the sidelines. Case-Schiller stats notwithstanding, are you anticipating a downturn sometime next year? |
Even with this low inventory its a mix of buyers i think. I think there's a lot of desperate buyers also, who make just enough to be able to give their right arm for a home and start shelling out 50% of more of their monthly on their mortgages. thinking that's its a good risk cause house prices will continue to rise. they even take out variable rate loans. I'm just looking at the median income to median home price levels in these areas and its just so out of wack. Like i keep saying the niche/cash buyers can't sustain this. they're aren't enough of them. And i have to believe prices will come back to down to earth. Of course realtors will only tell you its going to keep going up cause they want you to buy now - they don't make money if you wait.
I advised my cousin to wait till next year to buy- in the summer - to see a change. I can't see things staying the way they are at that time - i could be wrong but i don't think i am. |
|
| Back to top |
|
|
Goldenwest
Star Player
Joined: 28 Nov 2009
Posts: 2801
|
| Posted: Tue Sep 19, 2017 11:42 pm Post subject: |
|
|
| marga86 wrote: | | Goldenwest wrote: | | marga86 wrote: | | Goldenwest wrote: | | vanexelent wrote: | | Goldenwest wrote: | | ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.
the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger. |
Home ownership is near all time lows, so a bubble is less likely. |
Well, either I'm right, and there will be a market correction or your right and the US will become a third world country were a small percentage of the population owns a vast majority of the country's property and wealth. |
It's not black and white.. I mean the housing market was the hottest its been in 20+ years this past summer, so yea, there were be a correction.
Don't confuse a market correction with a bubble though, when interest rates go up, the housing prices will inevitably decrease because purchasing power will go down.
The monthly payment is what matters most to 99% of buyers at the end of the day. With interest rates being so low, people can afford more expensive homes. If you cant afford a $600k home @ 4% interest, you damn sure as hell wont be able to afford a $500k home @ 5.5% interest. In this scenario, just because prices go down, it doesnt make a home more affordable. |
It looks pretty black and white to me. And No, interest rates are not what matters most. Good paying jobs - i.e a reliable steady income with periodic wage increases are what matter most. First of all, good paying 'traditional' jobs are further and fewer in between than ever before. Go to your local Starbucks next time and ask how many workers there have bachelors degrees and you'll see what i mean. Second, People are mortgaging themselves to the hilt right now paying 50% or more of their net income on mortgage payments and living paycheck to paycheck. That's why retail is suffering so much, people just can't buy like they used to because their so cash strapped. This just can't sustain itself, just a little downturn in the economy will cause a pretty good rise in short sales and foreclosures, just like before, things are that precarious.
That's why i'm saying there will be a, lets say 'big' correction ok? because house prices have to adjust to meet the purchasing power/income of the average wage earner. right now its out of wack because of foreign money, investors or desperate wage earners but that will dry up for one reason or another and the market will revert back to normal wage earners. And it will revert back big, i would guess -40 to 50% what it is now. Already the rate of buying is noticeably on the decline. This summer has been pretty bad.
Look at the recent history of house prices, big spikes in house prices have always been followed by big declines. And no, its not different this time, its the same foreign investor, or bank bending rule crap (see the rise in 2nd mortgages) that went on before. Its coming back down, big. |
a 2% rise in interest rates reduces your purchasing power by 30%+, of course it's important.
I just attended a presentation done by an economics professor at UCI with a PHD. He talked about the economy and how growing wages is one of the hot trends right now, i'm not sure where you are getting your data from, but given his credentials i have to give him the nod. The working population isn't growing, which has lead to an increase in demand for "working age" people, leading to an increase in wages.
The income gap is getting bigger, not only between the 1% and the rest of us, but also between the peeps who are being paid 6 figures and those earning $30k-$50k a year. |
I don't know how the professor is saying growing wages is the hot trend when the average income and cost of living is lower today than it was in 1999. Some few niche areas may be sustained by upper income wage earners (200-250K+) but they can't sustain the inflated home price levels that have gone up all over LA and Orange county. The people that are buying homes are a mix of flippers, foreign buyers, people that are stretching themselves to the hilt and taking huge risks, and high wage earners. But no, there aren't enough high wage earners to sustain the levels by themselves (that's the only viable group that can sustain these levels long term).
Like i said to someone else, either i'm right and home price will come down just as fast as they went up or i'm wrong and we are approaching some king of third world status where the few own the vast majority of property and the rest of us are shut out. |
|
| Back to top |
|
|
marga86
Star Player
Joined: 30 Jun 2008
Posts: 3442
|
| Posted: Wed Sep 20, 2017 8:07 am Post subject: |
|
|
| Goldenwest wrote: | | marga86 wrote: | | Goldenwest wrote: | | marga86 wrote: | | Goldenwest wrote: | | vanexelent wrote: | | Goldenwest wrote: | | ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.
the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger. |
Home ownership is near all time lows, so a bubble is less likely. |
Well, either I'm right, and there will be a market correction or your right and the US will become a third world country were a small percentage of the population owns a vast majority of the country's property and wealth. |
It's not black and white.. I mean the housing market was the hottest its been in 20+ years this past summer, so yea, there were be a correction.
Don't confuse a market correction with a bubble though, when interest rates go up, the housing prices will inevitably decrease because purchasing power will go down.
The monthly payment is what matters most to 99% of buyers at the end of the day. With interest rates being so low, people can afford more expensive homes. If you cant afford a $600k home @ 4% interest, you damn sure as hell wont be able to afford a $500k home @ 5.5% interest. In this scenario, just because prices go down, it doesnt make a home more affordable. |
It looks pretty black and white to me. And No, interest rates are not what matters most. Good paying jobs - i.e a reliable steady income with periodic wage increases are what matter most. First of all, good paying 'traditional' jobs are further and fewer in between than ever before. Go to your local Starbucks next time and ask how many workers there have bachelors degrees and you'll see what i mean. Second, People are mortgaging themselves to the hilt right now paying 50% or more of their net income on mortgage payments and living paycheck to paycheck. That's why retail is suffering so much, people just can't buy like they used to because their so cash strapped. This just can't sustain itself, just a little downturn in the economy will cause a pretty good rise in short sales and foreclosures, just like before, things are that precarious.
That's why i'm saying there will be a, lets say 'big' correction ok? because house prices have to adjust to meet the purchasing power/income of the average wage earner. right now its out of wack because of foreign money, investors or desperate wage earners but that will dry up for one reason or another and the market will revert back to normal wage earners. And it will revert back big, i would guess -40 to 50% what it is now. Already the rate of buying is noticeably on the decline. This summer has been pretty bad.
Look at the recent history of house prices, big spikes in house prices have always been followed by big declines. And no, its not different this time, its the same foreign investor, or bank bending rule crap (see the rise in 2nd mortgages) that went on before. Its coming back down, big. |
a 2% rise in interest rates reduces your purchasing power by 30%+, of course it's important.
I just attended a presentation done by an economics professor at UCI with a PHD. He talked about the economy and how growing wages is one of the hot trends right now, i'm not sure where you are getting your data from, but given his credentials i have to give him the nod. The working population isn't growing, which has lead to an increase in demand for "working age" people, leading to an increase in wages.
The income gap is getting bigger, not only between the 1% and the rest of us, but also between the peeps who are being paid 6 figures and those earning $30k-$50k a year. |
I don't know how the professor is saying growing wages is the hot trend when the average income and cost of living is lower today than it was in 1999. Some few niche areas may be sustained by upper income wage earners (200-250K+) but they can't sustain the inflated home price levels that have gone up all over LA and Orange county. The people that are buying homes are a mix of flippers, foreign buyers, people that are stretching themselves to the hilt and taking huge risks, and high wage earners. But no, there aren't enough high wage earners to sustain the levels by themselves (that's the only viable group that can sustain these levels long term).
Like i said to someone else, either i'm right and home price will come down just as fast as they went up or i'm wrong and we are approaching some king of third world status where the few own the vast majority of property and the rest of us are shut out. |
the number of qualified homeowners is at an all time high -- the reason people default on homes when the economy goes bad is because they likely weren't qualified to afford that house in the first place. I think people overestimate a bubble (if any will happen) and how many people would lose their home on a foreclosure.
His data on wages was dis-aggregated per demographic. As i mentioned above, there is a big trend in overpaying for qualified employees -- this doesnt mean all employees will paid more.
Home prices don't have to be volatile, i would actually argue that they may stay stagnant for a few years to come, especially with projected increases in interest rates..
I've been hearing that the market will go down "this summer" for a couple years now, at least. The last time some dude told me this i was in an Uber in frisco, he was a real estate mogul.. "yea man, this summer will shock everyone, the market is gonna take such a big (bleep).. everyone thinks 2008 will never happen again, but prices are so high these days in LA, there is no way people can afford this"... next thing you know, summer was the hottest real estate market in 25 years. lol. |
|
| Back to top |
|
|
Goldenwest
Star Player
Joined: 28 Nov 2009
Posts: 2801
|
| Posted: Wed Sep 20, 2017 10:32 pm Post subject: |
|
|
| marga86 wrote: | | Goldenwest wrote: | | marga86 wrote: | | Goldenwest wrote: | | marga86 wrote: | | Goldenwest wrote: | | vanexelent wrote: | | Goldenwest wrote: | | ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.
the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger. |
Home ownership is near all time lows, so a bubble is less likely. |
Well, either I'm right, and there will be a market correction or your right and the US will become a third world country were a small percentage of the population owns a vast majority of the country's property and wealth. |
It's not black and white.. I mean the housing market was the hottest its been in 20+ years this past summer, so yea, there were be a correction.
Don't confuse a market correction with a bubble though, when interest rates go up, the housing prices will inevitably decrease because purchasing power will go down.
The monthly payment is what matters most to 99% of buyers at the end of the day. With interest rates being so low, people can afford more expensive homes. If you cant afford a $600k home @ 4% interest, you damn sure as hell wont be able to afford a $500k home @ 5.5% interest. In this scenario, just because prices go down, it doesnt make a home more affordable. |
It looks pretty black and white to me. And No, interest rates are not what matters most. Good paying jobs - i.e a reliable steady income with periodic wage increases are what matter most. First of all, good paying 'traditional' jobs are further and fewer in between than ever before. Go to your local Starbucks next time and ask how many workers there have bachelors degrees and you'll see what i mean. Second, People are mortgaging themselves to the hilt right now paying 50% or more of their net income on mortgage payments and living paycheck to paycheck. That's why retail is suffering so much, people just can't buy like they used to because their so cash strapped. This just can't sustain itself, just a little downturn in the economy will cause a pretty good rise in short sales and foreclosures, just like before, things are that precarious.
That's why i'm saying there will be a, lets say 'big' correction ok? because house prices have to adjust to meet the purchasing power/income of the average wage earner. right now its out of wack because of foreign money, investors or desperate wage earners but that will dry up for one reason or another and the market will revert back to normal wage earners. And it will revert back big, i would guess -40 to 50% what it is now. Already the rate of buying is noticeably on the decline. This summer has been pretty bad.
Look at the recent history of house prices, big spikes in house prices have always been followed by big declines. And no, its not different this time, its the same foreign investor, or bank bending rule crap (see the rise in 2nd mortgages) that went on before. Its coming back down, big. |
a 2% rise in interest rates reduces your purchasing power by 30%+, of course it's important.
I just attended a presentation done by an economics professor at UCI with a PHD. He talked about the economy and how growing wages is one of the hot trends right now, i'm not sure where you are getting your data from, but given his credentials i have to give him the nod. The working population isn't growing, which has lead to an increase in demand for "working age" people, leading to an increase in wages.
The income gap is getting bigger, not only between the 1% and the rest of us, but also between the peeps who are being paid 6 figures and those earning $30k-$50k a year. |
I don't know how the professor is saying growing wages is the hot trend when the average income and cost of living is lower today than it was in 1999. Some few niche areas may be sustained by upper income wage earners (200-250K+) but they can't sustain the inflated home price levels that have gone up all over LA and Orange county. The people that are buying homes are a mix of flippers, foreign buyers, people that are stretching themselves to the hilt and taking huge risks, and high wage earners. But no, there aren't enough high wage earners to sustain the levels by themselves (that's the only viable group that can sustain these levels long term).
Like i said to someone else, either i'm right and home price will come down just as fast as they went up or i'm wrong and we are approaching some king of third world status where the few own the vast majority of property and the rest of us are shut out. |
the number of qualified homeowners is at an all time high -- the reason people default on homes when the economy goes bad is because they likely weren't qualified to afford that house in the first place. I think people overestimate a bubble (if any will happen) and how many people would lose their home on a foreclosure.
His data on wages was dis-aggregated per demographic. As i mentioned above, there is a big trend in overpaying for qualified employees -- this doesnt mean all employees will paid more.
Home prices don't have to be volatile, i would actually argue that they may stay stagnant for a few years to come, especially with projected increases in interest rates..
I've been hearing that the market will go down "this summer" for a couple years now, at least. The last time some dude told me this i was in an Uber in frisco, he was a real estate mogul.. "yea man, this summer will shock everyone, the market is gonna take such a big (bleep).. everyone thinks 2008 will never happen again, but prices are so high these days in LA, there is no way people can afford this"... next thing you know, summer was the hottest real estate market in 25 years. lol. |
No, 30 year mortgage applications are at a all time low. 2nd mortgages are at an all time high. the number of renters is at an all time high too cause the majority of homes in LA Co are renter occupied not owner occupied. and most of those renting are not young singles but families. there may be a number of people that qualify for a loan but at what price? 500k 600k? The average income in LA dictates that very few can afford a 900k to a million dollar+ home.
There may be a trend in overpaying but thats only because its hard to find skilled workers. So that only effects a small number. If wages on average were really going up, retail would not be suffering like it is, student loan defaults would not be as high as they are, and renter occupied dwellings would not be at an all time high like i said earlier
Lastly, the first housing spike took 7 years to reach its peak (2000-2007). this peak started around 2012, so were just about at the peak now,.sometime next year I expect we'll start to see a drop-off, and more clearly a full slide by 2019. But it looks like you've convinced yourself that buying now is a good time. Go ahead, don't let me discourage you, i could be wrong (I hope i'm not because too many hard working W-2 people are shut out of the market and they are what drives a healthy economy and they need to get back in). But when the bottom falls out like i think it will don't cry that you weren't warned.
Last edited by Goldenwest on Wed Sep 20, 2017 10:36 pm; edited 1 time in total |
|
| Back to top |
|
|
Goldenwest
Star Player
Joined: 28 Nov 2009
Posts: 2801
|
| Posted: Wed Sep 20, 2017 10:33 pm Post subject: |
|
|
| And the lack of supply is interesting too. Its not that most people don't want to sell, they can't. If they bought low in 2012 for 600k, say their house doubled in price today to 1.2k. And with stagnating wages for most, why should they sell? to invest that 600k equity in another comparable home that was 600k in 2012 like their previous home except now with a higher property tax? the only ones selling are old timers, flippers, and a few people who are leaving the state. Supply will increase when investors start dumping, and the overstretched have to sell due to job loss. And we know how volatile and unstable the job market is. |
|
| Back to top |
|
|
ringfinger
Retired Number
Joined: 08 Oct 2013
Posts: 29418
|
| Posted: Thu Sep 21, 2017 6:01 am Post subject: |
|
|
| Goldenwest wrote: | | And the lack of supply is interesting too. Its not that most people don't want to sell, they can't. If they bought low in 2012 for 600k, say their house doubled in price today to 1.2k. And with stagnating wages for most, why should they sell? to invest that 600k equity in another comparable home that was 600k in 2012 like their previous home except now with a higher property tax? the only ones selling are old timers, flippers, and a few people who are leaving the state. Supply will increase when investors start dumping, and the overstretched have to sell due to job loss. And we know how volatile and unstable the job market is. |
Well, housing prices are always going up though, over the long term so I don't think its the house price increase which is the deterrent. I think the problem is that wages haven't gone up with them. So the problem becomes that I'm not incentivized to sell because i can't buy up. With wages not having increased, I can only buy laterally.
If my 600K house was 1.2M today, and my wages were 250K then and so 500K now accordingly, I could sell and buy up.
My plan of slow flipping is gone, i'll likely keep my house forever now. So my new plan is to save like crazy and purchase a second home when the proverbial poop hits the fan again. |
|
| Back to top |
|
|
splashmtn
Star Player
Joined: 30 Aug 2016
Posts: 3961
|
| Posted: Thu Sep 21, 2017 2:00 pm Post subject: |
|
|
| Goldenwest wrote: | | Ziggy wrote: | | Goldenwest wrote: | | ringfinger wrote: | | They are definitely not in sync with wage increases (or lack thereof) |
Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.
the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger. |
Depends what parts of L.A. people are looking. Some areas have always been high. My income as a business owner is the lowest it's ever been since I've been owner (around 12 years), as min wage has been steadily increasing over the last several years. My employees have never complained to me about rent. I hear more complaints about our public transportation than rent. I think I've been giving them raises faster than the rate of rent increase, and I'm certain this isn't an isolated case.
My family has been in business for 40 years and we've never seen wage increases like we're seeing now. Typically they raise it 0.25 cents or 0.50 cents every few years. It's been going up $1 annually and will continue to do so until 2020. To be clear, all of my employees make above min wage, but raising min wage means we're just raising the floor, so it affects EVERYONE, even those earning above min wage. I'm already looking to sell my family run business while I can still show a steady flow of income, because I'll be out of business before it hits $15. So something has to give.
My employees have never had a hard time finding an apartment. Once in a while I'll write an employment verification letter and they find a place within a week or two. I'm not saying L.A. has cheap housing. I know it's more expensive here. Just saying that isn't anything new. And squeezing more out of businesses isn't going to change that. It's just going to drive businesses out of california, which is already happening. |
Sure, one can find a reasonable rent in an older building in an ok area of Los Angeles City/County. But in many areas i've seen rents have gone up for say 3 bedrooms homes from 2600-2700 per to 3200-3300 in the same area over a 5 year span. For apartments, the newer buildings are 2800+ for 2 beds. And the home prices in these areas have doubled in that same time span. So an average 3 bed 1600 sf house in a decent family area in the foothills would go from 600k in 2012 to double that today. Its not only the foothills, i'm seeing houses south of downtown double also, from 250k to half a million. And like you said, income has decreased, flat-lined or increased a few percent - at most, while property has skyrocketed since 2012.
What is your product by the way? Are you competing with foreign imports? I agree with you, something has to give. I'm personally an advocate of re-establishing the manufacturing base in the US. I think its the key to just about everything. this global economy is really only helping the very rich get richer. |
or put in a crazy law thats basically a bigger tax to companies doing business overseas and in foreign countries.
make it Law where any american company has to pay american wages to anyone in any part of the world they employ to do the very same jobs.
So if you want to go overseas, go ahead. But you're going to have to pay the same basic hourly, salary wages. they will still be immune to benefits because other countries have completely different setups for healthcare. Come up with a statement that says "we're not longer about exploiting others in the world. if you work for one of our companies be prepared to make an american living wage.
You know what that would do? It would stop companies from running elsewhere as quickly. It would bring more jobs back to the states and lastly it would lessen illegal immigration. Why come to america when I can work right at home in mexico for the same wages and ball out.
And if by chance you want to take your ball and go home or take your company and lets say ....go to ireland but still sell your stuff to americans. thats fine. just get hit with the super tariff. So if you want to get real upset and you pull all factories/businesses out of the states and stop selling your products here. fine. Lets see how well you do out there in the wild. In addition, whatever you use to sell to the people will now be created by someone or someones in the states because there is a high demand for that service and/or product. |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
