Honestly, is California really worth it anymore? (Los Angeles, San Diego: 2013, home)

[OC4life]

Originally Posted by Bolanders

I just explained why as cap rates are easy to calculate . If you can’t figure that out then I don’t know what to say.

Again one reason we accept a lower cap rate in CA is speculate that appreciation will be higher in CA due to limited desired land with zoning etc.

Also I buy where I live.

I never asked how to calculate the cape rate. The answer is higher projected rent growth (or NOI growth which prop 13 helps with tremendously over time) and lower risk.

Similar to bond yields. I.e treasuries are lower credit risk than a BBB- junk bond. ergo the treasury is a higher "quality" asset. Remember what I said earlier? It's a crappier asset. Do you understand now?

Stop looking at this through political emotional rubbish if you're going to try and analyze investment of real estate.

[Bolanders]

Originally Posted by OC4life

I never asked how to calculate the cape rate. The answer is higher projected rent growth (or NOI growth which prop 13 helps with tremendously over time) and lower risk.

Similar to bond yields. I.e treasuries are lower credit risk than a BBB- junk bond. ergo the treasury is a higher "quality" asset. Remember what I said earlier? It's a crappier asset. Do you understand now?

Stop looking at this through political emotional rubbish if you're going to try and analyze investment of real estate.

Huh? I already said it was not a linear rate. That was obvious. You saying what I already said in a different way is pretty laughable. You also forgot the rate of appreciation. When I stated how to calculate the cap rate that should have told you all you needed to know which is why I put it. Asset values of CA commercial have gone up exponentially compared to TX (for example) thus the cap rat will be lower since the net income side is not linear. Hint: net income is talking about rising rents.

Also political emotional rubbish? Didn't even bring anything into that.

[thrillobyte]

Originally Posted by D-Doc

I lived in Southern NM for years and the crime didn't seem as bad as in most of the large cities in CA. That said I heard Alb has gotten nasty.

Anyway, CA is definitely worth it if you're rich. You can buy a nice place in Santa Barbara, central coast, north SD county, etc. If you aren't rich or aren't going to inherit a house then I don't think it's worth it. Who knows though- Corona might crush housing prices so if you still have a good job then maybe you'll get into something.

You used the key word: rich. People who aren't rich shouldn't even think of stepping into a high-priced area like Monterey. You couldn't get a 3+2 for under a million in a decent area of Monterey. Go into Carmel and raise that by 500K. I'm in LA and I'd love to move to Monterey and we're not exactly poor (combined value roughly 3 million in retirement) and we would never think to plop down a million on an average 1500 sq ft. 80+ year-old house with all the attending problems of an old structure (there's been no construction in the area for half a century--it was all built up by the 50's). Do yourself a favor--either look elsewhere in Cali far away from the ocean or look at another state--Oregon maybe. If however you have a net worth of 5 million or more and you're in retirement, think about it.

[amokk]

Originally Posted by Bolanders

No doubt if you bought in 1975 then that changes everything.

Not the case simply everywhere in Dallas. For example if you bought in 1975 in the city I am currently in that house/property would probably also be worth $1M and honestly probably far more since you would have gotten a ton of land back then.

Having said that most people don't buy a house and hold onto it for 45 years. Most people I know are in a house they are in or have been for likely less than 10 years. The days of buying and staying 30+ years are long gone. Sure it happens but not like it used to.

Anyone who bought in 1995 in the Dallas area in 1995 also hit the jackpot so to speak as there taxes have not gone up to nearly the levels the property is actually worth, plus the exemptions they get and of course on a side note the 25 years worth of income taxes they have avoided. Even my current house is only assessed at around $875,000 even though it is worth $1.2-$1.3M. Other family members in the area who bought a few years before are assesses at around $775,000 and theirs is worth $1.35M. While we don't have Prop 13 the values your are taxed at do lag behind actual values.

Simply put in this day and age if someone wants to compare property as to what they have bought in the last few years (which is the mass majority of buyers) it will take 45+ years to break even in CA even with Prop 13 when looking at like type situations.

Almost every post dealing with property taxes discusses having to choose between buying (today or soon) in CA vs some other area like Dallas and you always see the same mistake of saying TX property taxes are high which is just patently false. We moved here for one reason being very low property taxes since they are about 1/3 of what equivalent of CA gets you.

Crappier asset phrase also makes no sense. If Asset A is worth $1M and Asset B is worth $1M then they are equal assets.Had your mom taken her $40,000 in 1973 and bought $40,000 worth of property in my current city she would have gotten a house with about 20 acres or so. She could sell that house with 20 acres for about $6-7M today which would likely be turned into a subdivision.

No doubt CA is worth it to see people but this game of comparing different cities without any context of what truly is can lead to false data.

Allright nerds calm down. Here's the data. Buying a house in LA County with the median income in 1975 compared to the median income in Dallas County in 1975. Compared to 2018 you have a house worth 3x as much and you're paying about 1/4 the taxes.

That's why people like V8 Vega aren't leaving. They are retirees living on a limited fixed income so state income tax doesn't really matter to them and are paying next to nothing in property taxes. End of discussion. Done.

[Bolanders]

Originally Posted by amokk

Allright nerds calm down. Here's the data. Buying a house in LA County with the median income in 1975 compared to the median income in Dallas County in 1975. Compared to 2018 you have a house worth 3x as much and you're paying about 1/4 the taxes.

That's why people like V8 Vega aren't leaving. They are retirees living on a limited fixed income so state income tax doesn't really matter to them and are paying next to nothing in property taxes. End of discussion. Done.

Makes sense if you bought in 1975. How about for the other 99.9% of people who didn't buy in 1975. This surely does not apply to the masses.

[amokk]

Originally Posted by Bolanders

Makes sense if you bought in 1975. How about for the other 99.9% of people who didn't buy in 1975. This surely does not apply to the masses.

This quote right here is referring to V8 Vega.

Originally Posted by worldcitizen10

Because they don't abolish Prop 13, you mean, and you pay almost no taxes on that house? Wish for the 2nd party and you might have it the Texas way...and be taxed out of your house.

Per OCLife's post the speculation is that he bought a house in 1975. Nobody brought up the "other 99.9%" of people. Except you right now. Why does that matter? It doesn't. Infact it's a complete spurious statement since it doesn't matter about 1975. Every single person that bought in 1974 ALSO benefits from the exact same data I posted. Or 1976. Or 1977. Or 1978. Or 1979 etc. etc. etc. Do you understand that? It's not only some negligible 0.01% who somehow magically got it.


To answer your question. I don't know but it's sure more than 0.01%. Los Angeles County has DOUBLE the national length of home ownership. Precisely because of the point I just made. Also, the median age of home owner in LA county is much higher than the national average in fact it's DOUBLE. Why? Precisely of the data I just showed you. Glad I can help. Have a good night.

https://www.ocregister.com/2019/10/2...homeownership/

[RMESMH]

Originally Posted by amokk

Allright nerds calm down. Here's the data. Buying a house in LA County with the median income in 1975 compared to the median income in Dallas County in 1975. Compared to 2018 you have a house worth 3x as much and you're paying about 1/4 the taxes.

That's why people like V8 Vega aren't leaving. They are retirees living on a limited fixed income so state income tax doesn't really matter to them and are paying next to nothing in property taxes. End of discussion. Done.

V8 also owns a couple of other CA properties with a low tax base.

[V8 Vega]

I go to a big church that has a Tuesday morning 120 people senors group. A lot of my friends bought a tract house when the valley was just getting developed for I don't know what but probably $130,000. Now there worth $750,000 up. I was a machinist and couldn't afford it but I did buy a cheaper house and later moved up

[RMESMH]

Originally Posted by aslowdodge

Being that the poster listed 3 things he would hate about California, great weather isn’t necessarily something that outweighs the three things he dislikes. Already he knows there are 3 things he dislikes but hasn’t mentioned anything specific he does like about California. He just has a vague idea that at one time it seemed like a decent place to live. Note he didn’t say perfect or great place.
If you are calling his family ignorant naysayers to be ignored, keep in mind several members who know him better than you do. It’s possible they know his personality is not a good match for living in California.
I am not denying the coast has appeal, but seeing how the op hasn’t been back to discuss, it sounds like it was just a passing thought.

Yeah, I think people have to be drawn to the beach and might want to try to determine if they would really go to the beach that often if they lived 'there' before moving there. I used to live a couple of blocks from the ocean in Newport Beach and, while living in that particular spot, I didn't go to the beach that often. I also lived in another part of Newport where we had a private man made beach on the harbor, and I frequented that beach more often than when I lived a few blocks from the ocean. When I lived in Marin County, I lived on the bay side of the mountains, rather than the beach side, but even then, with having to drive, I went to the beach more often than I did in SoCal. I also used to live a couple of blocks from the beach in Incline Village, and I spent more time at the beach when I lived there then at any other time living near a beach. My house now is a bit over an hour from the Gulf (from Galveston), but I don't go to the beach there very often. If I wanted to live close to a beach now, I'd either move back to Incline Village, or move to Florida ( lots of nice beaches...at least ones I like...on the Gulf, and also some on the Atlantic). My point being that if the OP thinks he might like spending time on a beach, he might be able to find one that he likes (that fits more of what he likes in other ways) that doesn't require being at the beach in California (with my suggestion being pointless if he....to your point...never views this thread again).

[OC4life]

Originally Posted by V8 Vega

I go to a big church that has a Tuesday morning 120 people senors group. A lot of my friends bought a tract house when the valley was just getting developed for I don't know what but probably $130,000. Now there worth $750,000 up. I was a machinist and couldn't afford it but I did buy a cheaper house and later moved up

What years are we talking about? 130K houses sounds like the 80s.