Honestly, is California really worth it anymore? (Los Angeles: leases, brokers)

[nmguy]

I lived in the Bay Area for 50 years, then retired and moved to Placitas, NM, with a hefty amount of equity and dreams of a change. Lived there for 11 years and grew as a person. In 2013, tired of shoveling snow and having lost my wife, I relocated to the San Diego area.

I loved the culture, COL, and scenery of NM, but became disenchanted with its poverty, crime rate, and relatively poor health care. Luckily, I could afford to leave and enjoy a comfortable lifestyle in SoCal.

I grew up in San Diego in the 60s and have seen palpable changes: heavy traffic, dense population, climate change. Nevertheless, the laid-back attitude, access to beaches, and excellent health care, make it worth the move. (I'm 76 years old.)

If you make at least $100k per year, have a decent downpayment for housing, and have stable employment, you could return without problems. Otherwise, give it some thought.

Good luck.

[RMESMH]

Originally Posted by semispherical

The question to ask yourself is "What do I think I will be getting in CA that I am not getting in NM, and will that difference be worth moving for?"

And as has been pointed out many times before, people tend to refer to CA as though it is the same all over. But it's an extremely variable place in terrain, weather, coast access, politics, urbanization, COL, crime, affordability, and just about any other metric you can name. You have to narrow down your desired location much more than just "CA."

I also wonder where in NM it is that the OP currently lives.



Such big differences within the state.



If I lived in Gallup, I'd want to leave, but Red River...that can be a little slice of heaven at the right time of year.

[OC4life]

Originally Posted by Bolanders

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.

Past historical valuation is irrelevant to a cap rate.

Once again. Cap rate is fundamentally an evaluation of risk combined with growth expectations. This would be determined by the build up method. I.e. cap rate = risk free rate + risk premium + growth rate. I explained this in my comparison to bond yields. You can read many articles about this since you seem to be new to this stuff I'm going to help you out.

https://fundrise.com/education/blog-...hould-know/amp

https://www.coachcarson.com/cap-rate/amp/


Being a simplified rate of return measure, cap rates are subject to the same risk/return trade-off as other measures. In short, cap rates move in tandem with risk, real or perceived. While risk aversion varies from person to person, generally, investors are willing to pay more for less risky assets. As such, assets with less risk will carry lower cap rates than assets with higher risk.

[OC4life]

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.

That's some good stuff. Definitely shows why older owners aren't selling.

[Bolanders]

Originally Posted by amokk

This quote right here is referring to V8 Vega.


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/

LOL. DO the Math. Even at 12 years it would take 40+ years to catch up to reaching tax levels that TX has for your major metro areas. Why doesn't anyone ever do the math here?

[Bolanders]

Originally Posted by OC4life

Past historical valuation is irrelevant to a cap rate.

Once again. Cap rate is fundamentally an evaluation of risk combined with growth expectations. This would be determined by the build up method. I.e. cap rate = risk free rate + risk premium + growth rate. I explained this in my comparison to bond yields. You can read many articles about this since you seem to be new to this stuff I'm going to help you out.

https://fundrise.com/education/blog-...hould-know/amp

https://www.coachcarson.com/cap-rate/amp/


Being a simplified rate of return measure, cap rates are subject to the same risk/return trade-off as other measures. In short, cap rates move in tandem with risk, real or perceived. While risk aversion varies from person to person, generally, investors are willing to pay more for less risky assets. As such, assets with less risk will carry lower cap rates than assets with higher risk.

None of this is new. Had you understood what I wrote about linear net income this was assumed. You did not understand it though. Next time ask if what I write is too complex and I can portray it is an easier fashion.

You are also incorrect on cap rates. You forget cap rates don't take into account inefficiencies in the market at times. Since you want to act like a big shot please show me the regression analysis and how you ran it to show that "Cap rate is fundamentally an evaluation of risk combined with growth expectations" and in what % of circumstances. You should have the data to show this relationship. Building a new commercial property may absolutely be determined by evaluating risk combined with growth expectations, but you think that is how cap rates are determined for existing commercial properties you are mistaken. I'll wait for your analysis to be posted. We both know you won't.

[CA4Now]

Originally Posted by Bolanders

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...

You're baaaaaaaack. And turning every thread on which you post into a Texas vs California issue, even when it has nothing to do with the OP's topic. How--and why--do you do it?

[Bolanders]

Originally Posted by CA4Now

You're baaaaaaaack. And turning every thread on which you post into a Texas vs California issue, even when it has nothing to do with the OP's topic. How--and why--do you do it?

I didn't. Someone said that TX property taxes were high. I simply corrected them since one of the main reasons why I moved here was because of low property taxes. It was correctly pointed out that they were specifically speaking of V8 who bought their house in 1975 and their situation was vastly different. I acknowledged that certainly is the case then but does not apply to the masses in CA since most are at the 15 years or below mark for property ownership.

CA living in major metro areas is about 3X the cost of many other major metro areas. Is that worth it? That is an individual answer. It is not to me. If the comparison is Seattle, NYC, Boston, DC, then it would be worth it to me since those other areas are similar priced to CA major metros.

With all things being equal I have no clue why anyone would leave CA for DC, Boston, NYC, Seattle, Chicago, etc.

[Three Wolves In Snow]

Originally Posted by shadowmoses

Hello all, let me explain my question. See, I was born in Monterey county but my parents moved me to Missouri when I was only 1 and I was raised in both Missouri and Northwest Arkansas. Growing up I always dreamed of moving back because I saw the pictures of my mothers life in California growing up in the 60's and 70's and the place looked like a very decent middle class place to live. Definitely the sweet life.

However, most all of my family has moved away and they tell me that if i'm wise i'll go to Arizona or elsewhere instead. I currently live in New Mexico and I still have some desire to move back to California, but i'm also not a fan of super high taxes, the nanny state, or high crime. So....are they right?

Yes, they are, but you will get some on here who will only accept complete and utter glorification of CA or you're wrong!

The taxes are high, and it seems that they come up with a new tax as often as they can, the cost of living is high, it is a nanny state, especially some areas right now. Crime may or may not be higher than other places, but for the most part, if you're not into criminal activity, you should be okay.

However, I know where you're coming from in having this "desire". I lived in CA as a kid, and even when I was there it was a very good place to be - people were kind, patient, laid back, go with the flow type attitude. That has definitely changed in many parts of CA.

Nonetheless, you will always wonder. So, I suggest that you not only have the money to move there, but have the money to leave if you find out, after giving it a good year at the least, it really isn't what you want afterall.

Despite some on here who can't handle the slightest criticism of CA, it is okay not to like CA. Those who do, good for them, they can have it. I just left in March after 5 years there. I will never move back.

[amokk]

Originally Posted by Bolanders

LOL. DO the Math. Even at 12 years it would take 40+ years to catch up to reaching tax levels that TX has for your major metro areas. Why doesn't anyone ever do the math here?

HAHAHAHAHAH that's rich. I'm literally the only one who has done any math here. Let me post that for you again.