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Anyone considered what upcoming California residential flight is going to do to Oregon?

United States bank loans for mortgages, are here forward going to require 20 percent cash down payments.

Average home price in California is around $500,000. meaning that, a prospective new homeowner in California will, here forward, have to come up with a HUNDRED THOUSAND DOLLARS in order to be able to afford to buy that house.

Already occurring over the past 10 to 15 years, more and more Californians are going to be fleeing in exodus from that state. They have, already over the past decade or so, driven up home prices and RENT COSTS in Portland and all over Oregon (not to mention other western states to where Californians are also fleeing).

and Oregonians are also going to be impacted by the 20 percent mortgage down payment requirement mandated by banks. In addition to the Californians coming here who are either 1) selling an existing home and purchasing two (or more) homes here in Oregon or, 2) unable to afford a home in California and permanently move to Oregon to buy up homes and displace native Oregon residents / drive up prices and competition for housing here in Oregon.
California has had ever-rising costs of living and housing which have driven Californians to leave their own state and (by moving to other neighboring states) drive up cost of living, housing prices in states like Oregon.


Slightly strange story 16.Apr.2020 07:16

Mike Novack

The required down payment for a "conventional" mortgage (from a bank, not from a gov't program) has always been around 20%.

Nor do you normally start out buying a $500,000 home. One usually starts out with a far less expensive home, and only over time builds up enough equity in it that when sold, will provide that higher down payment for a more expensive on.

RE: "conventional" mortgage / $500,000 home 16.Apr.2020 16:07


yeah Mike please provide a list of every single American citizen you've known for the past 20 years who, has purchased a home with 20% down cash.

also Yes: $500K is the median price of a home in California.

which is why Californians-in-flight (due to housing costs, taxation and other state of California woes) have been going to other states and buying up MULTIPLE homes in exchange : for example in Texas, they buy up to 6 homes there for the sale price of their former property in CA.

Topic of beyond-control exorbitant home prices, particularly across the western United States today :

All being driven by California housing prices, their own state crisis of affordability / costs of living, and mass exodus-colonization to neighboring states.

Oregon, Utah, Nevada, Idaho, Montana, Wyoming, New Mexico, Arizona, Colorado and many parts of Texas have all had their real estate and home prices substantially affected and increased by influx of transplant California residents' (along with their homeownership-)money.

Additionally there is a factor of foreign (primarily Chinese) investors buying up houses and real estate in selected markets of the United States.

Occupancy rates — by owners themselves — for single family homes are on the decline, mainly due to investors and/or those who already own at least 1 other home buying/trading/selling properties as one would in the board game, 'Monopoly'.

Linked below are some reference articles to consult.

KQED's article — 5 Reasons California's Housing Costs Are So High — is a good overview of California's housing and cost-of-living situation overall including prices, new builds (which are declining and extremely low for the state's housing demand), employment-construction, urban vs. less-populated area demographics in the state, decline in owner-occupied units and rise in single-family homes occupied by renters (both of which aren't unique to California but also characteristic of other costly home markets such as Portland, Seattle), and other factors.

( Nota Bene that the Bloomberg piece uses "capitalize" in its headline, as if to imply that the cities-communities of Boise and Reno are somehow "benefiting" from this type of price-jacking and "I-can-buy-2-or-3-here-for-the-price-of-1-where-I-came-from" behavior on the part of California transplants, real estate industry and banks in either CA, ID, or NV... permanently altering the market and pricing for local residents )

Housing market in the United States now outpaces stock market investing in rate of return, and investors are pouring their financial equity into homes/real estate.

As the Forbes piece headlines: 'Why Buy 1 House In California When You Can Get 6 In Texas?'



Boise and Reno Capitalize on the California Real Estate Exodus

For some Californians, the state's punishing housing costs, high taxes, and constant threat of natural disaster have all become too much. They're making their escape to areas such as Boise, Phoenix, and Reno, Nev., fueling some of the biggest home-price gains in the country.



Priced-out Californians buying homes in Idaho for Monopoly money



Why Buy 1 House In California When You Can Get 6 In Texas?


 link to www.uscannenbergmedia.com

It's Harder to Buy a House in California Than Any Other U.S. State



Chinese buyers expand their reach in the US housing market as the middle class gets in on the act



5 Reasons California's Housing Costs Are So High



October 23, 2018, 5:00 AM PDT

Boise and Reno Capitalize on the California Real Estate Exodus

Sky-high housing prices in the Golden State bring an echo boom—and new neighbors—to other Western states.

By Prashant Gopal and Noah Buhayar

Julie D'Agostino outside her home in Boise. Photographer: Andy Anderson for Bloomberg Businessweek

Julie D'Agostino spent 15 years in the San Francisco Bay Area working in tech and considers herself decidedly liberal. Still, she ended up buying a home in a surprising place: deep-red Idaho. The 51-year-old moved to Boise two years ago, attracted to its walkable downtown, lively arts scene, and, most important, cheaper housing. She's happy there, even though her first winter in 2016 and Donald Trump's election were a shock.

"It was like, 'What have I done?' " D'Agostino says, sitting at the kitchen table of the three-bedroom home she bought in May for $259,000. But staying in the Bay Area long-term wasn't an option financially. "I was already priced out. I didn't see myself miraculously, suddenly being able to afford it."

For some Californians, the state's punishing housing costs, high taxes, and constant threat of natural disaster have all become too much. They're making their escape to areas such as Boise, Phoenix, and Reno, Nev., fueling some of the biggest home-price gains in the country. While the moves are motivated mainly by economics, they're also highlighting political divides as conservatives from the blue state seek friendlier areas and liberal transplants find themselves in sometimes hostile territory.

Change in Single-Family Home Prices

Year-over-year change, August 2018

Data: CoreLogic

California's history of booms and busts has fueled exoduses before, but its soaring real estate costs have made living there ever more difficult for people who don't earn big salaries. In the second quarter, only 26 percent of homebuyers in the state could afford to purchase a median-price single-family house, which was almost $600,000, according to the California Association of Realtors.

Almost 143,000 more people left the state than arrived from elsewhere in the U.S. in 2016. Trump's tax overhaul, which capped some mortgage interest and property tax deductions, has probably added "gas to the fire," says Glenn Kelman, chief executive officer of Redfin Inc., a national real estate brokerage that recently opened a Boise outpost.

But mostly it's the prices. "Eventually the laws of supply and demand are going to drive people to other parts of the country," Kelman says. "Boise isn't five times worse than California as a place to live. But places in California are five times more expensive." Boise is becoming an alternative to traditional havens for Californians such as Portland and Seattle that have also gotten too pricey, he says.

About 29 percent of the Idaho capital's home-listing views are from Californians, according to Realtor.com. Reno and Prescott, Ariz., also were popular. These housing markets are soaring while much of the rest of the country cools. In Nevada, where Californians make up the largest share of arrivals, prices jumped 13 percent in August, the biggest increase for any state, according to CoreLogic Inc. data. It was followed closely by Idaho, with a 12 percent gain.

The Renovare gated community in Eagle, Idaho, is selling homes that start at $650,000—a bargain by California standards, says sales agent Nik Buich.
Photographer: Andy Anderson for Bloomberg Businessweek

Nestled against the foothills of the Rocky Mountains, Boise (pop. 227,000) has drawn families for decades to its open spaces and short commutes. It's been particularly attractive to Californians, who accounted for 85 percent of net domestic immigration to Idaho, according to Realtor.com's analysis of 2016 Census data. While it has always prided itself on being welcoming, skyrocketing housing costs fueled by the influx is testing residents' patience. In his state of the city speech last month, Mayor David Bieter outlined steps to keep housing affordable and asked Boise to stay friendly: "Call it Boise kind, our kindness manifesto," he said.

It's especially easy for buyers who have sold properties in the Golden State to push up prices in relatively cheap places because they feel like they're playing with Monopoly money, Kelman says. The median existing-home price in Boise's home of Ada County was $299,950 last month—up almost 18 percent from a year earlier, but still about half California's. The influx is great news for people who already own homes in the area, says Danielle Hale, chief economist for Realtor.com. "But if you're a local aspiring to homeownership, it feels very much that Californians are bringing high prices with them."

But it's not just economic disparities fueling discontent. On a recent Friday morning at the Ada County Department of Motor Vehicles in Boise, an older man, who declined to be identified, takes offense when a reporter asks if he's one of the newcomers. He says he's not one of the people coming from California bringing their politics here.

Kyle Epperson, 22, exits the DMV, clutching new Idaho plates for his Mitsubishi Lancer. The shaggy-haired college student moved from El Dorado, Calif., about three months ago. Epperson, who says he leans right politically, says his mistake was waiting too long to change out his California plates: He's been flipped off twice. With a roommate, he shares a brand-new two-bedroom apartment that costs him $1,100 a month. He says it's a big upgrade over the dumpy one-bedrooms he was looking at in California for $1,500.

For 32-year-old Wes Ferguson, who's also at the DMV to change his California plates, the decision to move had some political elements. He relocated with his wife and kids to the area from outside Sacramento, and ticks off what makes Boise attractive: "Very family-friendly, cheaper cost of living, more conservative."

D'Agostino, the Bay Area transplant, isn't ashamed of her progressive views and is finding her place: at the natural foods co-op downtown, the Boise's Women's March last year, and with the volunteer group she founded to collect unused food for the needy. But it was also good to get out of her comfort zone, she says. "I can't remember a time when it's ever been this divided, so the fact that I can have some interaction with people who might not have exactly the same beliefs as me, that's fine," she says. "As long as we can respect each other."

It's not new for politics to factor into moving decisions—it's just that in the age of Trump, tensions get magnified. "What's different now is how far apart the parties are ideologically," says Matt Lassiter, a professor of history at the University of Michigan.
relates to Boise and Reno Capitalize on the California Real Estate Exodus

Julie Cuevas inside her restaurant Madre.
Photographer: Andy Anderson for Bloomberg Businessweek

Politics aside, businesses are rushing into Boise to fill every West Coast craving. In nearby Eagle, the new Renovare gated community is selling 1,900- to 4,000-square-foot homes with floor-to-ceiling glass and "wine walls" that start at $650,000—a bargain by California standards, says sales agent Nik Buich. About half of buyers are from out of state, he says.

Julie and John Cuevas left Southern California a year ago to open Madre, a "boutique taqueria" in Boise that would make many of their fellow transplants feel at home. It's more fusion than typical Mexican fare, with taco fillings including kimchi short rib and the popular "Idaho spud & chorizo." It would have cost them three times as much to open a restaurant in California, says John, a former chef at a Beverly Hills hotel.

John Del Rio, a real estate agent sporting a beard, baseball cap, and sunglasses, just registered moving2idaho.com, where he's planning to blog about all the things that make his new home great. He left Northern California two years ago with his wife in search of a place with less crime, lighter regulation, and more open space. Del Rio, a conservative with a libertarian bent, is reassured to see average people walking through Walmart with handguns in their holsters. In Idaho, he says, "nobody even flinches."



Business Insider

Priced-out Californians buying homes in Idaho for Monopoly money

Tanza Loudenback 10/25/2018

© Steve Bly/Getty Images Boise, Idaho

Idaho may be the new frontier for Californians.

In a new Bloomberg story, the reporters Prashant Gopal and Noah Buhayar describe an "echo boom" in which Californians are invading cities in landlocked states out west, like Boise, Idaho; Phoenix, Arizona; and Reno, Nevada.

The article said the move was ignited by California's record housing prices, volatile politics, high taxes, and "constant threat of natural disaster," like the recent wildfires in the state.

It wasn't long ago that people priced out of California were fleeing to Seattle and Portland, but prices -- along with traffic and other frustrations -- are rising there too. Earlier this year, Forbes named the roughly 700,000-person Boise metro area the fastest-growing U.S. city, followed by Seattle.

"Eventually the laws of supply and demand are going to drive people to other parts of the country," Glenn Kelman, CEO of the real-estate firm Redfin, told Bloomberg. "Boise isn't five times worse than California as a place to live. But places in California are five times more expensive."

The median home price in California hit a record $600,000 in June, more than twice the national median. Bloomberg described Kelman as saying it was easy for homeowners relocating to places like Boise to feel as if they're spending Monopoly money.

But frustrated locals feel that the Californians are driving up prices. The cost of a typical home in Ada County, which includes Boise, hit nearly $300,000 in September, an 18% jump from the previous year, Gopal and Buhayar reported. One new gated community sells homes with huge windows and "wine walls" to mostly out-of-state buyers, a sales agent told the news outlet.

Rent in these areas is also much cheaper. According to Zillow, the median rent in the Boise metro area is $1,400, compared with $2,300 in the Seattle metro area and $3,324 in the San Francisco metro area.

But the economic relief of moving to a down-home city is just one reason Idaho experienced a rise in popularity among Californians, who made up 85% of the state's total domestic immigration in 2016, Bloomberg reported, citing an analysis of U.S. census data.

Boise has for years appeared on rankings of the best places to live by outlets like US News & World Report, Niche, and SmartAsset, touting spectacular outdoor attractions, a high quality of life, and safety, in addition to low taxes, affordable housing, and a strong job market.



Oct 24, 2018, 03:55pm

Why Buy 1 House In California When You Can Get 6 In Texas?

Andrew DePietro Contributor
Personal Finance

San Diego is technically the cheapest real estate market out of the state's three largest cities. But its average home price is $848,500 | Getty Royalty Free

It's becoming obvious, if it wasn't already, that California real estate is uniquely expensive compared to the rest of the country. According to Zillow's September index, the median price for a single-family home in the state — $549,000 — is high, but house prices are even higher in its four biggest cities:

Los Angeles: $898,949
San Diego: $848,500
San Jose: $1,099,990
San Francisco: $1,400,000

In the majority of major American cities, you'd pay less for a house. And in many, you could buy several houses for the cost of a single home in a California city.

Cost Of A Home In California vs. Texas

Texas is a state that's booming in terms of population and business. Increasingly, more and more Americans are migrating to the Lone Star State, lured by jobs and affordable housing. According to Zillow, the median price for a single-family home in Texas is $277,062 — half of what the same home would cost in California.

When comparing the home prices city-by-city, California's exorbitant home prices become even more glaring. Check out these four major Texas cities and their current single-family residence price:

Houston: $342,250
Dallas: $415,000
Fort Worth: $255,000
San Antonio: $237,500
Austin: $394,950

Of these major cities, Dallas is the most expensive. But when compared to its California counterpart, San Francisco, the average price of a home in Dallas is a drop in the bucket. For the price of a single-family home in San Francisco, you could buy three houses with money left over, perhaps for a detached apartment or garage.

When comparing San Francisco to, say, San Antonio, the difference in home prices is even more absurd. With an average list price of $237,500, San Antonio offers you six single-family homes for the price of one in San Francisco.
Cost Of A Home In California vs. Florida

Florida is ever popular. Whether it's retiring Baby Boomers, young jobseekers or foreign investors, Florida draws in people and money. Yet even in the Sunshine State, home prices are far more tolerable than California's ludicrous rates. Florida overall has an average price of $299,623 for single-family homes — once again, essentially half the price of its equivalent in California.

In addition, on the city level, the contrast in home prices again is staggering. Florida's largest city, Jacksonville, currently has a median single-family home price of $219,000. Meanwhile, California's largest city, Los Angeles, comes in with a median price of $898,949. That means you could buy four houses in the up-and-coming city of Jacksonville for the price of one home in Los Angeles.

Even Florida's pricier major cities, like Miami, the median price is still only $499,000. Compare that to San Diego — the cheapest of California's three largest cities for homes — has an average price of $848,500, which is once again just shy of being double the cost. On top of that, Florida is home to one of the best places to own a home in the U.S.
Best Place To Buy A Home In California

If you're absolutely set on buying and owning a home in California, then you've got to be strategic, shrewd and persistent. Plus, you should really approach buying a house in California as a long-term investment. The majority of big cities are already seeing most of their former less-desirable housing markets blow up in recent years. Thus, you've got to search California cities with a fine-toothed comb to find whatever gems remain. According to an October housing report, this city is the best place to buy a home in California.



Chinese buyers expand their reach in the US housing market as the middle class gets in on the act

Published Tue, Jan 8 2019 3:54 PM EST Updated Tue, Jan 8 2019 5:08 PM EST

Diana Olick @DianaOlick

Key Points

Chinese buyers have been the top foreign buyers in both units and dollar volume of residential housing for six years straight, according to the National Association of Realtors, and now they expanding to new, lower price tiers.

More middle-class Chinese buyers are searching for lower-priced homes and they are using mortgages much more often.

While California is still the favorite among Chinese buyers, they are moving into markets in Texas, Georgia and Florida.

Chinese consumers may have soured on some American products, like iPhones, but they have only sweetened on U.S. residential real estate.

They have been the top foreign buyers in both units and dollar volume of residential housing for six years straight, according to the National Association of Realtors, and now they expanding to new, lower price tiers.

Chinese consumers appear to be less interested in trade wars and more interested in bidding wars, according to San Francisco-based real estate agent Michi Olson, who just returned from an international real estate property show in Shanghai.

"The Chinese are basically politically agnostic," Olson said. "What I mean by that is even though there is a great tension between [the] U.S. government and Chinese, the Chinese citizen seems to be able to separate the political turmoil with the sound real estate investment."

Olson said the biggest difference this year is price point. Initially, it was wealthy Chinese buyers purchasing million-dollar properties, all in cash. Now more middle-class Chinese buyers are searching for lower-priced homes and they are using mortgages much more often.

"The Chinese people still see the United States as a safe harbor where they can take their assets and park their money not only for their money but also for the future of their children," Olson said.

Several lenders in the San Francisco area now specifically cater to Chinese buyers. The median price of a home sold to a Chinese buyer dropped from just under $530,000 in 2017 to $439,000 in 2018, according to the Realtors. And while California is still the favorite among Chinese buyers, they are now moving into markets in Texas, Georgia and Florida.

Laura Barnett sells real estate in the Dallas/Fort Worth area and sees healthy Chinese demand there. She said while most foreign buyers there still use cash, she is also seeing the shift to mortgages.

"It is difficult to get loan approval on foreign buyers unless they put 50 percent or more down on a home, but several lenders specialize in this market now, so it is getting easier," said Barnett of RE/MAX DFW Associates.

As technology jobs spread across the U.S., it seems more Chinese workers in the sector are starting to buy properties in new locations.

Olson has several Chinese clients whose children are already working at tech companies in California. Once they are settled, a parent will fly in from China with a down payment for a condo. That is happening now in other places.

For instance, Chinese buyers flocked to an open house in Long Island City in Queens, New York, just a week after Amazon announced it would open a new headquarters there.


 link to www.uscannenbergmedia.com

Los Angeles

It's Harder to Buy a House in California Than Any Other U.S. State

Californians spend a much larger percentage of their income on housing than residents of any other state

By: Erin Rode
March 27, 2017

First-time homebuyers have just received some bad news: California has been pegged as the hardest state in the U.S. to buy a home.

This report comes from Claes Bell, an analyst with Bankrate.com. In an interview with the Los Angeles Times, Bell said California's rank can partially be attributed to the high percentage of income Californians spend on housing - at 35.2 percent, compared to the national average of 19.4 percent. Bell said housing costs should generally be less than 28 percent of an individual's gross income.

Gary Painter, a USC public policy professor who focuses on homeownership and housing markets, said California's unique environment drives up home prices while limiting opportunities for growth.

"[In California] there are environmental amenities - the beaches and the mountains - that actually make developing housing in every direction impossible, and also makes living in California a premium," Painter said. "So there's a lot of people from around the world who want to live here, either full-time or part-time, and that places extra demands on the housing market."

High housing prices might be driving young people and even families to rent residences rather than buying them outright. A recent study found that in Los Angeles, nearly 54 percent of residents are renters. This the fourth-highest rate in the nation, and more than 60 percent of those rented homes are occupied by families.

"In the Los Angeles region in particular, it is becoming more and more expensive to have close access to the amenities that everyone wants, such as access to jobs and cultural amenities," Painter said. "Young adults have to make some trade-offs. Their incomes are not as high when they first enter their career, so they either are going to have to buy less housing or they're going to have to decide to live further away from the kinds of amenities they prefer."

Of the young people who are able to purchase a home, many end up regretting it. NerdWallet, a website that offers free financial tools and advice, recently published its Home Buyer Reality Report, which notes that about 60 percent of millennial and Generation X homeowners said they had regrets and "would do things differently the next time around in the home-buying process." Just 38 percent of baby boomers said they regretted doing the same thing.

Painter notes that the challenges young would-be homebuyers face are not all that different from their older counterparts - in fact, they both have to prioritize what they prefer, bigger spaces or better locations.

Real estate agent Andy May says millennials are more interested in living in smaller houses in good, walkable neighborhoods, instead of fancy homes with high-end fixtures. However, it's hard to find open properties that go for less than $500,000 in the locations that they're looking for, like Silver Lake, Echo Park, and Los Feliz and similar neighborhoods.

As inventory drops and prices rise, the down payment on a home itself might be one of the most significant factors of the home buying process. So, May says, he's witnessed millennials purchasing condos as an alternative, because for young adults straight out of college, those prices are too hard to reach.

"If you want to put down for a house, the average home in Los Angeles County sells for about $550,000 so if you're going to put 20 percent down, that's almost $100,000," May said. "If you have student loans, that impacts your ability to purchase a home, so very few millennials are putting 20 percent down. You can still buy a house with as low as 3 percent, but loans are harder to get."

Anthony Amorelli used to live in Los Angeles but recently moved to San Francisco. According to him, Los Angeles still has more accessible housing than San Francisco, where the housing market is substantially more crowded.

"It's kind of intimidating going out there and not being able to afford something," Amorelli said, "[especially in] an area that you think you should be able[to afford to] to live in."



5 Reasons California's Housing Costs Are So High

Matt Levin
May 4, 2018

Why are California housing costs so high? At its most basic level, it's a story of supply and demand -- lots of people want to live here, and there aren't enough homes to go around.

But there are lots of uniquely California factors -- from the shape of our coastline to Proposition 13 -- that have attached a painfully expensive price tag to the California dream.

The median price of a home is now well over half a million dollars. That number is about $240,000 nationally. More than 20 percent of Californians pay more than half their income for housing.

Here are five reasons the state's housing market got so out of whack.

1. We Haven't Built Enough Housing

Experts who study California's housing crisis argue about lots of things. Is rent control good or bad? Will that new shiny high-rise going up in your neighborhood help or hurt housing costs? How much should we blame "not in my backyard" NIMBYs for our problems?

But there is one principle the vast majority of housing experts agree on: Over the past few decades, California hasn't built enough housing to keep up with the number of people who live here.

The state housing department estimates that we need to build 180,000 new housing units a year to keep prices stable. Over the past 10 years, we've averaged less than half of that.

Even when new construction was booming in the early and mid-2000s, new homes and apartment buildings weren't being built in coastal cities where the vast majority of Californians work. While places like the Inland Empire and Central Valley saw a building craze, places like San Francisco and Los Angeles basically flatlined.

We're also not keeping up with other states.

Places like New York and Massachusetts have built a lot more housing per capita than we have in recent years. That hasn't made those places cheap, but it has helped to alleviate some cost pressures.

2. Demand to Live and Work and Own in Urban California Has Reached a Breaking Point, and Part of That Demand Is Global

Over the last decade, Californians have increasingly tried to cram themselves into major urban centers that are already jammed with residents.

The Bay Area is the poster child here.

Between 2000 and 2007, Bay Area cities accounted for only 4 percent of the state's total population growth. Between 2010 and 2017, nearly 20 percent of all new Californians were either being born in or moving to the Bay.

While the tech industry certainly bears much of the responsibility for that trend, the increased demand to live in California's urban cores extends beyond Silicon Valley. The urban parts of L.A. and San Diego have all seen a major increase in people wanting to live and work there, which means increased competition for rental housing.

And we're not just talking about apartment rentals. Here's a pretty amazing graph.

The number of single-family homes occupied by renters grew by more than 400,000 over the last 10 years, while the number of owner-occupied units dropped during the Great Recession and has yet to recover.

So who owns these houses? The vast majority are "mom and pop" investors and wealthy individuals buying one or two additional properties. Foreign buyers, primarily from China, have also become increasingly enamored with California real estate. Last year, nearly one in four California single-family homes were sold in all-cash transactions, an indication of investor appetite for California real estate.

Overall, investors are a relatively small part of the housing market, especially when viewed from a statewide lens. But in certain local markets, investors compete directly with California families for homes.

3. Proposition 13 Dilutes a City's Incentive to Build New Housing

Why hasn't California built enough housing to keep up with its population?

Most housing researchers agree that part of the reason is Proposition 13, the landmark 1978 ballot initiative that capped how much local governments could collect from property taxes. While intended to protect California homeowners from unmanageable property tax bills, Proposition 13 has produced a host of unintended consequences.

Imagine you're a city, sitting on a huge plot of vacant land. You could zone that land for housing or for commercial use, like a hotel or a Target. Your city obviously needs more housing -- prices are sky high.

After Tax Cuts Derailed the 'California Dream,' Can the State Get Back on Track?

Easy decision, right?


Proposition 13 has made development decisions much more complicated. Because property taxes are capped, local governments have become increasingly reliant on other revenue sources. That vacant land is much more valuable to the city's coffers if a big box retailer gets built on it, as opposed to a multifamily apartment building.

Housing nerds call this the "fiscalization of land use."

There's debate about just how much Proposition 13 is to blame for the state's housing shortage. But talk to local elected officials, and you'll see the issue isn't just a hypothetical dilemma.

4. In Most Parts of California, the Process to Get New Housing Approved Is Difficult, Time-Consuming and Expensive

It can be hard to be sympathetic to developers.

From time immemorial, it feels like they've complained about rules and regulations they say make it harder to build their projects. The builder who designed Stonehenge probably thought there was too much bureaucracy involved.

While it may be tough to trust developers, that doesn't necessarily mean that they're wrong. The process by which a piece of land is approved for new construction can be incredibly cumbersome, time-consuming and risky. While good data on exactly how much this adds to housing costs is hard to come by, typical approval time for projects in San Francisco is over a year, while in L.A. it's eight months. That doesn't include when land needs to be "rezoned" for residential development, which can take even longer.

Why the lag? Here's the laundry list.

Multiple Layers of Government Review: A housing project often must go through multiple government agencies, including the planning department, health department, fire department, building department and perhaps most importantly, a city council.

Lots of Avenues for "Not In My Backyard" Voices: The review process for new developments gives ample opportunity for local residents to express their opposition. Locals may fear that new housing projects will change the character of their neighborhoods, increase traffic and hurt their property values. If a city councilmember votes for new housing, he or she may have to face dissatisfied voters.

An Often Misused Environmental Law: The California Environmental Quality Act, or CEQA, requires that local agencies consider the environmental impact of a new housing development before approving it. That sounds like a worthy goal, but the law has often been abused to prevent new developments -- even environmentally friendly ones with high-density housing and bike lanes. According to the nonpartisan Legislative Analyst's Office, CEQA appeals delay a project by an average of two and a half years.

Local Growth Controls: Two-thirds of California coastal cities and counties have adopted policies that explicitly limit the number of new homes that can be built within their borders or policies that limit the density of new developments. Subtler growth controls include not zoning enough land for new development or requiring supermajorities to approve new housing.

5. Land, Labor and Raw Material Costs Are Higher in California Than the Rest of the Country. And Those Costs Are Rising

Unfortunately, California's coastline topography makes it more expensive to build here than most other places. Also, there's the ocean. You can't expand into the ocean.

Limited land plus tons of demand means high land prices. In many markets in California, the bulk of a single-family home or apartment building's value is in the land it is built on.

But while the land itself is what typically eats up most of a developer's budget in California's hottest markets, it's not the only cost-driver. Construction labor and the cost of the raw materials have been rising over the last five years, and are higher in California than other parts of the country. According to the Legislative Analyst's Office, construction labor is about 20 percent more expensive in major California cities than in the rest of the country.

On the labor side, a shortage of skilled construction workers bears much of the blame. When the housing market crashed in the late 2000s, construction workers left the industry in droves. And those same workers haven't come back.

Construction today just doesn't seem to have the same appeal to younger workers. Firms are struggling to recruit younger workers to supplement and eventually replace a graying workforce.

Building codes and environmentally friendly design requirements in many California cities require different types of raw building materials to be used, some of which can be pricier than elsewhere in the country. And nationwide, the cost of vital resources like lumber and concrete are on the upswing.

There are plenty of reasons beyond the five we've mentioned here that help explain why California housings costs have gotten so out of control. The task of making California affordable again -- or at least relatively affordable again -- defies a simple silver-bullet solution.

CALmatters' Ben Christopher contributed to this report.

The California Dream series is a statewide media collaboration of CALmatters, KPBS, KPCC, KQED and Capital Public Radio with support from the Corporation for Public Broadcasting, the James Irvine Foundation and the College Futures Foundation.



So You Want To Move To California And Buy A Decent Home? Here Is How Much You Need, And Why

by Lee Ohanian
Tuesday, February 19, 2019

In an earlier California on Your Mind column, I discussed how California is ranked 49th among US states in housing affordability, 42nd in public school quality, and 40th in tax rates, all of which negatively affect Californians, particularly those with school-age children.

On the other hand, California ranks 8th in the country in wages, as there are a number of high-paying jobs in what is known as "Coastal California." This area refers to the counties that border or are very near the coast, including San Francisco, Santa Clara (Silicon Valley), Los Angeles, San Diego, and Orange (the populous area between Los Angeles and San Diego), among others. These areas account for about 65 percent of the state's population.

This raises the question of whether the relatively high-paying jobs in Coastal California offset the costs of housing, poor education, and high taxes. No, not by a long shot. OK, then how much does a family of four, with two working parents, need to earn to be able to buy the median-priced house in a Coastal California location, and have enough after-tax income left over to pay for other household expenses and put away a bit for savings? Around $130,000, according to my calculations, if a family sends their children to a public school. This is about 75 percent higher than actual household median income in coastal California, which is about $75,000. And, as I describe below, the median-priced home does not exactly qualify as your dream house.

The primary factor driving this high level of required income is very high home prices. The median-priced home in coastal California is about $743,000. Even if a family has a 20 percent down payment on this home (nearly $150,000), and no other debt, then qualifying for a conventional 30-year mortgage at an interest rate of 4.5 percent requires about $130,000 in annual income. To put this in perspective, the area with the highest median household income in California is Silicon Valley, at about $112,000 per year.

Making payments on a $600,000 mortgage, paying property taxes and homeowners insurance, and paying federal and state income taxes (after deductions) takes nearly $60,000. Housing expenses and income taxes alone would take up roughly 80 percent of the median household income in Coastal California.

Adding in other household expenses—food, clothing, utilities, health care, transportation, child care, and miscellaneous expenses—is an additional $59,000, for a grand total of roughly $120,000 in expenses. However, the cost estimates for these other household expenses from the California Budget Center may be too low. For example, it assumes food expenses of only about $6 per person per day. Assuming more realistic food expenses, along with adding in a small level of savings, increases this easily to $130,000 or more. And keep in mind, this is for a family using public schools.

This calculation suggests that only a small fraction of California households can afford to purchase a home in the areas of California that have the highest-paying jobs. So, who is buying these homes? It boils down to (1) households with exceptionally high incomes; (2) legacy homeowners, who have a very high down payment because of accumulated home equity, and (3) households who have considerable assets for a high down payment, which often reflects parental or other family help.

Suppose you are a household in one of these three groups and can afford the median-priced home. Here is an example of what you can buy in Northern California.

No, this home will not keep you up at night wondering whether you should take on a second job to buy it.

Meanwhile, here is an example of a median-priced home in Austin, Texas.

This newly constructed home is about 50 percent less expensive than the California home above, as building costs in Texas are much lower than in California. It is also the case that the median household income in Austin is about the same as in Coastal California. Is it any wonder that Austin is one of the most popular destinations for those who are moving out of California? And there are plenty of people leaving California, including 381,000 from LA County alone in the last five years. Housing is by far the number one reason why.

Economic policies that prevent new development are the major factor in keeping housing prices so high. Economic analyses indicate that the severest building restrictions in the state tend to be in the most expensive locations, including San Francisco and Silicon Valley. In these locations, "not in my backyard," or NIMBY, complaints against development run amok.

There is a simple economic reason why this is the case. Some homeowners in these locations have much of their net worth tied up in their home's equity. NIMBYism is therefore a natural consequence of homeowners trying to protect the value of their major investment by blocking development that they believe will reduce the value of their homes. It is now fashionable for politicians to decry NIMBYism, but the zoning and environmental-review policies that they have created are the main reason why NIMBYism is so prevalent in California.

Voters in Coastal California vote overwhelmingly for Democratic party candidates. This has created a significant tension in the state's Democratic party, as some Democratic voters, including some current homeowners, want to block development, while other Democratic voters (those who are not homeowners) want to substantially increase development to increase supply and reduce housing prices.

This tension has been in place for years within the state Democratic party, and thus far the development blockers have prevailed. Previous California governor Jerry Brown tried to exempt affordable housing from environmental reviews that are often used to block development or grab concessions, but this effort was blocked by community and environmental groups and by unions. In a very different approach, governor Gavin Newsom is now suing cities for not building enough houses. But this will be difficult for cities to do without reform of the regulatory measures that drive up the cost of building.

At a time when many in this country are attacking elitism and its undue political influence, it is this exact force that is responsible for the extraordinarily high home prices in the country's most politically liberal state. And in terms of your housing budget, the state's Democratic party effectively does not care.



What You Can Get in Every State for the Price of a California Home

Would you rather be in California or have many homes elsewhere?

By Gabrielle Olya January 28, 2019 Real Estate Investing 101

It's becoming clear that California real estate is uniquely expensive compared to the rest of the country. The 2018 median home price in the state — $539,000 — is high, but house prices are even higher in its four biggest cities: San Diego ($655,888), Los Angeles ($795,000), San Jose ($990,888) and San Francisco ($1,199,000).

In most major cities across the U.S., you would pay less for a house — and in some, you could buy multiple houses for the cost of a single home in a California city.

GOBankingRates determined  link to www.gobankingrates.com what you could get in every state for the price of a California home by taking the median listing price of the two biggest cities from every state, and comparing the cost of a home in each city to housing prices in California's biggest cities.


 link to www.cnbc.com

More Californians are considering fleeing the state as they blame sky-high costs, survey finds

Published Wed, Feb 13 2019 8:00 AM EST Updated Thu, Feb 14 2019 4:27 PM EST
Jeff Daniels @jeffdanielsca

More Californians are considering fleeing the state as they blame sky-high costs, survey finds

Key Points

A growing number of Californians are contemplating moving from the state due to the sky-high cost of living, with sentiment highest among millennials, according to a new study.

Fifty-three percent say they are considering fleeing, representing a jump over the 49 percent a year ago.

The poll conducted by Edelman Intelligence found the chief reason for dissatisfaction isn't wildfires or earthquakes but housing cost and availability.

A millennial couple looking at a home for sale in Los Angeles.
Wally Skalij | Los Angeles Times | Getty Images

LOS ANGELES — A growing number of Californians are contemplating moving from the state — and not due to wildfires or earthquakes but the sky-high cost of living, according to a survey released Wednesday.

The online survey, conducted last month by Edelman Intelligence, found that 53 percent of Californians surveyed are considering fleeing, representing a jump over the 49 percent polled a year ago. The desire to exit the nation's most populous state was highest among millennials, the survey noted.

"California is a great, great place if you're young and ambitious and daddy's paying the rent," said Joel Kotkin, a presidential fellow in Urban Futures at Chapman University in Orange, California. "It's similar to New York with the same dynamic, and maybe more of it."

Kotkin, who has researched California demographic and economic trends for decades, said he's astounded when he asks his Chapman students whether they think they'll be in the state in 10 years. "I would say the majority would say 'no,' — and many grew up in California," he said.

"There's no doubt that California's economy, for all of its strengths when it comes to innovation and creating these industries that people want to be part of, is struggling with high costs," said Aaron Terrazas, a senior economist with online real estate site Zillow. "Costs have gotten way ahead of incomes in California, and that's making a lot of people think about whether it's worth the hurdles."

According to Edelman, 63 percent of millennials in the 2019 survey indicated they were considering a move from sunny California. The chief reason for dissatisfaction: housing.

When asked in general about what would make them leave California, 60 percent of millennials in the survey gave housing cost and availability as the reason. That was slightly higher than the general population (55 percent), although 65 percent of renters cited housing factors as a reason to leave.

Californians believe housing costs are four times more threatening to the state's economy than high health costs. Residents also consider crime and security as a top-three concern.

Terrazas said millennials in California who are "tired of renting and looking to settle down and buy a home are finding it's often out of reach for them." He said this is especially the case in coastal job centers of the state, whether Los Angeles County or the San Francisco Bay Area.

"California just doesn't strike them as reasonable," the economist said. "The state has consistently seen much faster home value appreciation than most of the country, and the same goes for rent until about two years ago. Rents have begun to slow down, ... although they remain at high levels."

Terrazas said Southern California has high housing costs and on average lower incomes than Northern California. "In some ways, Southern California is in much more dire straits," he said.

Even with higher average incomes in Silicon Valley, though, he said homebuyers now must spend about half of their pretax incomes on a monthly mortgage for a median home. The median home in the Silicon Valley market topped $1.2 million at the end of 2018, according to Zillow data.

Statewide, the median home value in California was $547,400 at the end of 2018, while the U.S. median home value was $223,900. By comparison, the median home value in New York state stood at $289,000 and $681,500 in New York City; New Jersey was $324,700.

The Edelman survey found 47 percent of Californians are considering moving out of the state in the next five years. Again, it found the rates among millennials were higher with 55 percent of them contemplating the move. And 57 percent of Californians with kids under 18 also were considering packing up and leaving in the next five years.

Chapman's Kotkin believes the next wave of discontent in California won't necessarily be focused on housing costs but taxes.

"Taxes are a real killer if you're upper middle class and whether you're a younger person trying to buy a house or you just want to be able to spend what you make," said Kotkin. "There's also concern among people looking to retire and having their income taxed into oblivion."

At 12.3 percent, California led the 50 states in 2018 with the highest top marginal tax rate, according to the Federation of Tax Administrators. And that doesn't include an additional 1-percent surcharge for those Californians with incomes of $1 million or more.

"The tax bill made it worse," Kotkin said, pointing out that the federal tax changes mean deductions for state, local and property taxes now get capped at $10,000. "State taxes have become a significant factor now. We're getting into a situation where the middle class in California really can't hack it."

Overall, the Edelman survey involved a total of 1,900 California residents and was conducted Jan. 4 to Jan. 20. It said results were weighted to the Census to be representative of the state's adult population.

A report from California's Legislative Analyst's Office last year indicated Texas, Arizona, Oregon and Nevada are popular destinations for relocating Californians. It also found families with kids and those Californians with only a high school education were most likely to flee to lower cost states than college-educated residents.

Finally, the survey found more than 60 percent of residents feel that the best days of living in California are behind instead of ahead. And a large number of residents are "ambivalent" toward tech as an engine of prosperity, the survey said.


https:// forums/General/America-s-Housing-Affordability-Crisis-Spreads-to-the-Heartland/5-2242152/?page=4#i80282573

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Link Posted: 8/7/2019 3:00:45 AM EDT

I can tell you that Phoenix is fucked. There is very limited supply of decent homes under $400k. Most of them are either really poorly-done flippers, in need of serious work, or are in shit neighborhoods that are going nowhere but down. Too many flippers buying whatever is available, doing their shitty "remodel" with junk materials and design, and marking the price way up. Everybody trying to be their own HGTV show. Salaries have NOT risen in accordance with prices. I don't know what's going to eventually happen here but it is worrisome.

I bought my first home (2k sq ft for $242k) in 2002 and am still living in it. Sure I'd like something bigger/nicer but I can't afford to move. Just not worth it any more. Instead I spent 80k to remodel. I wouldn't pay what my house is valued at right now (probably well over $450k). I feel for first-time middle-class buyers. There really isn't much available at all. Too many people, too many "investors", too many flippers. They're ruining the market.

IMO, the problem with the epidemic of flippers is that they're destroying the opportunity for middle income buyers to purchase homes at reasonable prices and live in them either unrestored or remodel at the time and degree of their own choosing. Buyers are stuck with a shitty remodel at an inflated price because now the flipper has to make a premium profit on top of their cost to renovate. MLS search shows so many homes that are for sale at $350-500k that sold 6 months prior for half the price. And you can tell some asshat did a shit remodel using clearance tile from home depot and entry-level ugly-as-fuck appliance packages. They all have the same 30" two-tone consumer grade electric ranges with over-the-range microwaves. Then the listing says "newly remodeled!" Yeah go f yourself you should've just left the house alone.