Posted on 07/31/2017 12:54:02 PM PDT by Twotone
One more thing, illegals will not save or sustain the S. CA housing bubble and the fact is, illegals keeping housing inflated is more the exception than the rule. No question.
One more thing, illegals will not save or sustain the S. CA housing bubble and the fact is, illegals keeping housing inflated is more the exception than the rule. No question.
Looking at this below makes perfect sense and certainly does not look good for these inflated prices
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Where a four bedroom house with 1,500 – 1,800 sq/ft typically rents for around $2,400/month. Let’s be generous and round that up to $2,500/month, just for argument’s sake.
$2,500/month X 12 months in a year = $30,000 median annual rent
$30,000 X 10 = $300,000 median house value
Question: when was the last time you saw a house on the market for $300,000 in S.CA? You haven’t…not since the last time a Los Angeles housing bubble popped in 2007. What does that tell you? When a housing bubble crashes, houses typically return to their true values, or what the houses are actually worth…and wouldn’t you know it, when the last bubble popped, houses were being sold in the high $200’s to low $300’s. What a coincidence.
I read an article about the rental market in the times and it was illegals (immigrants their word) and LA county rentals only. I am a broker and my wife also and we have three associates,. i don’t get illegals buying houses, although i did 10 years ago when the lenders didn’t;t ask questions.
The article also blamed slow approval of contraction of low income apartments. i would also think the county is saturated and don’t know how much room there is too build except north. the traffic is already locked up
The pensions are used as bribes to gov’t workers to vote for democrats.
YOU are paying the bribes in higher taxes and no savings.
slow approval of construction
They can’t build any more here for the most part. They’d have to start demolishing millions of homes. And for those that live here they don’t want more homes, roads, apartments etc..Everyone agrees, the region just can’t handle more people, more traffic etc...It’s what’s driving a lot of folks out to begin with.
I’d be a cup of coffee RE prices start dropping in the near future especially for these inflated lower and mid priced homes in CA.
How bad is it? Our neighbors have about 100k in equity now. He told me he might be transferred out of state. If they had to rent it out, they’d have to charge about 5,000 per month to maintain the home. But rents in the area are only about 2600 roughly...
From my perspective, this certainly does not look good...
Politically, Oregon is an absolutely despicable state. I’m just fine with their corrupt pension system imploding on itself. May they all end up dead broke.
I see demand continuing high. but I agree that people who do low end service jobs can’t pay the prices and that will balance the rising costs.
I work the coast a lot from Encinitas to Santa Monica and i see a demand on the coast. people still have money at a certain percentage and the beach market is most desirable. that is where the money goes. i look at soCal as several markets and the beach is its own special one.
I still, see the rentals remaining high because laborers are renters and mexicans will share a house. i lived next to a house in pomona in the 80s which must have had 12-15 people living there. Again you can pay 3000 month if you have a group of people sharing the cost.
None of the proposals below are enough, I know, but they’d be a start:
1. Change the defined benefit formula so it excludes all compensation other than actual defined salary, with all other compensation NOT figuring into the pension.
2. Go drastic and impute what pensions already set would have been if those rules were in place. Take back what that calculation imputes as “excess” benefits - permanently.
3. Close the current pension fund - no new hires included in it.
4. Put all new hires in a defined contribution PENSION plan - not a lousy 401K or similar ad hoc plan, but an actual pension plan, but managed on defined contribution terms, not defined benefit.
5. Over time, divide up the existing defined contribution plan into more than one plan, and then put each of them into new PRIVATE not-for-profit entities allowed to take in individuals from anywhere.
6. Then (1) new hires get to pick which private pension plan they want to join, and (2) one-to-one transfers out of one plan and into another are permitted as well - PRIOR TO RETIREMENT.
Altogether these changes take out the politics and political management of government employees’ retirement plans. The only commitment the government has is to the rate of contribution it agrees to make per employee - that’s it. The pension, when they retire is no more than knowing the individual’s pension account balance, getting a mortality factor for remaining life expectancy, using a conservative earnings rate the fund might make over the years. Then, the math determines how many years a certain $$ amount per month can be expected to be funded for the individual’s remaining lifetime, from the INDIVIDUALS’ pension account balance.
When the individual lives longer, the fund experiences a “mortality loss”, and when they die sooner a “mortality gain”. Well managed determination of the mortality rates and the expected earnings rate works to see that, over time, mortality losses and gains balance out instead of putting the fund at risk long term.
It is the most simple and direct method for pension plans and has no complicated defined benefit formulas to be gamed by the individuals or the employer. You work. Your employer pays an agreed % per month/year into the pension plan. You have an account of your own that contributions for you & by you get accumulated, become part of an invested fund, and generate earnings on YOUR contributions. At the end you have an account balance that largely determines how much monthly pension you can get. That’s it.
Agreed not on the west side or west Orange. maybe Santa Ana.
Sometime has to pop with growing population and it will be lower socioeconomic. The only thing that keeps us there is our four adult children and grandchildren.
Best wishes.
That's because, looking at the formula above, so many people owe so much on their homes, they'd have to charge 5,000 per month just break even. But no one is going to rent for that...Maybe 2500, but certainly not 5k per month.☺
Oregon has actually tried to fix things. They have Tier I employees, who have the benefits currently causing the problem. Then new employees became Tier II - I’ve forgotten what year that was. Even that wasn’t enough to save them & there’s a Tier III for new hires since...around 2000???
The problem is that when they tried to fix things the courts said the state must abide by the original hire contract. Interestingly, judges were part of PERS. I think they got moved out, but I’m not sure about that. In any case, the Dems still don’t see the problem they continue to create.
Oregon ping
Ballot Initiative:
There shall be No Taxpayer Liability, for any retirement or Health insurance for any person or persons, that exceeds the maximum benefit available under Social Security and Medicare.
Problem Solved
I relate what was in the times. The number of people who can afford a home is fawn. Many illegals (the terms says immigrants) cannot afford homes, though the times would have government subsidize purchase, especially for immigrants. So it is an issue of increased population who take low paying jobs because of lack of skills, education, and language. The demand is far outgrowing the supply and since LA is sanctuary the demand will continue to increase.
If I can put 12 people in your house, I can pay 5,000 a month.
Again, this isn’t the 80s or 90s during the big ramp ups in illegal invasion. That’s long over.
The illegal population here and everywhere has been in decline since Trump was elected. This is a fact and will only continue to affect their numbers.
In addition, one would have to be financially suicidal to put 12 illegals into their rental property. That is just not a good idea no matter how ya chop it up.
And take hundreds of thousands of illegals out of the construction industry, will home prices go up even more? How does that work when prices are already thought the roof?
From articles we have been seeing regarding illegals bailing out...
Could Trump’s Immigration Ban Cause Another Housing Crash?
“”The question, of course, is whether or not Trump’s immigration crack down, on both illegal immigrants and H1-B visa holders, will reduce demand from immigrant families to such an extent that it actually drives down home prices? “”
“”In San Francisco, an Indian software engineer on a work permit canceled plans to bid on a $900,000 home. In Washington, a Brazilian nonprofit executive passed on a fixer-upper near her office. And, in Mesa, Arizona, a 24-year-old son of undocumented Mexican immigrants won the trust of a bank — a green light for a mortgage — but now fears deportation.””
“”President Donald Trump’s immigration policies threaten to crack a foundation of the American economy: the residential real estate market. Legal and otherwise, immigrants, long a pillar of growth in homebuying, are no longer feeling the warm welcome and optimism necessary for their biggest purchase.””
http://www.zerohedge.com/news/2017-02-22/could-trumps-immigration-ban-cause-another-housing-crash
thanx for the link
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