Home sweet home -- impossible? Californians fear high prices may drive young people away

San Francisco Chronicle ^ | 11/18/4 | Kelly Zito

[SmithL]

More than 50 percent of California residents said in a survey being released today that they are very concerned that fast-rising home prices will lock out younger generations from the housing market.

That trend already appears under way for those ages 18 to 34, with 31 percent saying high housing costs are forcing them to ponder a move from their region or out of the state, according to the study by San Francisco's Public Policy Institute of California.

Researchers at the nonpartisan think tank say an exodus of young workers could undermine state's economy, especially in the Bay Area, which relies on a skilled, mobile labor pool to drive its dominant technology industry.

"If the younger adults are thinking about moving out of a metro area like the Bay Area, the question is, where do you get the workforce?" said Mark Baldassare, the institute's director of research. "Who's going to come in and replace the skilled workers that we're going to need for our economy?"

[MineralMan]

"We're one of the families who will be moving out of CA. Mr. RightField retires next year and we're outta here!."

Good for you. I can't tell you how good my wife and I felt about our move this summer. It's been wonderful!

[FreedomCalls]

$625,000
11,457 Sq. Ft.
5+ Bed, 5+ Bath
Approximate lot is 4.95 AC
4 or more car garage
Swimming pool

In Abilene, Texas.

[freeasinbeer]

I kid you not, there were new homes here in Palo Alto, CA going for around 1,000 per square foot. Last year, three 1,200 sq. foot new homes on 2,000 square foot lots that were being sold for $1,200,000. And they all sold...

Here is one, $799,500, 1,300 sq. foot condo, no land, 2 bedrooms, oh and $458/month in Condo fees.

Here

[KC_for_Freedom]

This same thing happened in the SF Bay area in the '70's. Thats when I lost my teaching job due to declining enrollment. (Young adults moved away, could not buy in where the family house was.)

This persisted for a few years then two things happened to bail out the schools. (1) some parents began using the equity in their homes to help their kids make purchases. I still don't know how they made the payments but this was very successful. and (2) Mexican immigration brought in kids for the schools living many to a bedroom in the lower cost areas.

[Terpesman]

You go to West "by God" Virginia.

Seriously, it's a beautiful state and they are working hard to entice companies to invest in the state. Taxes are low, the cost of living is low, and crime (outside of the large cities) is not bad at all.

Now, having said that, I must admit that there is a certain stigma associated with living in WV. If you can get past that, you will be one happy camper.

[newzhawk]

My husband and I are struggling with needing to sell our big home on the water in FL and making money enough to live easier- knowing we would never be able to move back- we would almost have to have my daughter move in with us when she graduates from college to be able to live in her hometown. My friend in so cal is having same dilemma- he knows he would not be able to afford to move back - all the original home owners are dying off and realtors are buying them up and making a fortune off the resales- the realtors are coming around the week of the funeral!

[Mr. Jeeves]

Geez. What are the salaries like there?

Maybe 50% above the national average. Not enough.

How the heck can anyone afford to buy them at these prices?

A lot of the sales turnover comes from people selling existing homes and trading up. Some of it is dot-com money that got redeployed from the stock market after the NASDAQ crash. Some of it is mortgage companies handing out adjustable rate-mortgages to marginal buyers like Monopoly money, with the buyers planning to refinance before the balloon payment hits in a few years (they are in for an ugly surprise when rates go way up). Some of it is that there are only a small number of urban and suburban places you can live in this state without subjecting yourself to gang or drug-related violence - the price of security is very high. And some of it is the traditional California price inflation driver: Midwesterners who decide that they just can't take one more winter.

Some cite illegal immigration as a factor, but I think it only affects the security aspect - illegals aren't buying houses.

[Mr. Jeeves]

In Abilene, Texas.

Nice, if you can stand the risk of a tornado dropping it off in suburban Fort Worth some fine Spring evening. ;)

[taxed2death]

You might be surprised to know that not all Yankees are liberal.

[Wallace T.]

The main areas in Texas to avoid are Austin (UT - big time liberal), though Williamson County, north of Austin, is quite conservative, and the "inside the loop" areas of Dallas (I-635), Houston (Loop 8), San Antonio (I-610), or Fort Worth (I-820). These inner city areas are dominated by metrosexual types, outright homosexuals, and low income minorities. The suburbs of all these cities are predominantly conservative. El Paso, which is 75%+ Hispanic, and the Rio Grande Valley (90%+ Hispanic) are also unfriendly to conservatives who want to work for a living, though not bad for retirees who seek warm or dry weather. There is a wide range of scenery, from the tall pines and lakes of East Texas, to the rugged Hill Country, to the edge of the Sonoran desert, to the sandy beaches of Corpus Christi.

[doc30]

I live in the St Petersburg area. Bought a fixer a year and a half ago upper for $100K and its now appraised above $125. Four years ago, these homes were selling in the 65 to 75K range. Florida, especially near the water, has soaring real estate prices. 10-15% appreciation per year has been consisten for the past 7 years. Too bad salaries have been relatively flat with a median household income of about $30K.

[Awestruck]

we were blessed enough to get in the housing thing fairly cheaply...but the thing chasing us out of the state isn't the prices but the political environment! There is currently a scheme in the works to get rid of the gas tax but charge drivers by the mile via an electronic device for our cars! my husband says if this passes and Rinold signs, we're outta here.

[Ciexyz]

$569,000

Wow!

[scripter]

Checkout some of the homes here.

[FreedomCalls]

Nice, if you can stand the risk of a tornado dropping it off in suburban Fort Worth some fine Spring evening. ;)

That risk is overstated. Tornadoes are limited to a very narrow area. Your neighbor's home can be destroyed, but yours will be barely touched. The number of homes destroyed by tornadoes each year is far less than the number destroyed by hurricanes or floods. Most tornadoes just blow through empty land. It's something you really don't have to worry much about.

[Alberta's Child]

California has the added element of a property tax system that is designed to protect long-term homeowners at the expense of new buyers, by limiting the rate of property tax increases for existing homeowners.

[Betis70]

I'm one of those younger people considering this. For a downpayment on a 1 bedroom condo, I can pay for 1/2 the asking price of a 3 bedroom house in most other states.

Once my lease is up, I am outta here.

[Age of Reason]

When the average American can only afford to own property barely bigger than an SUV, I would not call that prosperity, no matter how many SUV's or electronic gizmos one may own.