Real Estate/ Lending institutions

[billyjoe]

Doug,
You've probably got more expertise and knowledge on this subject than most. Was just reading in the Cleveland Plain Dealer a comparison between Silicon Valley and the rest of the country. I suspect that California as a whole could generally be grouped in with Silicon Valley, but with say a 45% smaller evaluation. The median income of the Valley inhabitants is approximately 53% greater than the rest of the U.S. yet their homes are valued at 3 1/2 times that of the average American. The article goes on to give case studies of single digit millionaires working themselves to death in order to maintain the lifestyle with little or no retirement prospects in the future at least in the same geographical area. This looks like a disaster with no end in site. People are losing jobs and homes in Ohio and you had a link showing the low evaluation to begin with in Cleveland and nearby. How can California possibly withstand this crunch?

------------billyjoe

[IIC]

Doug,
You've probably got more expertise and knowledge on this subject than most. Was just reading in the Cleveland Plain Dealer a comparison between Silicon Valley and the rest of the country. I suspect that California as a whole could generally be grouped in with Silicon Valley, but with say a 45% smaller evaluation. The median income of the Valley inhabitants is approximately 53% greater than the rest of the U.S. yet their homes are valued at 3 1/2 times that of the average American. The article goes on to give case studies of single digit millionaires working themselves to death in order to maintain the lifestyle with little or no retirement prospects in the future at least in the same geographical area. This looks like a disaster with no end in site. People are losing jobs and homes in Ohio and you had a link showing the low evaluation to begin with in Cleveland and nearby. How can California possibly withstand this crunch?

------------billyjoe

I don't really know much about that market since it is 400 miles away...But we were up there a few years back and we went thru some rural areas that are maybe 80 miles away from San Jose...I told my wife that the area looked great and if someone didn't mind the drive to work they could live in a nice area for a low price...SURPRISE...when we got home I looked up some of those areas on the Net...EXPENSIVE.

Here is a site about RE in the area: http://rereport.com/scc/csper/

On another RE note...Earlier this year I noticed that the more expensive areas in LA were stagnant or even going down while the cheaper less desireable areas were very strong...Guess it was all many could afford and they didn't want to miss out...Well, from what I read those lower income area houses are dropping in value fast...I suppose because the subprime loans have pretty much dried up and now the Alt-A's are getting harder to come by...IMO, partial blame goes to those RE people on the radio scaring everyone into thinking that if they don't buy now they will never be able to afford it as some I heard were projecting increased valuations thru the end of this year and into next year...I remember swearing at some of them on the radio as I was driving.

[billyjoe]

Doug,
I watch about 5 different "Flip this House" shows and a few clones which are backdated and often show hot property in California being flipped for a couple hundred g's profit in 60-90 days. Lately some of the flippers being shown aren't doing so well. Along with financial disaster they end up divorced and with other bad results that the shows gloss over.

------------billyjoe

[IIC]

Doug,
I watch about 5 different "Flip this House" shows and a few clones which are backdated and often show hot property in California being flipped for a couple hundred g's profit in 60-90 days. Lately some of the flippers being shown aren't doing so well. Along with financial disaster they end up divorced and with other bad results that the shows gloss over.

------------billyjoe

I'm pretty much on the fringes of RE Billy...But I have noticed that the Donald Trump seminars w/ Magic Johnson have pretty much dried up around here...They may still have them but the advertising blitz must've ended.

One bad thing around here anyway is that residential rents are steadily climbing...In fact, in the City of L.A. they raised the allowable rent control increase by 3% (When people move in L.A. they can raise the rent as much as they want unlike a few cities).

I'd say that is (increasing rents) because with people losing their houses they have to go somewhere...so perhaps apartment buildings are still a good investment right now???

For example...I know a young woman who is recently separated...She is looking for a 2 bedroom apt. She's not looking in the fanciest areas but in what I'd call decent middle level areas...She's willing to pay $1,300 mo. and has been looking for 2 months...Very tough to find one at that price.

When she first started looking I looked around the Westside where I live and it seems that 2 bds. go for about $1,800 to $2,900 unless you go to the beach where they can be more...sometimes much, much more.

On Friday she mentioned a couple of places she found that sounded real nice...Problem is she'd be looking at a min. 2 hr drive to work each way.

L.A. is not the most expensive place but it certainly must be in the Top 10...Tough out there for a lot of people.

I was offered a job in San Francisco a couple years ago...Actually, it wasn't a firm offer...But they were talking about a 10% increase...Discussions ended when I said I wouldn't consider anything less than a 50% increase.

[Websman]

For example...I know a young woman who is recently separated...She is looking for a 2 bedroom apt. She's not looking in the fanciest areas but in what I'd call decent middle level areas...She's willing to pay $1,300 mo. and has been looking for 2 months...Very tough to find one at that price.

When she first started looking I looked around the Westside where I live and it seems that 2 bds. go for about $1,800 to $2,900 unless you go to the beach where they can be more...sometimes much, much more.

And we wonder why there are so many homeless people....