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Are you kidding me? I lived in Southwest England (Surrey) for 10
years. In the London suburbs, a 50 year old 1500 sq ft house with
moldy windows and a garage that barely fits a washing machine goes
for nearly the equivalent of $1million. The weather was so bad I
left the country every chance I had. In fact, I just got together
with a former Italian colleague who still lives in London, who told
me he flies home to Milan nearly every weekend so he can drive
around in his BMW Z4. Gasoline costs $10/ gallon and everything in
the stores cost twice as much as the US. I lived about 15 miles
outside of London and I'd be lucky to get to the City in one hour
because of the horrendous traffic. And the trains were rarely on
time. My wife used to complain that she couldn't buy the simplest
things in the UK that we all take for granted here. The movie
theaters(cinema) in England were like the little porno rooms in
Manhattan. Don't get me started. I can go on and on with the
horror stories.
So, everything costs double what it costs here, the stores carry no
variety of goods, the weather is consistently miserable, and my
school lunches tasted better than pub food. In California,
everything costs half of what it costs in London, there are endless
malls and superstores which carry more than any European can even
imagine, you're a few hours from the mountains, skiing and beautiful
beaches, and its always sunny. I think its rained 3 days all year.
This has nothing to do with status. Its a lifestyle choice.
Everyday, I know the weather's going to be nice. We think its
freezing when it gets below 50 degrees F (10C), and by the beach its
rarely above a dry 85%(34C). I can play ball with my kids, ride my
bike or go to the beach any day of the year. I haven't worn a
jacket, carried an umbrella or worn boots in the 4 years since I
left London. blah, blah, blah.
Back to your question. Generally, demographics and jobs drive
housing. California adds over a half million people every year.
And that's only the people who are accounted for. Additionally, the
marginal low income minority who couldn't qualify for a mortgage 10
years ago can qualify now due to easy credit. Property taxes are
half compared to the East coast. But when it comes down to it, you
just can't beat the weather. Every year when they show the Rose
Bowl in sunny 80 degree weather on the tellie, I'm sure another few
thousand Yanks around the country pack their bags and load up a U-
Haul.
As for the future, as the baby boomers age, I'm sure alot of
retirees will cash out of California and move elsewhere. You also
have to think the infrastucture can only accomodate so many more
people. There's a constant energy and water shortage. The low
income worker which is a necessary component of every society can
hardly afford to live here. Also, if home prices go up further,
business will move out like they did in the late 80s, and the
college grads won't choose to live here either.
I lived in Tokyo in the late 80s early 90s so I saw all that happen.
The rental cash flow just didn't make any sense relative to home
valuations. And sure enough home prices come down 50%. The
Japanese had some crazy real estate capital gains laws and 3
generation mortgages that just added to the mania. It wouldn't
surprise me one bit if the same thing happend here. But I guarantee
you, the same thing will happen to UK home prices because the US and
UK follow the same business cycle. Home prices were down 40% from
1990-1994 in London just as they were in southern
California.
--- In realtraders@xxxxxxxxxxxxxxx, "magcf2003" <magcf@xxxx> wrote:
> Mr. Ira, Bondo and all the others
>
> I just would like somebody to help me understand this real estate
> frenzy in California.
>
> I am not American, I am Italian and have been living in the UK for
> years. Last year I have been to L.A. and San Francisco. I do not
get
> it, PLEASE take no offence but I was not impressed. In Hollywood
> celebs get away with it, but, on the other hand, I found Venice an
> uncomfortable place, although Santa Monica was better, for
example.
> San Francisco was allright, but nothing really spectacular unless
> you have never moved from your 2,000 souls' rural village. In
Milan
> and London - two places I am highly accustomed with - middle class
> have been moving away from the town in recent years, driven by
high
> prices and poor quality of life.
>
> So, please do not answer me with the supply and demand thing, I
> would like to know in your opinion what drives demand there (hence
> supply).
>
> Thanks for all your help
>
> Claudio
>
> BTW = Anybody following currencies?
>
>
>
> --- In realtraders@xxxxxxxxxxxxxxx, "mr.ira" <mr.ira@xxxx> wrote:
> > Just saw some new homes in Northern California, 3000 sq.ft.
Lot
> size, 10,000-14,000 sq.ft. No landscaping, and rock hard clay
> soil. Located in a intermediate quality neighborhood. Starting
> price, with no upgrades, $945,000 and 6 sold the first day. What
> do they say? "Location, location, location".
> >
> > It just doesn't figure, but it is happening.
> >
> >
> >
> > From: bondo92677
> > To: realtraders@xxxxxxxxxxxxxxx
> > Sent: Monday, September 13, 2004 8:00 AM
> > Subject: Re: [RT] Real Estate
> >
> >
> > That's interesting. Southern California real estate has been
> marked
> > down 10-15% over the past 3 months and homes still aren't
> moving.
> > But that's not saying much since values have doubled over the
> past 3
> > years.
> >
> >
> >
> > --- In realtraders@xxxxxxxxxxxxxxx, BobsKC <bobskc@xxxx> wrote:
> > > Of course, there's is nothing quite like three major
> hurricanes in
> > a month
> > > to bring property values down fast. My home on Sanibel
> Island, Fl
> > > escalated from $290K in '98 to $550K in '03 but it's hard to
> say
> > what it
> > > may be worth right now. Also, purchasing at historical low
> > interest rates
> > > runs the risk that with rising rates, real estate values
will
> > fall. Sort
> > > of like being in a stock you can't sell because trading is
> > halted ... :)
> > >
> > > Bob
> > >
> > >
> > > At 02:39 PM 9/11/2004 -0400, you wrote:
> > > >Well I am finally seeing it happen in real time...in the
> > community I live.
> > > >
> > > >I am active in Homeowner's Association in my Myrtle Beach,
SC
> > community.
> > > >We are Lakeside and just 5 minutes from the Beach with the
> new
> > roads.
> > > >
> > > >I saw a list of the homes owned by people from CA and WA
and
> it is
> > > >growing. Apparently there is a network of over 2000 people
> > dealing with
> > > >select realtors who find fast growing and escalating value
> areas
> > in new
> > > >communities here and elsewhere.
> > > >
> > > >The out of staters are buying homes here and renting them
for
> > $1050 per
> > > >month which covers mortgage and practically all expenses
with
> > some left
> > > >over for repair. In speaking to one from WA, he can not
> afford to
> > retire
> > > >where he lives plus he believes the escalation in value
here
> will
> > give him
> > > >a better profit than the stock market. Apparently, his
> particular
> > effort
> > > >was started by a group of stock investment club women who
are
> > also doing
> > > >this.
> > > >
> > > >It is having a negative affect on our Family community
since
> many
> > renters
> > > >are college students...away from supervision...FWIW. But
that
> is
> > being
> > > >gradually dealt with.
> > > >
> > > >I am thinking about doing a few properties myself. There is
> no
> > let up in
> > > >demand here.
> > > >
> > > >Just FYI.
> > > >
> > > >Sincerely,
> > > >
> > > >John
> > > >
> > > >
> > > >
> > > >
> > > >
> > > >
> > > >Yahoo! Groups Links
> > > >
> > > >
> > > >
> > > >
> >
> >
> > Yahoo! Groups Sponsor
> > ADVERTISEMENT
> >
> >
> >
> >
> >
> > -----------------------------------------------------------------
--
> -----------
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> >
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> >
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> >
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