A Deja-Vue Report from Southern California...

[furnishedowner]

Just got back from San Diego, my first real look at our old hometown in 15 years.  I'm still trying to sort out my impressions.
We drove around and looked at every house we had ever owned.

The first place I ever bought was a little 2-on-1 on an owner-carry loan for $19,000.  A few years later I had a standard, stucco, 1200 S.F. 3-bedroom, 2 bath, 2-car garage house built there with $50,000 or so of special low-income area investment government money.

That house (in Encanto, for those who know San Diego) appraised for $223,000 in Dec. 2002.  We sold it in 2005 or 2006, just past the market peak, at $375,000.  Had multiple offers and it went for full price.

Well, that neighborhood looks worse now than it did then!  I had presumed that a $375,000 house neighborhood would have nice landscaping and pride of ownership and look way better than the old $50,000 neighborhood that I knew.  Wrong.

Instead it seems the high cost of housing has meant that people have nothing extra for the exteriors.  There are way more cars in the streets and parked in yards.  The population density has gone up! I am guessing that people have doubled up in some of those small houses and that adult children have been unable to leave and start their own homes elsewhere. There used to be kids playing in yards;  instead I saw guys just hanging out, no kids outside.  Video games? Or not safe anymore?

In Golden Hill, near downtown, there used to be lovely old mansions and houses that had fallen on hard times. I had thought it was an area ripe for gentrification--in the perfect climate zone and a few minutes commute to downtown.  Instead some of those old homes--including my 2nd home--have been torn down and replaced by cheaply constructed stucco cubes.  A total clash with the old bungalows.  The over-all  neighborhood charm is gone.  They built crap.

In Clairemont houses jumped to the $500,000 range. Those neighborhoods have yellow grass.  Where I remembered green, Brady-Bunch yards now whole streets just plain look scrappy.  I have heard there is irrigation restriction and sky-high water bills.

Yes, La Jolla stills looks so rich, manicured, glossy, lovely. No problems paying for landscaping or water there.  A fantasy town, a movie set.

Traffic density is incredible. San Diego is now L.A.  The city is a megalopolis. You don't drive anywhere quickly.

Why do people stay there?
The weather. Every day I was astonished.  The breeze--it's just right!  The sunshine--it's perfect, not too hot!  The humidity--couldn't be better!  The air--should be bottled.  The ocean waves glisten. Aaahhhh.

Furnishedowner

[sellnbama]

My neighbors grandson is Jake Peavy from here,since he's moving to White sox he said there's no telling how long it will take to sell his house there.I want to check it out one day to see what the hype is about.From what I here people are leaving there because of the outrageous cost.They should figure out what texas is doing right and copy as much as possible.

[furnishedowner]

People are leaving every day.  It seems like every time I ask some prospective worker where they are from the answer is always "California."

The lawn cutting guys, stucco workers, construction people--they are leaving California in large numbers and moving to where ever there is work and cheaper housing.

I am still having a hard time wrapping my mind around a slum of $350,000+ houses.

Furnishedowner

[sellnbama]

Yeah,that should say it all when you put slum and $350k in same statement,somethings wrong.That would get you a good sized house with land here.Just down the street is a 5000sqft on 8acres on the lake for $500k,,do they not get that show"what you get for the money"that shows house prices all over?But I guess with those prices they probably can't afford cable or a TV for that matter. 

[propertymanager]

The bad thing is that California's problems aren't limited to real estate prices.  The socialist agenda and ridiculous taxes (especially on the wealthy) are driving people out of the state.  Socialism never works and it won't work in California!

It's ironic that it took a Democrat Governor in Ohio (Strickland) to get some conservative fiscal policies in place.  He's been CUTTING taxes here as opposed to California and Michigan and he didn't raise taxes even though the state was broke.  Our Democrat governor did something novel - HE MADE CUTS to balance the budget.  Mind you these were not cuts to the increase in programs, they were actual CUTS - as in taking a meat clever to programs!

This is going to give Ohio a huge advantage in the future as opposed to the high tax socialist states and I expect a long-term increase in business locating to Ohio as a result.

Mike

[sellnbama]

Funny how those tax cuts that pelosi,obama call "tired and worn out policies"make business work for the people.We had a tax free weekend in all store for back to school here in alabama and you could'nt even get in the door at most places.Yeah,tax cuts are "tired & worn out" More like pelosi's face is worn out and obama's blame anyone but the liberals is soooooo tired.Thank god people are waking up to this anything but "transparent" administration.

[furnishedowner]

Propertymanager,

When you get people moving INTO Ohio you will know that the state is getting on a good economic footing!  Here I see not the rich, but the immigrant workers and retirees coming in from California to live where housing is affordable.  No boom here, but also no bust.

I was living in California when prices started ratcheting up.  We used to visit our Massachusetts and New Hampshire relatives and marvel at their low house prices.  California house @$125,000 and same house in Mass. @$35,000.  We even talked about buying a couple of "cheap" East Coast houses.  But we didn't do it.  Darn it--it's what happens when you have a risk-averse spouse!

Well. the NE prices escalated than very quickly.
The urban areas of the 2 coasts became equally high-priced.

Now I see the MIDDLE of the country prices sagging way below the coasts.  And migration out of California, Nevada and Arizona.  I predict that prices will go up in New Mexico and Texas.  It is in the Sunbelt and living is easier.

Followed last probably by the Midwest--Ohio and Michigan where prices may remain low until NM and TX prices get so high that migration goes North.

sellnbama,
We had a taxfree weekend here, too.  It's held every year right before school starts.  It doesn't matter what administration is in charge--the stores are mobbed by families needing to save that sales tax.

Furnishedowner

[PositiveOutlook]

Furnishedowner,

"We had a taxfree weekend here, too.  It's held every year right before school starts.  It doesn't matter what administration is in charge--the stores are mobbed by families needing to save that sales tax."

And how pathetic it is that we have gotten to the point where people have to wait on a tax-holiday to do their school shopping and then have to face the mobs... great qualty of life... average sales tax is 6-7%, so if you spent $500 on a couple of your kids, you've saved a whopping $30-$35 in sales tax...  Whoopdie-do...   

But once again, it PROVES reducing taxes SPURS economic activity...  but if you had the opposite, a day where the sales tax INCREASED, what do you think would happen to economic activity on that day?...

Exactly...

[christopher w]

Positive that is a great point.

Tax free day in Texas is coming up and it is a beating. You will end up waiting hours to save 20-30 dollars. You are better off waiting until the following week-end for big sales and summer close-outs. That is when the BIG money is saved. Thank god my three boys only want to wear baggy athletic shorts and sports camp t-shirts. I am not looking forward to the day that they discover Abercrombie. As it is the Under Armour athletic shoes are killing me.

[PositiveOutlook]

Christopher,

"Thank god my three boys only want to wear baggy athletic shorts and sports camp t-shirts. I am not looking forward to the day that they discover Abercrombie. As it is the Under Armour athletic shoes are killing me."

My son has been working with me part-time on our investment property, as well as, picking up 10 hours week at a local pizzeria.  He wanted a new pair of sneakers, and we told him he can get whatever pair he wants, but his budget with us is $20 (I personally think it is ludicrous to spend over $100 for a pair of sneakers that will be outgrown in six months)...  anything above that, was on his dime...

Interestingly enough, kids are ALOT like liberals, they are great at spending OPM, but when it comes to theirs...  not picking a fight with my liberal friends... just an observation for the purpose of this post...

Needless to say, not only did he not spend any of his own money, he budgeted it out (as they have before) and found a pair for $12 that he liked, then kept the $8 balance to save or use for more school shopping or whatever he plans on buying....



P.S. - You ever see that family out in Arkansas, the Duggars?... They spend a little over $1000 for the whole YEAR to clothe their 18 kids!  And they don't look like they are wearing cheap clothes...  I think their family motto is - "buy used and save the difference".. must work for them... they are debt-free, own commercial property, and have a 7000sf house...

[christopher w]

They probably do a lot of handing down clothing from older to younger. We do the same in my family. My youngest son wears his older brothers things most of the time. What is funny is that is what he prefers. Buying and wearing new clothes to him is a beating. He likes to think he is cool because he is wearing something that belonged to his brothers.

$20 for shoes is extremely inexpensive. Were they the Stephon Marbury "Starburys"? We spend that on my 9 year old but the two older boys usually get two new pairs of athletic shoes a year at around $65 a pair (we usually buy them on sale or when the Dicks Sporting Goods in my area has a local sports discount day). My oldest got a pair of Nike Hyperdunks for Christmas last year and they were $120, but that was pretty much all he got from us.

[sellnbama]

Atleast we're all trying to teach our kids how to manage money and the value of it.I can't believe what people pay for kids clothes that the kids can't hardly walk.I just wanna tell them -your kid will be asking for namebrands soon enough.Just don't understand some people.     

[justin0419]

We're really thankful for school uniforms here.  I would have hated them as a kid, but we have a 7 yr old who thinks she's already a diva.  A couple years ago, we lived somewhere else without uniform requirements.  She would try on about five outfits and almost make my wife late getting them to school.  With four kids, we keep things economical.  When we get fast food, the kids generally get things off the dollar menu.  Everything concerning money for our kids now is just a bunch of numbers.  They can't equate how much work is involved to earn $10.  I think that's when things will really click for them. 

[PositiveOutlook]

" Everything concerning money for our kids now is just a bunch of numbers.  They can't equate how much work is involved to earn $10.  I think that's when things will really click for them."

That is, until they do the work themselves, and then have to pay for it themselves...  funny how they all of a sudden understand how much it costs then...

[furnishedowner]

I just offered a 10-year old that I know $5.00 an hour to help paint some window frames.  His answer?  "No, thanks.  I just want to watch TV."

"You don't want to earn any money?" I asked again.

"No, not really. I GET AN ALLOWANCE. I have enough money".

I am seeing the kids 20-something and younger as really having a sense of entitlement.  I just called up my youngest to see how he was doing on getting a job or a roommate and he answered from a SUSHI RESTAURANT!

These kids have never missed a meal. Have never been even a little bit hungry, cold, worn-out or over-worked.  Haven't had blisters or sore muscles.  Haven't worried about a thing.  I fear this is going to be a generation of TV-watching, video-game playing under achievers. With a life focused on comfort and immediate gratification.

Remember the Italian movie actor and director who won an Oscar a few years back?  The one who jumped on the back of the seats in joy?  He thanked his parents for GIVING HIM THE GIFT OF POVERTY.  He said he wouldn't have achieved anything without that fire in his belly.  What are we giving our kids?

Furnishedowner