September 8th, 2017

California Dreaming – More than a third of California households have virtually no savings.

A lot of people do not equate California with poverty.  You certainly don’t think of poverty when you look at real estate values in places like San Francisco even though the homeless issue is right in your face.  The reality is that most people do not live lavish lifestyles.  In fact, a new report highlights that more than one-third of California households have virtually no savings.  These households would not have the ability to live at the poverty level for three months if one paycheck in the household was lost due to a job loss.  You also have more than 2 million young adults living at home with their parents since the rent is too high.  This isn’t the California that is presented in Hollywood movies.

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August 24th, 2017

San Francisco housing market overheats:  Tech beauty is unable to modify the realities of the real estate market.  

The San Francisco housing market is the most inflated and delusional market in the United States. It does make sense though at least from a psychological perspective.  You have many people that are cubicle or open space programming junkies working away to create the new app or new crypto currency and somehow, they feel that “tiny” spaces are worth lots of money.  It is telling but no surprise given the environment many work in.  Then you have the case of people doing mega commutes into the Bay Area from inland locations similar to the morning exodus of people from the Inland Empire to Los Angeles and Orange County.  Yet the market does seem to be overheating and some reality is starting to creep in.  Apparently, no amount of tech enabled photo filtering is going to turn a crap shack into the Cinderella of housing.

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August 11th, 2017

Baby boomers are refusing to sell and will age like a fine wine in their homes.  The dominant force in the housing market.

Older Americans own half of the houses in the market.  Many are simply refusing to sell and others have adult “kids” moving back in since they can’t afford a place to rent or buy.  It is a Catch 22 and many people are looking at countries like Italy where the number of adults that live at home is enormous.  Multi-generational families just don’t coincide with the “rugged American” worldview where you go out on your own and you make it with your own two hands.  Of course, many house humpers had mom and dad chip in but that doesn’t make for such a sexy story.  In the end, however there are many baby boomers that simply are not selling.  This is actually an interesting problem that is not going away.

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July 31st, 2017

The growing underclass of the Orange County Bubble:  You need to earn an hourly wage of $28 to afford a basic one-bedroom apartment but 68 percent of OC jobs pay less than that amount.

You have to love the Orange County bubble.  It is fitting that Disneyland is in Anaheim and actually has some of the poorest households in the entire county.  You have a world of Princesses and fantasy and right in the same city you have topless dancing fulfilling a fantasy of a different sort.  You have cities like Irvine where most of the new homes are selling to investors or foreign buyers.  It is an interesting county.  Yet a new report continues to show that California is no place for the middle class.  The report also found that Millennials are leaving the area while Taco Tuesday baby boomers and older folks are the only cohort actually expected to grow in proportion relative to other age groups over the next 25 years.  It is also no surprise that plastic surgery and expensive leased cars dominate the crowded streets.  Unlike L.A. County that understands that there is a large struggling class of people Orange County seems to be in a fog when it comes to the deeper realities.

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