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.

Read the rest of this entry »

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.

Read the rest of this entry »

July 22nd, 2017

California homeowners are getting older and taking homes into the grave.  Property turnover has fallen substantially since 2000.

California homeowners are entering into their geriatric phase.  The share of homes owned by older Californians has grown substantially since 2000.  The Taco Tuesday baby boomer crowd is dominating the ranks of homeowners.  This trend is new and because of key items like Prop 13 and Millennials living with parents, very few homes are turning over.  The first time home buyer in California is simply getting older and older contrary to the house humping cheerleaders talking about the days of “sucking it up” and having to save to buy a home.  Of course many were not contending with hot global money, limited inventory, artificially low interest rates, and a delusion of crap shack grandeur.  Now some yell from their beer belly exposed guts and a savory carne asada taco in the other hand that people should move out if they don’t like it here (and many are).  The economics of course are more subtle.

Read the rest of this entry »

July 14th, 2017

Los Angeles is the Whole Foods of Rental Markets:  Renter households spend nearly 50 percent of their income on rent.

The rental apocalypse continues in Los Angeles.  It is interesting to see how far some house humpers will go trying to justify prices.  Some are arguing future weed sales are going to create another boom which is somewhat ironic since the benefits are actually to mellow you out, not turn you into a Taco Tuesday baby boomer that becomes a cubicle stressed slave just to purchase a home.  And many times people plan on having a family shortly after which means higher childcare costs which they tend to forget.  However, Los Angeles once again continues to be the worst place to rent in terms of affordability (and own for that matter).  Zillow put out some interesting research and of course as you would expect, those spending nearly half of their income on rent are simply not saving for retirement.

Read the rest of this entry »

© 2016 Dr. Housing Bubble