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.

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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.

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July 5th, 2017

Millennials have the lowest homeownership rate in Los Angeles:  Less than 18 percent of young adults own a home.   

Los Angeles now takes the award for having the lowest homeownership rate for Millennials.  As it turns out most young adults are either living at home with their Taco Tuesday baby boomer parents or are living like sardines in rentals.  The options are limited short of forking over a massive amount of money and committing to living in a crap shack.  You will have to eat rice and beans (and tacos) for a decade but at least you will own a piece of the California dream.  That dream is clearly that – an illusion for most.  The figures back this up.  Of course the audience on this site tends to lean to higher income households and those with higher levels of education but the house humping rhetoric is still intense.  Most realize that buying a home in the greater L.A. metro area is just one giant pipedream.  Less than 18 percent of young adults own a home in the greater L.A. metro area.

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June 27th, 2017

Treating homes like ATMs is back in fashion: Home Equity Withdrawals rising at fastest pace since Great Recession.

I love getting tips from Uber drivers especially when it comes to buying real estate.  We are now back at that level where real estate can do no wrong, the house humpers are confusing luck with investment acumen, and of course the sheep dive in head first at the most frothy time.  It is clear that we are in a mania and hot money is flowing everywhere.  Credit card offers are soaring and lending is booming across all areas: credit cards, auto loans, student debt, and housing.  With housing, we are now seeing one of our favorite past-time events in treating a home like an ATM.  Home equity withdrawals are now moving up in a direction that is not exactly positive if you believe in actually keeping your equity locked in instead of cementing your belief in the bubble and adding more debt.  You do need to pay those loans back by the way which many tend to forget.  Home equity withdrawals are simply one of the final steps in the delusional mania.

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