San Francisco tends to put Southern California to shame when it comes to real estate mania. The tech driven frenzy in the Bay Area is something to behold. What is so interesting is that San Francisco, being the hippie and alt-culture hub back in the baby boomers heyday, is now fully gentrified by tech and investor owners that really have little to do with the hippie and art subculture of the area. I mean how many hippies can afford a $1.3 million crap shack? The Bay Area continues to defy gravity when it comes to prices. People are having to “drive to qualify” if they aren’t the DINK tech couples or investors with large pockets. Of course by definition the ultra-wealthy are a small part of the market but with few properties for sale, if they have a desire to buy they are going to buy. This is why you hear of stories of Google employees living out of vans even though they make what most would view as a fantastic salary. San Francisco continues to march on a unique path.
Being a hipster in Los Angeles is like being a drop of water in the ocean. Apparently one of the requirements of being a hipster is living in certain enclaves. Now in Los Angeles, a renting majority county, living in the right neighborhood is important. The HGTV housing erotica that is pumped out to the masses has conditioned many to accept the “fixer upper” world of crap shacks. Now typically when I say crap shack a bunch of Taco Tuesday baby boomers get offended but just remember that many hipsters actually want a crap shack. They are actively looking for “personality” in a property as if they were swiping right on Tinder. The market capitulated fully last year and now we are in the stage of euphoria. You can do no wrong with housing and Echo Park is home to many lovable hipster homes.
You would have a hard time believing it but California’s homeownership rate is near a generational low but the good news is that hipster pants couldn’t get any tighter without turning into spandex. A large part of the state is now fully praying at the altar of real estate mania lighting incense for the HGTV gods to bring granite countertops alongside host with upgraded body parts. It is an odd sort of Hollywood herd mentality but this is how we do things here in California. While the majority of L.A. County lives in rental Armageddon you have geriatric house humpers salivating at the Botox stretched mouth when a crap shack hits the market. “This makes total sense with a 20 percent down payment! They don’t make land anymore!” They also don’t make more time and life is too short chasing crap shacks. But for some, the crap shack is the ultimate dream like sipping hard liquor in the Caribbean. The culmination of all financial success is being in debt for a beat up house and this is the race many are trying to run.
In the last housing mania, people drank multiple rounds of the Kool-Aid and lost all perspective. That is to be expected when we live in the land of Hollywood and living in a world of make believe is pretty much par for the course. In fact, faking it until you make it is now a legitimate way to make a living. Doctored up photos with so many filters you would think you are purifying water to drink out of the L.A. River. SoCal is the land of rental Armageddon and delusional Taco Tuesday baby boomers who run around with their ugly looking dogs in “baby” strollers and think their crap shacks are worth one million dollars. So in the last mania, areas that were legitimately tough somehow carried ridiculous price tags. The pitch was that an area was going to gentrify because “no more land is being made!” or that it was in the county. We are now seeing some outrageous prices in areas that still have legitimate struggles. Today we go back to Compton.
City centers from Los Angeles to Miami to Seattle have all seen a massive revitalization thanks to hipster loving Millennials that enjoy good restaurants and access to nightlife versus the white picket fence McMansion propaganda brought on by the baby boomer generation. Zero lot condos and homes make up the new housing demographic where builders try to max out every square inch of their buildable land so they can pack new buyers in like sardines and you can hear your neighbor’s sleep apnea roaring at 3am. This is the modern day dream. Being able to waste your entire paycheck at Whole Foods and eating organic falafel at your new trendy restaurant. But Millennials are choosing to go their own way. For one reason, many can’t afford to buy an overpriced particle board crap shack so they ended up staying at home living with their parents deep into their late 20s and 30s. Many are also addicted to housing lust shows where reality star wannabes flip or flop on big real estate purchases. A modern day Lifestyles of the Rich and Famous. Yet most are not famous and many are certainly not rich. Ideals have simply changed and the market has transformed for Millennials.