Comments on: A History of the California Housing Gold Rush – The Financial Expansion of California Real Estate from 1850 to 2010. http://www.doctorhousingbubble.com/a-history-of-the-california-housing-gold-rush-%e2%80%93-the-financial-expansion-of-california-real-estate-from-1850-to-2010/ How I Learned to Love Southern California and Forget the Housing Bubble Tue, 07 Sep 2010 21:04:59 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Notsofast http://www.doctorhousingbubble.com/a-history-of-the-california-housing-gold-rush-%e2%80%93-the-financial-expansion-of-california-real-estate-from-1850-to-2010/#comment-45860 Notsofast Tue, 09 Mar 2010 06:51:48 +0000 http://www.doctorhousingbubble.com/?p=3095#comment-45860 The much-publicized trend of younger people moving to urban areas is a little faulty. In my workplace, my co-workers are mostly 19-25 and unless they get a high-paying job in an urban area, they do not want to give up the comforts of suburban living. My generation, which grew up in suburbs and exurbs, got used to driving, malls, large homes, backyard swimming pools, does not really want the difficulty and expense of urban living. Most are content to work low-paying jobs close to where we grew up and enjoy low cost rentals and overall low stress life. Many of us have lived in big cities and were not able to get ahead financially, so we moved back to where we grew up and found life easier. For this reason, I do not expect the price of housing in urban areas to stay elevated. - little demand going forward. Why live in a tiny rat trap for $2000/month when you can rent a house for $700/month? I think the New York Times and other urban voices promoting this trend are trying to justify their urban bias. As for the knowledge based/creative workforce preferring to live in cities, well, sure, but I know from experience that those types of jobs in those areas are very hard to come by these days and without jobs, housing demand goes down. Los Angeles area is hemorrhaging these types of jobs and rent/purchase prices of housing will come down because there is no next generation of buyers to soak up the supply coming down the pike. The much-publicized trend of younger people moving to urban areas is a little faulty. In my workplace, my co-workers are mostly 19-25 and unless they get a high-paying job in an urban area, they do not want to give up the comforts of suburban living. My generation, which grew up in suburbs and exurbs, got used to driving, malls, large homes, backyard swimming pools, does not really want the difficulty and expense of urban living. Most are content to work low-paying jobs close to where we grew up and enjoy low cost rentals and overall low stress life. Many of us have lived in big cities and were not able to get ahead financially, so we moved back to where we grew up and found life easier. For this reason, I do not expect the price of housing in urban areas to stay elevated. – little demand going forward. Why live in a tiny rat trap for $2000/month when you can rent a house for $700/month? I think the New York Times and other urban voices promoting this trend are trying to justify their urban bias.
As for the knowledge based/creative workforce preferring to live in cities, well, sure, but I know from experience that those types of jobs in those areas are very hard to come by these days and without jobs, housing demand goes down. Los Angeles area is hemorrhaging these types of jobs and rent/purchase prices of housing will come down because there is no next generation of buyers to soak up the supply coming down the pike.

]]> By: wgwgwg http://www.doctorhousingbubble.com/a-history-of-the-california-housing-gold-rush-%e2%80%93-the-financial-expansion-of-california-real-estate-from-1850-to-2010/#comment-45846 wgwgwg Mon, 08 Mar 2010 11:45:39 +0000 http://www.doctorhousingbubble.com/?p=3095#comment-45846 The enrollment at LAUSD is declining due to rising house prices. You have to understand that LA was super-cheap in the recent past. Look at the historical data for the 1990s. Good sized houses sold for $175k, and this is within a short distance of downtown. Middle class people were afraid to live in LA. Poor people were too, but they had little choice. So, even with recent declines, the prices are higher than what working class people can afford, in all but some parts of South Central LA. The enrollment at LAUSD is declining due to rising house prices.

You have to understand that LA was super-cheap in the recent past. Look at the historical data for the 1990s. Good sized houses sold for $175k, and this is within a short distance of downtown. Middle class people were afraid to live in LA. Poor people were too, but they had little choice.

So, even with recent declines, the prices are higher than what working class people can afford, in all but some parts of South Central LA.

]]> By: Dennis http://www.doctorhousingbubble.com/a-history-of-the-california-housing-gold-rush-%e2%80%93-the-financial-expansion-of-california-real-estate-from-1850-to-2010/#comment-45842 Dennis Mon, 08 Mar 2010 06:24:35 +0000 http://www.doctorhousingbubble.com/?p=3095#comment-45842 This is a Positive Rant, so pass if you are not in that frame of mind. I love your site and have been following for 2+ years and though I agree there is much pain to come, but some how, some way, there are answers (the above suggestion of a 120 year AMO could be a method - but let's say take it further and coupled with a waiver of estate taxes if these assets are deployed as a loan to new home buyers, or in the purchase of LEED certified homes located within the "Economic Zone of Efficient Frontiers" - yes, we will have wastelands...and so many people are and will be suffering...so help people first....but let's turn the outer reaches back to farms - solar, ag, fish, ? populated by small efficient communities) - call it what you may, but there are answers and we must experiment and have the vision that we can go beyond the basic math (no math?) of SubP and Alt A, while not being idiots in terms of Wall Street idiots, Quant Theory and derivative/leverage destruction. And so with that: First: California is two, three or five economies. Smart growth is not new, young urban's usually become "close in" suburbanites (SF to Rockridge and Berkeley and then becomes Orinda/Moraga/Lafavette - why? great schools + BART + an urbanish life simulated or very close by; same SF to Palo Alto, Los Altos, Mt View - train; SF to Marin - ferries; throughout Los Angeles and San Diego as well). There is only one Tahoe, one Mammoth, one Harvard Square, one Santa Monica, one Sausalito. No offense to anyone, but many people will continue to live in X rather than Y for lifestyle choice, basic supply/demand, that will never change. Location is nothing new. I understand their is an argument otherwise, but look at the gentle-person who reflected the pre and post depreciation prices: they never went to zero....they severely retracted...and yes, the rule of 70 can still be applied, ultimately bad - even a long, long bad - will turn to good. Just be prepared - Three Pigs, Cub/Girl Scouts, your grandparents and parents. Pay attention. Second: California is strategically positioned to Asia and that will never change whether importing in or exporting out. Third: we can solve our problem here in California, but the most difficult will be this: municipal and state worker retirement programs et al and etc., eliminating the abuse (unused vacation accumulated to a bonus payout "collectively bargained" (Sic) and so way beyond absurd - yes for the cops, CHP and our fireman; but no dice for anyone else eg: city managers, whoever). Lastly: housing will continue to drop in value as described in the outland areas, but demand, family estate family transfer and motivation, both at the personal and changes in planning department density restrictions will provide and allow subdivision of in-burg single family homes. Sure, less space, but it will not be a million cubed box sitting on Treasure Island. There is so much inner space, if you look and allow. NIMBY will have to give way. Waterways can be utilized to a level that simply have not been studied. We need to be creative and courageous, but the answer is not mass hiatus. People can and need to change their circumstances, and really, think about it: there is no new frontier (said long ago, 40 years now...Hotel CA, Don Henley - Eagles). I am no liberal humanitarian (though at times I wish I were), but I am sure and confident that there are thousands of ideas and solutions to so much waste and inefficiency. So much. This is a Positive Rant, so pass if you are not in that frame of mind.

I love your site and have been following for 2+ years and though I agree there is much pain to come, but some how, some way, there are answers (the above suggestion of a 120 year AMO could be a method – but let’s say take it further and coupled with a waiver of estate taxes if these assets are deployed as a loan to new home buyers, or in the purchase of LEED certified homes located within the “Economic Zone of Efficient Frontiers” – yes, we will have wastelands…and so many people are and will be suffering…so help people first….but let’s turn the outer reaches back to farms – solar, ag, fish, ? populated by small efficient communities) – call it what you may, but there are answers and we must experiment and have the vision that we can go beyond the basic math (no math?) of SubP and Alt A, while not being idiots in terms of Wall Street idiots, Quant Theory and derivative/leverage destruction. And so with that:

First: California is two, three or five economies. Smart growth is not new, young urban’s usually become “close in” suburbanites (SF to Rockridge and Berkeley and then becomes Orinda/Moraga/Lafavette – why? great schools + BART + an urbanish life simulated or very close by; same SF to Palo Alto, Los Altos, Mt View – train; SF to Marin – ferries; throughout Los Angeles and San Diego as well). There is only one Tahoe, one Mammoth, one Harvard Square, one Santa Monica, one Sausalito. No offense to anyone, but many people will continue to live in X rather than Y for lifestyle choice, basic supply/demand, that will never change. Location is nothing new. I understand their is an argument otherwise, but look at the gentle-person who reflected the pre and post depreciation prices: they never went to zero….they severely retracted…and yes, the rule of 70 can still be applied, ultimately bad – even a long, long bad – will turn to good. Just be prepared – Three Pigs, Cub/Girl Scouts, your grandparents and parents. Pay attention. Second: California is strategically positioned to Asia and that will never change whether importing in or exporting out. Third: we can solve our problem here in California, but the most difficult will be this: municipal and state worker retirement programs et al and etc., eliminating the abuse (unused vacation accumulated to a bonus payout “collectively bargained” (Sic) and so way beyond absurd – yes for the cops, CHP and our fireman; but no dice for anyone else eg: city managers, whoever). Lastly: housing will continue to drop in value as described in the outland areas, but demand, family estate family transfer and motivation, both at the personal and changes in planning department density restrictions will provide and allow subdivision of in-burg single family homes. Sure, less space, but it will not be a million cubed box sitting on Treasure Island. There is so much inner space, if you look and allow. NIMBY will have to give way. Waterways can be utilized to a level that simply have not been studied. We need to be creative and courageous, but the answer is not mass hiatus. People can and need to change their circumstances, and really, think about it: there is no new frontier (said long ago, 40 years now…Hotel CA, Don Henley – Eagles). I am no liberal humanitarian (though at times I wish I were), but I am sure and confident that there are thousands of ideas and solutions to so much waste and inefficiency. So much.

]]> By: worm http://www.doctorhousingbubble.com/a-history-of-the-california-housing-gold-rush-%e2%80%93-the-financial-expansion-of-california-real-estate-from-1850-to-2010/#comment-45840 worm Mon, 08 Mar 2010 02:06:21 +0000 http://www.doctorhousingbubble.com/?p=3095#comment-45840 San Diego home prices during 1919 till 1940. 1919-3453 1920-4665 1925-5570 7-1926-5826 6-1927-4682 6-1928-4789 5-1929-5599 5-1930-4450 5-1931-4000 6-1932-3050 6-1933-3050 6-1934-2500 over 55% drop, data I have 2300 on 1-1929. 6-1935-4000 then gradually down again till 3250 in 1940. San Diego home prices during 1919 till 1940.

1919-3453
1920-4665
1925-5570
7-1926-5826
6-1927-4682
6-1928-4789
5-1929-5599
5-1930-4450
5-1931-4000
6-1932-3050
6-1933-3050
6-1934-2500 over 55% drop, data I have 2300 on 1-1929.
6-1935-4000 then gradually down again till 3250 in 1940.

]]> By: SEAN http://www.doctorhousingbubble.com/a-history-of-the-california-housing-gold-rush-%e2%80%93-the-financial-expansion-of-california-real-estate-from-1850-to-2010/#comment-45838 SEAN Mon, 08 Mar 2010 01:42:07 +0000 http://www.doctorhousingbubble.com/?p=3095#comment-45838 California is still lacking in affordable housing. The days of cheap fuel will make it harder for other Inland Empires to sprout up from the ashes. People forget that California has an enormous amount of land that is similar to Arizona and Nevada. The Central Valley has plenty of room. Why don’t they build this out? For one, access to employment but also the cost of energy to keep these new cities up simply does not make economic sense. It is unlikely that we will see $1 gas again so fuel is going to impact the suburban sprawl dream that started back in the 1930s. New housing has to be smarter and more compact near city hubs. Look at places like Tokyo for example. We always hear the real estate building crowd that we need more friendly permits but then they go out and build sprawl just like they did back nearly 100 years ago. Is this really good for our longer term prosperity? Also, it might have reached its natural end. People can’t afford to commute from these outer regions Well said DHB! Nick has it right also. The future of the housing market will be cities with strong transit networks & that are walkable. Not just in CA but nationwide. wwwwalkscore.com is a good resource to understand how walking fits into the equation. California is still lacking in affordable housing. The days of cheap fuel will make it harder for other Inland Empires to sprout up from the ashes. People forget that California has an enormous amount of land that is similar to Arizona and Nevada. The Central Valley has plenty of room. Why don’t they build this out? For one, access to employment but also the cost of energy to keep these new cities up simply does not make economic sense. It is unlikely that we will see $1 gas again so fuel is going to impact the suburban sprawl dream that started back in the 1930s. New housing has to be smarter and more compact near city hubs. Look at places like Tokyo for example. We always hear the real estate building crowd that we need more friendly permits but then they go out and build sprawl just like they did back nearly 100 years ago. Is this really good for our longer term prosperity? Also, it might have reached its natural end. People can’t afford to commute from these outer regions

Well said DHB! Nick has it right also. The future of the housing market will be cities with strong transit networks & that are walkable. Not just in CA but nationwide.

wwwwalkscore.com is a good resource to understand how walking fits into the equation.

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