The commuter culture of California – The cost of commuting and buying real estate far from your place of employment.

60 percent of the people in the state of California live within the 56,512 square miles that make up Southern California.  22 million people in a car obsessed region.  Take a trip on any of the major highways or boulevards during rush hour and you will definitely get a taste of this congestion.  From the looks on people’s faces, they are not doing this simply for pleasure.  Most Californians spend a good amount of time driving to and from work.  The cost of commuting for many has been blindly accepted as a cost of doing business to live in the area.  Many middle class Californians simply accept this as a part of their daily reality.  It is amazing how many hours of lost productivity occur by people stuck in traffic or driving to and from work.  The employment hubs usually have very little residential housing and most Californians opt to live miles away from work.  We have many commuting from the Inland Empire into downtown Los Angeles and Orange County on a daily basis.  What is the true cost of the commuting culture in Southern California?

True Cost of Commuting

It is very typical for people to drive 20 to 40 miles on one way commutes in California.  It costs money to maintain your car from fueling up, insurance, and regular maintenance (let alone the mental toll it takes on people).  The IRS provides annual standard mileage rates.  For 2012, the rate for each mile driven was 55.5 cents.

Keep in mind that many two income households have two commuters so the costs are multiplied twice.  I went ahead and calculated these figures for various round-trip mileage scenarios:

commute time costs

These commutes are very common but I doubt people really consider the true cost of their driving habit.  Plus, many take their cars out on vacation as well adding more miles.  Take for example a couple commuting in from Riverside into Irvine:

commute riverside irvine

Approximate mileage:                   40 miles one way

Approximate commute time:     1 to 2 hours (each way depending on traffic conditions)

For each person taking this trip, they are dropping $44 per day on the commute.  Keep in mind there are many costs to driving including:

-Fuel

-Maintenance (i.e., oil changes, tires, brakes, tune-ups, etc)

-Car Insurance and Registration

-Car payment (many have leased or financed cars)

A 40 mile one way commute is likely costing you $11,100 per year.  This is not farfetched when you consider the monthly car payment on many new cars to be $500 alone (or $6,000 per year).  If two people in the household are making this commute, the actual annual cost is up to $22,200.  After 10 years this is a cost of $222,000 and just imagine if this money was actually invested?

This commute from the Inland Empire (Riverside and San Bernardino Counties) into Los Angeles and Orange County is very common.  But you also have people driving from LA to OC and OC to LA for example.  Now consider this in context to this data:

Riverside County

Median Household Income:       $52,883

Paycheck California:

paycheck california

Given a net pay of $3,485 that $22,200 per year in commuting costs takes on a bigger meaning.

Lost Hours of Productivity

The median home price for homes in the Inland Empire are much more affordable than in LA and OC:

Median home price

Riverside County:            $229,000

San Bernardino:                                $183,000

Given the historically low rates on the market, buying in these areas would likely make a lot of sense.  Yet I would seriously only examine this if you lived and worked out in these regions.  Many middle class Californians feel that in order to buy a home, they need to drive to qualify as some in the real estate industry put it.  In the context of commuting costs, how much is it really worth?

Also, keep in mind that assuming a fortunate one hour commute each way from this distance, you are spending 10 hours a week in the car.  In essence many Californians are adding one additional workday with no pay just to get to work.  Millions of Californians do this on a daily basis and I rarely hear about the above details which reflects a culture that simply assumes that driving is an absolute must for daily existence.  Just like housing, I think many simply focus on the monthly payment and miss the bigger picture.

It is far better to rent or lease close to your place of employment rather than living very far from your work to purchase a home.  Some take on brutal commutes just to buy a place.  I think if people really did the commuting calculations, they would realize the cost of purchasing their home would take on an entirely new perspective.  I completely understand the deep desire to own a home but from an economic perspective, I’m not sure if people realize how expensive of a proposition they are making by locking into a long commute.
Take that hypothetical couple commuting from Riverside into Irvine.  After ten years, simply by socking away their commuting costs they can purchase a home in Riverside outright.  The catch is finding employment where you live.  So why not live close to work and bank the savings?

People think that prices only go one way with real estate.  Let us look at the median home price for Riverside County ten years ago compared to today:

Median home price:  Riverside County

November 2002:              $228,000

November 2012:              $229,000

And keep in mind the current median price is already inflated by the artificially low Fed interest rate and the massive amount of investor buying.  This implied cost of commuting is also a reason why single family homes near employment hubs cost more as well.  For the typical household, say every hour of productivity is worth $25 so you are also facing an opportunity cost by being stuck in traffic for hours on end.

The reason large down payments are so rare in California is that the vast majority of people simply fail to look at the bigger picture.  The cost of commuting is large and many people make it more expensive by financing their car purchases.  Ultimately when people buy a home they are also buying a lifestyle.  To actually buy and commit to a long commute is a very expensive proposition.

Did You Enjoy The Post? Subscribe to Dr. Housing Bubble’s Blog to get updated housing commentary, analysis, and information.

 





85 Responses to “The commuter culture of California – The cost of commuting and buying real estate far from your place of employment.”

  • If the the household is income is $52,883 in Southern California, the household really ought to move out of the area and live somewhere cheaper, or upgrade its skills and earn more. For the area, that’s just poverty wages.

  • I rent and commute 140 miles round trip every day because I can never tell how long a job will last and the price of real estate is so outrageous. I live in a rent controlled apartment and pay $1,200/month for a 2 bedroom apartment in Warner Center. My commute might take 6 hours a day or it might take 4 hours a day. When this job is finally over, I will be better off paying my lower rent. Overall, I might have been better off moving 4 years ago, but income stability in IT is non-existent. Washington DC is always scheming to bring in more cheap foreign labor. I was out of work for 2½ years w/o unemployment at one time and the threat of more labor dumping is always there.

    • Another cost of to society of rent-control. Rent control is about winning the lottery or having an inside connection, or being young and a future professional.

      • Rent control is a panacea for the uneducated and profit control for the building owners. How much would you invest in your portfolio if the government capped your returns? Over time the buildings deteriorate and rarely is new stock added. Everyone loses except the government.

      • Methinks RM is throwing good money after good. If he gets 15mpg in his commute he is spending just under $650.00 a month in gas alone. Let’s assume a 10% cost of commute if he moves close to work, about 7 miles. That is $585.00 saved on gas to apply to rent giving me a monthly rental cost of $1785.00 for his rent controlled property.

        Add in the savings in insurance, food (less cooking due to lost time means eating out more), depreciation, opportunity and the loss of health and that west valley location looks like a prison lifestyle. I imagine he could rent a place close to work where he could bike to the job.

        If he knows the gig is only 6 months he’s smart but if his choice is out of the potential for layoff well it’s been said before that American’s are not good at math.

    • the government is ‘scheming’? You know people don’t need to immigrate here to benefit from IT jobs from American companies, right? And of the highly educated professionals gaining green cards how is it different from any other developed nations immigration policies?

    • The H1B thing actually has more advantages than just companies getting cheaper labor this way. H1B immigrants basically have to stay with the same company, they get almost slave labor with that kind of loyalty, the kind of loyalty no American worker has because they know it’s a one way street. Also there have been studies done that H1Bs are used to keep the hiring in certain industries YOUNG (it’s why tech industries are notorious for age discrimination). Because why hire an older person and their associated health care costs (even if they are health nuts in perfect health insurance costs are based on age) in a world of employer provided healthcare when you can get a young H1B immigrant? So “scheming” may be a bit strong, but exactly what is baised here is not exactly positive, and they know what the results are. There are academics that have done studies on H1Bs keeping STEM field hiring young and so on.

      • I think your conflating health care costs of older workers with direct pay systems. Entities hiring H1Bs I’d hazard are large group health plans. Any age related costs of medical would be buried in their actuarials and they are already paying them. I do like the rest of your argument tho. I know someone in IT who hires and he says it is difficult to get people with the needed skill sets. I’m not in on the details but I think there are only so many website building openings but a whole lot of degrees and certificates in same and not so many in C+ and Perl.

    • RM and JRS.
      I’m glad someone brought up the H1-B visa problem.

      The IT. industry use to be such a lucrative and sought after field, with hiring bonus’s, stock options, rapid hiring, and lots of job security.
      Now the large corporate software and IT companies like Micosoft, Google, Apple, Orocle and others collude with the Democrat party politicians and the cheap labor wing of the Republican party (think MC Cain and Lindsay Graham) to lower wages by flooding the job market with millions of Indian and Chinese immigrants that work for a fraction of what their American coworkers use to work for.
      One keeps hearing the IT. Ceo’s constantly begging for more H1-B visas because they say there are not enough educated Americans to fill the jobs.

      Economics 101 says if there was an IT. labor shortage, wages would be going up. The dirty little secret is that there is only a shortage of Educated Americans willing to work at the low wages that these CEO’s are willing to pay.

      JRS and RM have vividly described an extremely tough and depressed IT. jobs market, and the only reason for it is because our politicians have been bought by the cheap labor lobby to work actively against American IT. workers, as well as the American interest, by flooding the work force with millions of immigrants with the sole purpose of depressing wages. What’s even more despicable is they continue to do this during a virtual jobs depression, with over 20 million Americans unemployed.

      JRS and RM it’s time to wake up and realize that American immigration policy is hurting your career and income. You’ve been sold out in Washington, and that because of this you’ve joined the ranks of common labor, which has felt the brunt and the wage stagnation that is caused by mass immigration and uncontrolled illegal immigration. American labor in the construction, and service industry has felt this unfair competition for decades.

      RM and JRS, I hate to be the bearer of bad news but there comes a tipping point where Americans virtually abandon a field in our own country because mass immigration drives wages so low. Ask any American; carpenter, Mason, roofer, gardener, meat processor or chef how mass immigration has helped their livelyhood.

      My suggestion to you and any of the readers here who understand and agree that illegal immigration and mass immigration is hurting American workers is to look up Numbers USA. and join them and demand an end to illegal immigration and an immigration moratorium so that the wages of Americans can stare to rise.

      http://www.numbersusa.com

    • W, I think the point he’s making is that moving would be taking on a risk. He might save in the short term, but then what if his next job winds up being closer to his rent-controlled apartment, and double the distance from his new digs? Then he’d be really screwed.
      I think the point is about the bird in the hand?

  • One of the related impacts is of that on our children living near freeways. There is plenty of research to show that children living within 500 yards of a freeway have higher incidence of respiratory problems… but wonder for those commuters on the freeway for 1-2 hours a day and its impact on their health.
    http://articles.latimes.com/2007/jan/26/science/sci-lungs26
    and
    http://www.stateoftheair.org/2012/health-risks/health-risks-near-highways.html

    • Could the same health relationship be drawn from just living in a densely populated city?

      • Yeah I was thinking that.
        I’ve only been to LA once, and the sky was brown that day! It was the 1st time I ever had a palpable sense that there was clearly air pollution. I can’t help but think just living in certain places must put up your health risk. I had a friend who lived in Belgrade a few years back and she said the pollution was noticeable there.
        I’m figuring if you’re sitting in traffic… or just sitting in your car running, there has to be some kind of an effect.

        I am seeing in my google search for “studies on health effects of commuting” that there have been some studies.
        https://www.google.com/search?q=studies+on+health+effects+of+commuting&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

        And I found this…
        http://www.usnews.com/news/articles/2012/05/08/is-your-commute-killing-you
        Which seems to focus on high blood pressure, because “it’s a stressful activity” (commuting in traffic).

        Though I know that high blood pressure also has to do with sleep & non-sleep relaxation habits as well… relaxation, as much as sleep, is important.
        And I remember about 10 years ago I was on 5:30am flight from Ontario California to San Francisco, and the guy on the plane next to me, when I said I wasn’t used to having to get moving so so early (4am)… he told me that getting up for a 5:30am flight was actually sleeping in for him! He of course lived in the general vicinity of Ontario… and said he said his commute to work was almost 3 hours one way… so he always got up around 3:30am…
        I just couldn’t help but think that even if he worked 8 hours a day (assuming with inclusive lunch), that would only leave him only 10 hours for dinner, sleeping and any relaxation & recreational activities, and surely something pretty important was getting shorted there.

  • apolitical scientist

    Though I do think the good doctor somewhat overestimates the dollar cost of commuting, the quality of life impact to which he alludes is very real. When I purchased my home in Ventura County 20+ years ago it was a 3 minute drive or 10 minute bike ride to work. That job lasted another 5 years and then the best available alternative 25 miles away – no longer bikeable, but still a relatively easy commute. That job lasted another 15 years and then I was forced to take one in the belly of the beast, a 50 mile commute down the 101/405 corridor with a million of my closest friends. Having to get up before 5 every morning and waste 2+ hours behind the wheel is every bit as unpleasant as the doctor suggests.

    My point is that, even for those who buy a home with an eye to minimizing commuting, subsequent events may drag one into the SoCal long commute lifestyle. As the doctor points out the LA area just structurally has a lot of jobs in an industrial corridor with relatively few desirable and/or affordable homes. Unless one is fortunate these areas of concentrated jobs may well be where one ends up working if one settles in the area.

    PS. My personal situation isn’t quite so bad as this happened to me relatively late in my career. I just need to stick it out for another few years and then will retire and leave the state. If I were 20 years younger I’d have moved and started over rather than accepting my current commute.

    • Drinking and Driving is fun

      I have no desire to sit in a car for more than an hour to get to a job. I’ve done it for 10 years. No thanks. I’ll reduce my consumption of crap before I waste my time doing that anymore.

    • I assume the option of renting your house out for cashflow, and temporarily living in LA was considered at least briefly? Proximity is always a priorty for me: The suburban sprawl & bedroom society baffled me as a youngster. Us humans repeatedly defy logic and reason, but instead are oftentimes irrational.

      • Your best comment ever. For many years I commuted as a freelancer in LA. Then I went on staff. Sick of the commute by private car and the horror of late night subway trips home I moved to South Pas. Eight miles from the office. Between the motorcycle purchased as a ticket to the head of the line and the gold line it felt like being in a major US city as an urban worker. I had no rent control but landed a landlord who owned the property since the mid-sixties turned in a rental vitae earning rent raised once for 10% over a six year period (for less than RMs after the increase). Saved even more by buying a used bicycle which allowed me to leave my vehicles parked for weeks at a time. I left with a regret. Regret that I hadn’t moved to and bought in South Pas in the 70s when I had been urged to. Sure can’t now.

        My braggadocio post aside some can commute long distances in LA and do so without the high financial costs. Several co-workers commuted via train or bus from outlying valleys.

      • apolitical scientist

        When I bought my house I was single. Life isn’t quite as simple when you have a family. My wife has a good job in Ventura County (only a 10 minute commute from our home). Moving to improve my commute and ruin hers wasn’t a particularly palatable option, nor was splitting the difference and living in the SFV.

        My situation is hardly unique. More than half of my coworkers lived close to work when they bought their places, but through a series of consolidations and transfers ended up working in the LAX area aerospace nexus with a similarly awful commute. Most of them have working spouses and kids enmeshed in school and are every bit as stuck as I am. Again my point is that, even with the best intentions and apparently good choices in home location to minimize driving, workers in LA with families often eventually get stuck with the commute from hell. Do you really think all those poor jokers on the 405 at rush hour chose that drive voluntarily?

        BTW. I almost feel bad complaining since my situation isn’t as bad as most. Though I do have to wake up obscenely early this means I can go home fairly early as well and miss the worst traffic. My commute is usually a bit less than an hour each way. Several of my coworkers live up in the Antelope Valley, get up before 4AM and trek a solid 1.5-2 hours each way, day in, day out.

    • Before I left LA for Montana in 1975, I knew a salesman who lived in Agora, far west end of the Valley, and had to take a job in the OC. This was so repellent to me that it was one of the factors that convinced me to get out of there.

      Now I live 2.5 miles from work.

  • Anything over 30 minutes each way is soul draining not to mention wallet draining IMO.
    I promised myself next job will be in walkable distance.

  • Edward Sullivan

    Great stuff. See also:

    http://htaindex.cnt.org/

  • I am repositioning my career do to the commute, limited positions and salary deflation.I rather make less than spend time in traffic, stressed out and burning up time. I have less time in front of me than behind me. I’m in my 50′s. (Times flies!)

    The only way I would stay in my game and make some great money, is to commute to mid-whishire or downtown L A. No park and ride to a train and a reasonable walk, it’s a deal breaker. Love the beat of the city , but “ain’t” driving there.

    Anyone who would live in BFE needs their head examined. East Ventura County at least have some opportunities if you are flexible. I am, I’m kinda fond of eating and paying my bills.

  • People often don’t want to live where they work, so much so they are willing to pay more and waste away hours a day to live in a nicer neighborhood. These people were not brainwashed into a “car culture mentality.” Most make very rational decisions about where they want to live, even though they aren’t rational about the amount they pay. The new urbanists can peddle their propaganda, but happy talk doesn’t change reality.

    • Drinking and Driving is fun

      But what about culture? What about diversity? what about getting exercise getting chased through the streets? What about a free market drug program that the streets have to offer?! LOL!

    • feelgood
      I went to a Congress For New Urbanism meeting at USC years back. They were all for generfication of the downtowns and gettting everyone out of their cars. Funny that most got into their gas guzzling SUV and drove back to the burbs. It was laughable.

      We use the L A subway when we can. I am more loyal to public transportation then the flag waving BS artists I’ve met. They are so full of it.

      • I detest public transportation. I get uptight crammed into small spaces with thousands of my closest friends. It feels like the opposite of freedom.

  • Time is your most valuable asset. 2+ hours on the LA freeways during rush hour is literally taking your life in your hands everyday, not to mention robbing you from time with your loved ones. Is buying (renting from the bank) really worth it, if you to live so far from where you really might want to live? I think not INMHO. Throw in all the other factors and renting closer to work is a better choice. Especially, since jobs have become unstable in the last 12 years. Look folks, whether you like it or not, we have been in a recession since 2000. Only government manipulation (FED) has kept the illusion going. Don’t buy into it unless you can truly afford where you WANT to live and your income is NOT DEPENDENT on an employer. Globalization has changed the game.

    On the Westside of LA, where most of the work really is, the housing market is being gamed by the banks. Leaking out property ever so carefully, as they no longer have to worry about foreclosure. Yet still, someone is still picking up short sales at 50 – 75 cents on the dollar off 2007 peak prices. More than likely, Hedge Funds, PE companies and even other banks as well.

    Meanwhile, the average buyer takes it in the shorts again. Wash, rinse and repeat.

    http://Www.westsideremeltdown.blogspot.com

  • There’s also the fact that any type of transit option (other than driving on congested freeways) is nonexistent in So Cal. Even living 10 miles from work can mean an hour-long commute.

    • Is it possible that you aren’t fully aware of all the options? I work from home and I live in Murrieta but when I used to commute to downtown LA, I took a commuter bus to Corona and from there a metrolink train to downtown LA. The entire cost was ~$200 month unlimited use. The downside is that it took 2.5 hours each way but I was sleeping or watching movies on the laptop the entire way. I had a few times that I commuted to downtown San Diego, imo much more pleasant. 1.5 hours each way on commuter bus the entire way (1 transfer). That cost was less than $150 per month unlimited.

      I have family that live in Rancho Kookamonga that take the metrolink to downtown LA and it takes less than 1 hour each way because they have an express schedule. Again, the cost is less than $250 per month and none of the stresses of driving.

  • My husband used an electric bike for 3 years commuting to diff jobs in LA. the only time he’d drive was Santa Monica. we lived in Eagle Rock then Burbank. We rented a great apt in Burbank. 2000 month but it was the best we lived in our 18 years there. Sold the house , moved into apt, used electric bike and smiled.

  • And stopped used the words “I hate..” and “why is”. Moved to Las Vegas and live a very peaceful life now..believe it or not. I still don’t.

  • Well, I use to see hispanic immmirgants ride their bikes early in the morning in Anaheim to work. Usually they lived at the most 10 miles away.

  • I commute 25 miles because I don’t want to live anywhere near my place of employment. It’s a willing sacrifice for a better family life. Luckily the wife’s job does not require any freeways and pays higher than average.

    Work where you have to work, live where you want to live.

  • In a free market the poor would be pushed away from the city centers or industrial centers. Why not pay more to live closer to work? Makes sense in a free market. But….Who wants to move into a section 8 area and pay twice as much for housing then their under-skilled, multi-child, underemployed neighbor? Govrnments at all levels are making it harder for the average productive person to have a decent quality of life. The rich or high achievers can pay extra and live where they need to live but the ave. joe has to chose from apartment, house in ghetto or house in Chino Hills or Victorville. why are so many parts of Costa Mesa a sh!t hole? One of the most convenient places for a productive OC worker to live? And also near the ocean. Tons of crappy apartment
    complexes built in the 60s that should have been torn down years ago. The government is more concerned about preserving ghettos than cleaning them up. What about Long Beach? Bottom line is the productive responsible legal resident should be able to push the less productive out and force them to commute into the city and industrial centers. They can ride a 2 hour bus. their time is not as valuable. they recieve more then they pay in taxes. Let 60 miles east of LA be the ghetto and downtown LA be a safe enjoyable area for people who work. These crazy commutes are because of the preservation rather than the destruction of ghettos. For someone coming to the USA for the first time via LAX and traveling to downtown LA on surface streets they would thinke the USA is a 3rd world country. HAPpy New Year!

    • I don’t believe this to be true. Every major metropolitan city I can think of is filled with lots of ghetto people. Especially the most expensive Manhattan.

      • I don’t believe it either but for other reasons. In a free market, city living would be cheaper than suburban living. High population density lowers all kinds of costs of living; housing, services, utilities and more are much cheaper to provide per capita in a high-density environment, ceteris paribus. But, add in some do-gooder regulations, fees, taxes on city dwellers and layer on the subsidies for people living in the boonies (or owning second homes in the countryside) and whaddya know, city living gets expensive.

        So, why do poor people still congregate in central cities? Welfare. Welcome to Detroit. And central Los Angeles County.

        Free the People! End subsidies and abolish regulations.

    • Great post. So very true.

  • Metrolink ticket from riverside irvine one way = $10. Monthly Pass $281.50*

  • I have to live away from work since I don’t want my children assaulted, etc.

    I want to live around white people since I am white and that is my community. IF we had deed restrictions where we can have white neighborhoods, then I could live close to where I work.

    Whites have to be careful and have to avoid huge areas of cities today. The safety of my children, and the school they will attend, and number one. Once a schools gets over 20% black or mexican, then it goes to hell.

    • Al, I understand where your coming from, and I understand what a nightmare most of Los Angeles county is for White Americans who need a clean safe affordable area with good schools. I have kids and I also need a good safe environment for my kids.
      I don’t know where you work, but check out Santa Clarita, it’s got just what your looking for, good schools, A higher population of White Americans and it feels like a traditional American town. It’s a very family oriented area.
      The for sale inventory is pretty low right now, but I highly recommend it to American families who have kids and live in LA county.

      • Santa Clarita: Yes, I agree. It is a very nice community, but what percentage of the population actually works there? Everybody I know living there commutes to LA. I even know one who commutes to San Pedro…in his car.

      • The Sh!t Keeps Piling Higher and Deeper

        Funny, the last 6 or 7 mass school shootings have been in practially 100% white neighborhoods. Columbine………..New Town…….Heritage High………the list goes on. What do you expect broke people to have for schools? If there ain’t no money for themselves, how do you expect them to have nice schools? LOL!

  • Commuting sucks and is for suckers.

    • The Sh!t Keeps Piling Higher and Deeper

      That is true, but it’s Festivas for the rest of us!!!! I’d do anything to be able to work at home. As always here about how people would get bored and not have the social interactions they’d have in an office. I could careless. Why do I want to hear about my boss drone on and on about some BS? Or how about listen to the nitwit cry and complain about her astronomical student loan debt and other useless crap.

      I got enough problems of my own and quite frankly, I’m tired of hearing other people’s crap too.

  • Why is the article including the factors below in their analysis? These are costs that are independent of whether the individual has a long commute or not (you most certainly will have a car even if you don’t have a long commute), and they drive up the “estimated cost per mile” immensely.

    What the article should be doing:
    -Comparing the cost of a long commute as compared with a short one

    What the article is doing:
    -Comparing the cost of having a car and a long commute vs not having either of these things

    •Car Insurance and Registration
    •Car payment (many have leased or financed cars)

  • JOE Blow is talking about Costa Mesa. There were two things that caused that changed, namely the opening up of South Orange County which whites fled to get away from Santa Ana and Anaheim back in the 1980′s and 1990′s and then towns like Costa Mesa and so forth were left as immirgant destinations. Costa Mesa is odd a nice section and a crappy section. Two, companies have been hiring hispanic immirgants and some asian ones whether they are legal and illegal for 30 years and many politicans don’t care what happens. Costa Mesa was still not too bad back in the 1980′s but opening up Mission Viejo and the South cities later spilled some trouble for Costa Mesa and many older OC cities..

  • What I usually do is compare the cost of some type of housing unit near my work, and one within X miles / minutes to see how much commuting “saves”. Most of the time the additional gas and time (perhaps stress) for longer distance results in minimal monthly savings. For me it’s San Jose region vs. something like Gilroy (45mins) or Hollister (75mins). My commute is already 30-45mins. The additional 70-100% commute time drops about 25% of the house price per sq. ft. regionally, but I’m not willing to go that far.

    • The Sh!t Keeps Piling Higher and Deeper

      I got a job in Baltimore last year and I laugh at you So Cal guys and gals like to think how bad parts of your state are. I literally commuted from a friends house in Fairfax, VA to Northern Baltimore everyday. EVERYDAY…….75 miles one way. Why? Well, Baltimore……that’s why.

      I’d much rather be happy where I live than worry about where I work and the like. It’s easier to either find a job or loose one than it is to find a place where you enjoy living.

      Things always change. Some bad nieghborhoods become good, some good become dumps. It’s always been that way, and I don’t see it changing anytime soon.

      I’ve moved so many times in the last 10 years after college. Ohio to Atlanta, then to Tampa, then to Orlando, then to blah blah blah.

      I’m not leaving where I’m at now. Tired of moving. Tired of finding another place to live. Tired of chasing the money that always evaporates as soon as I have to move again for the same old BS job. All fields are becoming the same and we are all in the same boat.

      Less money, less healthcare, less benefits. I don’t care who you are, no one is safe.

      I can honestly say I am happier now than I have ever been. I like where I live and I like my job. I get ZERO benefits, but I work in a nice office and make plenty of money to save and go out on the weekends. I consider myself lucky these days.

  • And you didn’t even add in all the costs associated with keeping the price of oil somewhat affordable. Non stop war in the mid east-Asia, vast military presence all over the world, gargantuan military budget, etc.

    And the environmental costs: bad air, land fills full of used tires, vast junkyards, etc.

    And, if global warming/climate change is for real, add another layer of justification in there too. This paradigm doesn’t work, so it will fail. Don’t ask me when.

    • Like Carlin said, the earth does not need “saving” from man….it will soon shake off mankind like a bad case of the fleas. The earth has been here for 4 billion years and modern man for a few hundred thousand years. A blip. As we escalate our numbers (213,000 more people every day on earth), we’ll crash and burn from disease, famine, war, polluted environment, climate change, or a combination of the above. We’re pretty smart for animals, but just a nuisance in the grand scheme of things.

  • The good news is that your story is applicable only to southern California, the Bay Area, and most of the northeast, particularly the New York and Washington DC metro areas. The rest of the country mercifully doesn’t endure or require such brutal and costly commutes. The bad news is that these regions collectively account for about one-sixth of the nation’s population.

    I remember watching a 20/20 feature in the 80s called “Is This A Life?”, which followed the intrepid folks on a van pool journey from Moreno Valley to TRW in Redondo Beach, where they all worked. The van left the assembly point at 5:30 AM and arrived from its return trip at 8:30 PM–and that didn’t include prep time in the AM and drive time both ways to and from the assembly point.

    I could relate because I was doing the same in central New Jersey, rising at 5 AM to reach the assembly point at van pool departure time of 6:15 AM, and arriving in Newark at 7:30 AM or thereabouts. I did this for eleven plus years, because I was obsessed about owning a home and was willing, as you put it, to drive (or at least vanpool it or take the NJ Transit train) to qualify.

    In retrospect, it was undoubtedly one of the stupidest things I ever did. It cost me untold hours wasted for a house that I bought in 1986 for $88,600 and sold in 1999 for $89,900. The best I can say about the experience is that I really did like living in it. I had a beautiful big backyard, and my location had great access to loads of amenities in the area: New York, Philadelphia, Atlantic City, Jersey Shore beaches, Princeton, the Poconos, and the Amish Country were all within a 90 minute drive.

    For the past ten years, we’ve lived in northern Nevada, which unfortunately has seen its own real estate collapse, from which we were not exempt. However, our house is much larger and has a spectacular unobstructed view of the Pine Nut Mountains. My commute, before my retirement, was all of 20 minutes with hardly any traffic either way. Before that, we rented in town for two years with a five minute commute which enabled me to come home for lunch!

    While the value of our house here has declined precipitously since we bought it, at least we have very low mortgage payments and low property taxes (especially when compared to New Jersey!), and we don’t have to sell it. This time I don’t have to eat a loss, and if we have to die here, so be it. We are an hour from Reno and Lake Tahoe, and I certainly can think of far worse places to live.

    One thing for sure: I will never live in a metro area again.

    • The Bay area is fine-it has BART and Caltrain, the ferries and MUNI in SF. Most east and south bay cities also have a good transit system-as does the north bay.

      Socal not that nice-though I think the transit options are becoming better.

  • 20 years in LA and never not worked from home. Would absolutely not live here if I had to commute 30-60 miles each way.

    • If you can work from home you should relocate to a cheaper place. I’d like nothing better than to work from home (software QA, there’s really no reason I can’t long term) and move to Reno or some place cheap. I’d even take a wage cut as long as I was still ahead for the region’s living wages.

  • Well, only automation or robotics will eliminate a lot of the low skilled workers. Car washes can be automated and robots can be developed to take over the farmwork more granted the greater La area only employs only 1percent of illegal immirgants into farmwork and even some gardener and maid jobs can be cut down by some robots. La by 2020 could if robots take over reduce the illegal immirgant workload by at half or at least a third. The tech fields I agreee politicans are always flooding those with foreign competition and makes it harder for the native born. Canada is the opposite most of the immirgation is more at the high skilled and less at the low skilled. They even have a good contract set up with Mexico that prevents farmworkers from staying in Canada many of them go between Washington and Canada on their guestworker program for farmworkers..

  • Well, most of the public schools in SC are over 20 percent Mexican even Mission Viejo high now is 23 percent. Mexicans are younger on average than whites so this shift is happening. Two, a lot of cheaper housing by SC standards are in the older suburbs in La or are in the Mexican areas of OC.

    • The Sh!t Keeps Piling Higher and Deeper

      Why are Mexicans so evil?

      • 1) Non-Western values;
        2) Low impulse control (IC);
        3) Militant racist/La Raza “dis izz OUR land” credo;

      • 4) Last time I checked… MEXICO was run by… Mexicans. Maybeez SoCalers don’t… want that??? Haven’t taken a scientific poll, but… I will lay odds. ;)

      • Why do you call them “evil”? They are not. They have difficulty learning languages. yes. Many cannot speak Spanish after 500 years of Spanish domination. Most would rather work at menial jobs than go to school, but that is why liberals like them (no competition and cheap help). But that is no evil, just “peasant”. The problem comes in when liberals tell us they are going to pay our social security and Medicare when they are incapable of doing so and maintaining their peasant lifestyle.

        All that aside, there is nothing wrong with California filling up with Mexicans and becoming a mini-Mexico. Its just that we Anglos do not want to live in Mexico. No judgment, no blame, it just doesn’t suit us.

        What we really cannot afford is letting Mexican escapees abandon their country and come to America to take sub-minimum wage menial jobs, and then turn around and pay hundreds of thousands of dollars to turn their kids into rocket scientists, doctors and lawyers because it is “racist” to have a bunch of dumb Mexicans and smart Anglos.

        Think about it: if we have to pay astronomical amounts of money turning Mexican peasant babies into little Anglos because it is Evil Racism to have a subculture of little brown peasants, why are we letting them move to America in the first place?

  • I remember my commutes from Santa Monica to Sylmar every day back in the 90′s and back then the 405 North in the mornings was a piece of cake (65 mph the whole way). Then in early 2000′s I switched jobs to work in Moorpark. Santa Monica to Moorpark in the mornings (405N to 118W) was a 45min drive but the evening drive home would often times be 90 minutes. That was a killer, so I moved to Thousand Oaks at that time for a 10 minute drive each way. Now I am self employed, work from home for the past 10 years and need to thank my lucky stars that I have no commute at all. But if you talk to several people who work from home you will find the lack of relating to coworkers, added distractions, does have its drawbacks but perhaps minor compared to several-hour-commutes each day.

    • I am self-employed too and love working from home. It’s too bad it’s not an option for everyone. But, some companies will let you work 4 ten hour days, which if you have a long commute it will save one day of it. And also, you’d probably be going in earlier than than the morning rush hour and going home later than the evening rush hour. Some companies will let you work one day at home. I was pushing for one of these myself, before I decided to be self-employed.

      All in all, I think it is nice to have more at home hours (unless you want to get away from the family for longer).

      I don’t see the lack of interaction with co-workers as a big deal anymore. People used to say that to me and I think I adopted their thoughts. Besides, I go out to lunch at least once a week (can afford it now that I pay next to nothing in transportation costs).

  • I agree with what you said doctor but not everyone is in the position. I was single 7 years ago and I live less than a mile away from work. I live in work in downtown LA, but I met my wife and I move 15 miles away because i don’t want her to commute far from her work. And that’s in Torrance, our rent for a two bedroom crappy apartment there is $2,000, and we have a 4 year old daughter thys about to go to school this coming school year, so we started looking for a house and we picked valencia due to quality of life, a little better public school because if I live near my work, the cheapest school within the 5 miles radius in downtown LA is $1000 a month and if your kid goes to private school up until they’re in high school they will want to go to expensive school in college. Did the doctor compute if you have two kids going to private school near downtown LA. It’s way more expensive than commuting.

    • We picked a new community in valencia,ca and we looked at a community where the people who owns a property has kids too like us. I have no plans of letting my kids live in a rental in downtown LA this young. But after they go to college im going back to downtown LA and rent there for convenience. My current PITI right now is $2,000 with a decent size house and its brand new. me and my wife gas is $600.00 and we love new cars, we pay $700/month for the car. for the past 10 years, even though Im less than a mile from work I still have a new car. Either we live far or close we will still buy two card. It a SoCal culture in our generation. Lucky for other generation who doesn’t like new cars, kudos for that and good for you.

      • Dotmike

        I also moved to Stevenson Ranch about 4 weeks back..Bought a home in SR which was on short sale. Got a good deal. I lived and worked in Burbank for 12 years and still work in Burbank. Commute time wise is not bad but I have to fill gas once a week instead of once in 3 weeks now. Agree with you on SR and Valencia on the quality of life and schools..awesome places !

      • Dotmike and Mnair,
        congratulations on your purchase in Santa Clarita. I’ve been living in Santa Clarita for about six years now. I have to say I really like it a I don’t think I would live in any other area of LA county.
        Most of the schools here are good, the population density is low compared to most of LA county and over all the town is pretty family oriented.
        The air in Santa Clarita is cleaner than most areas of LA because the mountain pass where the 5 and the 14 meet, blocks off a lot of the smog from the San Fernando Valley.
        Santa Clarita is part of LA county, but you feel a real separation from LA because the demographics are little different here, which gives it a more tradition American feel.
        If you get a chance, go do some horse riding in Acton sometime, it still has a kind of wild west feel and it’s beautiful.

      • I agree with you Greg of LA, it took me more than a year to decide where should we live in LA county and Orange County, and I believe Valencia/SR/SC is the best bang for your buck. Thank for the info greg in LA regarding Acton. M nair, You will definitely enjoy it here, people here are very nice and friendly. Like what Greg of LA mentioned, the area is family oriented, you will feel the difference of LA life, a more traditional american feel and you are still not far away from LA.

  • Current rent + Current cost of driving Vs. New rent + New cost of driving
    Pretty simple….. I currently commute 95 miles (round trip)

  • I used to drive 100 miles a day round trip on the hell hole known as the 405. Never again! I think I figured out the equation: for every year of that commute, it took a half a year off my life. When you add up all the costs and other things (time, health, sanity, etc)…it’s simply not worth it. Rent or buy close to work or just move out of the area.

    • Geezus, talk about the wrong stretch of road to take. I used to have only ~20 miles commute on 405fwy (each way) and that already took 1.5-2 hours each way.

  • Mike – I have no idea what you mean by…

    Rent control is a panacea for the uneducated and profit control for the building owners. How much would you invest in your portfolio if the government capped your returns?

    Rent control in Los Angeles allows landlords to raise rent according to the dictates of the Rent Stabilization Board. The increases are consistently 3% on places where the utilities are electric and are paid by the renters and 4% in cases where the landlord has a gas heated building where he/she pays the bill. When tenants move, the landlord can charge market rate for apartments. Since most of the people do move within a few years, only a few of the units are much below market rate. Landlords also have to pass inspections so they can’t let their properties deteriorate to levels that are too terribly bad. The places don’t usually have the most updated kitchens and bathrooms, but the landlord can’t get higher rent if some improvements aren’t made so it’s the landlord’s loss when improvements aren’t done. With proposition 13, landlords who purchased properties many years ago don’t pay much in taxes so maybe they’re still making a boatload of money with minimal upgrades. I don’t see how the renters who are paying a 3% increase every year compared to owners who bought at reasonable rates years ago and are paying a smaller increase (about 1%) with proposition 13 are in a better position than the owners. Where’s the cap on the landlord earnings under these circumstances – especially when many of these properties are in high end locations in Los Angeles. Minimal commute for the renters & high gain for the long term landlords. Looks like a win/win compared to the inflated property prices buyers would have to pay to enter these neighborhoods.

  • Generally, I think that we’re stupid to put up with the crap that SOCA hands us. Most of us could go anywhere else and have a better quality of life, for about HALF the cost. This place is just stupid, insanely stupid. The prices that people pay for rents and mortgages are just stupid. You say the sunshine is worth it? Nah….it’s the stupidity fueling this mess.

    • The Sh!t Keeps Piling Higher and Deeper

      I hear North Dakota is hiring………..

    • I do like living in SoCal but I cannot blame you. The worst thing about SoCal are the large majority of people. Self centered, egotistical, narcissistic, selfish asshats.

  • Mike from Downey

    I worked at three places where I had a 35 mile commute each way. Two were in northern Cal, and during the buildup of the internet companies, it was a bad commute. Then, I had a 35 mile commute from OC to Montebello. It was a minimum of 1.5 hours, and 3 hours if it rained. I finally bought a house in Downey (pre-bubble), and had a 10 minute commute on surface streets. Downey was more expensive than the outlying areas, but it was well worth it. I could go home for lunch. Peace of mind is worth a lot.

  • Forever_Sidelined

    Does anyone here own and live in a condo? Seeing as though I don’t want long commutes and would like to live in metro LA- well, in a good area of LA- a condo seems like the only alternative. Even though condos in good areas like SM, Westwood, WeHo and Downtown are just as expensive as a house sometimes (not to mention sky high HOAs), I’ve been eyeing some in not-so-prime areas. I know it’s almost like living in an apartment, so I’m definitely worried about the noise factor. But I’ve read people warning about condo’s in a nightmare way…”Out of control rising HOAs!”…”20k special assessments”…”Never again!”. Anyone here have any search tips or positive experiences? I am leaning towards townhouse type condos and ones that don’t have that apartment to condo conversion feeling. “Community Laundry” is a good indicator. Of course an upper floor is ideal. Thanks all!

  • I disagree, the math here doesn’t even add up. It says its better to rent closer to the metro where your job is, but if rent is $2000, for 30 years, that’s $720,000 down the drain, and you’ll probably still own a car if you have a family. If you own a modest home in riverside, and commute, the commute alone adds only $516,000 over 30 years down the drain in just gas & insurance, unless you own a hybrid or Volt, then costs come way down to just insurance/maintenace -speculating around $25,000. Really its about lifestyle preference. Jobs and commutes can change over the years. I’ll take a commute to have the space and own my home over rent and have to put up with loud neighbors and noise pollution any day.

  • If you rent for 30 years, you have nothing to retire in, you own no real assets to sell or pass on, renting is never a good long term solution, financially.

Leave a Reply

Name (*)

E-mail (*)

URI

Message






© 2014 Dr. Housing Bubble