Land of the grown adults living at home: 5 reasons why California will continue to have millions of Millennials living at home.

California has millions of young adults living at home with parents because they are unable to venture out into an expensive rental or a dilapidated crap shack costing close to $1 million.  It is interesting to see many articles written by baby boomers sporting beer guts and how Millennials are “destroying” many industries like chain restaurants (i.e., TGIFs, Buffalo Wild Wings, etc) or retail stores (i.e., Sears, K-Mart, etc), or are simply not buying homes.  Of course Millennials have different habits.  And getting stuck with an absurd 30-year mortgage on a dump is not a big aspiration for many.  They are more into health and wellness, life experiences, and many are delaying marriage.  So why do they need a home?  The data is backing all of this up of course contrary to the house humpers that continue to sing the praises of $1 million crap shacks.  California is in a major rental revolution.  And Millennials will continue to live at home in mass for a few reasons.

Reason #1 – Demographics

If you are a Millennial in California you are more likely to live at home.  This is simply how things are playing out.  Take a look at this chart:

Chart_2

There are millions of young adults living at home because rent is too expensive or they simply cannot venture out to buy a home.  And many city revitalization efforts are targeting adding more apartments instead of houses.  Just look at Los Angeles.

Reason #2 – Failed Savings for Down payments     

When rents are incredibly high it is hard to stash away money for a down payment.  For example, the typical house in Orange County is getting close to $700,000.  So a standard 20 percent down payment is going to be $140,000.  Now a $700,000 home is nothing spectacular in many cities thanks to the crap shack mentality.

Now let say a family is pulling in $120,000 a year.  This would put the family in the top 25 percent of California households:

paycheck

To save $140,000 over 5 years they would need to save $28,000 per year (roughly $2,333 per month).  In other words, they need to save roughly one-third of their net income per month just for a standard 20 percent down payment – over 5 years.  And a typical rental apartment in many nice areas will go for $2,000 to $2,500 or a rental home will be $2,500 to $3,000.  After that, there isn’t much for retirement savings, food, and other bills.

Basically this is a one asset class strategy and you are aiming for a crap shack.

Reason #3 – Buying Power is Already Maxed Out

We’ve been in a low interest rate environment for well over a decade.  Rates can only go up.  So every little ounce that can be milked out of the market has already been done.  Also, you are competing with all cash buyers and older home owners that may have equity and sell out.  Yet many are not selling out because taxes would get reassessed and many of these older baby boomer owners can’t afford anything higher without shopping at the 99 Cents Store but living in a million dollar home.

In other words, sales volume is likely to stay low.

Reason #4 – Millennials are Different

Millennials don’t have the same desire of buying a home and pumping out 3 or 4 kids like older generations.  Ironically many are now living back at home in their late 20s, 30s, and even 40s.  They also enter into an economy that is hyper-competitive, with little company loyalty, and many will have multiple jobs with various companies over their career.  Long gone are the days when vast numbers of people enter into good paying jobs and were able to chase the American Dream.  In fact, this current political season shows how out of touch those with wealth are from the rest of America.

Millennials also value financial flexibility and many came of age during the last housing crisis and witnessed firsthand the nonsense their parents went under.  Many parents were rocked to their core when housing values crashed for the first time nationally in our modern history.  And what about the kids that lived in those 7,000,000+ completed foreclosures that happened in the last decade?  You think they are eager to buy?

Reason #5 – Lower Home turnover

As it turns out, many current home owners are just reaching break even.  Since many thought their homes were piggybanks they are now left having to delay retirement since guess what?  You can’t live off the equity until you sell!  You can live in a $1 million crap shack but you still need to pay taxes, insurance, and upkeep.  How do you access that $1 million?  By selling.  But many want to live like millionaires without unlocking that equity.  So here we are.  A stalemate.  And guess what?  Many of those adult kids are living at home.

Builders in California are smart.  They are targeting multi-family units over single family homes.  In some areas they are building out condos because if the market takes a turn, they can simply turn them into rentals since there is big demand for that.

The idea that Millennials were going to save the market is off base.  Prices are high but for reasons that go against a healthy housing market.

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320 Responses to “Land of the grown adults living at home: 5 reasons why California will continue to have millions of Millennials living at home.”

  • U.S. household debt reached a record high in the first three months of this year, topping the previous peak reached in 2008, when the financial crisis plunged the economy into a deep recession.

    Americans have stepped up borrowing over the past three years, yet the nature of what Americans owe has changed since the Great Recession. Student and auto loans make up a larger proportion of household debt, while mortgages — the epicenter of the financial crisis — and credit card debt remain below pre-recession levels. Those changes suggest households are still cautious about taking on debt to fuel day-to-day consumption.

  • When will this madness stop?

    In San Fernando Valley areas of Stuio City, Sherman Oaks, Valley Village, Encino, etc. the prices have leveled off, but not really falling. When will it start Q2 2018? We’ve been waiting for an opportunity, but the time never comes. And what if the time comes, and the Fed does QE 4? Another 5-7 years of waiting?

    • Analyzer,

      No one knows when (or if) the market will fall. I believe the goal is for prices to stabilize and return to a normal rate of appreciation. People are hoping for a severe price correction but I don’t think you’ll see one. The 2008 recession was possibly a once-in-lifetime occurrence. Since the bottom of the market, many homes were purchased by cash buyers, investors, and other people with “skin in the game” who are less likely to walk away from there homes this time. From an investment standpoint, rents have gone up so much the past few years compared to the last recession that I don’t see investors dumping their homes in droves.

      If you look at how fast the population is increasing and the lack of available land along with pent up demand, I don’t see a huge price correction. If you want to try and time the market, best of luck.

      If there is a moderate correction, I expect investors / foreigners with suitcases of cash to buy up properties if they go on sale. People expecting 50% price correction in LA are living in La-La land.

      • That 50% correction in parts of CA happened 8 years ago. So never say never. There are similarities in why the prices then and now go up despite locals not being able to afford the mortgages.

        I was looking at a small, older house in my neighborhood for sale this week and saw it sold for ~800k less just 4 years ago. I love seeing sales history. If the economy softens, do I want to take even PART of the haircut that would involve if I had to sell??? It’s a cute but 1 bath house and I’d only moderately want to live in for 1.8mil list price? No room for a pool. 🙁 There have been crazy spikes in prices over the past 4 years here in the Bay Area. No reason they can’t go down if “investors” decide their money needs to be used elsewhere.

        Not saying you’re wrong in general as I’m not sure what massive, shiny new thing it would take to make that happen. I doubt the bay area would be willing to introduce laws limiting or deterring people’s acquisition of investment property. I know numerous colleagues, mostly older, who own several properties in the area for rental income. And some just leverage what they already own to buy more – keeps squeezing “poorer” buyers out of the market.

        If you want to call my hesitancy in not buying said house and waiting for a better house or better price “timing the market” fine. But I’d call it not wanting to be a sucker, or bankrupt, or an idiot. If that mediocre 1200 sqft 1950s house can go up 800k in 4 years, imagine how it feels if it comes down just 400k in 2 years? And still no pool. Ah, but I could be underwater. See the pun? Maybe I’m just chicken.

      • Prince of Heck

        “all cash buyers”
        “skin in the game”
        “lack of available land”
        “pent up demand”
        “buyers with suitcases of cash”
        “high rents rationalize high prices”

        All recycled catchphrases by RE cheerleaders to convey that “this time is truly different”.

      • SoCalGuy,
        nobody is stopping you from buying now.
        I on the other hand will wait for a 50-70% drop in prices. People like you think that what has worked during the last bubble will work this time again. What i mean is: Realtards, lenders, banksters profit from implementing fear like buy now or priced out forever BS. That worked last time with the boomer generations. Millennials on the other hand google everything. After a few mouse clicks you can read about this rigged market. The lies, the people who profit and how buying makes no sense if there is no rental parity.
        So, you can tell us all day long, buy now, there is no price collapse…..it wont work and i bet you are not in the market to buy now….you just want millennials to pick up the slack and keep this mania going. Good luck!

      • “was possibly a once-in-lifetime occurrence”

        the current RE bubble is the 3rd and quite possibly the 4th RE bubble I’ve witnessed in my lifetime.

      • “…All recycled catchphrases by RE cheerleaders to convey that “this time is truly different”….”

        Additionally, let’s not forget:

        A) Everyone wants to live here.

        B) The entire states of Michigan and Ohio are preparing a mass migration.

        C) O.C. weather is always great.

        D) There may be a bubble in ______, but not here.

        E) California population is growing.

        F) USA economy (based on RE market and equity-fueled
        consumer spending) is strong. – 1,000 maids are
        being hired in hotels each day.

        G) They aren’t making any more land.

        H) Housing had reach a new permanent plateau.

        I) Prices are reflection of buyer’s demand.

        J) You had to buy now or be priced out forever.

        K) Prices will rise 20% for ever.

        L) Foreign buyers will keep buying.

        M) Low interest rates will stay low forever.

        N) Renting is for losers.

        O) Real estate NEVER goes down in value.

        P). David Learah said………

      • I am pretty sure as long as residential homes are a commodity open to speculation both foreign and domestic we will continue to see a constant cycle of housing bubbles, Booms and crashes.

        The current price trend may not crash or come down as 2008, but prices do not always go up. No investment asset has that property and if it did we would all be leveraged up to our eyeballs in property making a fortune.

      • Lord Blankfein

        @octal77,

        You forgot a few things:

        Supply and demand, no more buildable land, rental parity, skyrocketing rents, Prop 13 handcuffs, stock markets at all time highs, trader joes, progressive thinking, diversity, tacos, etc….

    • Anyone waiting for the housing prices to tank is kidding themselves. Don’t wait, buy now. Even if it drops, it will be back up in 10 years and you will be fine.

      If the price drops, landlords will just begin to buy again like the last time. This game is rigged. But if you want in you have to pay. There are hedge/stock funds with cash that will pounce when the buy/rent multiplier is right. So yes, right now housing is a little high, but in 10 years it will seem cheap.

      2008 won’t repeat in your lifetime. It will repeat in 2108 when everyone today is long done and it’s just a text book memory.

      • Sean, 2008 was not a one in a lifetime situation. 2008 was a minor correction. The Fed pumped quickly billions if not trillions in the market. Banksters were bailed out and interest rates lowered. The market was never allowed to really crash. Wait for the the next downturn….the fed has no more weapons. The next crash will be the biggie. If you dont believe it why dont you buy now?

      • Prince of Heck

        “So yes, right now housing is a little high, but in 10 years it will seem cheap.”

        As I said before, if current prices represent the through in the following decade, then housing will be the least of our problems. Concentrating an ever increasing amount of the country’s resources into the non-wealth producing FIRE sector is the death knell of the economy as we know it.

    • We started looking for a house in the spring of 2012. The general feeling on this blog then was, as Jim likes to say, going to tank.

      we eventually bought a foreclosure in glassell park after searching for 5 or so months. the deal would not have happened without our Realtor, Courtney…also our next house would not have happened is it was not for courtney.

      Anyway. We bought a fannie Mae forclosure for 3% down and received 3% towards closing costs.
      https://www.redfin.com/CA/Los-Angeles/4546-Verdugo-Rd-90065/home/7177420

      we turned down a few places that we thought were too expensive, all of them were fannie mae foreclosures with the same loan option.
      check these out:
      $300k in Feb. 2012
      https://www.redfin.com/CA/Los-Angeles/3390-La-Clede-Ave-90039/home/7065258
      $410k in March 2012
      https://www.redfin.com/CA/Los-Angeles/3264-Garden-Ave-90039/home/7065883
      $265k in Jan. 2012 (sold for $287k)
      https://www.redfin.com/CA/Los-Angeles/5050-Almaden-Dr-90042/home/7081413

      $350k was about the max I was willing to spend. making over $100k and I felt with was too much…..

      basically after 18 months from when we bought our house on 4546 vergugo rd, seeing how high prices went up i decided we needed to see and sell fast because after the summer, prices were going to crash. I was so sure, I was willing to sell at what I thought was the top and pay capital gains in order to take my money off the table….

      eventually the blog will be right. I am a landscaper and I am now seeing people pay $800k+ for a house in El Sereno.
      https://www.redfin.com/CA/Los-Angeles/3271-Amethyst-St-90032/home/7000556

      Anyway, housing prices to tank hard…not sure when or how hard.

      i thought the prices were overpriced in 2012. I thought people were stupid for over bidding on houses in 2012, like the house on Almaden Dr. Can you believe some idiot bought it for $287k?!!!! I wonder if prices will go lower? if they do, what would that mean for the economy, my Roth IRA, my wife’s 401k, our regular investment portfolio, our gold/silver coins, and our jobs?

      for now I am loving living in my new place paying $2200/month. 3bed, 2.5 bath in eagle rock, 2 car garage (up against the freeway)

      Buy Low, sell high! only america can You turn a little more than $0 into $120k+ in less than 2 years.

      • My good friend in Berkeley did something similar, putting $15K down on a house in 2011 that would now make him over $500K (house is now worth over a million)…and he thinks it’ll go up forever, so he won’t sell.

        Man, what I wouldn’t do to turn a $15k investment into a half a million profit in 6 years!

      • Had a boss that was sitting on some yuuge gains in the tech bubble of the late 90s. Wouldnt sell, didnt want to pay the taxes. Crash took care of that problem.

        Part of what I realized from his and others’ stories is that if you are a true believer, you ride it up and ride it down and in the end arent affected too much. If you are a doubter, you dont make any money either. You have to be able to see when it gets ridiculous and GTFO. The current stock/housing bubble is beyond nuts so the aftermath should be interesting.

  • Carlos from Oxnard, the Newport Beach

    You don’t have to sell your home, get a home equity loan at three or four times your income. I am a loan broker as well as real estate and can set you up with that. Many older folks don’t sell due to taxes and sales expenses. Calif. taxes gains at 9.3% plus, and it is the Feds that capt gain, not Calif. Makes sense to sell if move out of state to AZ or NV. I advise the parents to kick their losers out or if they pay rent, tell them to shut up and follow the house rules. I don’t have that problem, thank God, I live on a boat. I work on the weekends, but come Monday, it is Tequila and the honeys. The Coast Guard told me no Tequila and piloting the boat, but that is a whole another story.

  • I keep finding new listings which don’t seem to be as overpriced as older listings. Is it possible that home prices are already beginning to fall in Southern California even though June is traditionally one of the strongest sellers’ months of the year? If the real estate market is weakening in June, what does this foretell about home prices in the fall and winter?

    Perhaps, realtors can sense that the market is weakening and are telling their sellers to be less greedy.

    • I think prices are still going up at least in south SF Bay price listings. Venice area in SoCal looks like it might be similar. Inventory Low. They’re almost trying to break records it looks. Saw a sold price and it was 60k over the 800k asking on a really tiny small place on Friday. Disheartening but almost surreal at the same time. Truly hard to attach the asking price to the property I’m looking at. Crap shaks seem extinct. Did see one billed as an artists cottage. They even showed a community party invitation because everything else was ORIGINAL down to the asbestos linoleum floor tile and you were buying the culture of the neighborhood.

      Seems worlds apart from what I saw online just a few years ago when I first started looking. Oh well.

      Rents, on the other hand, are softening a bit. You have much greater rental unit choice and even some luxury units are starting to quietly offer free months rent. They were starting to get pet unfriendly (said my complex was “at capacity”) and now seem to be back to welcoming your pets like royalty to get you to sign a lease with them. Woohoo for renters.

    • Anecdotally, even my realtor up here in Portland let it slip that things seem to be slowing down, which surprised me.

    • I noticed that too

  • California millennials remind me of whitetail deer. A small herd will typically live in an area 1/2 mile by 3 miles. This can go on for centuries. In a really bad winter, they will not go out of the area to search for food, not even over the first hill. They stay and starve.
    California millennials could move to Raleigh-Durham, North Carolina and get a job in the Research Triangle and buy a house for $100,000, not a million. There are many parts of the country like this.
    But no.
    Entropy reigns.

    • @roddy6667

      But then you’re stuck living in Raleigh-Durham with people who often confuse you with whitetail deer.

      • Laura Louzader

        Isn’t that the truth!

      • The quality of life is very high in Raleigh-Durham and many would consider it better than living in a third world slum of LA in the Democrat’s communist state of California and it’s definitely better than living on the Democrat’s bankrupt entitlement plantation of Chicago with its horrendous weather, high taxes and high crime.

        The median home price is 246K and the median rent is $1375 in Raleigh-Durham.

        https://www.trulia.com/real_estate/Raleigh-North_Carolina/

      • I think people are confusing general millennials with young people who just like coastal cities and want to live in one.

        Believe it or not some of us just grow up in larger cities and prefer a more bustling and less personal life style. Its not meant to disrespect alternate lifestyles. There are certainly Midwest cities that can offer a similar level of experience to LA without the overpriced housing or being in Cali.

        And even growing up in California I too find the vast majority of LA unappealing. But don’t go overboard with the broad assumptions that all areas of LA are crime ridden, unsafe and filled with homeless people. LA has nice suburbs and desirable areas, which is part of why its overpriced. Overpriced sketchy areas are still generally safe, they just may be more heavily populated with immigrants and lower middle class. Prices skyrocket there for those who have a taste for taking the gentrification gamble… not my cup of tea but it appeals to some and may work out for some as well.

        It is fair to pick on people that complain about prices in California though as though they are trapped. Its a choice to live here and their are other areas to pick from that offer similar life styles with a slightly lower price tag.

    • ^^^ California is irreplaceable. I moved out a long time ago to Texas, and not a day goes by that I don’t miss the SoCal weather. As I get older the Texas Weather fronts “hurt” my body if you know what I mean. Joints, headaches etc. There really is no good answer for our kids. There are other nice parts of California that are not as expensive as SF or LA. Central coast/inland perhaps?

      • Yes, CA is full of very reasonable places. Only LA, OC, and SF are high. There are lots of great places that are not much higher than fly-over country. Look for places half way between San Diego and Irvine, there are good deals in that area with nice weather.

      • Katera, precious, have you ever been to Kerrville? The weather there is fine, plus we will even throw in Kinky Friedman.

      • There is no perfect place for weather. It’s fairly nice along the California coast but it can be damp and dreary with fog inversion layers. California’s inland valleys are usually scorching hot in the summer and often cold and foggy in the winter. Fresh water is a major concern for most of the state along with earthquakes.

        If you have arthritis, a dry climate like Arizona might be the best solution.

      • Thank you, Samantha. The weather is overrated. Relatively pretty decent, but not perfect. The first couple months this year it rained a lot and there were bugs everywhere up until about a month or so ago. The past few months have been bone dry except for the freak rain we got on Thursday. Then there was the drought, which isn’t perfect. Now we are full on June gloom, also not perfect. It’s been rather cool the past couple of weeks and later this week it’s going to be hot anywhere not within two miles of the coast.

      • I moving to the Central Coast when I retire. CA is hard to leave for sure.

    • Seen this all before, Bob

      My millennial daughter and her husband just bought a 3 bd 2 ba 2300 sq ft house in Raleigh NC for $190K. No problem when both are nurses making $50K+ each. No problem even when only one is working. In coastal S.CA that would have been impossible and they would have been living with us for awhile. There are an amazingly high number of millennial CA transplants who have moved to this college town.

      • This and that

        Or, millennials keep living in CA and enjoy rent free living at mom’s hotel. I think I can keep doing that forever. I save so much money I am thinking of working part time or retire early. Living rent free at mom’s is my American Dream. I just came back from a month long backpacking vacation overseas. This would never been possible if I had to pay for child care or an overpriced mortgage. That’s true freedom. If you are tied to a ton of debt you are not free…..you are a slave to the 1%.

    • The problem with Raleigh is you have to live in Raleigh. Cold winters (though not as bad as the NE) and horribly humid summers.

      The other issue is the people. If you are young and live near the schools the kids are open minded enough. Otherwise, people become more ignorant as you venture out. It’s very clicky and everyone will want to know what “church” you attend. If you are Mr. And Mrs. White they might tolerate you. But as soon as you open your mouth and you don’t have their accent then you are an outcast.

      That southern hospitality is a bunch of bullshit. Bunch of ignorant people playing in their private tennis clubs sipping on nasty sweet tea. They’re nice to your face and will take your money but they don’t want you there.

      Southerners don’t like Yankees and hate liberal folk from the land of fruits and nuts. My sister married a native. She was never accepted and complains about it all the time.

      There are nice people in the Deep South but not NC. You can find even cheaper homes but you have to live on Walmart wages.

      But you can find cheap houses. Great.

    • I kid you not, my husband and I did try to move to Raleigh last year. We are older Millennials with two small children. Husband works in the entertainment industry, and most employers are clustered in California. There is only one company in NC he could work for, so if it ever went under or fired him we would have to sell the nice house and crawl back to CA most likely. Still, he did interview with them, but they realized he had no experience in the particular area they were looking for. Oh well. I tortured myself for a while by looking at Raleigh on Redfin.

      We have other Millennial friends with kids who have bailed and fled CA for Arizona and Ohio. In our case we settled for moving from the Bay Area to Orange County–out of the fire and into the frying pan; every bit helps right? I don’t regret it, people are more friendly down here.

  • I’ve figured out over the last couple years that…I am the weird one in my circle of friends….
    I penny pinch, I brown bag it to work, I avoid movie theaters, I avoid fads, I avoid eating out often, I avoid convenience stores which charge 300% markup on most items. I AM THE WEIRD MILLENNIAL!

    I have zero debt and a net worth in the six figures. I’d like to get married and have kids but I don’t want my life broadcast by a SO on instagram or facebook. Plus every girl my age with a decent body has a tattoo. Ughhh I guess I’ll just keep picking up cougars in Manhattan Beach.

    • “Plus every girl my age with a decent body has a tattoo.”

      Lol. When I grew up in the 50’s no woman would ever think of having a tattoo. And the only dudes who had them were those out of prison, or out of the Navy. And as far as not eating out, good for you. The best way to be/stay healthy is to cook your own meals.

    • You sound like the male version of me. There’s nothing wrong with saving $$. I have an old phone bc I refuse to spend $600 -800 bucks. And I still drive my old college car, 99 saturn. So turret ate a few of us weird ones out there.

      • Cynthia,

        I have been thinking about the price of smart phones and considering they are basically a super computer I think 600-800 is probably a reasonable value. That doesnt mean I agree that every average joe/jane should have one. I got lucky and bought the 6s @$200 just before ATT subsidies were stopped, I won’t be buying a new one anytime soon. I have taught myself to replace batteries and screens so I dont have to drop a mortgage payment on a cell phone. Similarly I grew up in a family that “changes their own oil” so I am able to save thousands doing my own repair work on cars unless it’s something major. Good on you for keeping that old dent resistant saturn on the road!

      • Cynthia and John, get a room, already. 😉

        (also, reasonably good phones are only $200-$400. Get on a good MVNO and you can get one every year or so and still come out cheaper than the big 3’s contract rates with “subsidized” handsets)

    • NoTankinSight

      John,

      If you want to go all in on, my advice would be:

      1. Get a vasectomy

      2. Buy a multi family property and rent to young millennials, landlords will benefit greatly over time with the millenial generation. Home ownership will be controlled by a wealthy few over time similar to the rest of the world. The trend will accelerate because the millennials want no part of ownership.

      3. Enjoy your life

      • Notankinsight,
        “millennials want no part of ownership.”
        Correct. Unless we get a 50-70% price collapse i am not getting off the couch to look at open houses. Renting saves millennials tons of money over time that can be invested in a smart way. Buying overpriced crapshacks is like burning your cash in a fire pit.
        The best would be to stay with parents and enjoy rent free living. Unfortunately, my parents dont live next to my work place.
        BTW, i know some co-workers who decided to buy in the inland empire….they hate their daily commute. You waste so much time by being stuck in traffic….much better to rent closer to work and save money on top of it. I enjoy a happy renters life, short commutes and therefore less stress. Its a no-brainer.

    • I thought I was the only one! I’m 29 and I’ve never been in any kind of debt – never even carried a credit card balance, which is kind of a miracle when you consider that I’m a renter in CA. Though I’m definitely not worth six figures (more like four) and I’m not sure how anyone gets there from here. Everyone says “go to school!” but I don’t want to spend that much money (even if it’s other people’s money), and I’m kind of skeptical of this whole way of thinking where we can preserve the American Dream by jamming everyone into the very tip of the jobs pyramid.

      And yeah I totally get you on the girl problems. Is it me or does everyone seem to be stuck in the party phase forever now? And it seems like every girl I meet is either a psychology student or a single mom. That doesn’t seem normal.

      • School trains you to be dull. It kills creativity and stifles innovation. Unless you plan to have a career in a technical field that would require a degree, you’re better off just learning by hard knocks, finding something you can be better at than others, and doing it independently. If you want the breadth of a college education, Kahn University and Dr. Jordan Peterson (among others) have a plethora of valuable educational materials available for free.

      • Frau Farbissina

        The term is called “Extended Adolescence” and Matthew McConaughey made a movie about it called “Failure to Launch” which accurately describes most Millennials/Snowflakes

      • “every girl I met is either a psychology student or a single mother” Hey, I saw that episode of Crazy Ex-Girlfriend!

    • If you think a house is expensive just wait until you have a wife and kids. You are likely the richest now in health, happiness, and freedom than you will ever be.

    • Exactly why I moved out of the United States! My advice to you is to get portable job skills and get out. Once you meet some nice foreign girls you’ll never go back to dating American chicks. Trust me.

    • No debt, no house, no spouse, no tattoo

      I’m no millennial (I’m 45) and I feel like you, a decade older. No debt here, either. When the first housing bubble was ramping up I was in my 30s and resigned myself to never owning, so I went to grad school instead. Years later, I’m done with school (worked my way through, no debt), doubled my income, and I still wouldn’t buy at these prices.

      Speaking of tattoos – I’ve never married and you are right, it is nearly impossible to find someone without them now. I’m far from a prude, I’m a musician and toured in a band for years (hence why I had to go back to school to get a chance at a better job!) but I never got a tattoo. It is funny to me how having a tattoo went from being an anti-establishment thing when I was a kid to something that EVERYONE has now. It was just becoming mainstream when I was in a band, and the most “rock n’ roll” people I knew ended up being the ones who never got tattoos because they weren’t “joiners”. Now every 30-something single mom nowadays thinks she is Lemmy from Motorhead.

      It’s like if people permanently adopted any previous fashion trend – picture if every woman who had a “Rachel” haircut in the 90s had to wear their hair that way forever. Or if you wore a polyester leisure suit in the 70s because it was in style, and then you had to wear one for the rest of your life. It is just fashion now, and will be out of style when all of these kids grow up and associate tattoos with their uncool parents.

      • Get into Med School, go into plastic surgery and open a removal clinic like Dr Tatoff. Being in a field outside of Obamacare is a great idea for an up and coming physician who wants good money for doing a public service.

      • Funny thing is the inks are quite toxic and tattoo removal breaks them up so they more readily pass into the bloodstream apparently. Doh!

        And I hear you on the weirdness this culture has devolved to. Im 46, 7 figure net worth never married and most women (men too, but I dont care about them) are a mess. What has shocked me lately is how fat people are. All kinds of fd up, more tattoos than teeth, just a disaster. I’d swear there is something in the water to make all these people commit slow motion suicide.

    • John,

      I’m with you man! I lived in Hermosa Beach for 3 years when I was in my mid twenties. I always felt like the south-bay was full of middle aged woman who never wanted just wanted to still party and never face growing up or had married young, gotten divorced and were now reliving the years they missed out on in their twenties. I would rarely find any chicks my age up there that had their shit together. I since moved to San Diego and the quality of younger professional women blows the South Bay out of the water. Live where you want to live and invest where the numbers make sense. I rent in Mission Beach but own rental properties out of state. It’s the best of both worlds. I get the benefit of equity gain/appreciation and don’t have some miserable commute just so I can own a house..

    • I am in my 40s and retired on my rental houses. I got married in my early 20s. Married a hard core catholic girl who goes to church every day. I was an out of control party animal. If I did not marry this girl, I am certain I would be dead. The best thing I ever did was getting married to a conservative girl. I recommend that to everyone.

      • Smart move JT. All people influence one each other – for good or for worse.

        I did the same thing. Married in my 20s, still married decades later with the same conservative girl. That was the best move I made in my life. From there to saving and investing it was easy. I would not be semiretired today with lots of paid off RE investments without that marriage. That after raising 4 children and put them through college.

        I know that what you and I did is not popular today, but it is still practical from many points of view – finances, health, and happiness.

      • Flyover, the most important choice in life is your spouse. Get that wrong and nothing else works out. Getting your real estate or career right is far less important in the grand scheme of life.

    • manbearpig4lfe

      Haha John, we are one of the same! Except you have much more savings than me.

      I live in Hollywood and these women will be all over you and then the next minute they’re gone. When women are younger they have artificially inflated egos. They don’t realize that eventually they will get too old to have kids, they will get wrinkles, those perky boobs will be gone, and then they will be clawing at any guy desperately. I am all about discounts haha.

      I’m not gay but guys just seem to get better with age until we are senile like some of the posters on here….

    • Fair Economist

      Payments on a $600,000 loan – $3,770 (not counting another $189,000 down)
      Monthly rental on the two units – $2,390

      And it’s rent controlled.

      Houston, we have a problem.

      • NoTankinSight

        Assuming you could eliminate the rent control it might make sense.

        People don’t usually invest on hope.

  • The problem with millennials is that they’re true believers. As a Gen Xer I get to see the high points and low points of those on either side of me. Millennials are the true Trotskyites. They’re true believers in “social conscience,” clean eating, eco-friendly, etc.

    The Boomers invented all of these things, birthed out of the hippie movement, right down to organic living and rock crystal deodorant (it doesn’t work). The boomers look at the millennials and say, “wow, I can’t believe they bought this sh*t, we were just talking out of our asses.” The vast majority of Boomers were only superficially communist, even in the 70’s. Their selfishness and self indulgence would never allow them to be real, actual communists (except professors).

    So what you have is the millennials, these kids eating up all this “social justice” nonsense and the boomers turning around one day and are now having their empty words thrown back at them by true believers. It’s like making up a religion and then being overthrown by puritans of what you made up. And now the Boomers scream, “but it was all bullsh*t! A marketing gimmick!”

    • Repeal Prop 13

      This is one of the best comments of all time. Thank you.

    • NoTankinSight

      JR,

      This is truly a brilliant comment.

      As a fellow GenXer I wonder what happens when the true believers are in charge.

      The millennials who visit this site are not part of the mass of true of believers.

      The true believers wouldn’t even bother with a housing site, they don’t care about ownership in any form. All they want is their living wage and a fake art job in a top urban area.

      Their kids will probably be the next great generation who has to put on their boot straps and pay for the mess.

      • Reading the comment about “true believers” is interesting. I am a millennial and i dont think it applies to me.
        I dont believe/trust anybody in life. In general, people dont just give you good advice. They give you advice that looks like good intentions on the surface but in reality benefits the person giving the advice and not you. You cant believe banksters, your employer, realtards, insurance agents, sales people…or anybody in power. Just look at our clown president…A con artist who cheated his whole life is now president. Does that not tell you something? You cant even believe your boomer parents or boomer parents in law when it comes to buying houses. They cant handle thinking about the market going down causing book values to vaporize. So they tell you to buy now to keep the bubble going.
        I also dont believe in social justice or crystal deodorants or this gluten free overpriced food. Are you a sheep or a wolf? Do you do your own research and be vigilant or are you driven by a drive-through-mentality wanting to have everything now. Those are the kind of questions i ask myself and act accordingly.

      • That’s definitely the big question there. The millennials on this site are not your average millennial. It will be interesting what they millennial generation becomes, how it morphs over time.

        Now this Z generation is an interesting bunch. They remind me more of the Gen X crowd, mostly because they’re the kids of Gen X.

      • NoTankinSight

        JR,

        I feel bad that my kids will have to grow up in a millennial controlled world.

        At some point I am certain the millennials will start a living wage, inflation is going to get out of control at some point under millennial rule.

        Millenials don’t understand that all of their tech efficiencies simply create hyper inflation in the few necessities of life. Millenials end up spending near 100% of their salary on rent and food.

      • Millennials=true believers of what boomers invented???
        One thing you cant do is generalize….I am a millennial and I am def. not what you describe. One of my millennials Co-worker just quit his job to pursue some online/day trading business. Apparently being a currency pirate pays much more than a high level job at a TECH COMPANY!!
        Another quit a good paying job at the same tech company and took his family to south america to start a business at the beach. Another one quit a few months back and is still backpacking in Thailand. These are real life stories. I barely meet a millennial who wants to start a family, buy a house and be a debt slave. I often try to push buttons and ask why don’t you want to live the American Dream. The responses are one sided. They want no business in buying real estate. Smart people! They don’t repeat the mistakes of our former generation. Live independently, seek an adventure abroad while giving two shits about the American lifestyle/values! I like it. Its becoming embarrassing to be American…just look at that political shit show. I lost my devotion to support this economy and these shitty values. Maybe even lost my patriotism. I am a true UNBELIEVER.

      • Jordan 99, Do you think you’re the first generation to discover South America and Thailand? Do you know how many baby boomers just had to go to Machu Picchu at your age? Do you think pitching a tent in Peru and “dropping out” was invented by millennials? You’re following the same arc. Only believing it. The boomers didn’t go to Peru to pitch a tent, they went to screw each other and take drugs. The tent pitching was part of the process. Heck, even my Generation went to Prague and Amsterdam circa ’95 to screw each other and take drugs.

        And do you know what the boomers did after they screwed each other in Peru? They came back here and opened a chain of Cost Plus World Markets that sold cheap Peruvian trinkets that were made by Chinese slaves. Wake up Jordan. You will have that tract home in Laguna Woods (no lagoon and no woods) one day.

      • Nice post JR. I wonder if it will sink in with anybody. As a rentier, I fully support these delusions (and high prices…)

      • JR wirt,
        By reading your comments I def. believe your drug use history. Keep repeating your millennials are true believer nonsense. What’s more likely is that boomers will be remembered for creating the biggest debt burden in history. The mess has to be fixed by generations to come while boomers escape the responsibilities.

      • Interesting analysis.

        I am technically a millennial and don’t trust anyone. I think the older millennials like me will have more influence. I remember a pre-cell phone world. Some label us the Oregon Trail generation.

    • GREAT comment! Statements like this are why I read this outstanding blog. Love the people who post here!

    • Brilliant.

      Rejecting the “values” of my Boomer cohort has reaped all sorts of benefits in my life.
      { not “lifestyle”, please note }.

      Al that double talk about being a “better generation” and rejecting materialism and we became our parents X10.

      • Thanks for all the great comments.

        I’ve always felt that to really know the baby boomers you had to see them in their baroque era (the 1980’s). My God they were an ambitious crowd. Not the deer in the headlights, lamenting mortality while plastered on margaritas, Taco Tuesday boomers we see today. I had a jazzercising first wave soccer mom. I know these people. Right down to the track lighting and skylights. I will say for any downside to that generation, they did have the best music. No one can deny that the best thing about the boomers is their record catalogue.

      • Millennial_Not buying your overpriced crapshack

        It seems a significant amount of boomers believed the “buy now or be priced out forever” nonsense back in 2003-2008. Many lost their shirt. Fast forward a decade we are at the end of bubble 2.0 and they really expect millennials to believe them that “this time is different”. If millennials would buy what boomers are trying to sell them why are they not interested in buying homes? Aren’t boomers constantly telling us its the american dream, interest rates are low and buying always makes sense in the long run? Its obviously not working….ever heard that the younger generation is trying to avoid their parents mistakes? I am wondering if you got this backwards here with the true believer notion.

    • My concern for the generation that follows is that I see a bell shape curve being formed. Boomers are the beginning of the growth and Millennial’s maybe represent the peak. However, the generation that follows probably follow the degenerational group. Those that saw the past and missed it and now have really no motivation to innovate or get ahead. likely will stay at home until they see a need for a change or the family kicks them out.

      • Jenny_the millennial

        Homerun,
        you make it sound like staying home with your parents is a bad thing. I am in my early thirties and love staying with my parents. They love it to…we help each other. I would never rent an overpriced crapshack if i dont have to. Same for buying. If we get a beautiful crash / economic disaster i will go and start looking to buy

      • No I was not looking at it that way, but the prospects for a job/career for the next generation might not be so promising and the likelihood that we will have echo millennial’s living at home more often may become the norm for a majority of families. Question is at what age does a typical millennial plan to leave the nest?

        If you are a landlord waiting on these millennials to keep their income stream flowing when do you call it quits? If millenials find less job prospects in the future, hud does not pay the bills like they used to or less foreign buying? It seems that landlords would be screwed if families did the logical thing to allow their young to hang out if they want to avoid rent. Obviously job prospects near them may not likely fit their location which is why this living arrangement may not work out for everyone. Of course the landlord will like this arrangement.

      • Prince of Heck

        “I would never rent an overpriced crapshack if i dont have to. Same for buying. If we get a beautiful crash / economic disaster i will go and start looking to buy”

        Statements like these give me some glimmer of hope that the elite .0001%’s plans to heap all the debt onto subsequent generations can be somewhat thwarted. We have seen corporations walk away from their obligations, financial institutions get bailed out while the rest gets thrown under the bus, and chief perpetrators of the last economic crisis get immunity. Millenials are only doing what’s best for themselves.

    • Boomers. Be careful what you wish for or you may get it!

  • son of a landlord

    Flipping mania has reached peak insanity. The same houses are being repeatedly flipped at high markups, without ANY work done.

    A Santa Monica house: https://www.zillow.com/homes/for_sale/Santa-Monica-CA/20486564_zpid/26964_rid/globalrelevanceex_sort/34.056783,-118.433819,33.962155,-118.559647_rect/12_zm/

    Sold in March 2017 at $2,100,000.

    Offered in May 2017 at $2,650,000.

    A $550,000 markup after only TWO months. With NO remodeling done. The photos are the SAME as during the March sale. I watched this house, and its paint, everything, are unchanged since the March sale.

    Or consider this Woodland Hills house: https://www.redfin.com/CA/Los-Angeles/4326-Pampas-Rd-91364/home/4307610

    Sold March 2016 at $755,000.

    Sold again in November 2016 at $839,000.

    Offered again in June 2017 at $929,000.

    Again, NO real work done on it since the March sale. Maybe some new paint. The listing LIES. It says “updated” kitchen. I toured this house in Feb 2016, before its first sale. The kitchen is unchanged. I took photos and I still have them to prove it.

    I suppose the realtor could say, well, it was “updated” several years ago. But the listing implies it was updated since the last flip. That’s what prospective buyers will assume.

    People are buying houses, and reselling them within MONTHS, with NO work done on them.

    • Richard Rollo

      Looks like it has some water damage in some weird places. R

    • This could be a realtor scam. I see it all the time in my area. A realtor will find someone to list a home what is clearly 25-50% too high for the area. They use this as a comp for a home that is 20% overvalued. This tricks Zillow and Redfin and the fake “worth calculator” will increase the value of the home calculation.

      I see this all the time – the game is rigged to go up.

      And stop looking at the home quality – they are all mostly junk in CA. 90% of what you are paying for is land and location. Just rebuild the home, they are not that expensive.

    • Insanity, theres no other was to describe it.

      • The bubble is pure entertainment. laughable prices and laughable comments plus a lot of useful information/statistics like the ones you can find here on housing bubble. We are in a unique situation….we can experience bubble 2.0 live and the great collapse thats coming up. Get the popcorn ready.

  • Speaking of the young ones living at home…

    How many avacado toast breakfasts does it take to buy a home?

    http://www.bbc.com/capital/story/20170530-the-avocado-toast-index-how-many-breakfasts-to-buy-a-house?ocid=ww.social.link.facebook

  • I bought a home in this neighborhood in 2012 and new it would ‘take off’. The reason is it is the absolute closest to the beach neighborhood in all of LA but without the Beverlywood, or Culver City prices (or all the other high prices as you work your way West to the coast). and its 15min to the beach on Sat/Sun morning.

    This home sold last year for $630K Now with 2 new bathrooms and a new kitchen $900K!

    Someone will buy it, perhaps it will sell for $875K?

    If you ARE in the market to purchase, consider Baldwin Vista. It is West of La Brea, East of Lacienega, South of Jefferson. Before you laugh at what you think is a crime ridden area, take a drive through. Most of the crime is not in the neighborhood, it is car theft and shoplifting at the stores on La Brea and La Cienega.

    • Millennial Mama

      My husband and I drove through Baldwin Vista by accident a year and a half ago on our way from an open house in Beverlywood to an open house in Westchester… we have made offers on a few houses in the neighborhood since then, but were beat out by all cash or flippers, or people who are seriously overpaying each time. Now you only see things coming on the market there for 800k+, whereas last year you were seeing stuff in the high 600s-700s. So unfortunately the secret is out and we missed the boat on that neighborhood. Not going to pay over 800k for a house where you have to send your kids to Dorsey High.

      Also, the “view” homes in Baldwin Vista are going for well over a mil now – we made an offer on one sweet little grandma house- in ok shape but small with no recent upgrades, needed a new roof, etc. 71 other people made offers and it ended up going for 1.2 mil (asking price was 799k). It did have a 180 degree view of LA but still. People in the neighborhood saw that and have been putting up their homes for sale with no pictures of the house in the MLS listing- just a photo of the view and a price of a million or more!

      We have stopped looking with any motivation to buy… things are too nuts. Going to stick it out in the rental apartment in the nice neighborhood for the foreseeable future.

      • The House Owns You

        Millennial Mama. The same insanity is going on in the Bay Area.
        We bid on a 2 & 1 condo 1033 sq. Ft. listed at 445K. We offered 488K
        Seller countered at 492K which we accepted. Someone decided it was worth another 20K over that (512K) You are better off renting, no risks if you need to move.

      • You are smart. It’s not worth stretching yourself to the limit to buy in an area with marginal schools. Keep renting, and also maybe consider option #2: Bail California and buy a nice home in a good school district in another state.

    • The problem with that neighborhood is the closest retail and schools are in slummy areas.

      • @ avi. True but it is changing. Baldwin Vista is 1.5 miles from downtown Culver City. There is Trader Joes, Sprouts and Co-Op in Culver City now and a Whole Foods is going in at La Cienega and Jefferson next year (on the site of the old radio Towers).

      • HI Samantha. Wow I didnt realize my neighborhood got that expensive. But the homes that truly in Baldwin Vista do not have the million dollar views or price tags. They are North of Colesium, bounded by La Cienega, La Brea and South of Jefferson.

        there are a few still under $1M, here is one.

        https://www.redfin.com/CA/Los-Angeles/5612-Bowesfield-St-90016/home/6889831

      • Millenial Mama

        Qe Abyss – that bowesfield house is a flip. We looked at it when it was first on the market back in September but it ended up going before we could get an offer in. It also needed A LOT of work before you could move in- which clearly the flippers have done (though who knows what invisible things were left unaddressed), and are going to see a 300k profit from it. Again- I love the neighborhood, but we won’t spend close to a million bucks for the privilege of a Audubon Middle or Dorsey High education for our kiddos.

  • Fair Economist

    At local housing prices, I’m surprised the difference between CA and the rest of the nation isn’t more. Where are all the people working in retail and food service living? You can’t afford any place on near-minimum wage around here.

    • They are illegal immigrants crammed into crowded conditions like 10 people to a 2 bedroom apartment. Ever wonder why we are a sanctuary state? Citizens aren’t willing to live in those conditions.

      • Or they are millennial’s living with their parents with really low or no rent. This is the only way people can live here working low wage jobs.

  • Reason #6 – They don’t want to buy high, and be left holding the bag when the market crashes again

    Purely as an investment, houses looks like shit right now. Sure, prices have melted up the past five years. But, if you buy at this point in the cycle, you better have an exit strategy. What happens if you get laid off and you have to move to find another job? Can you charge enough rent to cover your mortgage payment? Maybe you can now, but what happens if incomes go down in the next recession? Also, if you’re buying now, you’re locking in an extremely high property tax bill. The RE game is all about leverage and timing. Maybe some renters and basement dwellers are smarter than we give them credit for.

  • DavidinFlorida

    We bought a Florida retirement home in 2011 for cash. It is worth about 30% more now than when we bought. We helped our younger millennial son buy a home in NE Pennsylvania in 2010. We loaned him some money and gave him some money to purchase the home. He moved and bought another home in his new city. His home is worth at least 10% more than what he paid for it. It may be foolish to buy a home in CA but in other places it is still worthwhile.

  • You saw the first signs of this current tech bubble popping on Friday with the Nasdaq down 200 intraday. When the tech bubble comes undone, the damage to CA real estate will be significant. For the computer crowd, they’d be better off living somewhere where they aren’t likely to marry someone exactly like them and have autistic kids. Autistic millennials will not be buying with cash. But they will be happy to hump the CA welfare system.

    • Sigh. 200 points. Wake me up when there’s a real crash.

    • Are you talking about SoCal or Silicon Valley? Tech bust might have some effect down here but not nearly as much as up north. Plus if you are a techie in LA you will most likely partner with a non-techie.

      • Some effect? “Silicon Beach” will certainly feel major effects of a tech collapse. It wasn’t that long ago that my friend was sharing an apartment steps away from the beach in Venice on an hourly wage.

  • I am almost a millennial and I plan to work until I die and I believe it is a blessing. Ironically, I feel that the Millenial Generation (born in 1980s and 1990s) are similar to the Silent Generation (born in 1920s and 1930s). Please enlighten me if you have something to say.

    • Mark, “plan to work until i die”?? thats sounds horrible….why?
      Millennials will inherit all the wealth from boomers. There is no housing shortage. There is massive oversupply. The only reason why boomers are not selling is the cant even afford the house they are living in….prop13 keeps them alive. And millennials will profit from it since we inherit the houses and low property taxes!….The only thing you have to do is hoard your cash and wait. And if you can, live with your parents….save tons of money and enjoy the full fridge. Cant get much better than that!

      • Each generation has its own challenges and struggles. That is how we can grow. All these glooms and dooms are really depressing. I will try my best to live one day at a time.

      • Working until you die sounds depressing.
        “these glooms and dooms are really depressing” Recessions/depressions/economic meltdowns/price collapse thats all good stuff. It lowers prices which is good for potential buyers! In an economy that we have right now, only the wealthy are making money. The little guy is being screwed. Downturns are part of the economic cycle. Its healing.

      • So Mark are you younger or older than a millennial? Why such ambiguity in your comments?

      • “And millennials will profit from it since we inherit the houses and low property taxes!”

        Well, what’re you gonna do for those 30+ years while you’re waiting??? I’m in my mid 60’s and my mom is 92. I will inherit her house, but then again, I’m past my prime, but I’m not going any time soon, and neither are the boomers. So be prepared to hunker down for 30 years.

    • If the generation now of childbearing age doesn’t have children who have a reasonable chance of growing up to be productive workers with skills that the Market wants, then you most certainly will have to work until you die to have any sort of bearable living. Unless we all become lotus-eaters fed by super robots who keep us for pets.

    • You should read Howe & Strauss’ book called The Fourth Turning. I’m in the middle of it now, and, although I’m not usually apocalyptic, the book’s comparison of generations and cycles is both compelling and frightening.

      • Strauss and Howe and the “fourth turning” is pseudo-scientific garbage. It has no more validity than astrology.

        It is worse than astrology, actually – at least you can talk to women about astrology, which gives it some limited usefulness!

      • Gen X'ers are weird

        Great books!

    • Mark Aaron,

      “Living one day at a time” is a great way to go nowhere in life. Living in denial of the future.

      I wasn’t around in the ’60’s, but didn’the the hippies live at the same time as the squares? I’m a “square” trying to get rich and retire, while some my age are trying to be cool, spend too much, drive expensive cars that depreciate in value, and go on lots of vacations so they can waste time posting pictures on Facebook.

  • Two statements by the Good Dr I have to comment on:

    “We’ve been in a low interest rate environment for well over a decade. Rates can only go up. ”

    In the real world, maybe, but in the surreal world of now, with a couple of rate hikes under the belt, any big recession could trigger ZIRP all over again or maybe even NIRP!

    “Many parents were rocked to their core when housing values crashed for the first time nationally in our modern history.”

    Depends what you call modern. I’m a Baby Boomer. Both of my parents lived through the Depression as adults, and they were very conscious about how prices for everything crashed in the Depression. My Wife’s Father’s family lost a modest fortune in California Real Estate in the ’30s. He never completely got over it. I’ve seen articles about East Coast and Midwest Real Estate in the ’30s and it wasn’t any better. People’s money was often stuck in Savings and Loan institutions that they couldn’t get their money out of and passbooks were sold on an open market for less than face value; the amount you got depended on how solvent the institution was. S & Ls were invested in Real Estate.

  • If this isn’t the “crapshack” paragon, I don’t know what is. Yes, ladies and gentlemen, for $1.1 million, you get a view of a dreary wall of the 405. In the backyard, you have the pleasure of apartment renters peering down at you. No central heat or AC. 2 Bed, 1 Bath.

    Unbelievable. All of the value is in the land.

    https://www.redfin.com/CA/Los-Angeles/11230-Pickford-St-90064/home/6753928

    • Laura Louzader

      I have a close relative in 90064, and have been told that it’s an extremely desirable area…. and have also been told that any tiny 2 bed 1 bath fixer-upper costs over $1M.

      This is a rather cute little house that has some limited possibilities, but it is no architectural masterpiece, and it’s badly in need of a facelift and a rehab. The exterior of the house, and the grounds both look like hell. I’d balk at paying more than $200K, let alone $1M.

    • More like all of the price is in the land.

  • I’m a Gen-Xer, and I wouldn’t mind moving back “home.”

    My rent for a 1 Bedroom is shooting up to $2000.00 per month.

    Not everyone should buy a home right? I never did. Wow. Big mistake.

    I feel like I’m a college student again. Scraping to pay the rent and enjoying Top Ramen at the end of the day.

    I’ve read that the median for a 700 sq ft one bedroom in LA county is $2100. This is insanity.

    • Your not alone! I’m a Gen X too in the bay area. I think the best approach is to move back home (if you can) and save as much as possible, build a massive war chest of savings, then buy when the opportunity presents itself.

      • Sadly, moving “home” is not an option.

        But I agree, if you can do it, stay there for 5 years until you have $80,000 saved up!

      • 3rd Generation

        How much $ is that ?

      • So if you don’t own a home and don’t have enough for a downpayment, as a Gen Xer, what were you spending all of your money on?

    • 2k for a one bedroom? I would never pay that much rent for a one bedroom. I rent from a private homeowner who bought during the last downturn. The old lady rents the 2 bedroom condo for a bargain. I will stay here until she dies or the market crashes 🙂

      • Millenial,

        I have been living here for 10 years paying 1200 per month. Landlord sold the place. You never know when your good luck will run out!

      • Luck? Finding a cheap place to live has little to do with luck….its putting effort in to find it. Sometimes you have to get out of your way and search long. Never rent from a professional managed place or a company.

      • You are wise, millennial. Sorry to have crossed you. Your temper is short.

        Correct. It took a long time to find this place. Owned by a family for 3 generations. That’s why the rent was cheap. Time to look again…. just as you say.

        Peace and well wishes.

    • Another Gen X here. After the peak of the first bubble, I was like Millennial – convinced prices were going to drop 60%+. Needless to say, they didn’t (not in the area we wanted), but luckily my nesting wife put her foot down in 2009 and we got in on the way back up.

      I’ve since learned never to underestimate the government’s desire and ability to reinflate the market. It doesn’t matter that prices NEED to correct a certain amount, they may very well not. So even if prices have only dropped 25-30% (especially on the coast), if you see the median leveling off and the number of offers climbing, time to consider buying.

      • There you go. You are confirming what i am saying. Its all about timing.
        “my nesting wife put her foot down in 2009”

        You buy after the crash…..not in the middle or the end of the bubble peak…come on now, its not that hard to understand. Buy low sell high.

      • “There you go. You are confirming what i am saying.”

        Not exactly. You’re waiting for a percentage drop that may not happen in your lifetime, which is exactly what I stopped doing, and it paid off.

      • nope, we are doing the same. You bought after the crash which is exactly what i will do. Dont get confused with a percentage drop. That is a given.

  • For most Americans buying a home is one of the worst financial decisions you could possibly make. Investors are purchasing homes, making quick fixes and then selling the overpriced crapshack a short time later. Also, foreign investors are looking to buy property because if the property is deemed “investment” property then they can get fast tracked citizenship.
    Once the Boomers start downsizing or dying off – the housing market is probably going to go into an all out freefall. Gen X and Y were hurt big time by the 2008 financial crisis and will be very reluctant to buy into the homeowner investment b.s. and Millennials see what happened to those who bought homes – so they aren’t looking to step into that beartrap.
    Super easy credit is going to mask the real problems for a while but at some point the game of musical chairs will end.

    • Spot on Anna Mouse!

    • I agree that the end of the Boomer generation will have a negative effect on many local real estate markets. I disagree that foreign money will stop coming into US real estate. Unless we get a Venezuela style Marxist government, foreign money will find its way here. I can see no shortage of kleptocracies out there. Connected individuals will certainly continue to try to get money to safe havens. So the more desirable the area is to the rich and infamous, the better it will do in the Götterdämmerung of the Boomers.

      I’ve done well with real estate myself, but not all that much better than with other sources of retirement investing. As they say, diversification is the key to investing success. People who use a house as their sole retirement nest egg in this market are plumb loco.

    • “For most Americans buying a home is one of the worst financial decisions you could possibly make.”

      The word “most” in this context is wildly inaccurate. “Most” of America has elevated prices, but is not in a bubble. You can buy a beautiful 2,500+ sf home in Orlando for $300k, in a school district with a junior high (the most difficult age group) that’s rated a 10 on Great Schools. That’s below rent parity, in a public school district that rivals the best private schools in southern California, with salaries that are far more in line with housing costs.

      • I agree with your post. I wanted to discuss predictions of the future in my post rather than present issues. I think you have to look at returns from buying a house in the particular market you are buying in. As your post points out, there are good markets to buy in if you are planning to stay for a few years. Look at all your assets and liabilities, and look at all investment options and come up with a plan that doesn’t depend on all circumstances lining up in your favor.

  • Everyone knows I am the biggest real estate bull, but only very long term. Like 15 – 20 years holding. But, I am shocked on how far prices have risen in east side costa mesa south of 20th street. There are two options. Either, we are seeing just craziness, or we are seeing the start of very big inflation. Very risky. If you buy now in a quality location, you will either see a huge gain, or a substantial loss. One or the other. Unlikely you will see price stability. I am stepping back and watching the show. However, renting is a tough spot because you will either win or lose big as a renter.

    • Eastside CM is taking off because the City is promoting it as “Costa Mesa Cool”, “the Action Sports Capital”, “Live, Work, Play,” “Playful City”, and it’s crown jewel: “City of the Arts”. The business license fees max out at only $200/year!!! So, it’s remarkably cheap to start a business. It has plenty of dilapidated rental duplexes & R-2 homes sitting on valuable land less than 2miles to Newport Beach with it cool ocean breezes! Also, many Newport Beach owners help their grown kids move closer to them. Prices are half of what a Newps address fetches. Three freeways make it easy to go anywhere in OC, and hipster shops and top-rated chefs have been opening restaurants like crazy. CM is redeveloping.

      FYI: The City has a 65-35% rental ratio which the City Council is correcting with a mandated development requirement of “townhome or SFR only” ordinance via the “Westside Plans” so now the Huntington Beach close Westside is the new up-coming neighborhood to buy into now. Check out the Freedom Home prices b/w Victoria & 19th St.

    • A big problem is that rents have also gone up big time, meaning that if you wait if out you won’t be able to save as much…. so bailing the state seems wisest.

      • My rent has not increased in many years. I think its a myth that rents are rising…rents usually go with income….Americans have not gotten a significant raise in a decade. Rents cant go anywhere.

      • Correct oceanbreeze.

        When we moved back to the “Bay Area” (really Solano county) last year, it was either pay $2500 a month for a decent apartment or $3000 a month for a decent house for my family of four, or bite the bullet and plunk down that savings for a house where my PITM would be about $2500. We opted to purchase even though I know full well it could be at the top. I made sure we bought in a nice school district and the house I chose does have an in-law unit that we rent out that helps out with monthly bills.

        I would have been sick spending that much on rent a month, so here I am, hoping for the best but expecting a correction.

        Our neighbors apparently bought for about the same price we did back in 2008, so back to pre-recession levels in this neck of the woods.

      • Millenial,

        Rents have absolutely increased (dramatically) in my area Orange County. Not a myth; i see it every day as I have been looking at either buying or renting.

      • @Millenial

        Unfortunately they have indeed gone up big time. If you have been at your place for a while and not looking, and your landlord has not raised then that is very good. I know some people looking now, and it is just pitiful what you get.

      • @Calexan

        Sounds like you made an informed and well thought out decision.

      • Lord Blankfein

        If you haven’t gotten a rent increase in the past 6 or 7 years, consider yourself very lucky. I like tracking rent prices in the old complex I moved out from in 2012. Rents for a 1 bedroom were around $1750 in 2012. Today they are pushing close to $2300. Another tactic is putting wood floors and cheapo granite into apartments, now it is a luxury apartment and you can pay an extra 20%.

      • Here is an old latimes link from 25 years ago. Back then, average OC rent was $790.

        Better yet is this quote from the article:

        “People’s salaries have not increased at the rate house payments have increased.”

        People were saying that back when a luxury beach home was available for 400K. Fools.

        http://articles.latimes.com/1992-05-11/business/fi-1315_1_housing-units

      • I have seen apartment complexes in our area that used to be owned by local landlords. However, that changed when we hear other large property corporations acquire these properties and essentially create a monopoly. All of a sudden the new rents went over 60% in about two years! As for the renters that stayed they got increases but I hear the renters now have to share some of the costs of the water, trash bills on top of the standard rent fee that normally was covered with the rent. What a joke that is and I almost feel it is bit deceiving to charge other fees on top of your rent.

      • “If you haven’t gotten a rent increase in the past 6 or 7 years, consider yourself very lucky.”

        Has little to do with luck. My landlord keeps telling me how i am one of her best renters. I am guessing most people pay late or not enough or are just a pain. Americans are broke. There is no more parking on the streets because people rent and have to sub-rent a room to a stranger to survive.
        No pay increases means landlord have a hard time collecting rent or charging more. Its just reality. I know RE cheerleaders wish the story would be different but that’s life.

        Wait for the next job-loss recessions and its lights out for the housing market.

      • Lord Blankfein

        “My landlord keeps telling me how i am one of her best renters.”

        Dude, I was the best renter there was. Paid early every month, never complained about anything, was courteous, quiet, etc. Every year there was an envelope taped to my door with a rent increase letter. It was all about supply and demand, if I didn’t want to pay the increase there was a line of prospective tenants who would have. Giving people a break for being good tenants is a good idea; however, being a landlord is not a charity business. Market rate rents or very close to it!

      • rising rents….
        i rent a room in my house (private studio) $1575, last year we rented it for $1350

        http://www.latimes.com/business/realestate/la-fi-rents-rise-again-in-20150402-story.html

        I am not familiar with this site, but did a quick google search for rents in LA.
        https://www.rentjungle.com/average-rent-in-los-angeles-rent-trends/
        January 2011 = $1585
        May 2017 = $2503

  • Starting to see some major price reductions; rather quickly (in the area I am looking).

    Softening coming or has already arrived?

    • Yes, has already arrived. There is only one way for housing….and thats downhill….we will experience a massive crash soon.

      • I put in an offer (site unseen) on a 800k property only b/c my wife was bugging me about it. I don’t think I inteded to follow through if accepted, but, threw out 790k.

        They immediately countered at full ask and FASTER/SHORTER contingency periods than normal. Come to find out they had already accepted an offer and I was the back up and since they had already fallen out of escrow once they wanted an aggressive timeline.

        Well; I obviously passed and the agent called me 2 days later saying the accepted offer never delivered their escrow deposit and are now out too. LOL.

        Cocky sellers and no buyers now.

      • Throbert Girth

        Blood is rushing to my mid-section in anticipation

    • Mind telling us which area? Don’t leave us hanging.

      • Ladera Ranch

      • Agent keeps calling me to tell me to meet 1/2 way at 795k; and I keep telling her that the 790k was almost too generous in my opinion.

        Even though the property was turnkey in a great area; the downstairs was too tight and the floorplan is the problem.

        Also; I hate cocky sellers and will not give them my money.

      • son of a landlord

        Dan, if you lowball a seller, make sure your offer contract allows you a “final walk through” before closing. You don’t want the seller trashing the place (e.g., removing light fixtures or such) to “make up” for the lower price or to “get back” at you for the lower price.

      • @son

        Always. That’s a given

  • The Treasury report recommends fostering an environment conducive to increasing the availability of credit with a particular focus on residential mortgages, leverage loans and small business loans. Key highlights:
    ◦Repeal or revise the resi mortgage risk retention rules;
    ◦Encourage banks to rely on a robust set of metrics instead of a simply 6x leverage metric when making leveraged loans;
    ◦Consider reassessing regulations concerning CRE lending to promote additional flexibility for situations where a loan has strong collateral

    This is good news for buyers.

    • Prince of Heck

      Why expand (loosen) credit if supply was too tight to meet insatiable demand? Unless of course, demand was never as strong as claimed.

      • Currently the banks primarily just look at income, 3x or 4x regardless if you put 40% down. Under the proposal, if you put a large down, they will loan more times income, since a large down, 40% will more than cover a market down turn. Some people are cash rich, but the income is lower, so they can not afford to sell their home to buy another home for the same amount. Don’t forget the income tax on the sell of your current home.

  • @Lord Blankfein

    Yeah it’s just that. If you haven’t gotten a fat rent increase consider yourself lucky. Where do you think the increase in homelessness came from? Rent got jacked, family ended up in a tent on the street.

    • Prince of Heck

      I have feeling that we’re in store for mini ghost towns inside American cities. An over-abundance of overpriced apartments for which there is little or no organic demand for. Just like an over-abundance of overpriced houses that drives down organic demand.

      • Or we could see a lot of those apartment developments convert to condo as has happened many times in the past.

      • Prince of Heck

        @Avi1985

        Still would an overpriced condo for which there is little or no demand in today’s economy.

    • Rents are not going up because there is an affordability problem. People who are paid well are being laid off left and right. These jobs are going overseas. At our company we lay off each year and even transfer entire manufacturing sites to South America and Eastern Europe. There is nobody in the world who can stop Globalism. Ah wait, Trump will fix it: “I alone can fix it”. LOL

      • You can not stop globalization but you can stop massive illegal immigration in this country. There is no need for so many immigrants when the economy can not generate enough jobs here due to globalization. The sanctuary cities and sanctuary states don’t help with the drain of taxes from the middle class either. So, Trump has some valid points.

        The worst part of the globalization, never mentioned by MSM, is the globalization of the banking cartel with the final goal of one world central bank – communism on steroids. With this all democrats are for it; some republicans, too. This economy is already dominated by FIRE (about half of it) and they suffocate the main street economy. All decisions are made to help the Wall Street and they threw the Main Street under the bus.

      • @Flyover You cannot stop companies from setting up shop overseas, but you can indeed stop foreigners from buying property in the US. And reform the eb-5 visa program so that the investment *must* be in depressed and decrepit areas with a media home price of less than 100k.

  • Seen this all before, Bob

    You know, in a sane world, the seller asks too much and the buyer lowballs with 30% under asking. The seller counters at 15-20% below asking and the deal goes through. Win-win for everyone (Especially the RE agent). Insanity is going on now.

  • New Property Offer History:

    Area: Ladera Ranch

    04/26/17 Price change $849,000
    04/05/17 Price change $859,000
    03/09/17 Listed for sale $880,000

    I offer 810k (a few days ago).

    They counter at 836k. I was going to stand firm at my offer amount.

    3 houses down; a pocket listing is in escrow. I call the agent and it closed today at 845k w/ 220 more sq ft, extra bed and bath. Now it does need some work (as does the one I was looking to buy).

    Another one in the same area/vicinity just had a price reduction of 15k to 829k and is bigger, which we are looking at today.

    Using this info; I inform the agent the market is telling her sellers they’re drastically over-priced and I am either pulling my offer or revising it downward, if the sellers even want to talk. Otherwise I am moving on.

  • manbearpig4lfe

    Unless you are flipping a home or doing some weird price appreciate speculation, you have no business buying a home right now.

    Even if you make buko bucks its a bad call. A $140,000 down payment could be a hell of a good investment if you started a business or gave it to me to start a business. You would be looking like Warren Buffet in a few years.

    OR you could put $140,000 into a home earning you $0 and actually costing you several grand a year in maintenance, insurance, etc. Oh yeah and i bet you don’t have earthquake insurance (which is even more extra), so when the next quake hits and your poorly built garage partially collapses you get to foot the bill. That is such a great investment people. I mean really really smart investing.

    I don’t know anywhere in a somewhat desirable LA location where the mortgage payment is cheaper than renting. Not smart to buy ATM.

    • Prince of Heck

      But but but….rental parody.

    • Lord Blankfein

      Manbearpig,

      We heard the same arguments back in 2015. “Only fools would buy at the top…” Those fools have seen their properties go up by 20% plus. Nobody knows where the top is, we could have already passed it or this market could run for another 3 years. Buy only when it makes sense for you!

  • I wonder if todays interest rate announcement will cool the market or trigger panic buying?

    TA4K

    • The raise in interest today is short term rate. I can argue that it’s going to alleviate the fear of inflation in the scared bond market. That can keep long term mortgages low instead of increasing.

      However, the RE prices are headed down with or without interest increases. That is because of reverse QE also known as QT (quantitative tightening) starting this year at 10 BIL. per month. That is going to mop the liquidity from the markets.

      • Just read that it would be around 10 Billion per month over 30 years. It would be a very slow unwinding. I guess as they unwind the treasuries (bonds) interest rates may perk up slowly over that time or potentially faster . Who knows? DT administration and Republicans want it to go faster but I think that if you unwind then that would mean interest rates may have to go up faster as well?

        However, what is funny who are they selling these treasuries to? There is mention of another entity called “Other”. Is it just an accounting entry of some fictitious buyer in the FED agency?

      • Rates are lowest they have been in 8 mos today! No joke. I follow rates closely, and today was an excellent day to lock.

        Lowest in awhile

      • Homerun, the fact remains that now they are talking about QT (tightening) regardless of the economic fundamentals. In a very stressed system like we have today, you don’t have to wait for 30 years to see the effects. Something breaks really fast (sometimes in 3 months) and then you see the domino effect. In case of an “event” sometimes you see TRILLIONS disappearing within months in a vicious downward spiral. By the time the FED see their “accomplishment”, the damage to the system is already done.

        It happened so many times in the past when the FED tries to accomplish a “soft landing” in a bubble created by them. I never saw the air released from a bubble in a slow controlled fashion. It always pops. That is a sad fact for millions of unprepared people.

      • @Flyover
        You mean something like this?
        https://www.mta.org/kb/three-steps-and-a-stumble/

        I guess we start stumbling now?

        This whole plan is about trying to get back to the Glass Steagall Act which will not likely be in it’s original form after the mess is complete IMO.

  • Bryan (Realtor)

    I get what you all are saying, its great discussion for theoretical purposes, but its the same conversation since 2012 with different names, market tops, end of bubbles, not sustainable, jobs going over sees, rents too high, no one has money, Tank hard soon.

    Its a shame…not saying its different this time or that anyone should be buying, because that is someone’s decision to make on their own, but lets deal in reality. Prices can go up, but they might not. This may be the end of the bubble, but it might not. You cant 100% time markets, but you might guess correctly and think you are a genius.

    Some people come here for real help and some people scare and influence people to do things counter to their interests because they push an agenda, thinking if they just use logic enough and say its not fair that will all of the sudden change things. If you are here for advice, no one knows if houses are a good or bad price right now, and I will actually further that point by saying now is not the best time to buy a house, that time has either already past or will arrive at some future unknown date of which you have no idea when that will be, the values are constantly changing and the only way to tell if a cycle or trend has reversed is after it has happened.

    If you decide to buy, ensure you like your house and location be prepared to live there for at minimum 7 years, and most of all make sure you can afford to live there. If you cannot do those things rent, there is nothing wrong with renting, but I do not think renting forever is a wise financial proposition,and historical data backs up my assertion, not hyperbole and not dramatics.

    Overtime the cost of everything goes up, capitalism is based on inflationary economics and that will not be changing it is fundamental to growth and expansion in the system. Some of you people would argue about gravity and not to get to comfortable because the poles will reverse and when they do nothing will ever be the same, its already started to happen even though I have gained size my scale said I was light gravity is a sham!!!!!!!!!!!

    Like I said, same exact conversation 5 years later; however, the names change because even the biggest railers against the system eventually realize that their hope and logic do not change what is actually happening. Markets are not logical, so when you apply logic to them, it makes no difference in the market.

    Plus lets just say houses take a 50% hair cut again, will you buy then? Probably not, because you want an 80% discount…and lets just say that happens 80% off will you buy then? Nope, because cash investors will make a more attractive offer because property is in demand and you will always thing you can get it cheaper and its not worth the price. In all truth if some pays an amount for a good then that is the market. So if transactions are happening then the prices are accurate, because that is how markets function, in real time and markets don’t function with the past or future in mind they function in a specific moment in time.

    If you cannot afford a home do not buy one, but if you can and you think you will 100% time it at some point in the future and get an amazing deal, don’t count your chickens before the hatch from those eggshells, sometimes they never actually become chickens.

    Good luck everyone.

    • Bryan, I agree with owning. No, I don’t want 80% off. I think 40% off is reasonable right now and even 30% off in some circumstances. Secondly, you’re right, 100% of the time you will come out ahead. But on what timeline? If there was a pill that extended my life by 50 years, these prices would make sense. Maybe the RE market is pricing in a magic new pharmaceutical? I don’t want my RE investment to pay off to the beneficiaries in my will.

      If you buy now, you’re buying an insanely long timeline for breakeven when the market can and will correct. The “Rational Markets Theory” was debunked in 2000, and in 2008, it will also be debunked in a couple years (or sooner).

      • Bryan (Realtor)

        @ JR — Thats kind of my point though, when its 40% and headed down most will not buy because they assume it will head down further and will miss their chance, then will not have access on the way up from rock bottom prices because they will be outbid by cash. However as mentioned in my post if you cant stay for the long haul say 10 years + then renting may be a better option and there is nothing wrong with that.

        Who said anything about a rational market? There is no such thing…markets are not rational, nor predictable, they are specific to time and place and change without notice and usually not for reasons people believe or see coming.

    • I’ve decided to buy the cheapest condo available. If prices continue to go up. Fine! If the prices drop 30%? Even better. That’s when I’ll get the house.

      • Bryan (Realtor)

        @ Polish Paul — that seems logical, you are hedging your bets, which seems wise. And if that big crash comes, hopefully you can hold the condo purchase and rent it out, then in several years you will have an asset in your possession generating income that you spent very few actual dollars on. Of course if the crash does come you will think you should have waited, but since it might happen and it might not you are not going all in, you making a calculated risk with long term certainty. That seems pretty wise to me. Good luck in your search…

    • “Some people come here for real help and some people scare and influence people to do things counter to their interests because they push an agenda,…”

      Lol. Written by a Realtor.

      • Bryan (Realtor)

        @ Jed — I am not speaking for anyone but myself, but exactly what agenda did I push? I made a pretty clear argument for not buying as well. My point is not to try to persuade people to buy. Why would I? Its not like I am going to find a client here. My point was that some people are on her looking for a home to live in, others looking for homes to invest in, and some in the middle and whats good advice for one may not be good advice for another, but if people are unclear on each other’s particular circumstances and views those lines get blurred and understanding misconstrued, and that is unfortunate because they may be doing something against their own interests because of other people “factual” opinion of a “XX% market crash”, that nobody knows how much higher the market will go or drop once that occurs. There was no scare or prediction in my post. Just simple truth that nobody knows what will happen, and that people need to make their decisions with that in mind, that’s all. You make it sound like Realtors are the reason the market has gone up. Buyers are the one’s who determine prices, not sellers, and not Realtors.

    • “capitalism is based on inflationary economics”

      Funny, I was just reading somewhere that Capitalism is deflationary. The era of unbridled Capitalism in the 19th century saw falling prices for almost all manufactured goods and farm crops as improved production methods caused huge increases in supply. The computer industry illustrates this beautifully. I can buy a smart phone today that for under 100 bucks does far more than a $200 smart calculator could do in the ’70s.

      What is inflationary is government and entitlements. The areas where prices are rising the fastest are where government controls the section: healthcare and higher education. Government also controls the home mortgage business. ‘Nuff said.

      • Laura Louzader

        Good post. The reason people associate capitalism with all our worst economic ills, of which inflation is the most damaging, is that we have never had a true free market in over 100 years, and barely even then. What is referred to is a “free” market is a market rigged by government policies designed to convey all wealth to the powerful and connected and skew the economic choices of hundreds of millions of individuals and entities in favor of those that benefit connected cronies. Tax credits for the purchase of electric vehicles is one example. Another example is the one that did the most to totally reconfigure our built landscape and the way we inhabit land in this country, which was the redlining of urban neighborhoods in the early 50s while offering special incentives to buy in new bedroom suburbs, such as no-down VA and low-down FHA loans, that were not available to urban home buyers at the time. These are just two example of how government policy interferes with “free market” decisions- interest rate repression that drives investment capital into speculation and high risk assets in a desperate hunt for yield, of course, is the obvious example.

      • Joe R, it is true that capitalism is deflationary. It is socialism that is inflationary; in other words, like you said, the government interference in the markets.

        We ceased to have true capitalism in this country in 1913 with the creation of the FED. Since then, we have a “central planned” economy with a heavy formation of an oligarchy around the FED. Since 1971 when money were replaced by currency all wealth was stripped from the middle class and transferred to the oligarchy which exists around the FED. With massive increase in government and entitlements, what we have today is socialism. What Bernie is proposing is communism like in N. Korea, not China. China, like Russia and US, has an oligarchy formed around a big strong central government with “central planned” economy by the central bank. They also have currency not money.

        I know all the theory taught in school. Above I was talking strictly from the practical point of view of someone who actually lived under communism before. You can NEVER have communism and freedom at the same time, anywhere regardless the culture or time in history. The bigger and stronger the government, the less freedom you have. The reverse is also true. Freedom brings hope and opportunities. Lack of freedom is slavery.

      • Bryan (Realtor)

        @ Joe R — Inflation as in the amount of money in supply as a result of debt creation. Debt allows for business expansion. I am not making this up, if debt were not allowed most of the stuff we have in our world would not have occurred because people took out money in order to try an idea, which led to advancement. I agree with you overtime consumer goods deflate in value but that is because their value diminishes by a better product which replaces it.

      • Nice try Bryan. Who’s creating the money to loan out for houses? Not me. Could it be…. the Federal Government?

    • Millennial_Not buying your overpriced crapshack

      Nice try Bryan (Realtor). I saved a ton of money the last few years. I am in the position to buy now but would rather shoot myself. Buying now would be the worst mistake. I don’t care what you or a hundred boomers/realtors/lenders say.

      • Bryan (Realtor)

        @ Millenial — Glad to hear you have made your own decision on this. Also happy for you that you have done well and positioned yourself properly. You will do well regardless of what the market does but I hope you don’t shoot yourself that would be counter-productive. People have said your exact quote, “Buying now would be the worst mistake…” since 2012 on this site, that is how long I have been around here. Clearly that was not the case back then. Could that be correct today? Yes it could, in fact the chances are better today that you are right, but its possible it would not be the case. Right now is not the best time to buy, but can you be certain that there will a better time with all the time lapse and such it may end up being a no win proposition.

      • Millennial_Not buying your overpriced crapshack

        Bryan, i dont ever need to buy. Buying an overpriced crapshack makes never sense under no circumstance. I can rent forever and inherit the houses my parents bough for a bargain. However, I will buy if we get a crash because then you have rental parity or find yourself even way below rental parity. A house is just a box. You can rent money from the bank to purchase it and call it your own even though it isnt or you rent it. Its just a numbers game….no emotions necessary.

      • Bryan (Realtor)

        @ Millennial — I agree 100% with what you said, although I will point out not everyone has parents who own to inherit from as you do. Like I said, everyone’s situation is different. In housing there is no one size fits all solution.

      • NoTankinSight

        Millenial…..

        until you find out your parents reverse mortgaged the house LoL

        and your rent is 3 times 2012 rental parity

      • Millennial_not buying until after the crash

        Tankin,
        I have never met anybody who has taken a reversed mortgage. The word itself sounds wrong. Smart people (my parents included) don’t use their house as an ATM. I think that’s more an option for the stupid ones. I will inherit two paid off houses and the prop 13 taxes on it 🙂 no reason to buy an overpriced crapshack unless we get a nice economic meltdown and housing collapse. In that case buying makes sense.

      • Well Millennial, now your attitude and user name all make sense. Your plan is so cunning, I’d like to sign up for your class!

      • Millennial_not buying until after the crash

        “Well Millennial, now your attitude and user name all make sense. Your plan is so cunning, I’d like to sign up for your class!”

        I am glad you like it. There are no classes. I give out free advice and dont charge…on top of it, it bothers some boomers, realtards and lenders….thats my pay off.

    • The smartest way to buy is when your mortgage payment is slightly over the asking rents for a similar property. So if a place rents out for $3000 per month, you may consider buying if the mortgage is $3500 including a decent down payment.

      If, like many parts of LA, your mortgage payment would be $5000, you are not making a good decision *financially*. Now, you may do it anyway because the advantages of ownership are worth the premium to you.

      Also, do not insult others as “promoters of special interests” when we know realtors will always encourage people to buy a home at some point.

      • Millennial_first time buyer when it crashes

        Buying a place for Piti of 3,5k that you can rent out for 3k is a great investment? Can I sign up at your investment classes? You sound incredible smart and I am sure if I follow your advice I will be rich soon. Sign me up before all seats are filled!

      • Make it $2.k PITI and I’m totally onboard 😉

    • Last time, prices did not fall 50%. On average, it was less than 30% with desirable areas falling about 20%. A 20% drop in the good areas is about what you see in a decent recession. However, the averages ( county wide ) fell by more than 30% because the mix of homes changed. During the last drop, many of the foreclosures were bottom of the barrel junk which exaggerated the county wide numbers.

      Going forward, prices will drop again in the next recession. However, when will that happen? Who knows. If the recession does not hit until 2020 or after, then you are better off buying now because the gains will be larger than the eventual drop. But, if the recession hits in 18 or 19, then you are better off renting.

      My strategy has always been to get a quality property which holds up better in recessions. You can determine this by looking at price and rent patterns in different areas. For example, I noticed that low end beach city properties in quiet locations with back yards always fall far less than most other properties in a recessions. So, those are always at the top of my list. However, higher end inland properties get hit very hard, so I never buy one of those. It is all about understanding your risks.

      • This and that

        JT, your first sentence is already wrong. In many areas prices dropped by 50-70% last time. It’s just facts. I know people on the internet like to make up things in order to turn millennials into buying. It’s a losing strategy. If you have to make up shit to make buying an overpriced crapshack look good you are affirming those who wait. The next crash will probably happen this year or next year. Prices are already dropping in certain areas. Rents have been stagnate and we are overdue for a recession. Buying now it the worst time in history.

      • One more comment …. because I saw that beach close fixers with back yards on quiet streets always fell less than most homes in recessions and were easy to rent, I had no problem doing close to zero down loans since I felt I could hang on during recessions. However, on higher risk properties, like inland luxury homes, I would never trust that home with a low down mortgage. They are hard to rent and the prices drop very hard in a recession. It is not about timing tops and bottoms, although a bottom gives you bragging rights. It is about picking smart properties that can withstand recessions. That is how you make your money in real estate.

      • JT, you are wrong. Prices in Orange Co. and Los Angeles Co. dropped about 35% and that drop occurred everywhere. There were NO 20% drop areas. Prices dropped about 40% to 60% in less desirable areas like Riverside Co. and San Bernardino Co.

        For example, at the 2006/07 real estate top a home on my street sold for $860.000. At the bottom, a similar home, a few houses away, sold for $570,000. That amounts to a drop of 34% in a desirable area of Orange Co. Similarly, a friend of mine sold an investment property in Tujunga (in LA Co.) for $495.000 in 2007. At the bottom, that same home was sold for $300,000. That is a drop of 39%–not a drop of 20% or 30%.

      • There were homes that fell by more than 40%. However, there were homes that only fell about 20%. Low end homes in east manhattan beach ( big lot, quiet street ) only fell around 20 to 25%. Same in Corona Del Mar south of the highway. There were no 50% drops here. Now in the inland empire, there were some that fell close to 50%. On average, it was not 50%. It was less than 1/3.

      • Gary, This and That

        I remember what you are referring to. Back in the recession, inside deals between banks and certain buyers were taking place where the bank would have a property they took back, then it would get flipped for up to 50% off. I saw some of these. As soon as they got listed, I had an offer in ( I am talking 30 minutes later ) at a price above ask, but I would find out it already went to someone else at a less price .; their buddy. Turns out people were charged and went to jail for this … defrauding the bank. I saw at least 4 homes that this occurred. Apparently, there were thousands of homes that were affected.

    • Joe crap shack

      Your first mistake was to out yourself as a realtard. Prostitutes are more honest than realtards. you pay and get a service for it. With realtards you get ripped off and lied to all day long. I refuse to buy with a realtard. I rather print out the forms my self or get a lawyer. If you are bored at home cause nobody is buying get a real job. Posting your crap on this blog and thinking this will change the sales numbers somehow is pathetic. Most realtards on this blog don’t out themselves. they pretend they are normal people and come up with some bogus story why buying in this bubble makes sense. Wake me up when the market crashed by 70% like last time…..that’s the time when I look at what’s for sale.

      • Bryan (Realtor)

        @ Joe — Thanks for tips, I have a real jobs, several in fact, but I am not really here to defend myself or insult anyone, its not really very constructive. Also if you read through what I have said I did not say anyone should or should not be buying a house in this market. Putting myself out as a Realtor was a disclosure of honesty, pretty much the thing you have already stated I am not. Because even thought of buying in this market makes someone a cheerleader, and rather than appear to be hiding something since I have an alternate thought from the prevailing one here, I would just save you all the trouble so there could be an actual discourse of ideas on the issue not the people.

        What exactly did you take issue with that I said? And how does a discussion on an anonymous website in which I will never actually make a client help me or my sales numbers? That does not even make sense… Oh wait because, you perceive me as different my opinion and thoughts have no place here?

        Interesting, I have heard of places and times like that throughout history.

        Have you actually had a negative experience with a Realtor? If so that is unfortunate, and I am sorry that you assume everyone that looks or is in the same line of work like them is exactly the same…and to share with you, I am not concerned with sales numbers. If you are honest and a resource for people when they need help, those numbers will take care of themselves. There is no need to lie about anything in real estate, from Realtors all the way to commentators on a blog.

  • Hopefully if the FED keeps raising rates the prices will drop a lot.

    • If Fed keeps raising rates, that means they expect inflation to run hot, which is good for real estate. What is bad for real estate is a recession. Every drop in real estate was recession related.

      • Prince of Heck

        Highly doubtful considering that RE inflation has depended largely on cheap and easy credit. But darn, your ability to spin everything positively needs to be in taught in some sort of PR relations course.

  • Jim taylor tank hard in his prediction!!!

  • Bryan is wrpmg in saying that the people of this board would not buy if prices dropped 50%:

    “Plus lets just say houses take a 50% hair cut again, will you buy then? Probably not, because you want an 80% discount…and lets just say that happens 80% off will you buy then? Nope, because cash investors will make a more attractive offer because property is in demand and you will always thing you can get it cheaper and its not worth the price. In all truth if some pays an amount for a good then that is the market. So if transactions are happening then the prices are accurate, because that is how markets function, in real time and markets don’t function with the past or future in mind they function in a specific moment in time.”

    Everyone of this board would buy a million dollar home if it dropped 50%. And it would not be hard to tell when the actual bottom is reached either. The investor class would start buying tens of thousands of homes at the bottom because the bankers would tell them when they are about to stop foreclosing on homes and what the FED plans to do about interest rates. The endless cycles of bubbles and crashes are all a game, a setup to transfer wealth from the middle class to the wealthy. The cycle will continue until all of us are renters and the oligarchy owns everything.

    • Bryan (Realtor)

      @ Gary — There are many people on this board that did not buy the last time there was a 50%. how can you say “this time is different?” The same thing that shut people out the last time it bottomed will repeat in a crash. Those with cash will crowd out the those that need lending, lenders with clamp down and be less likely to lend, and regular consumers will again miss the bottom because they will not react until the big players have already closed the doors on them. Then 5 years later people will be here saying they will buy at the next bottom no doubt about.

      Look the point is it just happened and many missed it and it will happen again. The point is not to buy now, or buy ever, the point is that you cant expect to buy at the very best time. There is no best time to buy, there are only better times to buy and in 95% of cases that time already passed. So the idea of waiting for the best time to buy may have already happened and may never happen again, so then what? Because you missed the best time to buy you wont do it?

      Buy or don’t buy, that choice is completely up to each individual, but to assume you will know and act at the right time when it comes up in the future is most likely inaccurate.

      I can appreciate not wanting to buy at the height, but people have been assuming a height and a bubble since 2012. Will 2012 prices be seen again and if they are not will that mean that some force did not allow things to be priced correctly? Buyers set the prices, no one else.

      I appreciate the discussion.

      • Lord Blankfein

        Bryan,

        Very well said. Doing simple rental parity calculation back in 2011/2012 resulted in one thing…BUY NOW. Many people were simply lost in the fog of war from the RE blowout or they thought they were catching a falling knife that may go down another 20%. As I have said umpteen times on this blog, if you are anywhere close to rental parity in socal, you need to buy. Long term renting strategy in socal is one of the worst financial decisions you can ever make.

      • Back in 2011, 2012, even 2013 there were was a lot of arrogant (would-be first time buyers) on this blog who kept talking about a ‘dead cat bounce’ and touting that when the 10,000 boomers per day who retire would flood the market with homes for sale.
        I dont know where they came up with that sentiment but it was without any merits.
        I bought in 2012 and when I made my announcement on this site, I had many who replied saying I was a knife-catcher.

        I think a lot of those people are still posting, complaining about the high prices but if and when a crash comes they wont be in any different position they were before. a) not knowing where the bottom will be b) getting beat to the punch to purchase a home by all cash investors who they will rent from in the future.

      • Bought a couple houses during the last crash. Since 2013 there is no more rental parity or money to make unless you are into flipping. During the next crash I will buy again a few more rentals. I have seen many ups and downs during my life time….right now is the time to laugh at those who buy and think somehow the market will keep going up. You will never run out of stupid people…..which is good. That’s how I make money.

      • “The same thing that shut people out the last time it bottomed will repeat in a crash. Those with cash will crowd out the those that need lending, lenders with clamp down and be less likely to lend, and regular consumers will again miss the bottom because they will not react until the big players have already closed the doors on them. Then 5 years later people will be here saying they will buy at the next bottom no doubt about.”

        This is absolutely true. The next generation of our family bought a townhouse about 50% of the way down during the bubble crash. They got a good financing and discount from the builder, but prices in the area went down but not to where they were ever under water. As the prices started to go up again in 2013 we helped them jump into a much bigger house on a big 1/4 acre lot with a large swing loan that gave them an edge on the competition. Their old house sold for more than it would have at the start of the process, and they made a small profit on it. They wound up with about 35-40% equity in the new house, and now based on the prices in their area, they have more than 50% equity. Three kids in the old townhouse would’ve been a crowd. What they have done made absolute economic sense.

        You are right that for long term purposes, exactly calling the top or bottom is irrelevant and unproductive. However, that does not mean that people should just jump in willy nilly. Common sense about the current market in your current location should be exercised, and going in with big downpayment never hurt. It allows the owner to get the best financing options, where you are not over-stretched to meet your monthly obligation.

    • Seen it All Before, Bob

      If housing prices drop 30-50% like last time, there are many more problems happening than a good opportunities in RE. Fear reigned at so many levels. People weren’t buying anything. Last time, many people lost their jobs so they could qualify for a loan. Many people suffered a 30% decline in the stock market so no longer had a down payment. Some lost their private industry pensions when the companies went bankrupt. Some lost most of their retirement savings in their stock market 401K’s. If the housing market declines 50%, you had better have the down payment under your mattress only if the dollar holds firm like last time. Otherwise we may end up like Venezuela with a $1K cup of coffee.. Where is your money? I keep asking and I am very interested. Seen it all before 8 years ago. One could go crazy thinking about worst case scenarios. Maybe I am.

      • Millennial_not buying until after the crash

        Loan? The whole reason why I am waiting for a 50% collapse is to buy in all cash. By being successful in my job and living with my parents has allowed me to save a boat load of cash. And even if you don’t have cash…..lenders will give you a loan when the crash happens…..they need the business to survive. Crash is always good for potential buyers. The prices become realistic and you go from there. A bubble is a time to kick back, relax and laugh at the sheep who gets burned.

  • DR I know I am late to the comments with this one but wow!
    https://www.redfin.com/CA/San-Francisco/81-22nd-Ave-94121/home/101391161
    Read the description LOL

    • son of a landlord

      That property (a driveway) was listed on April 1. So I assume it’s an April Fool’s joke.

      Seems someone subverted Redfin, or the MLS, to post that joke property. A pretty subversive joke, actually.

    • Seen this all before, Bob

      We don’t know how many people use this driveway but $50 per passage should cover the monthly mortgage.

      • That would be huge, but I am pretty sure all homes on that driveway already have easements. But if they don’t then you are right you could make a killing!

  • Below is the anatomy of a failed liberal state:

    http://www.zerohedge.com/news/2017-06-15/unable-pay-bills-illinois-sends-dear-contractor-letter-telling-firms-halt-road-work-

    It was long time work in progress till it hit the critical mass – taxpayers are leaving and those protected by sanctuary cities and states increase in number. It was just a matter of time till math and gravity took over. CA is another liberal state with work in progress – that means work done by politicians to bring the state to junk status. It looks like the liberal politicians never took math courses or they just steal while in power and who cares what happens in the end.

    Few years from now, the same articles you read now about IL you’ll read about CA. The “sanctuary” cities and state status will just precipitate this outcome. Chicago and Detroit were long time ago some of the richest cities in the nation. Since liberals took control they just had a downward spiral. Of course they blame it on all kinds of circumstances as if their policies do not have anything tot do with those circumstances.

    • Flyover: Your observations are so very true. California is slowly being destroyed by a leftist state government. We are going the way of every other places run by liberals.
      That is complete failure and social breakdown. Most large cities in America are really financially insolvent due to liberal politics. Worse yet , the quality of life is deteriorating for their many citizens. The people who have created this chaos will blame everyone and everything but their own policies. Unfortunately, their constituents follow along in knee jerk fashion and continually vote for the same political forces thinking that the promised improvement in the quality of life will come. It never does and never will.

      • After they will suffer the consequences of their choice of leftist politicians, then they will blame Trump – the scapegoat.

    • son of a landlord

      I’m sure Illinois has plenty of spending it can cut before cutting road repair. But of course, the government will start by cutting basic services — police, fire, infrastructure, etc.

    • Please compare California to Canada or Australia, not other states of the USA. California is very different.

      • CA is no different. Same spending exceeding the revenue. Simple math. Long term you make all taxpayers to leave and you get only beggars. While the CA population increased by 10 million, the number of taxpayers increased by 150,000. You don’t have to be a genius to see the financial prospects. The spending policies have to do to with leftist ideology. The bankruptcy has to do with simple math.

      • OK. I’ll compare CA with Canada and Aus. CA does not have its own currency – it can not print money like the other two. That means that it is only so much they can tax till they scare all the taxpayers. At that point they will have the same fate like IL. If your state bonds get junk status, as a state you are toast – bankrupt.

        If Aus and Canada borrowed in US dollars they can also be toast. If they borrowed in their own currency, they will print their way out till they buy a bread with a million dollars.

    • Don’t turn this forum into the partisan drivel over on ZH. It’s not as if more conservative Kansas is thriving, either. They just had to reverse the tax cuts that were driving them into the ground.

      At the end of the day, the Midwest is simply struggling as a whole, as I saw in the 90s when I made sure to get out of there. Add together WA, OR and CA, and you’ve got the 5th largest economy in the world. That may change some day, and I certainly think we’re in a tech and housing bubble, but that’s the problem with the Midwest. The economy just isn’t what it once was, and the residents are unfortunately suffering because of it.

      • The main reason they have a high GDP is due to FANGS. Very soon they will be toast because you can not push the stocks to stratosphere for ever. You’ve got a small glimpse of the FANGS fate last week when they dropped fast. None of the coast states have their own currency to print. If they continue to spend more than revenue, they go bankrupt – simple like that. I’m not too worried about WA for few reasons: The number of liberals and conservatives is almost equal, a little bit in favor of liberals. That prevents too many exceses – politicians afraid to lose power. WA is very rich – income per capita and more uniformly distributed.

        The reason I posted the article does not have anything to do with the source but with the impact of the deficits run for a long period of time on RE. The facts are:
        1. IL is a very liberal state and it was so for a very long time
        2. IL run a budget deficit for a very long time
        3. IL punished the taxpayers and rewarded the moochers of the system for a very long time.

        All these facts made their bonds rated as junk and at that point they are toast – they can not continue to borrow anymore.

        I know; all these facts are disturbing but it was not Zerohedge which brought them to this level. Don’t shoot the messenger of bad news. It is better to learn from it.

      • Flyover, ZH may give info, but it’s slanted, which is why I gave an example of Kansas also having issues. Heck, since I was born in the 70s, Illlinois has only had 2 Democratic governors (out of 6,) and, like Laura said, Chicago is still a rich city.

      • GH, did you EVER found information which is not “slated”?
        I didn’t. Actually, in the last 2 days I found the info about IL in many sources and all said the same thing.

        What was your point? That if CNN would write the article, they would praise the mayor of Chicago for the wise way he administered the public funds??!!!…Well, if that is your point, you may be right; I am not surprised by anything coming from CNN anymore.

    • Laura Louzader

      Chicago still IS one of the richest cities in the country, and cannot be compared with Detroit, St Louis, Milwaukee, or Cleveland. The city is mostly intact, has dozens of wonderful, intact neighborhoods and is seeing the rapid rehabilitation of formerly blighted neighborhoods, and is replete with a high level of culture (including the largest number of live theaters in the nation), top tier educational institutions, and more architectural eye candy than most other cities put together. It is also, contrary to what you hear on Faux News, safe in most places- 95% of the mayhem in this town takes place not in the “inner city”, which is now clean, trendy, and very expensive, but in a few far south and west wards.

      But I wonder how far we can go down the slope we are on until we descend into a real death spiral. I’m not optimistic about an apathetic citizenry that allows the same corrupt, spendthrift criminals to be returned to office for 4, 5, or 6 terms, and wants spending cut for everything but the things that THEY want. It is maddening to watch as each of 50 wards receives an annual “menu” allowance of $1.3M to fritter away on whatever unnecessary projects the local alderman pleases, with no regard for city-wide needs, such as funding our pensions and necessary services.

  • In January of this year our 28 year old daughter and her husband located a home for sale. They had been vigorously searching the market for some time and had made numerous previous offers. They ended up purchasing this home in Elysian Park (aka: Frog Town). Its a completely remodeled 1000sq ft home in a cute area. The home has a great yard and some amenities, including central A/C. Its a 2 bedroom 1 bath with a large great room and a very nice kitchen. It also has an inside laundry room and a cute gazebo type structure in the rear yard. Also a small finished basement. The home was built in 1924. Everything is newly remodeled, including the roof. Unlike so many homes in the area it has its own parking. They purchased the home for $560,000. They had enough for a partial down payment and we helped with additional fees for the down. We also placed a lien on the property for our portion of the down payment. Everyone is OK with the arrangement and they can now easily afford the monthly payment. They are very happy in their new home and its surroundings. Both have very short drives to work. In fact, he can now ride his bicycle! They have been busy fixing and decorating the home to their tastes. In January, when rates were even lower than today, they got a really good 30 year fixed loan. Say what you want about a crap shack but, they are very happy and may someday sell and buy an even nicer home….

    Prior to this they lived in an apartment for 4 years and saved diligently. Their dream was to eventually get their own home. It was NOT easy but it WAS doable.

    You can read this blog and listen to all the excuses that people here have. As one poster here said, these arguments are the same ones used for years by those looking for excuses not to buy their own home. So be it. Those of you out there who have a dream need to formulate a plan. Set yourself(s) a long term goal. Stick by your plan come hell or high water. Going on vacations, buying new cars and myriad other things to waste your money have to be rejected in favor of moderation. Nothing worth having is easy and owning your own home in this environment is incredibly difficult….but it can be done!

    • Frog Town? There’s a few over priced crap boxes for sale there like this one near the Glendale Freeway with an asking price of $799K:

      https://www.redfin.com/CA/Los-Angeles/3044-Perlita-Ave-90039/home/7065776

    • Prince of Heck

      “You can read this blog and listen to all the excuses that people here have. As one poster here said, these arguments are the same ones used for years by those looking for excuses not to buy their own home. So be it. Those of you out there who have a dream need to formulate a plan. Set yourself(s) a long term goal. Stick by your plan come hell or high water. Going on vacations, buying new cars and myriad other things to waste your money have to be rejected in favor of moderation.”

      Do you realize that very few families have the resources to swing the type of financial arrangement that you and your daughter did? I’m willing to be that there was a time when your generation did not have to stretch financially like her generation has had to. If you had paid attention to this blog, many families have had to resort to far more desperate measures just to get into the door. The long-term consequences of over-leveraging for a historically over-priced asset are inherently unsustainable for the middle class. This is how bubbles form and burst.

      I suspect that your claim that this blog and its participants are anti-buying is emotional rather than logical. Most of us favor buying responsibly — without having to resort to low down payments, over-stretching monthly to afford housing, or treating your primary residence purely as a financial investment. In other words, those who do not learn from history are doomed to repeat it.

    • Lord Blankfein

      Curt,

      Excellent post. Buying a home in decent parts of socal today requires a plan. This involves saving, sacrifices and foregoing all the nonsense the majority of the people are spending their money on. A few years back, I was almost laughed off the blog for mentioning that saving a down payment in socal can sometimes take 10+ plus years and followed by a 30 year mortgage commitment. This separates the contenders from the pretenders!

    • Curt, that reads like a very sad story. I like how you use the real estate jargon to describe this crapshack…..”cute” which means it’s very small. 2 bed 1 bath!! For half a million! Insane. You do know Elysian park is a very low income community….this shack has probably a real value of 90-120k. During the next recession your kids will end up walking away from it when comps sell for 50-70% less. I can believe you are posting this sob story….are you looking for people to feel sorry or are your really expecting people to applaud you for this? Your comment about excuses not to buy made me laugh out loud….who in their right mind buys right now!? Even realtors say this is not a good time to buy ROFL! The fact that you are on this blog tells me though there is something in you that tells you this was the wrong move. Just crazy what people sign up for…..those are the people that walk away from the mortgage and blame everyone else except themselves…..history keeps repeating itself when it comes to housing bubbles and peoples stupidity.

    • I grew up in NE LA (Highland Park) and I never heard of “Frogtown” until recently. I guess it must’ve been considered as a part of Glassell Park. Similarly, I lived in the Hermon district of Highland Park, and now it’s being called “Hermon” and not “Highland Park”. I always used to think that the hills were “good” and the flatlands “bad” in NE LA. Probably because we lived on a hill and were better off.

    • Seen this all before, Bob

      Curt, congratulations to your daughter and her husband. PITI with a 20% down is less than $3000/month for a 560K house. That seems like it is approaching rental parity. On top of that, the benefit of no long stressful commutes.

      Just hang on to it for 10 years and you are almost guaranteed to make money when you sell.

    • Frogtown is what the gang there used to be called. And it originally got its name from the frogs that would crawl up from the (now concrete) riverbed. I grew up thinking of it as part of Elysian Valley – but maybe it is part of Glassel Park. It used to be called GLAssel Park. Now it’s glaSSEL Park. Anywho. That area became hot once the River Renewal Project received a billion in funding. I wonder how that will turn out. The channel there is landlocked between the 5 freeway and that little neighborhood. No matter how green they make it, it will still be barely be the same width as the freeway that’s a stone’s throw from it. Should be interesting since the “river” is often dry for months at a time.

  • The numbers don’t look promising. State population 40,000,000 number of housing units 14,000,000 Percemtage owner occupied 54%. Living at home with your parents has to come to an end if mom and dad don’t own their house or will have to remortgage it to pay for retirement, medical or nursing home care. Then what for junior? Make his way in the world for the first time at age 50 or 60?

    • You’ll never convince any of those social cause nuts, but part of this imbalance of housing supply and demand which is driving prices through the roof, is caused by immigration, legal or otherwise. You’ve got lots of unskilled workers driving down wages making it harder for everyone else to compete and earn enough to live. Then you have the rich Chinese who made a fortune off of us buying all that cheap stuff, who drive prices up on the upper end of the market because they have money to burn!

    • Millennial_Not buying your overpriced crapshack

      Most boomers own one or more houses outright. Why? Because when they bought housing was dirt cheap. Millennials can stay rent free until the inheritance.

      • “Millennials can stay rent free until the inheritance”

        No chance of that resulting in a lazy, entitled adult brat. Once my kids graduate college, they will pay rent if they expect to stay. Nothing exorbitant, but enough to make them think about the benefits of being independent.

      • There is no evidence that suggests living on your own and wasting money on rent/mortgage makes you independent. You can be highly intelligent and successful in your career and live with your parents at the same time. It’s a smart move. That saved money can be invested to retire early or spent on vacations, electronics and other fun stuff. Sure, if the market takes a haircut by 50-70% I would probably buy a home or two.

      • The parents’ feelings on the matter are irrelevant, then. Leech off them and play Xbox until they die. Got it. Good luck with dating.

      • “The parents’ feelings on the matter are irrelevant, then. Leech off them and play Xbox until they die. Got it. Good luck with dating.”

        Most parents dont mind if the kids got a nicely looking bank account. Also, living together with your parents is a win-win. You help each other.
        Yes, i play lots of Xbox, go to the beach, happy hours, partying, and backpacking vacations.
        My girlfriend usually live at home at well….i would not wanna date a chick who is a broke crapshack homeowner….those girls never have any money for fun activities.
        Its works out quite well….living during a housing bubble.

      • In your 20’s it can work. If you’re still single in your 30’s, not so much. As a 30+ year old, “I live with my parents” is one of the worst things you can possibly say on a first date, regardless of the state of the economy. “I made some mistakes in my youth and did time” would be more well-received.

        I have yet to meet a woman who finds dependency attractive. As they get older, women want their own nest – not competition with a matriarch and a 40-year-old boy who hasn’t been weaned. Having a lot of money almost makes it worse – you can afford to be away from your parents but choose not to. Not to mention the whole privacy issue. You can be successful AND independent.

        I once dated a girl in her late 20’s who eventually came right out and told me she planned to live with her parents forever. I ran like a grizzly was chasing me.

      • Nothing you or any other boomer/realtard or lenders say makes me want to move out. I am living my dream and probably stay home for another decade or so. 40 is the new thirty.
        Staying at home and saving all this money while making good money feels like you are cheating the system. I love cheating the system. Its my way of not supporting this economy. So far, i had no trouble dating younger girls….i would not wanna date a chick who thinks buying an overpriced crap shack is a good idea. I would have fun with her for a while but nothing serious. Its kind of an IQ test….if a chick thinks buying overpriced crapshacks are good – you know she is not a keeper. I believe boomers struggle with millennials adapting to housing bubbles. Some boomers are stuck in the old mindset when housing was cheap. They are not in the market to rent or buy now, they profit from bubbles and want millennials to pick up the slack. Thats another reason why i like to tell boomers i am staying at mom’s hotel until we get an economic crash or maybe longer 🙂

    • Yes, indeed this is the case. An entire generation is living with their parents now. Many have good jobs as well.

  • Sadly, places like the west coast are really no more expensive than a London, Paris, Sydney, and perhaps still even cheaper! Don’t bet on a significant correction. Do bet on a continued growing divide between the ‘have’s’ and the have not’s’. And, don’t blame the Boomers for this mess. I see the same rationalization of status and wealth, ‘I earned it so I can spend it how I please’, among those younger generations who have ‘made it’! The real problem of our time is there are too many people, too many in other parts of the world willing to work for 1/2 the wage of an American, and an ongoing onslaught of automation which will continue to reduce human labor demand. My Son-in-Law has pegged this correctly. He works in a specific niche in IT that requires very high skills and pays extremely well. He is already career/skill planning for the inevitable, that his job will be eliminated at some point due to self-aware systems, or an H1B worker! So, the millennial that lives with Mom and Dad hasn’t a chance especially if they haven’t got the talent/skill to make it without their parents help!!!!

    • Jns, I agree with mostly everything except the last sentence. I have been very successful in my career and make good money. I am in early thirties and live with my parents enjoying rent free living. This type of arrangement allowed me to travel and feel debt free. I don’t get why people of age think that adults living at home means they are not independent? Why waste your money for a place that is not as nice as your parents house. when I travel and explore the world I stay at lots of different places by myself or with a friend. So I have already proven I can be independent. If I would pay a high rent I could not afford to live my dreams. Buying a home was never a desire…..I don’t get why people pay that much money to be tied to a certain spot. 500 a million for these ugly places? No thanks. I will inherit the home of my parents, so I am all set when I retire.

      • So you’re living in your parent’s home rent free and you’re “independent”? I don’t think that word means what you think it means…

      • It means: “not depending on another for livelihood or subsistence, self-sufficient, self-supporting, self-reliant, standing on one’s own two feet, grown-up”

        Nowhere does it say you cant be independent when you live with your parents. Living rent free is smart. I think what you struggle with is this: If you have enough money to live by yourself you need to do that otherwise you are not independent. I on the other hand say: i can easily live by myself but don’t want to, because i save sooo much more money by living with my parents. Its a choice. So in reality, i think you don’t know what independent means.

    • Investors have purchased most of the inventory for rentals. Rents are rising and are paying off these high mortgages. Investors will never have a reason to liquidate as rents rise and investors have increasing monthly income. Homeowners that own now won’t sell because they don’t have anywhere to go and they are paying their mortgage. If homeowners lose their jobs in an economic downturn and can’t pay mortgage they will not foreclose because (unlike 2007) wealthy investors will immediately snap up their homes at current high prices (unlike 2007) and charge (see above) high rents that pay the high mortgage. As such, this economic downturn (unlike 2007) will not affect RE as there will never be high inventory again to cause RE prices to crash. There will only be wealthy foreigners (home owners and investors) moving into US RE and causing prices to stay high and snap up everything available even at high prices (again, high rents keep high prices attractive to investors). Most everyone not in RE now will rent forever or eventually become semi wealthy then buy simply because they want the autonomy, privacy and ability to create their own sanctuary/ renovations etc (not as an investment). This is the new US RE market.

      The only thing that would cause RE here to flatten is if they institute a national rent control making investing in rentals slightly less desirable (shrinking their margins). If they start liquidating and moving into stocks, then the inventory would cause a dip in RE prices, otherwise it won’t happen. Blame renter nation not investors for keeping prices high. Renters keep paying these outrages rents. Unless their is a renter revolt, forget it. Investors will keep the market here it is.

      • “The only thing that would cause RE here to flatten is if they institute a national rent control making investing in rentals slightly less desirable ”

        What do you think the politicians will do when the majority will be renters????!!!!…..I think that based on past experience the answer is easy to find. It will not be “NATIONAL” rent control, but it can be at city or state level. In SoCal, the vast majority of voters are poor and renters. It is just a matter of time till a majority of them will decide to vote and there are plenty of opportunistic politicians to respond to their frustrations. If you don’t believe me, just look at the popularity of Bernie when he started to promise freebies. They were willing to even drop Hilary, another liberal politician.

      • Prince of Heck

        “Investors have purchased most of the inventory for rentals. Rents are rising and are paying off these high mortgages. Investors will never have a reason to liquidate as rents rise and investors have increasing monthly income.”

        I have a feeling that you were spitting into the wind when you made these statements.

        “Bay Area rents fall, with San Francisco down 9% since last year”
        http://www.bizjournals.com/sanfrancisco/news/2017/03/23/bay-area-rents-fall-with-sf-down-9-percent.html

        “Manhattan Rents Fall for Every Apartment Size, Even Studios”
        https://www.bloomberg.com/news/articles/2017-03-09/manhattan-rents-decline-for-every-apartment-size-even-studios

        *But things are truly different in So Cal because of the lack of available land and its appeal.

        * — written with sarcastic overtones

      • LA, SD, SF are different-rents may drop, but investors breaking even or being underwater in these markets is ok for long term investors who double and triple their value in 10 and 20 years when they cash out. Being underwater 500 per mo is 60k loss in 10 years on a $1M property that it is now worth $2M.

      • Prince of Heck

        Yeah, I bet their creditors will love your reasoning when hearing that they are cash flow negative. Heck, why are banks pulling back now instead of going pedal to the metal on loans?

  • Jeannette Barker

    Curt, that is very nice about your daughter and husband. However, there are plenty of people who cannot (or will not) subsidize their children. There are also those who want to do things on their own and not take hand outs from their parents. Your words of “wisdom” come from your own experience. Lots of people are not in that position.

  • Here is how you approach real estate. When you are ready to buy, you must assume there is a chance a recession will hit and prices will fall a lot after you buy. This can happen and usually you will not see it coming. Very few do. So, you must make sure that if a recession hits right after you buy, you will need to hang on during a tough stretch of about 4 or 5 years. During this time you will be under water, and you can not let that wipe you out or it is game over. You need to run numbers assuming a recession and make sure your career and your savings will allow you to ride through the bad times. This is the professional way.

    • Good advise! For the vast majority of people, RE prices as they are, would not make your advise work. That is the whole point of this blog. Prices are too high (in bubble) territory, to make your advise practical. There are 2 choices left:

      1. Continue to rent and wait for a correction
      2. Move out of state.

    • Thanks schoolmarm SOAL! We all need an English lesson to read while we solve the problems of the Universe.

    • jt, you say that “if a recession hits right after you buy, you will need to hang on during a tough stretch of about 4 or 5 years.” That tough stretch is California is more like 10 years than 4 or 5 years. That is long time to wit to break even. It ties up your capital for a decade, and you might loss your job or get divorced. You might get a job transfer or lose your job. The risk of buying at an obvious top is just too great. At bubble tops like now, one has to wait and see how big the decline turns out to be. Do prices decide 30%, 40% or more?

      • Prince of Heck

        Loss of income during the inevitable recession is one of the biggest reasons for not committing (over-leveraging) oneself to an over-priced asset regardless of the time frame. Even successful corporations will walk away from money-losing commitments. If maintaining positive cash flow is important to large organizations, the same principle should be far more critical to smaller players.

  • We will have another crash, but not until Republicans repeal Dodd Frank and let banks lend money to anyone with a pulse again. The current buyers and owners are awash in equity. And the buyers from 2009-2014 probably have the highest credit scores of home buyers in the history of home buying. They are the cream of the crop that weathered the recession with high credit scores and good jobs. Rents are double what they were in 2006.

    When the liar loans, Arms, and 45-60 year mortgages become a thing in the next 5 years… then you will see a crash…. but probably only back to current home price levels.

    • Prince of Heck

      So many bad claims to rationalize what is essentially a continuation of the previous bubble….

      • What claim did I make that was bad? Are they still giving out liar loans to people with no verifiable income? Are rents not more in line with home prices than 2007?

        There are more differences than similarities between how this 2017 “bubble” occurred than how the 2007 bubble concurred. If you looked at the finances and credit scores of 2010-2017 buyers compared to 2000-2007 buyers the differences would be huge.

        A recession would shake off some weak hands… but an owner like me who bought in 2011 and has a PITI on a 4 bed/2 bath house of $2150 …. isn’t going anywhere unless I’m moving out of state. I couldn’t rent a 2 bedroom apartment for what my PITI currently is. And all cash investors aren’t going anywhere unless rents drop in half. Which, when has that ever happened in history?

      • Prince of Heck

        “Dodd Frank and let banks lend money to anyone with a pulse again.”

        Dodd-Frank is still active, but low down payment loans have been issued for years. In addition, lending criteria have been curtailed, from lowering FICO score requirements to counting relatives incomes for income purposes.

        “The current buyers and owners are awash in equity. And the buyers from 2009-2014 probably have the highest credit scores of home buyers in the history of home buying. They are the cream of the crop that weathered the recession with high credit scores and good jobs. Rents are double what they were in 2006.”

        Ever heard of HELOC’s and reverse mortgages? They have been coming back with a vengeance. During the current cycle, a large amount of buyers have been hedge funds (currently buying not selling) who made their acquisitions through hard loans (a.k.a. all cash). Rents are high now because these rentier hedge funds jacked prices up to cover their costs. Other buyers were retail buyers and flippers (weak hands) who are highly leveraged.

        “When the liar loans, Arms, and 45-60 year mortgages become a thing in the next 5 years… then you will see a crash…. but probably only back to current home price levels.”

        The vast majority of mortgage defaults during the last downturn (and in history) originated from prime borrowers. The bubble is in high prices, not in lending standards. Don’t believe me? Real Estate collapsed in foreign countries even though subprime did not exist during the last cycle.

      • Prince of Heck

        ““The current buyers and owners are awash in equity. And the buyers from 2009-2014 probably have the highest credit scores of home buyers in the history of home buying. They are the cream of the crop that weathered the recession with high credit scores and good jobs. Rents are double what they were in 2006.”

        Forgot. The home ownership rate is at an all time low because speculators have been pricing them out during the current cycle. So margin calls will matter more than FICO scores will.

    • Prices have to fall soon since a recession is long overdue. The only question is what will all the investors do when home prices start to fall. Will they run to the exit all together or stay put? They are the wildcard of the exit decline. My guess is that they will panic because they are overextended.

    • The Ds don’t want it repealed, the Rs are a bunch of sissies and the WH is neutered right now due to the BS Russia investigation.

      Dodd Frank won’t be replaced, repealed, or reformed

  • Throbert Girth

    @son of a landlord I had no idea what Flyover was saying until you made that clarification…thank you

  • Three price reductions on this one in Irvine!
    https://www.redfin.com/CA/Irvine/61-Gillman-St-92612/home/4697953

    Owner or agent overreaching? House requires some significant face-lifting in a few areas as well.

    • Seen this all before, Bob

      Nice house but $850K for a 2 bd? The minimum bedroom requirement is 3 bedroom.

    • The Irvine house still way overpriced at $850,000, I won’t believe they will received any offers until the asking price gets down to about $800,000. This home willl probably drop below $600,000 after the bubble pops.

      • Yup, agreed on the inflated pricing (perhaps they’re overly optimistic given the nice Irvine neighborhood). As for the bubble popping, hope it happens sooner rather than later!

    • That place would sell for 1M easy as is. But, the problem with that area is the noise from the 405 freeway is crazy. Homes need double pane windows to shut down the groan of half a million vehicles per day. That home is a poor investment.

      • 1M?!!! :-O No way, that’s crazy, who’d pay that much?! Didn’t realize the freeway proximity aspect, however, good observation.

  • I miss Alex in San Jose. Hope he’s okay.

  • “you say that “if a recession hits right after you buy, you will need to hang on during a tough stretch of about 4 or 5 years”

    Assuming housing resumes its trough to peak to trough behavior. Demographics would suggest it is different this time. Housing would have continued its collapse in 2012 had it not been for government intervention. The hold time could be much longer than you suggest.

    • It is never different. People say home prices will never go down again. Next, the central banks tighten too much. Then, the recession happens and they fall. Then, people say they are going to zero and they are never going up again. Then the central banks eases, the recession ends, and prices go to new highs. It is always the same. The trick for you is to figure out how to make a long term investment in housing. In the very long term, good location will outperform all other investments because of tax laws and government policy. However, as an individual, you need to make sure you can hang on for a few up and down cycles to cash in. But, if you can not figure out how to hang on during up and down cycles, you will lose everything, and you should just rent.

  • Global conditions have changed everything. When we crash (economy and/or RE), wealthy foreign investors with nowhere to go now will buy up everything (they are more pissed than you are that they missed an oppty of a lifetime in 2010 and they have cash). You can’t compete with them. I’ve been trying and won twice. Net result, mediocrity. And next time is going to be worse/more competitive. You can save, wait and hope, but don’t plan on tons of inventory for pennies like 2010. Many wealthy around the world learned a painful lesson by sitting on the sidelines and concentrating just on stocks over the last 7 years. You can’t fool them. They are watching and waiting like hawks.

  • I bought my first house in 2013 at age 45. After years of school, renting and the being priced out during the mania of the last housing bubble. I had been approved for a loan around 2006 with almost no questions asked or need for income verification by the bank. But was continually outbid for homes and never bought as prices went completely insane. In contrast this time around the bank loan process was incredibly strict with regards to income/liabilities/down payment etc even though my credit score was spotless and I could have paid for my house with cash. They wanted to see proof of everything. If I am representative of the average current homeowner in SoCal we are not in a bubble.

    • BUZ,

      You seem to have no clue what a bubble is.

      “In contrast this time around the bank loan process was incredibly strict with regards to income/liabilities/down payment etc even though my credit score was spotless and I could have paid for my house with cash. They wanted to see proof of everything.”

      Just because you had to show some documents has nothing to do with being in a bubble or not. That is normal.

      What is not normal, is that banks sells their loans and dont keep the risk on their books. We have historical low interest rates. If lenders/banks were required to hold the risk on their ledgers, interest rates would be much higher because it would reflect the risk.

      A bubble is when prices disconnect from fundamentals and are artificially pushed higher. We see this globally and it will crash globally. 50-70% price drops and an economic meltdown are inevitable. Its not a matter of if but when this happens.

      • The linchpin is interest rates I agree but I do not see them going significantly higher in my lifetime. Currency debasement yes. Bigly. Higher interest rates no.

  • It seems this existence we are living in and being conditioned with the plan to buy and sell high strategy appears to fit well so far. However, has anyone ever considered how many decades or centuries this could go on? I can’t imagine society will survive this way for so long especially due to future droughts, food rationing, and limited area to build. Consider the US with a population of a billion+ residents. Now imagine California with over 200 Million people. I think there is going to be a point where population growth will put a break in how much this planet can provide and likely mean an actual top in growth for all of us. Not just the US. Before that happens I might start shopping for a house on Mars or various Moons in our Solar System.

    • Homerun, you have legitimate concerns about population growth. Then, why do liberals attack Trump on his immigration policies???!!!!…In this respect, Trump is the only adult in the room full of crying liberals. The same liberals then scream about environmental degradation and rent control to exacerbate even more the housing shortage. Why is so hard to connect two dots about massive immigration (legal and illegal) and all the consequences of this massive immigration??? Are the liberals blind to this when they create sanctuary cities and states??? Also the natality among the immigrants is way higher than among the natives. What are the consequences to this long term, besides lower and lower wages (adjusted for inflation) for the middle class????

      • Laura Louzader

        Flyover, I agree with you on the matter of overpopulation and immigration. However, we now live in a time in which politics is all about emotions and images, in which every election is just a high school popularity contest, and in which people will love any idea that they associate with a face and voice they like, whether it comports with either reality or their own core principals, or not; and despise any idea, no matter how sound, that they associate with a candidate they hate. Therefore, there’s no way to conduct a reasonable discussion, and, sadly, Trump has such a horrible personality and has drawn so many hate-mongers and maniacs out of the woodwork, that his better ideas are shouted down as “hate” and “bigotry”. More sadly, Trump himself IS a hate-filled, bigoted child-man, and even people who are capable of thinking things through, so hate to be in any manner associated with him, that they pan his better ideas.

        Personally, I love living in an area with many immigrants from many cultures. I live in an area of Chicago where 57 different languages are spoken, and that is inhabited by people of every ethnicity and religious persuasion. However, I will state that as much as I like my immigrant friends and neighbors, I will also state that this country is FULL UP and is at the end of its mineral, water, and soil resources, and that adding tens of thousands more people to compete for jobs and housing will not help either natives, or immigrants already settled here. Several friends of mine are naturalized citizens, and they, too, agree that it is not a good idea for any country to allow unrestricted access to its resources and social welfare systems.

        In reading history, I notice that 300 million population seems to be a “tipping point” for large nations, past which it deteriorates economically, and essential resources become depleted to the point where the vast majority of the population is reduced to ragged poverty, complete with grotesquely overcrowded dwelling, lack of clean water anywhere, squalid, overcrowded living conditions, and, finally, slavery and exploitation as people become so desperate for a meal that they’ll sell themselves into bondage for it. Sadly, that is already happening here, and to people who once thought they were safe from the Dickinsonian working conditions and slave wages now the rule in industries that used to pay decent middle incomes.

      • I think if the plan by our divided parties is to bring society down to a world worse than we can imagine I would hate to think our Think Tanks would not try to steer society away from Armageddon or Anarchy. Or maybe they are just there to provide a litmus test for the politicians to figure how far they can drag society through #@!#$. I certainly don’t see any true leadership to improve society and that by upholding housing laws, etc.. I think we are on just borrowed time.

    • Our evolution, as a species, is moving forward in hyper-drive, moved dramatically by computers. We are just in the beginning innings. But we are also a resilient species and I would look to underwater cities, or islands in the sea, or living densely in very high, high-rises, as well as mass cities of shipping containers, before we venture off the planet.

      • son of a landlord

        Is this a joke? We’re not going to merge with computers. And we’re not going to build cities on Mars, much less in other star systems.

        It’s been over 40 years since men walked on the moon, and since then, nothing. Off-Earth is way too hostile an environment to live in. Way too expensive to equip people with the required life support systems.

        We’re stuck on Earth. We’ll send robots and probes to the other planets. That’s about it.

        No such thing as “warp drives” or flying through wormholes. The speed of light limit will limit us to our star system. Forever.

      • ValleyDweller

        Prince of heck,

        The vast majority of owners who purchased this cycle are far less leveraged and over extended than the last bubble. Sure job losses and a recession will hurt even Prime borrowers like it did last time. But my prediction based off current economic momentum is that the market has lots of juice left before we crash. There’s lots of tricks and loose lending standards that can be unleashed again to keep the economy moving.

        If everyone starts getting fired from their jobs tomorrow and landlord cut rents in half… then of course housing will crash. I just don’t see us hitting that scenario for another 3-6 years after things heat up even further.

  • Prince of Heck

    “The vast majority of owners who purchased this cycle are far less leveraged and over extended than the last bubble. Sure job losses and a recession will hurt even Prime borrowers like it did last time.”

    Sure, if you consider only mortgages as the form of leverage that counts. The vast swaths of money from QE and global ZIRP probably found their way into the vaults of investors. What happens when prices go down? Will their investors sit and wait for prices to go back up or will they move to the next investment?

    “But my prediction based off current economic momentum is that the market has lots of juice left before we crash. There’s lots of tricks and loose lending standards that can be unleashed again to keep the economy moving.”

    What economic momentum are you referring to? Consumer spending has been in the toilet for a long time in great part because of high housing costs. Existing home sales continues to fall during the supposedly busiest time of the selling season. Low down payments programs were enacted out of desperation several years ago because the hedge funds were exiting the market. The new lending tricks you are referring to represent a last gasp effort to buoy the market.

    “If everyone starts getting fired from their jobs tomorrow and landlord cut rents in half… then of course housing will crash. I just don’t see us hitting that scenario for another 3-6 years after things heat up even further.”

    The bubble will burst because there would have been too few buyers at current prices — simple as that. Exactly what has been the engine of growth during the current “recovery” besides asset speculation based on credit expansion? I posit that falling prices will be the spark that drives us into the next recession.

  • Economy is going down the toilet

    Recession is coming. Record high in food stamps. Stocks & Housing bubble at its peak.
    Americans never had more debt. Retail stores are closing / malls are dying. Auto loans at record high delinquencies. Millennials have no interest in buying homes. Automation is fast approaching – future lay offs will be across the board/industries. Deflation is coming and can already be seen in grocery prices & oil.
    If you are planning to buy a house now….GOOD LUCK and you have been warned.

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