patrick.net

There is a big difference between cheap and affordable, I thought that you would know the difference.

There is a difference between ironic sarcasm and critique. I thought you would know the difference. As someone who was born in Indiana, and grew up in the rural Ohio/Indiana farmland area, I think I'm entitled to find as much wrong with some New Yorker dismissing my Heimat as "cheap" as you do with anyone who might disagree with your pronouncements.

But that's just me.

But you are comparing Santa Monica, one of the most expensive suburbs of CA to GA, how much is the GDP of GA excuse me? If GA just disappears overnight, what kind of dent will it make on America?

GA is a place that I cannot even fancy for retirement, it is so humid in the summer that you can hardly take a stroll outside. There is a lot of plantation and civil war history for sure, but if I were a history buff, I'd have a better time in the old Europe or China.

@allah,
Those homes just aren't my cup of tea. I agree with OO, they look very prefab and mass-produced. Plus, that colonial brick, multiple gables, double columns at the entryway, no trees nearby the house all say McAlbatross to me. Yes, that's all personal preference and doesn't speak to your argument, but there it is. If you happen to like that stuff, and it's aplenty in the place you are considering moving to, then you're in luck. It's a tough nut if you want a California ranch in the Northeast or a brownstone in California, rather than the other way around.

The only new(ish) stock in her neighborhood is for seniors (a hotel being converted to apartments), She is not a senior, so that won’t benefit her.

Try Metropolitan Apartments in San Mateo. It is quite new.

I'm a little late to this thread but I can't resist the temptation to throw in my two cents. One of Patricks main points in the article about fundamentals is the disconect between rental value vs sales value. This is a well known cornerstone of realistic housing prices. As a result the temptation for those with a vested interest to hail any rent increase as proof that all will soon be right in the world of residential real estate is very strong. But it's all nonsense. Things are to far out of wack to be fixed by rent increases alone. A rent increase that large would require significant wage increases on a broad scale to support it and that hasen't happened. Nor is it likely to happen as wage increases are slow in coming and to a large degree being held in check by cheap foreign labor and the loss of many high paying jobs to outsourcing.
Rising rents may contribute a little towards getting the fundamentals back into balance but the majority of the rebalancing act will have to come from price decreases. At this point prices are so high in many areas that even lower interest rates can't help. There simply are'nt enough people left that are either willing or able to buy into the current market to keep prices at this level. The show is over! The only poeple left in the audience (market) now are the ones that won't leave the theater until the credits stop rolling.

If rents increase is that a reason to buy? No, it’s a reason to move! Why finance some homedebtors overpriced POS!

Well, soon you will find yourself in the Philippines. :)

If rent doubles while price remains, it may be a good time to buy.

Oh come on people -- don't you understand; we have intangibles here! I mean, where else can you get a cable car ride?
Oakland, high crime? Must you believe everything you hear about in the media -- I mean they can't even get the rents right :-)

Randy H. - love your "no counteroffer" bid strategy. Now that would make a great reality TV show. Would like to be a fly on the wall when the RE Agent presents to the client; they may as well just dowse them with a cup of cold water.

The Sierra Club does make some good points regarding where you live and how you spend your income (although it does assume lending standards that seem to have already been uhhh... bent). They recommend a loosening of standards in urban areas.
"Most homeowners devote about 55 percent of their income to housing and transportation costs combined. Families in suburban areas spend 30 percent on their homes and 25 percent or more on their cars. Those in urban neighborhoods with good transit spend a mere 10 percent getting around but 45 percent on their homes."
http://www.sierraclub.org/sierra/200509/lol.asp

They recommend a loosening of standards in urban areas.

See, nothing good ever comes out of the Sierra Club. I will not waste time on anything they say.

But why is LI's rent soo high? Does it have too much tenants rights? Or does it have very high property tax?

Those in urban neighborhoods with good transit spend a mere 10 percent getting around but 45 percent on their homes.

Robert, please debunk the heresy.

Let me chime in about the south. I did a stupid thing late last year. I got so fed up with the housing situation in LA that I moved 2500 hundred miles to SC. I've been here 10 months and I can tell you besides the miserable sauna like summer the cultural divide exist. Aside from Charleston there is nothing of interest they are about twenty years behind and they do not accept west coasters readily. As oon as I get a decent job offer I'm outta here. They think we are all liberal druggies (californians) talk about ignorant. Even the monied are schrill....

I think also that the divorce rate is pretty high and you find these single guys who have to become renters.

Single women have to become renters too. More money for the lawyers. :)

"Uh, was there ever really an economy on Long Island? Other than Roosevelt Field Mall, real estate, potato farming, and fighting Shoreham?

No, there never was, but shhhhhhhhhhhh! Don’t ruin it for them, they think it has a really strong economy! "

I spent my HS years in Shoreham, just at the peak of the fighting Shoreham thing. There are no potato farms left out there. It morphed into sod farming after the potato crops failed, and now on the north fork it is nurseries and vineyards. Everywhere else it seems that the sod farms turned into McMansion developments.

I go back every now and again because my folks are still there and I tell you, there is truth to the "you can never go home" statement. As long as you live within a few blocks of the beach and don't have to go anywhere, you have about 7 weeks in the summer when it's wonderful. For the rest, you can have it. I hate it now and am glad I left.

Peter P.

LI has INSANE property tax. There are also an awful lot of human beings there and there is only one way off of that place and that is through NYC. It's a trap and once there, they will have their way with you.

David J,

Good post. Some people here have suggested the "inflating our way out of the bubble" possibility, with rising rents (and possibly wages) coming in line with current housing prices. The problem with that route is just what you mentioned. Who the hell will pay those inflated rents? Salaries just won't support that right now. Salaries don't support housing prices, but that's because funny money fills in the difference. There is a LONG way to go before the rent vs. buy equation makes financial sense on the buy side. Of course, that's looking at it from a purely financial standpoint.

No, they get to keep the house along with the children. The guy has to help pay the mortgage through child support.

Another reason to be a stay-at-home dad. Then perhaps you will be paid child support. :)

I think divorce should be made more difficult, as it has too much negative externalities. It should require nothing less than a compelling case and court approval.

Allah,

The western suburbs of Richmond VA. I know I know...Richmond has arguably one of the worst reputations on planet earth, but you know what, for where I am in life (mid 40's, married, kid in middle school), it's really pretty good. Good schools, safe where we are, good sense of community, friendly neighbors. We've been here for 12 years (moved here from Boston), and the move was a good one. When my kid goes to college, we'll probably leave, but until then, as I said it's pretty good.

It can get kinda hot in the summer though.

In active job search now. Primarily western US. Actually when I drove out last January I went I-40 across I wanted to go thru north western NC\Asheville beautiful drive. I live between Sumter and Mrytle Beach basically alot of foresed swamps.

Actually, they should make marriage more difficult. Couple should be required to live with each other for a year or two before being allowed to marry!

If you make divorce difficult, people will not take marriage so lightly.

A vow is a contract.

@allah,

Is the divorce rate really particularly high in LI? I've never heard that statistic. I've heard about the high breast cancer rate there, though.

I had lived in GA, and NC when I was married. My ex was a full bird USA we moved a few times. The last time I'd lived in the southeast was 85 so I thought I could hang. Well this time was different I didn't feel like I could stay for years. And let me tell you guys I could buy a house outright here for 150K at least 1600 sq ft. It' not the cost of living it's the area and lack of amenities.

Not true. People are always optimistic. They get married never thinking that it will fail. They buy houses never thinking it will lose value “not in my town”.

After they see their friends getting stuck with no way out they will be much less optimistic.

@David J,

Please read my post from October 19th, 2006 at 2:14 pm from the previous thread: http://patrick.net/wp/?p=336#comments

i think it has a lot to do with money or lack of it.

It is more about faith. Not only in God but also in humanity itself.

Crashlander said: "1950 is awsome if you are a straight white republican male christian family man veteran hunter beer drinker who eats meat at every meal.
otherwise its boring."

LOL this is very very true of the South. You have to have an adventurous spirit and really look pretty hard to amuse yourself if you do not fit that mold. However, rest assured, it can be done. There are like minded people, but you will not meet them at the mall, that's for sure.

Yeah.. I picked up on that hostilty from some folks. The company that brought me out here have some churchy types. They think I'm weird because I don't go to church. In fact I feel I'm judged because of it it's like they don't accept difference. You can't even buy booze on sunday and the stores don't open til 1:30 in the afternoon sundays. It's very apparent that the religous right rule this state.

They think I’m weird because I don’t go to church.

Some of my friends think that I am weird because I eat veal.

It's like Sushi? What's that? the ethnic diverse cuisine we have in CA we take for granted. I think we've been exposed to more so we forget others have a more limite life experience. But at the same time what you see here is very unsophisticated.

I see you don’t know too much about LI.

No, I don't. Nearly all of our friends in the Bay Area are divorced though. I guess they have too much faith on humanity, thinking that someone "better" is always out there.

Makes me understand finally once and for all that living in california is about opportunity cost not just merely cost of living. We have more diversity and infusion of different cultures. We are more metropolitan and global. There are parts of the south that are still like the Johnson era 60's.

I wonder how it would be if not for cable or the internet?

We have more diversity and infusion of different cultures.

True. Better food too!

If I have my way and can convince my BF I'll be back in 07.

@Sylvie,
But I've heard good things about the relatively cosmopolitan nature of the research triangle (Raleigh/Durham/Chapel Hill), Charlotte, Asheville, and yes allah, Atlanta. Also, at least architecturally, Savannah, Charleston and maybe a few other places seem beautiful. I just wonder if many of "us" Californians are too Cali-centric.

LILL was right right when she told me there s no place like home...

What factors influence rents like rent control, cost basis / mortgage of the landlord, taxes, maint. etc.. Why didn’t all property owners try to cash out like so many condo conversions?

I live in the north midlands primarily forested swamp area. The coast is as expensive as San Fran especially Hilton Head\Charleston. Alot of mexiacan illegals are infiltrating Georgia in fact there is alot of tension ith the local balck population to this newest invasion. Seems that we're exporting our cheap slave labor forces to the south. I've seen alot since I moved here.

Thanks HARM. It looks like I'm a day late and a dollar short. Had I seen that I would'nt have bothered posting!

You see the illegals building homes here and in all the service industries. The wealthy business owners love cheap labor. If they build a fence it's going to stretch all the way to Florida. More coming each month because it's even cheaper here to live.

They are competing with the lower income service industry jobs and they'll work cheaper. It's causing racial tension with african americans down here.

I do really see a time coming soon when we'll see prices revert to 2000. Wages have notdoubled and tripled in five years. The imbalance can't last besides the current GOP s toast and so is the pandering to wealth. Middle class people would eventually revolt.