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We live in a free market economy.
The only other solution is to go communism
Lol.
So all the restriction California has on building is "free market"?
Explain why in a free market a widget that can be mass-produced for $250K is sold used for $500K in San Luis Obispo.
Location location location.
That 250K house is standing on a lot that is worth $250K. Therefore the price is $500K.
A few years from now that house will depreciate to a $200K value, but it will still sell for $1million, because the land will be worth $800K. There is no stopping it.
Explain why in a free market a widget that can be mass-produced for $250K is sold used for $500K in San Luis Obispo.
The cost of the land.
Yes 6% moving forward is possible. Maybe even more.
Because the number of rich people in the world is exploding. Half the human population lives in Asia, and their economic growth rate is truly amazing.
So according to you, an invasion of Asian millionaires will kick out 90% of young native Californians from California.
Do you realize how that sounds?
APOCALYPSEFUCKisShostikovitch says
The only cure for anything is CANNIBAL ANARCHY.
It's true. Worked great for my hemorrhoids.
Explain why in a free market a widget that can be mass-produced for $250K is sold used for $500K in San Luis Obispo.
The cost of the land.
Yeah, because we all know land is RUNNING OUT in San Luis Obispo. It's surrounded on all side by water and every square inch has been built.
Yes 6% moving forward is possible. Maybe even more.
Because the number of rich people in the world is exploding. Half the human population lives in Asia, and their economic growth rate is truly amazing.
So according to you, an invasion of Asian millionaires will kick out 90% of young native Californians from California.
Do you realize how that sounds?
Truthful?
We kicked out the Native Americans didn't we? Now Asians are coming in and becoming Americans too. America is not just for European descent, it's for the whole world. Everyone wants a piece of the American pie. We are the melting pot.
The cost of the land.
Not a real explanation, just an assignation.
The reason land is expensive is because it's immobile (along with the house and other fixed improvements as a practical matter) and totally fixed in supply in any given area. And the more popular an area is to live, the less land available for development.
And land has a valuation that is largely independent of what exists inside the lot lines, actually. What drives land valuation is its access to a quality community, since this is no longer the first millennium and we all need to purchase goods and services from third parties, not make them in autonomous manors.
Access to jobs, shopping, nature, entertainment -- aka quality of life -- also pushes up valuations.
Negative factors -- street crime, pollution, poor roads -- can push down valuations, too.
Explain why in a free market a widget that can be mass-produced for $250K is sold used for $500K in San Luis Obispo.
The cost of the land.
Yeah, because we all know land is RUNNING OUT in San Luis Obispo. It's surrounded on all side by water and every square inch has been built.
Look at it this way....If someone is willing to pay $500K for a home that cost $250K to build, wether there is a lot of land or not, how are you gonna prevent that? It's their money.
Location location location.
That 250K house is standing on a lot that is worth $250K. Therefore the price is $500K.
No $250K is the price for the land and the house.
You are saying a piece of land in San Luis Obispo is as precious for the same reason land a Malibu lot above the ocean is precious, or maybe an apartment in Paris. i.e. all rich people want to live in San Luis Obispo.
Get a grip of yourself.
Who wants to live in San Luis Obispo?
What industry do they have?
What attraction?
If someone is willing to pay $500K for a home that cost $250K to build, wether there is a lot of land or not, how are you gonna prevent that? It's their money.
Yes it is their money. I'm not going to prevent it. I don't want to prevent it.
I'm just saying it's ridiculous to expect it to appreciate 6% a year.
Location location location.
That 250K house is standing on a lot that is worth $250K. Therefore the price is $500K.
No $250K is the price for the land and the house.
You are saying a piece of land in San Luis Obispo is as precious for the same reason land a Malibu lot above the ocean is precious, or maybe an apartment in Paris. i.e. all rich people want to live in San Luis Obispo.
Get a grip of yourself.
Who wants to live in San Luis Obispo?
What industry do they have?
What attraction?
People who are willing to pay $500K certainly want to live there.
Buyers and sellers determine the price of a house. You cannot dictate the price.
You tell me, why are they willing to pay that high price?
If someone is willing to pay $500K for a home that cost $250K to build, wether there is a lot of land or not, how are you gonna prevent that? It's their money.
Yes it is their money. I'm not going to prevent it. I don't want to prevent it.
I'm just saying it's ridiculous to expect it to appreciate 6% a year.
So why has it been happening for the last 50 years?
We kicked out the Native Americans didn't we?
Yes, by force.
You do realize there are immigration laws with a ceiling on the number of immigrant visas that effectively prevent millions of Asians to come to California?
I'm just saying it's ridiculous to expect it to appreciate 6% a year.
What sold for ~$30,000 in 1975 sold for $420,000 in 2014
That's ~9% pa appreciation (in Salinas, CA).
The condo my bud's parents flipped in Westwood CA -- bought for $185k in 1986. sold for $735,000 in 2008 -- 6%.
The beauty -- and terror -- of exponential curves is that you never know where you are on them, since their rise is self-similar at every point.
http://research.stlouisfed.org/fred2/series/MZMSL
shows that in 1986 MZM was under $2T. Now it's over $12T.
In 2036, will it be $70T? Why not?
So why has it been happening for the last 50 years?
For one thing it started low. Debt levels started low.
You can't claim things are the same now as they were 50 yrs ago.
effectively prevent millions of Asians to come to California
it only takes dozens of well-heeled buyers to affect a local market, not millions.
http://www.cnbc.com/id/101225345#.
and we're not going to close the door to them.
You tell me, why are they willing to pay that high price?
not helping matters:
http://research.stlouisfed.org/fred2/series/CUUR0000SEHA
rents have more than tripled since the 1970s.
that, combined with low interest rates:
http://research.stlouisfed.org/fred2/series/MORTG
has pushed up the housing cost curve immensely.
http://research.stlouisfed.org/fred2/graph/?g=EJc
shows the average wage has risen from $13,000 to $50,000 since the 1970s.
Housing is our primary life need, it's easier to live without food for a day than tenancy in housing.
Now, if you'll excuse me, there's a beach calling me. : )
We kicked out the Native Americans didn't we?
Yes, by force.
You do realize there are immigration laws with a ceiling on the number of immigrant visas that effectively prevent millions of Asians to come to California?
Lots of loopholes too. If you're illegal no laws apply.
Now, if you'll excuse me, there's a beach calling me. : )
At 7.00pm on a Tuesday? Enjoy the sunset walk...take your dog with you.
Lots of loopholes too. If you're illegal no laws apply.
So Chinese millionaires will come - illegally - with their millions (after all it's easy to open a bank account in the US without a ss number) - and then spend their millions to buy the precious real-estate in the San Luis Obispo global metropolis.
Do you realize the number of weird rationalizations you have to make to justify your belief?
it only takes dozens of well-heeled buyers to affect a local market, not millions.
So you are saying a few dozens platinum-shitting Chinese will come and buy half of California?
Why? How?
Think about this: the game only ends because the currency is not expandable, no credit to keep it alive.
Humm... I think it ends because someone has all the money and all the assets, and the other players die the mouth opened.
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