patrick.net

Ironworker says

But if you don’t make at least $250K

=> career failure

FortWayne says

Very few happy people in that group, they paid too much and stretched themselves thin.

I know lots of people in the Bay Area who overpaid and got burned, including two families with kids, bankrupted by their mortgage and had to move.

Looking forward to seeing the new limitations on mortgage interest deduction bring prices more into range for ordinary people with savings.

Patrick says

FortWayne says

Very few happy people in that group, they paid too much and stretched themselves thin.

I know lots of people in the Bay Area who overpaid and got burned, including two families with kids, bankrupted by their mortgage and had to move.

Looking forward to seeing the new limitations on mortgage interest deduction bring prices more into range for ordinary people with savings.

In theory it should. But I see no sign of it yet here on the Peninsula.

A few people on this thread have made comments about the housing appreciation in the Bay Area being a good thing and a good reason to invest in housing there and the lack of housing appreciation in other places a bad thing.

The price of housing is either governed by fundamentals (the rent it generates, the value of the shelter it provides) or it is governed by expectations of future value gains.

The second way of thinking is a bubble mentality. I’m surprised so many people have fallen for this again so soon after the last crash. Be careful. There’s only so much people can afford to pay for your house, don’t be left holding the bag.

FortWayne says

Just living in CA for a long time, I can tell you that it doesn't work out quite like that. Those who truly cashed out are the once who bought before the housing prices speculation that occurred Clinton/Bush. Left the state to retire in cheaper CoL states. Now everything has appreciation priced in, and since property taxes are no longer a write off, you can imagine it's going to make buying in CA a bad proposition.

that is the average appreciation rate since 2000. it has been that way for a while.

the change on SALT deductions affect all states not just CA. GA income tax rate is 6%, a mere 3.3% lower than CA, it will have the exact same impact for every home buyer.

if CA home prices go down because of this tax bill, so will GA's and most states'.

Ironworker says

But if you don’t make at least $250K and most likelly much more, you’ll live in a shithole. Your kids will go to shitty schools, you’ll be constantly strapped on time, you’ll face lot of crime.

i'd agree with this more than "CA sucks - some other place is better." it all comes down to cost of living. i'm pretty sure somewhere else someone is complaining the same things about GA or SC saying this place sucks because cost of living is too high. look at all the things i can buy after moving!!! I'm moving to a cheaper state.

Ironworker says

SF Bay Area is not a shithole. It’s beautiful.

But if you don’t make at least $250K and most likelly much more, you’ll live in a shithole. Your kids will go to shitty schools, you’ll be constantly strapped on time, you’ll face lot of crime.

So yes - shithole. I’m slowly working to get out of here.

Yes, you are mostly right.

$250k household income is probably where you can start to have an average standard of living (by national standards) in the Bay Area. And yes, I stress “start”

God forbid you make $250k/yr but you have no cash in the bank. You might never make enough for a down payment with the rent you will be dishing out and the extreme cost of living.

I have countless friends and acquaintances where both the husband and wife are professionals commanding 6-figures and they can’t seem to get any traction here.

I also have a couple friends that don’t make shit (but got in the real estate door in 2009-2011) and are crushing it... 7-fig equity in San Carlos if you can believe that!

BorderPatrol says

FortWayne says

Just living in CA for a long time, I can tell you that it doesn't work out quite like that. Those who truly cashed out are the once who bought before the housing prices speculation that occurred Clinton/Bush. Left the state to retire in cheaper CoL states. Now everything has appreciation priced in, and since property taxes are no longer a write off, you can imagine it's going to make buying in CA a bad proposition.

that is the average appreciation rate since 2000. it has been that way for a while.

the change on SALT deductions affect all states not just CA. GA income tax rate is 6%, a mere 3.3% lower than CA, it will have the exact same impact for every home buyer.

if CA home prices go down because of this tax bill, so will GA's.

Not necessarily because the real estate portion of the bill has the biggest effect on expensive houses in metropolitan cities within blue states.

BayArea says

Not necessarily because the real estate portion of the bill has the biggest effect on expensive houses in metropolitan cities within blue states.

nope it will affect most states. a family doesn't need to make much to begin being affected by this tax bill.

anon_26e00 says

Based on CA home prices, that sounds like a very nice double wide that you own. What does the mobile home park charge for monthly HOA fees, or is that included in the $2440?

you definitely know a lot more about mobile homes than I do. but i'll tell you this home was a brand new townhouse in a middle class gated community. it pays to buy and refi at the right times.

i'm never jealous of people who do better than me and i'm flattered when it is the reversed.

BorderPatrol says

BayArea says

Not necessarily because the real estate portion of the bill has the biggest effect on expensive houses in metropolitan cities within blue states.

nope it will affect most states. a family doesn't need to make much to begin being affected by this tax bill.

Out of the gate it has ZERO impact on 18% (9 states...) of the states with no income tax. So 1 in 5 with almost 99% certainty will not feel the new SALT limits. The 1% in those states probably will because they have nice houses and maybe hit the cap of $10k in higher property tax states or regions.

Let's just round up the median family income in the country to $60k. CA has the highest TOP marginal bracket at 13%. Let's even say the median family will be taxed at that amount. That's $7,800 in taxes, at the TOP bracket. They won't be taxed that amount since it's tiered based on income. The cap is $10k. Well over 50% of families and individual income earners won't even come close to touching the $10k SALT cap on state income taxes. It simply doesn't affect MOST states. It affects maybe 3-4 states and specifically maybe 6-10 regions.

Here's the link showing the HIGHEST marginal state income tax bracket. https://taxfoundation.org/state-individual-income-tax-rates-and-brackets-2016/

The claim that it will affect most states is completely inaccurate.

BorderPatrol says

the change on SALT deductions affect all states not just CA. GA income tax rate is 6%,

BorderPatrol says

nope it will affect most states.

Wrong again.

A nice 3/2 house in GA can be bought for $250K and it has a $1800 tax bill. The income needed to afford that mortgage is WELL lower than the $250K salary needed in your backyard for the same sized $800K CA house.

So between the lower state income tax on lower salary and the lower property tax, these people will be well BELOW the $10K ceiling on the new tax plan.

To keep saying it will affect most states is dishonest.

BorderPatrol says

i'm never jealous of people who do better than me

Like the OP of this thread?

BorderPatrol says

BayArea says

Not necessarily because the real estate portion of the bill has the biggest effect on expensive houses in metropolitan cities within blue states.

nope it will affect most states. a family doesn't need to make much to begin being affected by this tax bill.

With all due respect, this is wrong.

I suggest you reread the new tax code and then review home prices in Georgia. Then compare that to home prices in California. Apply tax code. Then it should be clear and we could move on from any misunderstanding

@Patrick - I know this will cross the line most likely, so do what you will with it. @BorderPatrol has ignored every single request for clarification on his claims about buying a place with $10k down and then having $160k in equity in 5 years. So he bought with an FHA loan at $285k based on the down payment with almost 100% certainty if he's telling the truth. That's the only loan product that would work. One of his more recent posts, quoted below, said it was a brand new town home, in a gated community, in LA region.

BorderPatrol says

you definitely know a lot more about mobile homes than I do. but i'll tell you this home was a brand new townhouse in a middle class gated community. it pays to buy and refi at the right times.

This is pure garbage. This might be one of the biggest lies I've ever seen written on any forum. While I don't like flame wars, and I'm not trying to start one here either, this is probably one of the most provable lies I've ever seen on the internet. Then there are claims that most states will be affected by the SALT limits. This also is simply not true. Apparently Joshuatrio and NewGuy are living in hell in their new locations according to BorderPatrol because he says so.

I genuinely don't know how to rid a forum of this type of BS. But this is a blatant piss in the face of reality. I'm not even sure the point trying to be proven by BorderPatrol outside of him being a complete CA homer. As you'll see from the post history, I would love to live in CA. I have the money to. But I have family and that outweighs high prices and good weather.

CA does fine on it's own without BP pumping it, so I don't get the insecurity of having to defend the state of CA so religiously and most certainly lying about it.

Hi @WookieMan I think the right thing is just to ignore that claim, or put the guy on ignore so you don't see his other posts or comments. He's not attacking any other user.

If he does attack another user specifically, feel free to delete that.

Patrick says

He's not attacking any other user.

While this is kind of true, in the sense she's not directly calling someone else an ass for example, all I'm hearing is crickets from BP.

Personal attacks are bad, I agree. Blatantly false claims are arguably just as bad. While it will never be 100% perfect, some content should not be allowed.

My concern is that something 100% false about something I know very well was claimed. There's not even a defense of this false claim from said user because she knows it's 100% wrong. She made the hypocritical statement that my comments are too long and proceed to make just as long comments in other threads herself. She didn't think the math out when she made something up out of thin air. This honestly should be punished if you ask me. You don't have to do anything and I'm not asking for you to. But if my kid did the same thing there would be a consequences.

Hopefully she'll clarify where she bought this brand new town home in LA. As I said before, crickets is all I'm hearing from her. ;)
;)

BorderPatrol says

CA certainly is a much better purchase long term. even Los Angeles gains 5.8% a year (https://www.neighborhoodscout.com/ca/los-angeles/real-estate). buying in places like Atlanta may sound like a good idea now, because the numbers "make sense." but in 20-30 years from now everyone will wish they bought in CA.

If you are counting for a 6% gains on your home in CA for 20-30yrs, you are not doing basic arithmetic. You have to ask what supports such wealth - outside just that: prices going up. There is nothing in LA. Most cities around LA have zero industry. People would leave and the economy stall. This is already happening, and 20yrs of that getting much worse would shred the economy to pieces.

Heraclitusstudent says

There is nothing in LA. Most cities around LA have zero industry.

Yep, no industry at all (except enterntainment, tech, aerospace, fashion, petroleum, telecom and banking. Not to mention two huge ports and several universities).

anon_dabc8 says

Ironworker says

But if you don’t make at least $250K

=> career failure

Not interested in heart attack in mid 50s, screwed up kids on drugs that don’t know their father And cheating cheating wife of traweling exekutíve.

It doesn’t matter how much money you make, the devil takes its dues eventually.

anon_dabc8 says

career failure

=> not interested in hearth attack in mid 50s, screwed up kids on drugs, cheating wife

Heraclitusstudent says

If you are counting for a 6% gains on your home in CA for 20-30yrs, you are not doing basic arithmetic. You have to ask what supports such wealth - outside just that: prices going up. There is nothing in LA. Most cities around LA have zero industry. People would leave and the economy stall. This is already happening, and 20yrs of that getting much worse would shred the economy to pieces.

that is only your speculation and everyone has their own. how many % are you going to add to Los Angeles appreciation over the next 30 years as China gets richer and buying more L.A, OC, and SF houses? what if Amazon moves to Los Angeles? these are things you can't anticipate. it's best to avoid going this route. remember when you are in the business of predicting macroeconomic for a large place like Los Angeles, chances are your odd is just as good as a coin toss. just ask Peter Schiff, Kaiser, and others how hard it has been for them.

am i saying the house will be EXACTLY $2.7M 30 years from now? absolutely not. but if one is to estimate the price 30 years from now, it would be ridiculous not to use existing appreciation rates already available.

now, back to some productive and intelligent real estate discussion!

BayArea says

I suggest you reread the new tax code and then review home prices in Georgia. Then compare that to home prices in California. Apply tax code. Then it should be clear and we could move on from any misunderstanding

i'm well aware of the tax code and i have discussed it extensively in another thread saying it will affect CA home prices. however, what is said above is entirely 100% accurate. lets look at the numbers from an unbiased point of view.

"a family doesn't need to make much to begin being affected by this tax bill."
- BorderPatrol

first off, what many people don't realize is there are many many ghetto pockets with very very low home prices that drag Atlanta's median home price down, which is at $218K. this due to Atlanta's demographic make up which is self explanatory. a good place where a middle class family can call home is a place like John Creeks. 30-40 minutes from downtown. but the price for a decent home in this area is about $450K for a 3bed room house.

https://www.redfin.com/city/33537/GA/Johns-Creek/filter/sort=lo-price,property-type=house,min-beds=3,max-beds=3,min-baths=2,min-year-built=2000 3/2+ built in 2000 and later.
the average is $450K at minimum.
property taxes (1.2%) $5.4K
interest (20% down 4%) $14.4K
income tax (6%) $4.6K ==> $76K

as you can see, at this price (to be able feel safe in a place like Atlanta), property taxes are already $5.4K. that leaves only $4.6K for state income tax deduction before they get hit with the cap. that translates to an income of $76K a year at 6% tax rate. they can't use the standard deduction either because even at $76K (for a TWO person household), they already make more than the $24K cap. so how many families make more than $76K in suburb areas like John Creeks? the answer is A LOT, considering the average income for ONE senior software engineer in Atlanta is $102K/year.

now before you say i pick all the "high end" houses in John Creeks. feel free to click on that link and remove all criteria to show all homes in the area. MOST are in the $600K-$1.3M range. or spend some more time, pick another random suburb area, like Marietta, enter the same criteria above and see what is the AVERAGE home price there? you won't see under $400K. this is just a totally RANDOM city i picked.

of course people will come in and say what about my home it's well below $450K? well...i wouldn't call that a safe, white neighborhood free of troubles. and i'm not saying everyone is affected, i'm saying a LARGE portion of middle class families in Atlanta will be affected as my numbers have shown. $450K is NOT a home for the rich or wealthy, even in Atlanta.

i will agree that the tax bill hit CA harder than cities like Atlanta, but don't think it doesn't affect a significant portion of middle class families in Atlanta or most states.

BorderPatrol says

am i saying the house will be EXACTLY $2.7M 30 years from now? absolutely not. but if one is to estimate the price 30 years from now, it would be ridiculous not to use existing appreciation rates already available.

So why haven't you used that income of yours that can afford a $1 million home and BOUGHT a $1 million home? Instead you're living in a glorified apartment (condo)? You're missing out on some YYUUGGEEEE appreciation sitting in that condo.

WookieMan says

This is pure garbage. This might be one of the biggest lies I've ever seen written on any forum.

Certainly seems that way, the words don't match the actions, and if he thinks appreciation is going through the roof, he should buy the most expensive home he can afford (which is probably the condo).

Maybe he doesn’t need a big house? Any purchase 5 years ago in Los Angeles would have good buy.

Not to say any purchase would have been good 5 years ago. I remember reading some people here have not seen appreciation for years because they couldn’t afford to buy in a decent area. Which I can see why every time this topic is brought up, it makes some people more “animated.”

anon_93a3c says

BorderPatrol says

am i saying the house will be EXACTLY $2.7M 30 years from now? absolutely not. but if one is to estimate the price 30 years from now, it would be ridiculous not to use existing appreciation rates already available.

So why haven't you used that income of yours that can afford a $1 million home and BOUGHT a $1 million home? Instead you're living in a glorified apartment (condo)? You're missing out on some YYUUGGEEEE appreciation sitting in that condo.

WookieMan says

This is pure garbage. This might be one of the biggest lies I've ever seen written on any forum.

Certainly seems that way, the words don't match the actions, and if he thinks appreciation is going through the roof, he should buy the most expensive home he can afford (which is probably the condo).

anon_c1f2b says

Maybe he doesn’t need a big house? Any purchase 5 years ago in Los Angeles would have good buy.

I actually totally agree with this sentiment. Earlier in this thread I specifically stated not to sink all your money into a primary residence. I actually think if BP is telling the truth, he made a great move buying a town home and not some million dollar house. And yes, I agree with his assessment that buying in LA was a really good idea.

What I take issue with is a claim he hasn't backed up. That he only put $10k down and now has $160k in equity. My questioning his claim could so easily be shot down. I've even set myself up to be proven wrong. He hasn't done that because I believe he doesn't know how to talk his way out of the lie. Instead he just complained my comments are too long and doesn't have the courage to admit a lie. Everyone here has lied at some point or another, it's not a big deal, own it.

Here's a tip BP. Just say I put $10k down and borrowed the money from a private lender or friend at 10%. Not so hard. It would explain your payment and how you only put $10k down on something that was almost certainly higher than a $285k, which would have been the price if you used the only conventional type loan that would finance with that small a down payment.

I put zero down on purchasing my primary by borrowing from family. Roughly $85k. House is worth $205k as of an appraisal last month for a cash out refi. This is in IL of all places. So I did about $45k less in equity gain in low appreciation IL.

Your story can be legit, but the problem is you couldn't explain it and therefore I highly doubt your claim to be true. You could have easily just said what I did above, but you didn't think of that so you just didn't say anything.

I know patnet isn't a bastion of honesty necessarily. I actually don't like Donald Trump. But I don't necessarily believe he's hurting the US economy (it might go south 2-3 years with tax revenue shortages blowing up the debt). You post constantly about DT which is fine. The problem is you lose all credibility in my opinion from anyone that's read this thread. Your opinion is no longer taken seriously if a new user to patnet were to ask me.

I'm going to return your gesture of ignoring and just put you on ignore now. First person I've had to do that with here and that's kind of saying a lot. Our lines of thought were very similar on many things you've commented on here. To bad your opinion cannot be trusted.

Satoshi_Nakamoto says

Heraclitusstudent says

There is nothing in LA. Most cities around LA have zero industry.

Yep, no industry at all (except enterntainment, tech, aerospace, fashion, petroleum, telecom and banking. Not to mention two huge ports and several universities).

Agreed. That comment is so untrue.
I have rentals in socal and I believe strong growth and foreign investments will continue to drive CA real estate for many years to come.
This thread has been entertaining to follow. Hilarious seeing people getting worked up over BP's claims whether they are true or not. His numbers certainly are not impossible.

This reminds me of the time when Roberto was here and many hated him for his luck.

anon_c1f2b says

Maybe he doesn’t need a big house? Any purchase 5 years ago in Los Angeles would have good buy.

But he's making a big stink about appreciation and why someone should buy in LA. So he buys a $300K condo and "claims" a $160K appreciation.

If he's such an advocate for buying for appreciation, he should have bought that $1 million house, just think of the appreciation he would have on it! It would be over $500K. Why pass up on all that FREE money? His claim doesn't add up?

Then again, he would truly need to have the ability/salary to buy a $1 million house, and factually, he lives in an approximate $300K condo, so it appears THAT tells the true story.

WookieMan says

Your story can be legit, but the problem is you couldn't explain it and therefore I highly doubt your claim to be true. You could have easily just said what I did above, but you didn't think of that so you just didn't say anything.

There's your answer. Crickets.

Satoshi_Nakamoto says

Heraclitusstudent says

There is nothing in LA. Most cities around LA have zero industry.

Yep, no industry at all (except enterntainment, tech, aerospace, fashion, petroleum, telecom and banking. Not to mention two huge ports and several universities).

Yeah huge tech, aerospace, petroleum, telecom and banking around LA.
Yeah every young people have jobs paying enough to buy million dollars houses, and they are getting raises to pay 6% more every year.
Keep believing.

Heraclitusstudent says

Yeah every young people have jobs paying enough to buy million dollars houses, and they are getting raises to pay 6% more every year.

Nice strawman.

Satoshi_Nakamoto says

Nice strawman.

If most young people leave because they can't afford it, then what remains to justify prices growing to the sky?

Heraclitusstudent says

Satoshi_Nakamoto says

Heraclitusstudent says

There is nothing in LA. Most cities around LA have zero industry.

Yep, no industry at all (except enterntainment, tech, aerospace, fashion, petroleum, telecom and banking. Not to mention two huge ports and several universities).

Yeah huge tech, aerospace, petroleum, telecom and banking around LA.
Yeah every young people have jobs paying enough to buy million dollars houses, and they are getting raises to pay 6% more every year.
Keep believing.

In fairness - note that you left certain industries out of your response.

CA had all the industries listed in 2007 and 2001 when housing crashed the last 2 times.

I'm not saying that CA housing is going to crash anytime soon, but the values today are even higher then they were in 2007. There's probably a lot of people that bought at the right time like BP and got some equity, but a lot of buyers didn't and are buying with very little down and having no equity. CA needs growth to drive 6% real estate gains every year. How can CA grow when new comers can't afford to buy housing?

People are leaving the state: http://money.cnn.com/2016/11/04/pf/people-moving-out-california/index.html
I predict that CA real estate will get along fine for the next few years with people with equity swapping houses and foreign buyers investing, but eventually some trouble (most likely China bubble bursting) will pop the CA housing bubble and it will crash again. The only way to win this game CA people is to not play it, take your equity, and get out.

anon_4e80d says

but eventually some trouble will pop the CA housing bubble and it will crash again.

Like this?

anon_4e80d says

There's probably a lot of people that bought at the right time like BP and got some equity, but a lot of buyers didn't and are buying with very little down and having no equity.

Several co-workers who bought around 2003-04 went from "yuuugee equity" to "no equity/underwater" and now back to "yuuuuge equity".

Satoshi_Nakamoto says

Several co-workers who bought around 2003-04 went from "yuuugee equity" to "no equity/underwater" and now back to "yuuuuge equity".

Hugely important to predict the next 20-30yrs.

Heraclitusstudent says

Satoshi_Nakamoto says

Several co-workers who bought around 2003-04 went from "yuuugee equity" to "no equity/underwater" and now back to "yuuuuge equity".

Hugely important to predict the next 20-30yrs.

There is no reason to believe the same rollercoaster shit can't happen once (or twice) again in the above mentioned time period.

anon_ef1f9 says

In fairness - note that you left certain industries out of your response.

This is true. You can't take for example the foot soldier of the silicon valley: the fresh-out-of-school engineer that, like, actually does the work.
His salary is not going up 6% a year. Right now many are living in cars, in closets, in bunk beds after many years of housing going up 6% a year.
There is a point when the entire premise that SV exists in CA doesn't make any sense. The idea of living in SF will be abhorrent and uncool to young engineers.

But people don't think like this. It's different this time. Rich Chinese will pop up with suitcases full of cash and swoop any available units, regardless of anything. It's California. Of course they want it.
Trees will grow to the sky - at least for an other 20-30 yrs.

Omfg they are fucking insane and stupid.

zzyzzx says

anon_4e80d says

but eventually some trouble will pop the CA housing bubble and it will crash again.

Like this?

Even worse, only illegal immigrants qualify as tax collectors in California.

Salary doesn’t necessarily need to go up with housing 100% at the time. Look at NYC.

Heraclitusstudent says

anon_ef1f9 says

In fairness - note that you left certain industries out of your response.

This is true. You can't take for example the foot soldier of the silicon valley: the fresh-out-of-school engineer that, like, actually does the work.
His salary is not going up 6% a year. Right now many are living in cars, in closets, in bunk beds after many years of housing going up 6% a year.
There is a point when the entire premise that SV exists in CA doesn't make any sense. The idea of living in SF will be abhorrent and uncool to young engineers.

But people don't think like this. It's different this time. Rich Chinese will pop up with suitcases full of cash and swoop any available units, regardless of anything. It's California. Of course they want it.
Trees will grow to the sky - at least for an other 20-30 yrs.