"Three years ago we bought a 3 bd, 2 bath, 2 car garage house in the Bay Area. "
We have the same thing in Oklahoma (3bd, 2ba, 2car), built in the 90’s on 2 acres. If I use the same math as Willy (which should be more than reasonable since property tax is less than 1% in OK). My out of pocket each month is $690!!! Just under 3x what Willy pays! I don’t know about the rest of you, but I can have a hell of a lot of fun and take vacations in paradise with the $1400 per month I’m saving. My house certainly won’t appreciate like a house in CA, but it will appreciate some. So, in order for a Bay Area house to actually be finacially better than a house in OK it would have to appreciate more than $17k + what my house appreciates EVERY year. Certainly possible, but not guaranteed and I don’t have to wait for my house to sell to realize the financial benefit. I see it every month guaranteed.
Income in CA vs. OK? I’m working for the same company and they are transferring operations to OK. My income doesn’t change, hee hee hee hee!
Cousin Elwood you named all the natural disasters except the two that CA has frequently. Fires and earthquakes! Were more or less homes destroyed by fire in CA in last the 12 months than in the midwest by tornados? I think I know the answer.
There is no perfect place. CA is far from perfect. Everywhere else is a compromise as well.
Not even close. I was in the RE biz about fifteen years ago, and some wiseguy (figuratively) about gave me ulcers, heckling me to find him an affordable house. He kept telling me the prices out here were going to tumble (he was from NJ) and that he’d wait. Four years later, with prices almost doubled, he moved back to NJ.
“The dream can’t last forever. It’s starting to outprice itself. Sooner of later industries will say it’s way to expensive there and move to cheaper places such as O.C., etc.”
Been hearin’ that since homes were $125,000.
“I wish I could move my house/property to southern California. It’s worth about 150 K here in the rural boonies but probably 2 million in LA area. I’d sell it real quick and move back to sticks.”
That’s the deal, you suffer with the downsides of a crowded area and high cost of living in hopes of selling and moving somewhere cheaper. I can’t imagine living someplace cheaper. I tried that, and found out that it was cheaper because it wasn’t as desirable.
It’s not as bad as many people think it is. There are a lot of hi-tech jobs here and the engineers make decent amount of money. You don’t even need a down-payment as some other people suggested. I bought my house five years ago for $350k with 100% financing and I lived very comfortably with the resulting mortgage. I refinanced last year and dropped my payments by about 1/3, and now my biggest problem is figuring out what to do with all the money that keeps accumulating in my bank account. On top of that, the house has now appreciated by about 25%.
I’ll refrain from adding to the chorus of the ideal weather conditions, but I have to point out that although we do not suffer from tornadoes/snowstorms/unbearable humidity etc., this is the (I believe) third most earthquake-prone region in the world. Still, I wouldn’t move back to the midwest.
As someone said above, I am really living here for free. Not really. I am actually being paid to live in my house. The money is deferred until I sell but I am in the black.
I have lived in our home for three years so $2,100 * 36 months = $75,600
But our house has appreciated by $125,000 so net worth is up $50,000.
The one flaw in your logic is that your home will not appreciate as fast as CA homes, plus, you have to live, and work, and play in OK.
I don’t need to go anywhere for a vacation. All I have to do is ride my bike to Marin, Half Moon Bay, Santa Cruz, Monterey, Big Sur, Napa Valley, the Northern CA Redwoods, Lake Tahoe.
You have to do the math to realize it’s not as bad as it looks. You don’t need to make 4x the salary UNLESS all of your expenses are 4x. Your housing expense is probably not the only living expense of any consequence that you pay. Car payments, utilities, goroceries, taxes, race registrations (the important things) remain the same or in some cases lower (I pay less taxes, goroceries, utilities, etc here than when I lived in Wisonsin).
Don’t get me wrong - housing is huge here (I’m in San Jose) and you definitely lower your expectations and living conditions - indoors. Outdoors however, is what makes it all worth while. Now for those folks around here that never go swim, bike, run, hike, ski, skydive, whatever… I have NO idea why they pay the “sun tax” like the rest of us!!
There was no flaw in my logic. I thought I was pretty clear that you just have to guarantee that your house will continue to appreciate $17K more than my house appreciates every year and you still have to wait until you sell to realize the benefit. I don’t.
Are you suggesting that every person who buys a home in CA is guaranteed it will appreciate 20-25% every 3 years? Guaranteed?
As for the rest. Everywhere is a compromise. EVERYWHERE!
Marin, Half Moon Bay, Santa Cruz, Monterey, Big Sur, Napa Valley, the Northern CA Redwoods, Lake Tahoe.
Yep, been there, most more than once… I’d like to visit Moorea, Fiji, Europe, NZ, Australia, and Kenya. Whether I be in CA or OK I still have to get on a plane.
Oh my gosh, I’m embarassed I didn’t realize this earlier. Willy, you are talking about imaginary financial gain. I was talking about real savings. Your house can appreciate 100% every year and you still won’t realize a penny until you leave California. Until you do, your financial windfall will remain tied up in your home. If you ever sell, you’ll have to buy Cousin Elwood’s home that also appreciated just as fast and all that money you “made” goes right back into the mortage of the new home. Getting paid to live there? Hardly. What you said should have said is that some day you might get paid to leave.
I feel sorry for you guys. You’re playing with imaginary money.
"I feel sorry for you guys. You’re playing with imaginary money. "
Hmmm, you may be right, but if you bought a $250,000 house four years ago, and it is appraised at $750,000 today, it would be nice to know that you now have half a million dollars in equity. Even if it’s not “real”.
“I feel sorry for you guys. You’re playing with imaginary money”
Don’t worry about us, in 10 years, we’ll have $3 mil, with which we can move to BFE and watch our toenails grow if we choose, or we can buy a smaller place out here and struggle to keep up. Meanwhile, you’ll be living someplace where it snows and blows and rains in the summer, and where there are no ocean beaches…
At the end of the road, you’ll still have nothing, and we’ll have $3 mil and a pot full of options about what to do next.
I am not even going to try to argue that Oklahoma has an nth of the natural beauty or ideal weather of California, but there is much to be said about my home state. Perhaps most importantly, it is a fine place to raise a family. Ease up a bit, would ya? Admittedly, it is windy here. But, what some may call wind, I consider running with CPAP and a PEEP of 10. At times I would love to move to California, but I could never give up all the room I have for a tiny, cramped, 300k hut. Plus, I’d miss my family.
I cannot speak for CA but living in HI is the same story. I feel the same as Cathy. I grew up in MI where it is very cheap to live. I moved to HI because I wanted too. I left a good job and MI and had no job in HI. Would I go back? Not even if the cost of living here doubled. The cost of paradise is worth every penny to me (and my wife).
But what happens once the really “big one” hits. And it’s going to happen sooner or later. Guess that’s when Nevada beach sales become the hot property.
Even if it’s not in our life time, the thought of it is enough to keep me away from Cali.
But then I have my phobias - German dogs, California earthquakes, and the fast food industry replacing French cuisine.
In 10 years your $500K house will be worth $3 million? You must buy lottery tickets too, eh? Heck why don’t you hold out for 20 years and buy Bill Gates house? Gimme a break. Was your house worth $85,000 10 years ago? Didn’t think so.
Besides how you gonna pay that $90,000 property tax bill in year 9?
“At the end of the road, you’ll still have nothing, and we’ll have $3 mil and a pot full of options about what to do next.”
Nothing except that $1400 a month + interest + equity + appreciation… Guaranteed.
But California is paradise remember. Your only option is to put your pot back into some other $3 million home.
If it makes you feel better, keep counting your imaginary money.
The reason California costs ,is there is only so much to go around, and we are talking property / soil / land , the house is meaningless 60 -100K . You can still find good homes for 225K in southern Ca. . If you don’t have money / bought one house already, forget buying a Ca, home unless you have 10 + Asian roommates. As a rule Cheap home in other states are places no one would live or there are no jobs. A buddy got a home last year in Idaho 1000 sqft brick - paved street -power -water - cable 28.5 K cash , Its not the asshole of the earth , but you can smell it from there. I grew up in San Diego , Couldn’t find any nicer place in 20 yrs travels , but the traffic is from HELL , in San fra-angeles- diego.
"In 10 years your $500K house will be worth $3 million? You must buy lottery tickets too, eh? Heck why don’t you hold out for 20 years and buy Bill Gates house? Gimme a break. Was your house worth $85,000 10 years ago? Didn’t think so. "
One of the houses down the street was $20,000 when it was purchased in 1955, it is appraised for $1,000,000 today
Unless you live here you may not believe it for yourself
“But what happens once the really “big one” hits.”
That’s my absolute favorite argument. Check this:
I was raised in the SF Bay area, and lived here for the first 21 years of my life. During that time, I have no recollection of an earthquake, nor does history record one (other than in So Cal, which was nasty but not as nasty as…
I lived Balto for four years and experienced Hurricane Agnes, which washed away homes and did more damage than all the earthquakes since '06 combined.
I lived in Chicago during the Blizzard of '81 that killed 119 people, and almost moved to Cinti just before the big killer tornado that ravages Xenia and Cinti to the point where the producers of WKRP even did a segement on it.
So in the time I’ve lived (53 years) less than 20 people have died here from earthquakes, while THOUSANDS died in Balto., Cinti., and Chicago from hurricanes, tornadoes and blizzards.
BTW, since returning from Chicago in '84, I did experience my first real quake, which did a couple of mil in damages in the little town of Morgan Hill where, by coincidence, my current GF’s family lives, but they received no damage from it. My parents were living five miles from the epicenter of the Loma Prieta ('89 World Series) quake, and my dad lost a bowling trophy in that one, although several of his neighbors had chimney damage. I was living in Sacto when that one hit, and never even felt it.
So in 53 years, I’ve experienced exactly ONE earthquake.
I grew up in Michigan too. Had one of Those Moments in high school where we’re up at a track meet in Greenville, it’s the first weekend in May, and it’s snowing enough to stick to the ground. Michigan’s a nice enough place in the summer, but it’s the other 10 1/2 months that get to you.
I couldn’t see living in CA either. (though it’s a very nice place to visit) Too crowded, too expensive, too much time spent working and commuting that would cut into the fun stuff to an unacceptable level.
I feel like I’ve got the best of both worlds now. Great weather for most of the year, close to some of the World’s Most Beautiful Beaches ™, an interesting and diverse group of neighbors, great food, concerts and bush league pro hockey about an hour away for my entertainment needs. Little more than three hours from New Orleans. Orlando and Atlanta are driveable long weekend trips. Lots of state and national parkland nearby. My work commute is a whole five miles and takes me less than 15 minutes. The weather has seasons, they’re just kind of subtle compared to Up North. The sports can be divided neatly into triathlon season and winter marathon season.
And so much cheaper than California too. We paid $129K for our 3/2/2 1700sf house in 2001. (it would sell for about $235K these days) The state has a great tax set-up for its permanent residents, including capped property taxes on your primary residence. Utilities and fuel costs are low by national standards. I’ve been known to grumble about how the tax deduction for mortgage interest is pretty worthless to us because our property taxes plus interest payments aren’t anywhere close to standard deduction. Two people can eat out here and get some damn good food for $25 including tax and tip.
