Millennials simply can't afford to live in OC (San Francisco, Irvine: renting, car insurance)

[man4857]

Originally Posted by IHate Texas

Maybe millennials and future young americans need to understand that in order to live in a desirable area, you need to be motivated in getting an education to prosper in life. Not to expect affordable housing and government handouts. I'm quite satisfied when non-contributing members of society get priced out. They are an inconvience to be around.

Uhh, you need to take a real hard look at what the COL is in Southern California and not just blame it on uneducated millennials. I'm one of those highly educated millennials you're talking about, got my BS and MS in Electrical Engineering. Got work experience in between and at the salary level most companies are paying me, won't even get me a house in OC... You tell me, is the market pricing me out when my income is $80K and a decent house in the OC is approaching on AVERAGE, $650K, or am I not educated enough...

I moved to Arizona thank you and I'm happy I did, to be able to save more than half my income and live in what's equivalent of Irvine for half the price. For all I know, you need a salary of ABOVE 250K to be able to afford a home in the OC (following the rule of thumb 3x your annual salary), or else you'll be house poor and stuck with a mortgage until I die like everyone else.

[k374]

current home price levels are unsustainable and unfortunately we will have a massive crash again. Just like the last time people are vehemently in denial of course. I work close to up and coming 2 mortgage companies and I constantly overhear the same things I used to hear during the last reckless market... crazy loans etc. Just this time they are over leveraging people with good credit scores OR the government is doing reckless DTIs with marginal borrowers. The end result is the same... recession hits, people lose their jobs - without jobs it is irrelevant if you had a 800 FICO when you got a home, if you don't have a job and can't pay you can't pay and lose your home. Most of these people don't have the sufficient buffer to tide a bad recession which could linger for multiple years and if you have a big burn rate you are screwed.

This is going to end in tears again. Just because nobody seems to care right now and everyone who is a homeowner has a justification for the prices does not make it legit. At the end of the day prices are based on income/earnings and when the recession hits people are going to lose their homes in droves just like the last time.

Anyway, this is just my rant... but it's also the rant of Michael Burry, who was the genius who shorted the last market (The Big Short) who says there is considerable systemic risk building up. Well, just like last time everyone thinks Burry is wrong this time as well.

Human psychology is so predictable it's hilarious LMAO!

[OCBruin]

pretty good movie, it's slightly different current market compared to the situation then, even when the economy dips, you won't have people who aren't qualfied having multiple houses and such like back then

its so nuts about how much these wall street folks make

[cedarite]

Gen X here. I remember when the same nasty things that are being said about the Millenials now were being said about us by the Boomers. The economy is changing in ways many older people don't seem to understand. I guess attacking the kids is easier than facing the reality.. too many people+ more automation= not enough good jobs. Just wait until self-driving vehicles put all the drivers out of work.. that'll be millions more needing to "upgrade their educaton" or be attacked as lazy and "non productive." They're working on decision making computers which can replace middle managers... that will be millions more, etc. etc.

I left OC and moved to southern Utah over a dozen years ago. I can work from anywhere and so went where my income can get a better standard of living. I own a largish house with a red rock view in a nice neighborhood. I would be struggling just to get by in OC. But the flip side of that is that the people who used to be able to afford homes here in Utah are priced out now because wages in the area are low and move ins like me are affluent in comparison. The entire economy is in flux. And in my opinion, it won't be the rigid name-calling old guard that will be the ultimate economic survivors.....

[CaliRestoration]

Originally Posted by man4857

Uhh, you need to take a real hard look at what the COL is in Southern California and not just blame it on uneducated millennials. I'm one of those highly educated millennials you're talking about, got my BS and MS in Electrical Engineering. Got work experience in between and at the salary level most companies are paying me, won't even get me a house in OC... You tell me, is the market pricing me out when my income is $80K and a decent house in the OC is approaching on AVERAGE, $650K, or am I not educated enough...

I moved to Arizona thank you and I'm happy I did, to be able to save more than half my income and live in what's equivalent of Irvine for half the price. For all I know, you need a salary of ABOVE 250K to be able to afford a home in the OC (following the rule of thumb 3x your annual salary), or else you'll be house poor and stuck with a mortgage until I die like everyone else.

You could save money. With an $80k salary, there's no reason you can't save $25,000 a year. On a $500,000 condo, you could save the down payment in 4 years.

Why can't you save money?

[cedarite]

Originally Posted by CaliRestoration

You could save money. With an $80k salary, there's no reason you can't save $25,000 a year. On a $500,000 condo, you could save the down payment in 4 years.

Why can't you save money?

Rent and expenses in the meantime would devour that 80k if the poster stayed in the OC.

[man4857]

Originally Posted by CaliRestoration

You could save money. With an $80k salary, there's no reason you can't save $25,000 a year. On a $500,000 condo, you could save the down payment in 4 years.

Why can't you save money?

Just do the math:
Take home pay for 80K (assuming no benefits deducted from full time job) = roughly 4000/mo.
Pick any place you want to live, rent and utilities will easily eat up half that amount (unless you want to live in the worse of the worse or deal with a very very long commute).
Then you have to pay for gas, car insurance, car payment, and student loans. (Easily 500-800+ depending on your situation)
Then you should be saving 15% for retirement. $600
Then groceries, living expenses, fun money... what's left?
Oh and on top of that save for your downpayment 20%. The numbers don't even work out. Yet here you are saying to buy a CONDO for $500K??!?!? I want a nice house for my hard work...

If you get benefits from work, these numbers will be squeezed even more. This is not even considering supporting family down the road.

I can get a brand new house, in a very safe and nice community in Arizona for 1/3 the price in SoCal... Plus my salary in Arizona is not that much lower than CA, I actually make more cause of lower taxes.

[CaliRestoration]

Originally Posted by man4857

Just do the math:

- Rent a room in townhome or SFH, $700-800
- Utilities share, $100-$150
- Groceries, $300
- Gas based on a 25 mile commute, $250-$300 on car with 20-25mpg highway efficiency
- Retirement, $400-$600
- Entertainment, $100-$200

I'm still roughly $2,000 in the black.

You're simply bad with money and spend way above your pay grade if you're paying half your pay just to live under a roof.

I can get a brand new house, in a very safe and nice community in Arizona for 1/3 the price in SoCal... Plus my salary in Arizona is not that much lower than CA, I actually make more cause of lower taxes.

That's fine and a perfectly good way to go, but Arizona has a very arid climate, a much smaller economy, and less overall outdoor beauty than California. I'm not a California pumper (see my post in the general forum), I don't even claim residency in the state any longer (I still own homes in SoCal), but there are reasons why people flock to CA, and there are demand side reasons why California real estate is worth what it is (and valid reasons why it may not be).

[man4857]

Originally Posted by CaliRestoration

- Rent a room in townhome or SFH, $700-800
- Utilities share, $100-$150
- Groceries, $300
- Gas based on a 25 mile commute, $250-$300 on car with 20-25mpg highway efficiency
- Retirement, $400-$600
- Entertainment, $100-$200

I'm still roughly $2,000 in the black.

You're simply bad with money and spend way above your pay grade.

Uhh no, the only major differences is, car payment, student loans, and cost of housing... I'm assuming 1 bedroom apartment. You also forgot car insurance and renter's insurance too, I guess you're taking a huge risk by going without it.

[CaliRestoration]

Originally Posted by cedarite

Rent and expenses in the meantime would devour that 80k if the poster stayed in the OC.

No it wouldn't. There are plenty of people who live in OC perfectly fine on 80k.