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My paper mail hasn't picked up (I just made an offer on a house, so I appreciate the last few posts), but I'm trying to figure out where I hosed up while shopping for a house and securing financing, because I am getting literally 3x as much email spam as I ever have, and 90% of it is for home improvement crap, "Loan Approved!" and refi stuff.
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Jul 3, 2013 22:08
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I understand the general sentiment in this thread about condos is "all the negatives of renting and buying", but does this apply even to big cities where single-family homes are prohibitively expensive and further out from the city center than I'd like to be? I feel it's a good time to buy housing in Seattle currently because of the increasing rent prices, a constant influx of well paid workers (so if I wanted to rent my condo, I almost assuredly could), and my general sentiment that this city will be the next SF bay area, with the accompanying high property values. However, being younger, I would really only feel comfortable buying something like a smaller condo (something 250k or so), and I do not want to sacrifice proximity to downtown. Am I being foolish and overlooking that buying a condo is generally a bad idea? Someone talk me down.
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Jul 3, 2013 22:43
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Dreadite posted:(so if I wanted to rent my condo, I almost assuredly could) Not so fast. Most HOAs have rental caps, and usually the percentage allowed is very low. Most condo owners don't want their neighbors renting out their units. If your building is at its rental cap, you either will have to wait for a renting owner to sell or re-occupy, or convince the HOA board to raise the rental cap (good luck). Incidentally, I'm also in Seattle and have been torn on the idea of buying a condo for a lot of the reasons you mentioned. I want to live relatively centrally, and to do that in a SFH tends to cost at a minimum about $1 million. Comparatively, a 1 or 2 bed condo in a nice steel & concrete building can be found in the 300-500k range. For the past few years I have actually been renting condos rather than apartments in Capitol Hill and Queen Anne. Of the 3 I have rented in, only 1 of them would I ever consider buying in, despite all of them being "luxury". If I ever did it, it absolutely would have to be a steel & concrete building and I would scrutinize the HOA financials very very carefully. And even then there are a lot of risks. All that said, Seattle is probably one of the few cities in the country where condos aren't a terrible decision if you purchase wisely. Our economy is strong, the city is growing rapidly, and there's a strong trend toward centralization, denser neighborhoods, and improved transit.
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Jul 3, 2013 22:53
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Dreadite posted:Am I being foolish and overlooking that buying a condo is generally a bad idea? Someone talk me down. It's generally either an awesome idea or a recipe for making your life a total hell, I would call it all of the best things about buying a house and renting an apartment combined. Yes there are a lot of restrictions, yes there are a lot of poorly run buildings, often a condo lifestyle isn't for people but to me owning a house I lived in would be a living hell for me.
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Jul 4, 2013 01:48
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Dreadite posted:I understand the general sentiment in this thread about condos is "all the negatives of renting and buying", but does this apply even to big cities where single-family homes are prohibitively expensive and further out from the city center than I'd like to be? I say go for it. I just bought a condo in Chicago's West Loop, and if you're looking to own in anything approaching a city center, and if you are not a billionaire, condos are the way to go. I'm actually thrilled with my decision: neighborhood development is going supernova, my appraisal came in 5K above my offer, I can walk to the downtown core in about 10 minutes and I live literally steps from everything a city-dweller could want, including public transportation, restaurants, independent coffee shops, dog parks, graffiti, etc.
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Jul 4, 2013 03:49
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BossRighteous posted:Yesterday was signing day, and final inspection day. With 2 hours left before the signing, Chase banks all over Phoenix lost their ability to network and create cashier's checks. After 40 minutes we were all set to withdraw $10k in cash and get a cashier's check from Wells Fargo. Right in the clutch the check final comes through. Crisis averted. I was really surprised that I was able to just write a personal check for closing costs and a 20% downpayment.
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Jul 4, 2013 06:59
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eddiewalker posted:I was really surprised that I was able to just write a personal check for closing costs and a 20% downpayment. They request a wire transfer or a cashier's check, typically.
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Jul 4, 2013 14:27
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My bank will probably just fill out teller tickets since my checking, savings, and mortgage are all at the same institution.
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Jul 4, 2013 16:32
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Three Olives posted:It's generally either an awesome idea or a recipe for making your life a total hell, I would call it all of the best things about buying a house and renting an apartment combined. Owning a house would suck for me. We move into our new condo on 1st of August and I can't wait, no yard, no worrying about shoving and a garage all for 100k less then a freehold where I live.
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Jul 4, 2013 19:15
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How important is age for a building? We're finding a lot of good priced possibilities but they're all built in the 70's. Anything newer costs a lot more. Or does it really depend on too many factors and that's what a good inspection is for? For instance, we found a 1300 sqft place for 230,000 in a 1976 building OR A 980 sqft place for 230,000 in a 1993 building OR A 1200 sqft place for 260,000 in a 1995 building Yet we often find nice big perfect places for like 210k with everything we want in a building that SEEMS fine, yet just blocks away the a smaller place in a dumpier (looking) building will be like 260k. Are people just bad at pricing? I guess that's another question, how much should you trust pricing to be a reflection of quality? If two places are 1000sqft and have all the same amenities but one is 210 and one is 260 is it usually safe to assume the cheap building has something wrong with it? Also why are realtors such absolute poo poo head idiots and never post unit plans and often leave key features (like does it have laundry) out? Holy poo poo am I loving sick of emailing like 20 realtors to simply find out if they can send me a plan and if the unit has its own laundry. Bonus points when they avoid the question in the reply email and invite me to come see the unit my self where he'll be happy to answer all my questions. Is that something hosed with my region? My continent? In berlin EVERY unit had a nice clear plan plus all features and info clearly listed and there was almost no fluff. Blueprints and facts, not a bunch of lovely photos and a paragraph of absolutely useless fluff poo poo like "WOW GREAT UNIT MUST SEE!!! Tired of cramped condos??? Check out this BIG unit from a motivated seller! Condo includes 2 bedrooms and wonderful views! Unit is managed by a wonderful strata in a fantastic quiet building! Make this your new home, or an amazing investment opportunity!" thanks for telling me gently caress-all.
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Jul 4, 2013 19:29
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Home prices do fluctuate a lot. People often set their prices at what they think their home is worth (versus what the market thinks it's worth) or based on how much money they need (usually the amount just shy of a short sale). +/- 20% in prices between comparables isn't unbelievable. Some homes also end of grossly undervalued because the owners lack the money to remodel it and many buyers can't see past the cosmetics to see how easily they might remodel it. Perfect example is the old rambler I just purchased. It was a 3 bed, 1.5 bath, with no clearly defined master and no bathroom connected to any of the rooms. For less than $5000, I'm turning the massive half bath into a full bath and converting the attached massive rumpus room into a two-room master bedroom and office. Based on the value of comparables, that small change is worth easily $20k in equity. Buying older homes is fine, provided that you have the cash on hand to do the necessary remodeling. You might be able to buy the $200k older home, invest $25k into it, and make it just as nice as a $250k new home, but that presupposes that you have an additional $25k to burn over the down payment and closing costs. If you're planning on buying and updating an old home, and you're not going to do all the work yourself, I'd speak with a general contractor ahead of time and get a good-faith estimate from them of the costs.
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Jul 4, 2013 20:14
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Baronjutter posted:How important is age for a building? We're finding a lot of good priced possibilities but they're all built in the 70's. Anything newer costs a lot more. Or does it really depend on too many factors and that's what a good inspection is for? If it is wood construction I might be a little weary but if it is a highrise and it has good management it might even be more desirable than a new building and will likely still be running fine when you are long dead. An older building will likely have higher HOA fees for maintenance but most buildings are constantly upgrading and updating to stay competitive. I would take a very good look at the finances, reserve accounts, financial planning ect of any condo but with a well run one there is nothing to worry about, a good one is planning on major replacements and updates years in advance, a bad one can be like "Oops, we should have known a decade ago that we need to spend $300k on new chillers but we didn't, fork over $2k immediately" That and even if they know look at how they plan, some boards intentionally keep HOA fees low and make up the difference in special assessments, others have high HOA fees but are sitting on giant piles of cash and will rarely if ever have special assessments and some use a combination of both.
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Jul 5, 2013 00:23
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We found it really important to look for a block constructed home with no HOA. We went from a very new wood constructed apartment to a detached single family home. Age on a wood constructed home doesn't mean much of anything to me. I'm probably wrong but the more recent wood homes I've seen have had major structural issues as they age. Our apartment is basically glued together and is falling apart at the seams. Our new 1979 block home is in much better shape structurally than our 2004 wood apartment. The energy costs for heating and cooling are also much better. Others will probably have more anecdotes, but I tend to not trust modern wood homes, especially in developments, because they seem rushed and poorly constructed. We have 1950s homes in better shape than 1990s homes in Phoenix.
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Jul 5, 2013 01:42
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BossRighteous posted:We found it really important to look for a block constructed home with no HOA. We went from a very new wood constructed apartment to a detached single family home. Age on a wood constructed home doesn't mean much of anything to me. I'm probably wrong but the more recent wood homes I've seen have had major structural issues as they age. Our apartment is basically glued together and is falling apart at the seams. Our new 1979 block home is in much better shape structurally than our 2004 wood apartment. The energy costs for heating and cooling are also much better. Doesn't block home with no HOA in Phoenix relegate you to places a lot of people would rather not live, for lack of better phrasing?
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Jul 5, 2013 03:12
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Three Olives posted:If it is wood construction I might be a little weary but if it is a highrise and it has good management it might even be more desirable than a new building and will likely still be running fine when you are long dead. An older building will likely have higher HOA fees for maintenance but most buildings are constantly upgrading and updating to stay competitive. All the options are wood, we're priced out of concrete as it ends up costing almost double per sq ft. I just hear horror stories of "oops we weren't maintaining the roof well enough, everyone in the building has to cough up 60k right now to fix it". Which is why you do look for a building with a good contingency fund. Some people have told me to buy into a 90's building because they all were well built but had horrible condensation issues in the walls and everyone had to pay like 50k+ per owner to fix the buildings, and that's with government help. Because of this, they're all very recently fixed up and despite being from the 90's now have outer walls and vent systems all up to today's code. Also man, gently caress north america where a building from the 70's is considered old and near the end of its life cycle. God drat disposable culture.
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Jul 5, 2013 03:27
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My understanding is that with the housing boom in the early 2000s, really cheap construction ("efficient") went into style, so you should use caution when looking at homes less than 15 years old (particularly in a cookie cutter subdivision). I know from first hand experience, one thing to watch out for in homes from the 70s or earlier is that their ductwork was not designed with air conditioning in mind. It can be quite expensive to get two stories evenly cooled.
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Jul 5, 2013 03:31
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JPrime posted:Doesn't block home with no HOA in Phoenix relegate you to places a lot of people would rather not live, for lack of better phrasing? Aww what's wrong with SunnySlope?
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Jul 5, 2013 05:07
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I've done 'community service' in Sunny-Slope so I get the joke. Lived on Dunlap and 22nd Ave. for 3 years. But nah, we looked hard, paid $211k, and found a decent neighborhood at Elliot and Dobson in Chandler. Phoenix-metro at least. It hasn't come without its issues but overall the area is great to walk day and night. We've scoped the neighborhood pretty thoroughly and it's a nice little outcrop right on the edge of Mesa and Tempe. Carriage is a cool road with a lot of variety as far as housing goes. Our agent tried to convince us that block/no-HOA was irrational for the price/area but we kept at it and hit gold assuming the seller doesn't gently caress us over with final inspections in the next 72 hours.
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Jul 5, 2013 05:51
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We once lived in a rent house built in 1922, I think it was a Craftsman of some sort. A tree fell on it during Hurricane Ike. It resisted giving way for a good while even in the high wind, but ultimately part of the roof collapsed... but just the part over the porch. Despite the attic being open to 100+ mph wind not only did it not fly off, but all our poo poo in the attic was still dry. Also none of the walls were damaged. The insurance company engineer inspector dude was pretty flabbergasted about it.
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Jul 5, 2013 14:13
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So my younger brother, who's in his mid-20s and still in grad school, has just told me that he and his wife are buying a home... - While he's unemployed (except for a grad student stipend). - In a town he'll only be living in for 4 more years. - In a FSBO scenario. - Without an agent. - Without a lawyer. - Without an inspection. - Because "the sellers seem like honest people." I'm torn between not wanting to see my brother ruined and wanting to sit back and just watch the carnage unfold. 10-8 fucked around with this message at 14:47 on Jul 5, 2013 |
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Jul 5, 2013 14:43
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10-8 posted:So my younger brother, who's in his mid-20s and still in grad school, has just told me that he and his wife are buying a home... The only question you need to ask here is will he move in with you once everything goes tits up. If so do everything in your power to stop it short of kidnapping him. If not try to talk him out of it but if he wants too let him.
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Jul 5, 2013 16:07
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10-8 posted:So my younger brother, who's in his mid-20s and still in grad school, has just told me that he and his wife are buying a home... How is this even financially possible? Doesn't he need to prove certain level of income to get a mortgage? Downpayment? I know people make fun of the US saying any old hobo off the street can be given a mortgage on a McMansion but I thought that poo poo went away after "The Crash".
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Jul 5, 2013 16:23
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Dreadite posted:I understand the general sentiment in this thread about condos is "all the negatives of renting and buying", but does this apply even to big cities where single-family homes are prohibitively expensive and further out from the city center than I'd like to be? Ok, here's some feedback from someone who actually does this: I get why people why away from Condos but I think that is mostly due being burned by a poor choice in housing selection based on area, a bad building choice, or not having enough put down initially on a purchase. Buying a condo/townhouse 30 miles from a city center or point of interest? Bad, horrible idea, buy a house or buy nothing and only do this if you are CERTAIN you'll stay put for a while. Condos in major city centers can be fantastic investments and supplemental income opportunity. To your point, buying a condo in a big city where single family homes are non-existant or too prohibitively expensive, can be a really excellent idea, with a few caveats: HOA fees are reasonable Decent HOA board, condo remains in general good repair Condo is located in a MAJOR city in a desired area Condo is reasonably modern and isn't in need of any major overhauls (You'll be surprised what some basic granite counters and ~2k in stainless steel front appliances can do!) Building has a well run management staff You haven't overpaid/can put down a sizable downpayment So again, take this at face value since it is purely anecdotal, but I own 2 condos in Boston. I do not live in Boston because certain things about the city don't work for me, but it IS a great place to own RE and people want to live here and pay insane housing costs. Long story short, I bought a 600 sq. ft, 1 bedroom apartment for 250k in a high rise building (rare in Boston) with parking and professional management. My HOA fees were a bit high, and I did have a good downpayment, but today the place rents for $2100/month and I will generally have a waiting list when it is unoccupied. Since I paid the place off, after HOA fees and taxes I can net somewhere around $1400 a month or so. The other one I rent to my sister and her long time friend, I break even on that but since I am helping family I am cool with it. When they move out next year I will probably net another $1000 a month or so. Your mileage may vary. Boston is one of four cities I consider to be reasonable investments due to their unique situation of being a major hub for SOME sort of major profitable industry. NYC, LA, and DC also are similar in this sense. Finding a single family home (row home, more realistically) is upwards of several million dollars in city proximity, and condo prices approach, if not are the same as Manhattan, with the only upside being lower property taxes and vastly lower HOA fees (we also don't have co-ops here). Seattle isn't QUITE there yet but I agree with your assessment that Seattle will become the next Bay Area due to the skyrocketing cost of living and prohibitive tax structure of CA (as well as their horrendous financial health as a state). You have Boeing, Microsoft, Amazon, Costco, etc. stationed here. There are low overall taxes, no income tax, the people are nice and the city is well maintained. You are young and unless you are in some sort of dead end job with no hope of supplementing your income, I think this is a good bet. I am with you in not willing to sacrifice being downtown and many people are as well. The downsides? You may not want to do this if you can't perform your own repairs. One major repair can wipe out any profits you had, which is something people don't fully take in to consideration. I didn't really make any money last year because I redid the cardboard box sized bathroom in one of the units for the tune of ~12k. But at the end of the day it raised the property value so it worked out. Let me know of any questions.
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Jul 5, 2013 16:25
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Dogen posted:We once lived in a rent house built in 1922, I think it was a Craftsman of some sort. A tree fell on it during Hurricane Ike. It resisted giving way for a good while even in the high wind, but ultimately part of the roof collapsed... but just the part over the porch. Despite the attic being open to 100+ mph wind not only did it not fly off, but all our poo poo in the attic was still dry. Also none of the walls were damaged. The insurance company engineer inspector dude was pretty flabbergasted about it. My parents have an 1930's Craftsman home. That thing is SOLID. Everything is original. Heavy, heavy solid wood doors. Solid wood door frames throughout the house (even on like, the bedroom closets). Solid wood window frames. Not sure what the walls are made of but you can barely her people talking or the TV on even when you're in the next closest room. Having grown up in that house, it makes me sad seeing all the lovely particleboard and hollow door houses that dominate the market now. Also knowing that I'll never be able to afford a house that nice, not to mention the fact that no one makes houses like that anymore! It's all cheap, cheap, cheap. Cheap material, cheap labor, cheap construction.
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Jul 5, 2013 17:11
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All the condos we look at don't allow rentals, or only allow "limited" rentals that need to be approved by the board, so the whole looking at a condo as a potential investment thing is out. And from people who have rented out a house or condo it sounds like a bit of a nightmare with terrible tenants destroying poo poo and you as an owner barely being able to break even with the rent vs mortgage and condo fees. Like a unit you're paying $950 a month plus $250 in fees you'd be lucky to get 1,200-1,300 a month for. When you factor repairs and lovely tenants into that you don't really come out ahead. I used to think condos that don't allow any rentals were lovely but after visiting some friends who live in newer condos that are like 75% rented out I now want to live in a no or limited rental building. When we look at condos in "NO RENTALS" buildings they are tidy and well cared for and full normal and older people. When I look at buildings that do allow rentals there's overflowing ash trays and empty bottles on the patio, vandalism in the hallways, and sketchy looking kids hanging out on the roof. Where I'm living now the street is all non-rented houses except for one, which is in a constant state of disrepair and full of lovely loud kids having lovely loud parties every other night. Why renters gotta be lovely? I wish I could show the board of one of those 55+ buildings my model train set, my early bed time, and my hate of loud music and be let in as an honourary old. We keep seeing really nice deals for very ideal condos but then we notice the 55+ rule.
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Jul 5, 2013 17:18
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Just saw this thread and I'm not going to search all 8000 posts. So if this has been covered sorry for the repeat. When I was buying my first home I did something that surprised my wife and even my real estate agent. When we were about to pull the trigger on the house we chose. I made sure to do one last check. I went out into the driveway and pulled out my phone and used a gps compass to scan around in all directions. See, being native to the state, I've learned a few things about the weather and what I was doing was checking the realative position of the trees on my lot and the neighbors lot in relation to the most common direction storms come from. Guess what, it saved my rear end. We got hit with a hurricane no less 6 months after moving in. No damage to our house but my neighbor across the street ended up with a tree on his roof from one the directions I checked. Pretty much the only area of my house that is in true striking distance from trees is from the SE and ESE. Which has pretty much a nil chance of having damaging winds expect maybe from a retrograded storm off the Atlantic. That being said there's always a chance as weather is unpredictable. But at the very least I lessened the risk by picking that house.
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Jul 5, 2013 17:34
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I lived in my condo for maybe 8 years. The place was maybe 20% rented, but I would guess 80-90% of the condo issues (trashing common spaces, noise violations, that sort of thing) came from renters. I am relatively pro-condo. You just have to realize that you are not buying only your unit.
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Jul 5, 2013 17:36
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The tree talk reminds me, our new house has a neighbors tree overhanging our roof. What's the expected protocol on addressing this? I just planned on going over there and talking about it like a normal person. I'll do it myself with a hacksaw if they don't care about how I do it. Otherwise I figure they can shop a limb removalist and pay for it themselves. The branches are small so it's not a chainsaw job or anything. Edit - Looked up some things and I guess the options are do it myself, pay for it myself, or convince them to pay for it if they want it done a certain way. root of all eval fucked around with this message at 17:49 on Jul 5, 2013 |
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Jul 5, 2013 17:40
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Agreed with the comments about renters. The condo association will generally provide a disclosure of renter:owner occupancy and you can make a decision from there. Heavily rented properties have no pride of ownership and are sometimes in less than idea condition. With that said, don't let it scare you away in all situations, a GOOD HOA Board will curb this and impose lots of fines to idiots and this can curb a lot of bad behavior. These units will also not be cheap.
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Jul 5, 2013 17:41
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Belldandy posted:Seattle isn't QUITE there yet but I agree with your assessment that Seattle will become the next Bay Area due to the skyrocketing cost of living and prohibitive tax structure of CA (as well as their horrendous financial health as a state). The Bay Area's economy is surging like gangbusters. Also, California has a budget surplus this year. Recovering real estate prices in CA are going to boost state revenues further. There is a right-wing segment that complains vociferously about CA's tax structure; yet its economy and population continue to grow, and real estate prices are rapidly recovering. There are some very strong incentives to locate here, especially for high-tech businesses seeking qualified employees. I don't know if that has any affect on Seattle - it may well be a growing economy and a great place to invest. But opinions I read about CA from other goons tend to indicate they read a few articles over the last five years, but don't really know all that much about the state's economy, governance, and structure. We've still got a lot of big problems, but we're not Michigan.
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Jul 5, 2013 17:47
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BossRighteous posted:The tree talk reminds me, our new house has a neighbors tree overhanging our roof. What's the expected protocol on addressing this? If the tree falls on your house, your insurance covers it, whether it's your tree or your neighbors. Your neighbor however can be held liable if that tree poses a threat and the nieghbor failed to trim it after being contacted by you stating that it poses a threat. So basically if that thing looks like it will decimate your house, send a certified letter and keep pictures. If it's just branches and poo poo, just talk it out and come up with a plan.
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Jul 5, 2013 17:53
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BossRighteous posted:Edit - Looked up some things and I guess the options are do it myself, pay for it myself, or convince them to pay for it if they want it done a certain way. Yep, funnily enough this is one of the more frequent questions people ask when they find out I'm an attorney. This and fences and landlord/tenant crap. As you have discovered, you can trim the branches back to the property line.
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Jul 5, 2013 18:09
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Leperflesh posted:The Bay Area's economy is surging like gangbusters. Also, California has a budget surplus this year. Recovering real estate prices in CA are going to boost state revenues further. There is a right-wing segment that complains vociferously about CA's tax structure; yet its economy and population continue to grow, and real estate prices are rapidly recovering. There are some very strong incentives to locate here, especially for high-tech businesses seeking qualified employees. Not to turn this in to a political debate, and that's a nice article, but notice the key word is "rare". CA is about $850B+ in debt, if not $1T+ and that surplus is a mere $1.1B according to the article. It's a step in the right direction but that is a single budget and they have a massive amount of debt and eventually that cannot continue. Their income tax rate is now the highest in America. Its economy and population continue to grow because it, again, is a hub for high tech, fashion, and entertainment and an overall attractive place to live. Ignoring their horrendous financial state is reckless and left-wingers (I'll assume since you did) seem to ignore vociferously the problems they have. The CA tax structure is NOT business friendly and that is most likely why you, again, see businesses expanding in areas like Austin, Seattle, etc instead of CA. Take a look at the retroactive tax bill they passed earlier this year, a state-wide sales tax to 8.25%, (highest in the nation). CA also had a increase of 0.25% in each personal income tax bracket, a high corporate income tax rate of 8.84% and the inclusion of the Alternative Minimum Tax. CA is an attractive place to live but that tide is rapidly trending. Look at median pay and where startups are settling down and Austin, Seattle, Denver and Salt Lake are closing in on SF at a rate that can't be ignored. You couldn't pay me to start a business in CA and a lot of other people feel strongly about this. Home price may be surging (+32% in the Bay Area in a month - not good), rates that are higher than the 06-07 bubble, and while they are still around 30% lower than peak prices, we shouldn't ignore historically what happened in these conditions - in addition to the nice beaches CA is also now the loan-default capital of the US. Much like your earlier example I suspect you are confusing a one-off market shift vs. a trend that will sustain. No market or business has ever been able to sustain a growth rate that high, historically. We are benefiting from historically low interest rates (which are now rapidly increasing) and I think we are misinterpreting investment purchases for occupancy purchases. CA is not Michigan, and they probably never will be, but that doesn't mean they can't lose an enormous chunk of their population to states that much better cater to both employees and businesses.
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Jul 5, 2013 18:23
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Belldandy posted:Not to turn this in to a political debate quote:and that's a nice article, but notice the key word is "rare". Not really. The real key words are "third biggest ever". California continues to grow, and consequently so does its state budget. The reason surpluses are rare is that the state normally does not put money into "savings"; unlike the federal government, states cannot run defecits, so they must finance shortfalls via bonds or other borrowing. CA has a lot of debt, compared to other states; but it does not have so much debt that it is in any danger of being unable to service it. Neither party likes to just stick money into savings accounts, at the state or the federal level; normally when there is a budget surplus, liberals want to destroy it by increasing services and conservatives want to destroy it by cutting taxes. You can see this at the federal level too. quote:CA is about $850B+ in debt, if not $1T+ and that surplus is a mere $1.1B according to the article. That's deceptive. The $1.1b is what the state chose to put into reserve; the surplus was much larger, but CA has increased its overall budget. According to this article: quote:This year’s budget commits $2.6 billion to continue to pay down budgetary borrowing of prior years. From its peak of $34.7 billion at the end of 2010-11, the outstanding debt is $26.9 billion at the end of 2012-13; under the budget signed today that will be paid down to $4.7 billion over the next four fiscal years. I don't know where you are getting $1T in debt from. quote:It's a step in the right direction but that is a single budget and they have a massive amount of debt and eventually that cannot continue. I don't really know what you mean by this. Most states have bonds and make regular payments against them indefinitely. CA's debt rating was recently improved to A+, which is not fabulous but also not junk. From that article, quote:[California State Treasurer Bill] Lockyer is preparing to sell state-backed bonds over the next few months. He hasn’t said how much of the general- obligation and public-works bonds he plans to offer. The state had about $102 billion of gross tax-supported debt, the most in the nation, according to Moody’s Investor Service’s 2012 State Debt Medians Report. So the "wall of debt" was $34.7b, and the total public supported debt was a max of $102b. The above article also mentions that Illinois' debt rating was just dropped to A-, below that of California. quote:Their income tax rate is now the highest in America. Its economy and population continue to grow because it, again, is a hub for high tech, fashion, and entertainment and an overall attractive place to live. Ignoring their horrendous financial state is reckless and left-wingers (I'll assume since you did) seem to ignore vociferously the problems they have. I'm going to assume you don't live here. Nobody here has been "ignoring" (how do you vociferously ignore something??) our problems. In fact it's been a subject of a great deal of yelling and screaming statewide for the last five years. I can only assume that right-wing talk idiots nationwide like to make talking points about how terrible Liberal California is because us Liberals obviously don't know or care what the gently caress we're doing. This is just wrong. quote:The CA tax structure is NOT business friendly and that is most likely why you, again, see businesses expanding in areas like Austin, Seattle, etc instead of CA. "Instead of" is wrong. I don't doubt there are businesses expanding in other places like Seattle and Austin; and probably you can find a handful who publicly state they've fled CA. But businesses are also expanding in California: you can see this in how our state's unemployment level has dropped recently (although it is still above the national average). The idea that business is fleeing California is a right-wing talking point, not an actual fact. quote:Take a look at the retroactive tax bill they passed earlier this year, a state-wide sales tax to 8.25%, (highest in the nation). quote:CA also had a increase of 0.25% in each personal income tax bracket, a high corporate income tax rate of 8.84% As with the federal business tax rate, conservatives always talk about the rate, rather than the actual tax paid by corporations, which is far lower. Because there are always a slew of deductions. Many huge and highly-profitable businesses pay no taxes at all on their revenues, because they take advantage of all these methods of reducing their tax burdens. It's no different here. quote:and the inclusion of the Alternative Minimum Tax. As with the federal AMT, this tax helps to ensure that people who make most of their money from capital gains rather than earned income, or who have other ways of sheltering their income from taxes, and who make a lot of money. Typically it affects earners pulling in at least $100k or so; also businesses making less than $7.5m are generally exempt. I have no problem with the AMT applying to california income tax. Generally it's good for the state tax policy to mirror the federal, because it makes tax-filing simpler. If you have a beef with the AMT, surely the federal AMT should be a bigger issue to you. quote:CA is an attractive place to live but that tide is rapidly trending. I disagree. I think CA remains an attractive place to live. Even if other places are doing great and getting better, that does not diminish CA. But you don't have to take my word for it: as I said, the population continues to rise, mostly due to immigration. Plainly, people want to live here. That's a statistical fact. quote:You couldn't pay me to start a business in CA and a lot of other people feel strongly about this. I don't want to be rude, but this is pretty idiotic. California has ~12% of the nation's population. It has the 8th largest economy of the world. There are thousands of successful businesses here. There's gobs of money to be made here. OK, if you prefer Austin or Seattle, that's fine: they're both lovely places, and having less business regulation is obviously an important factor for someone starting a business. But having access to a customer base and qualified employees are also important factors. quote:Home price may be surging (+32% in the Bay Area in a month - not good) I agree it's too fast, but it should be understood as recovering from a bottom. Much of the surge is being driven by cash investors. Interest rates on loans are now rising quickly, and this will put a brake on the surge. I think what we saw between March and June was a lot of people trying to get in and close on deals before rates start to rise. quote:, rates that are higher than the 06-07 bubble, and while they are still around 30% lower than peak prices, we shouldn't ignore historically what happened in these conditions - in addition to the nice beaches CA is also now the loan-default capital of the US. Defaults happen mostly due to underwater owners. As prices rise, defaults will fall. I agree that we don't want another bubble; I think everyone here is acutely aware of the potential for a bubble. But the buying frenzy right now is due in part to the aforementioned huge quantity of (often out-of-state) investors looking to buy for cash and help to satisfy the horrendous rental market that has built up the last four years. In part it's due to buyers who have been waiting four years to buy, due to uncertainty and lack of confidence in the economy. And in part it's due to borrowers deciding it's now or never for locking in sub-4% fixed rate loans. Key things that aren't represented here are sub-prime lenders, balloon mortgages, "liar loans," and other borrowing shenanigans. These are factors that help to assure this isn't going to be a horrible credit crisis bubble re-inflating. I predict prices will slow a lot over the next four months as rates rise. I predict we will not see prices outside downtown san francisco hit their 2007 peaks any time soon. quote:Much like your earlier example I suspect you are confusing a one-off market shift vs. a trend that will sustain. No market or business has ever been able to sustain a growth rate that high, historically. We are benefiting from historically low interest rates (which are now rapidly increasing) and I think we are misinterpreting investment purchases for occupancy purchases. California is not showing the slightest sign of losing "an enormous chunk of their population". Quite the opposite. The US Census Bureau estimates California's 2012 population as 38,041,430, while it pegs 2010 population as 37,253,956. That's a 1-year growth rate of 2.1%. (source). By comparison, Texas estimates a 3.6% growth rate, Washington a 2.6% growth rate, and New York a 1% growth rate, for the same period. We can perhaps conclude that Texas and Washington are growing more rapidly, and maybe that's because of attractive business climates; but one state's growth is not necessarily at the expense of another, since the overall national growth rate is 1.7% for this period. The whole country is growing, which implies that all of our state economies can and should be growing too. Any state growing faster than the national average can assume they are therefore more attractive than average to immigrants. All of this is just to reiterate what I said before: Leperflesh posted:I don't know if that has any affect on Seattle - it may well be a growing economy and a great place to invest. But opinions I read about CA from other goons tend to indicate they read a few articles over the last five years, but don't really know all that much about the state's economy, governance, and structure. We've still got a lot of big problems, but we're not Michigan. California has the most electoral votes of any state, and those votes are firmly blue. We are also the home to that den of vice and iniquity, Hollywood. These factors make it a popular target for conservative pundits who have an agenda: namely, "look at what the deviants have wrought, our conservative policies are better." If you want to argue that taxes are evil, obviously it's important to look to a state with higher taxes and find it lacking. If you want businesses to move to your area, it's important to look to where there are a lot of desirable businesses and try to convince them they're getting a bad deal. If you want mobile, affluent, well-educated employees to move to your city, you can try to convince them they're suffering from too high of a cost of living. You should take these motives into account when you evaluate your news sources about California. The picture that gets painted is a caricature. Leperflesh fucked around with this message at 19:27 on Jul 5, 2013 |
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Jul 5, 2013 19:18
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There's a brand new California Megathread: Best State in D&D you guys should check out.
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Jul 5, 2013 19:25
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Jerry Brown is a crook and a liar who steals from the rich but otherwise I love this loving state.
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Jul 5, 2013 19:26
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Man even up here in Canada people know California is doing really well, almost too well what with the housing prices in the bay area. When ever I hear of someone moving to the US for a job it's always in California, specially the bay area. Holy poo poo bay area, can canada please keep at least a few of our comp-sci majors and tech workers? It's like a black hole swallowing up every nerd. House prices in the bay area and silicon valley are getting so bad companies are threatening to relocate, the transit is hosed or non-existing, and NIMBY's and suburban assholes are keeping that the status quo. But it's still where all the jobs are.
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Jul 5, 2013 19:29
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Yeah OK let's take it to that thread. Also, taxes enacted by a majority of voters = theft, you heard it here first.
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Jul 5, 2013 19:31
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Leperflesh posted:Yeah OK let's take it to that thread. Also, taxes enacted by a majority of voters = theft, you heard it here first. Yeah taxes enacted by a majority of voters who were presented with a Sophie's Choice: shut down the schools or just take the money from the rich. You choose! "Forget what I said about promising to balance the budget last time. I was only kidding."
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Jul 5, 2013 19:50
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I'm alright with stealing from the rich. But yeah, take it to that thread.
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Jul 5, 2013 20:02
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