A housing question to Californians

[centrifuge]

That's what we say to the Californians here in Idaho Housing prices are still reasonable, but are going up significantly primarily due to out of state (err ummm Californian) investment.

[:) Smiley]

To clear some misconceptions:

1) Aside from public housing, most new construction is luxury or at least upper middle class, where profit margins are the highest. Everyone else buys used housing.

1a) Since there has been no major apartment construction in cities until now there are mostly two types of apartments - new luxury lofts and really old tenements. The houses of the age that would normally be bought by the middle class sit on land of such value that it gets redeveloped into luxury homes.

2) Right now most housing in California is single family detached houses. There are a whole range of building types between such houses and highrises, from "granny units" in the back to townhouses to low-rise (3-5 floors) urban blocks to mid-rise (6-9 floors) blocks on parking podiums. Unless the CA population is projected to hit 1 billion, there is no need to highrise the state.

3) While CA doesn't have regional growth boundaries, this is not necessarily a good thing. With everyone commuting 2 hrs by car, a huge amount of land is needed for freeways. While San Francisco has demolished some of its freeways, there are about four ten and twelve lane elevated decks, the width of an entire city block, that cut through the East Bay.

4) It is cynically argued that the problem is self correcting as current Federal policies continue to erode the size of the middle class.

5) The size of middle class families is rather dependent on the availability of adequate housing. In San Francisco, children make up a much smaller percent of population than normal.

this is a map of NorCal. There are people who commute every day from suburbs outside Sacramento to San Francisco.

[:) Smiley]

And this is the Los Angeles metro area. Scale is the same.

As you can see NorCal and SoCal are quite similar in urban development patterns. San Francisco is merely an abberation caused by large bodies of water...

[:) Smiley]

I had a hard time believing this when I saw it myself, but this is Japan at the same scale.

[Dinner]

Originally posted by Zkribbler
Real Estate prices in San Diego, which were leading the charge upward, have flattened. It looks like the top of the boom is in sight. Get ready to see prices starting to drop. Can you spell "massive foreclosures?"

Unlikely that we will see big drops. People just don't sell when prices are down unless they absolutely can't avoid it because no one wants to take a lose. Instead they just keep living where they are. More likely we'll just see another flat period or a very slight but sustained decline of a few percentage points per year (1%-2%) since this is a very unliquid market and the population keeps growing while new units aren't being built.

The problem is that the prices couldn't keep going up since they'd become so high very few people could afford them. $700k-$800k for 20-30 year old track homes just isn't very reachable for most people. The people who do have them though aren't willing to go any where in mass though. the city does have a problem in that the jobs bases isn't as rich as the bay area or even LA so more of our people hear relatively blue color jobs. Even if their $35k-$50k salaries for blue collar work sound good on paper the reality is the cost of living eats into that.

We're going to have to wait for the population's income levels to catch up with the price of realestate before we see more big gains. The years of 25% annual appreciation rates (which were great while they lasted ) are over for a decade or two if not longer.

[:) Smiley]

Not necessarily. In San Francisco this catch-up in income levels was done by the influx of high paid workers and the outflow of former residents. San Francisco has more lawyers per capita than anywhere, because they're the ones who make enough to live there.

Fourth map: London at same scale.

[Shi Huangdi]

I think the best solution the high housing costs would be high speed commuter rail from cities to far away areas. The main problem with commuting to the city from the outer suburbs now is horrendous traffic causing unacceptably long commuting times. The further out you extend the area it is feasible to commute to the city from, the more supply of housing you will have which will lead to lower prices across the board.

[Drake Tungsten]

I had a hard time believing this when I saw it myself, but this is Japan at the same scale.

That's Nagoya on the lower-left, not Osaka.

[Dinner]

Your urban map is wrong in several areas. A huge stretch of coastline between LA and San Diego (stretching eastward to the 15 freeway) is taken up by Camp Pendleton. That area is almost entirely undeveloped as it is a military reservation yet your map shows it as urban. We're talking something like 25 miles by 40 miles 1000 square miles or so.

[Dinner]

That is true about population migration. Also I suspect your maps have a built in bias since the mapping company is American and spent more resources providing detailed maps to its home market. If you've been to southeastern England then you'd know it is as urban as California is if not more.

All that color difference is showing are areas where the level of detail is increased by the cartographers.

[:) Smiley]

25x40 miles is about the size of that one non-urban rectangle between LA and SD.

[Dinner]

Originally posted by Az
pffft. You know that can never happen. I mean, it's a good idea, in theory, but in reality, it can't be done. It goes against human nature.

On one walk I took downtown last month I couldn't 20 cranes for new high rises. Most are only 10 stores or so but there are several taller ones. Unfortunately they're mostly residential (with the bottom floor retail) and not office space so I predict this lack of balanced development will mean wage and job growth will still be slow here. The developers want to build low density houses but the local ordinances prevent them and force them to build high rises instead. They decided there is less risk to build residential high rises and quickly flip them then there is to build commercial spaces and rent them out or sell them.

The solution seems to be to strong arm the **** out of the developers. You want to build your two towers? Fine, you owe me one high rise office space. Don't like it? you just lost your building permits on the other two and we're going to use immient domain to seize them in a year if you don't start building according to the cities growth plan. They whine, they moan, then they start doing as they're told because they'll make enough off the other two towers.

[Dinner]

Originally posted by Smiley
25x40 miles is about the size of that one non-urban rectangle between LA and SD.

That is the Santa Margarita Mountains not pendleton. Pendleton is right on the coast. The areas around it are all national forest too so they're not urban.

[:) Smiley]

Building new office towers doesn't create new office jobs, it creates vacant office buildings. That is unless there is a shortage of office space, in which developers ought to be putting up towers left and right.

Why does that army base need to be so large anyway?

[Dinner]

The single biggest reason businesses say they're leaving the city is the high cost of office space. Increasing the supply would lower prices attracting more businesses and making more decide to stay.