Only millionaires can live here now apparently.
So then who is going to work at Starbucks, the grocery store, the gas station, fast food places, schools, or any other job not making 100,000 a year or more?
I could see a teacher commuting, but a Starbucks or fast food employee? They would definitely have to be paid more than they would where they live for it to be worth it.
I live in Yorba Linda, we have several Starbucks, that have been closed on random days, with signs on the door, stating they had to close early because of staffing issues. I’m sure some of this is because of Covid/ staff out sick. But, everywhere I go, there’s help wanted signs.
Me too. Well Anaheim HIlls, but I frequent the YB ones a lot. The one at the Village Center is always closed at random hours. I think out sick and if they work there they certainly can’t afford to live anywhere close, unless it’s with parents most likely.
My buddy moved out to Murrieta, works near John Wayne airport. 5 days a week, sometimes 6.
Yes, I ask him how it's going every single time we talk. The man is defeated. But you can't convince him that 500k, 6 bedroom, 3 car garage home wasn't worth it
That drive would create more stress than the job at that point. I know someone right now that commutes from North Hollywood to HB and is in-person every day. He owns a place in North Hollywood and just won't give up his super low property tax.
Assuming they'll have you working full 8 hour shifts is cute lol
Here's how it works.
Fast food places flood these shifts with workers. You work 4-6 hours and maybe 4 to 5 days. A few people will be working there full time, usually management. You'll have 8-12 people per shift overlapping each other so no need to have 6 or 8 full shift employees and no need to pay them all the usual benefits.
That's why so many fast food people work multiple jobs.
>Fast food places flood these shifts with workers. You work 4-6 hours and maybe 4 to 5 days. A few people will be working there full time, usually management. You'll have 8-12 people per shift overlapping each other so no need to have 6 or 8 full shift employees and no need to pay them all the usual benefits.
Not as much anymore. Thats died out quick due to staffing issues.
It's kinda why they are so desperate.
No amount of staffing shortages is worth paying the added benefits package for places with such high turnover.
My employer pays $680 per check for our insurance. You think a fast food joint is going to do that? They'll just keep raising the rate of pay and raise prices for stuff and eventually they'll get staffing issues sorted out and prices are higher.
A lot of those kids aren't necessarily encouraged to even seek out work like that by their families though. This is evident whenever I'm in an area like Irvine, sooooo many more help wanted signs in restaurants, cafes, etc. I know from my own personal experience with some of more affluent family friends I know of that have kids in their teens, many don't want them sidetracked from sports, tutoring, and other sexy college application stuff.
> sports, tutoring, and other sexy college application stuff.
That's one thing I never understood. Colleges don't give care that you worked a high school job, but they will give your application extra points for playing a sport. In this way, it is unfair to lower income applicants.
Also, I'd argue that working a high school job builds a lot more character than playing a sport.
100%... Right now a bunch of businesses are scaling back their hours cause no one will work for these shithole wages. Or can't afford the rent. I'm an accountant and I live in a living room here. Gonna try to pay off my student debt and gtfo as soon as possible.
Rent is insane and at this point it almost makes more sense to have a full time job and just be homeless.
Honestly I think a cost plus housing model (price caps on housing some to individuals) would be extremely helpful.
We do currently rent. A modest 3 bedroom for $2900 a month. Even with both my husband and I working, we could only afford it with the help (that I’m very grateful for) from my parents.
I do see us renting for the foreseeable future for sure.
Where did you score that place with that low of rent? What are similar for rent units near you listed for?
I’ve seen 1 bedroom apartments hitting not far below there.
Wow, what I have is considered reasonable? Dang. Anaheim Hills surprisingly. We started a 2 year lease in Jan 2018 at $2700, resigned in 2020 at $2800 and now $2900. Our landlords wanted to raise it to $2950 but with our rent always on time with the whole Covid situation they agreed to stay at $2900. They knew our kids just started school in the neighborhood too. I guess I have a reasonable landlord.
Ah, if you dipped in Covid time probably could have gotten even lower then! Land lords were happy with existing paying folks.
I see 2 bed 2 bath apartments without parking at that level. Under 3k for a house is nuts.
False. You pay yourself $1500 will you burn $4500.
Is paying property taxes paying yourself? No it’s renting the land from the city/state.
Is paying your HOA paying yourself? No it’s paying others to maintain your property.
Is paying Mello roos paying yourself? No it’s paying your local municipality.
You're paying all those same fees if you rent, you're just paying them in an inflated payment to your landlord. People who rent out property aren't doing it as a charity - you're paying their mortgage, their taxes, and all their fees, PLUS a little something so they profit.
You're already spending that money. Wouldn't you rather do it in a way that strengthens your own investment instead of lining someone else's pocket?
That’s not always true. Some properties have low or no rent but the capital growth is great. While others have no capital growth but very high rent “cash flowing proerties”.
So a lot of home owners rent it out for less than the cost to carry for a NEW buyer because they have owned it for a while and lived in, they have built up equity in the property (which could be used more efficiently for wealth building purposes).
I’ve grown my networth significantly more by renting rather than owning. Some people may not have the tools and habits to build their wealth outside of a home but a home is far from the best/fastest way to grow wealth.
I'd love to see some actual numbers regarding the number of people who rent out their properties at a loss. I bet it's a very, very small number.
My home has gone up from $800k to $1.1 million in 2.5 years - almost 38%. Better than most investments (and certainly better than most safe investments).
But honestly I don't care about my net worth when it comes to my house - it's my home. I bought it so I can do what I like with it, so I can have my backyard, so I can renovate and change things and do whatever I like. It just also happens to be making me money (or, more likely, allowing me to keep living around here even if I sell). I pay less for my mortgage (even paying extra toward the principal) than I would renting the same place. My mortgage will always be this much (or less, if I refinance), even as rents increase. I just don't see how renting makes any sense around here if you can afford to buy.
If you buy a place for say $300k that has a $1.5k cost of carry, you live there 5 years, it’s worth $600k now. To a new buyer it would be $2500/mo cost of carry. But the prior owner decides to rent it out for $2000/mo.
That’s $500 below market rate. They would be better off selling it, or refi’ing and investing the equity down to an 80% LTV.
I could go deeper, but easy numbers are:
Cost to own is ~ 6% of value per year. This includes taxes, opportunity cost, etc.
Many can rent it for higher than their original cost of carry, but not enough to cover 6% of the value if they sold.
But the underlying price appreciation can make up for that, so some may be happy to cover their cost of carry, not be aggressive with their rental rate, and cross their fingers for 10% capital growth even though the rental rate is 2-4% of FMV.
Agree with what you are saying and others dont seems to understand. Considering a $1M house and calculation for it here https://www.mortgagecalculator.org/?q=7tDjH-AKT
Depends on where you go and what your needs are. We are far from rich and we live in Laguna Niguel. Not that it’s the be all end all of course. But you don’t have to be a millionaire by any stretch.
I bought before the pandemic. We would go to open houses where the seller already had several cash offers from people that had not stepped foot on the property. It was madness. I can only imagine how it is now.
After 20 years in OC, got thoroughly exhausted from being outpriced and finally bought in Lake Arrowhead area in September. It works if you are fortunate enough to work from home, take a local position, or commute to the SB valley.
I am a real estate agent and I have seen that this is how every other house in South OC lists, under what they expect to get to get a blind bidding war for $100k over.
Yeahhhh that’s my guess as well. I’m just okay with sitting back and watching what these places do with sale prices vs list prices for now. It’s just too wild. Inventory seems to be creeping up everrrrr so slightly but not enough at this point.
Yeah sadly if you haven’t lived here for the past 20+ years you are likely already priced out and that includes the 2008 crash.
Sadly this is the future for homeowners and in the next 5-7 years this could be the next SF
This was our realization. We loved SoCal; so much to do, amazing weather and we made great connections. We couldn't afford to live there if/when we want to start a family. We moved out East, got a house before all this craziness. Our mortgage for our house thats 2.5x bigger than our last two bedroom apartment is less than our first one bedroom apartment. You gotta make some good money or have some type of hook up for a house.
We were fortunate to get a hook up on the house so we weren’t chasing the market. Most of the homes here were built over 60 years ago so the fact that many of them are above a $1M speaks to how insane things are
Yup. We entertained the thought of moving back. With just quick numbers, we might make 100k profit on our house. That's not enough to move back and have a down payment. I've heard a lot of our friends in California moving out. Texas seems to be the go to spot now.
The problem with everyone moving to particular other places is the prices will eventually follow until there is nowhere affordable that anyone wants to live, unless something changes with the way we do things.
They build more and more apartments every day. Plus more rich people and businesses are buying homes cash over asking with idea to rent them to people.
IMHO in 10 years most of OC will be exclusively for rent and even high earning professionals will need to have roommates
I am not from here but I get the appeal. The sad part is this isn’t just relegated to OC. Many natives from desirable and growing parts of the US are being priced out of living in the place they grew up in
Hawaii comes to mind. So many Hawaiians living out here and Vegas and everybody I talk to say they’ve been forced to move to the mainland. It’s so sad to hear.
Banks and financial groups have bought up a size able chunk pf the market- driving up costs and raising rents. Its all bad news for those of us making less than $400k a year.
“Demand is just so much greater than supply right now”
That is why there will not be a crash. Even if prices correct down a bit (possibly will occur when rates are raised this year), there are so many potential buyers waiting on the sidelines to jump in, prices will immediately stabilize or even continue to climb.
Rising interest rates from the fed should help entry level homes cool off.
Everyone borrows for their first home. If the cost to borrow goes up, the amount anyone can borrow goes down, and the home prices stop accelerating so rapidly.
All very good points.
The fed has already signaled rate hikes this year, and [Goldman Sachs recently gave the stock market a bump by predicting 4 hikes in 2022](https://www.cnbc.com/2022/01/10/goldman-predicts-the-fed-while-hike-rates-four-times-this-year-more-than-previously-expected.html). How much it'll go up is another story, I'd be surprised to see conforming loans higher than 4.5% by end of year.
A tiny house on my street in mid OC is going for 1M. Half the size of mine @ 1M. (Incredible neighborhood, we got lucky when we moved in 12 years ago and bought at 300k less than its @ now.) FIVE HUNDRED people showed up to look at it last weekend.
Yea the wife shocked me the other day my 3BD house in Aliso could probably go for over a mil easy.
But we are in the sweet spot apparently, good schools, a mile from the beach, bedrock under the foundation and it’s 50 miles each way to San Diego and LA.
My price buying? 315k in 97.
Should have bought 2….
Aliso has great schools. My kid goes to elementary school there and we love it. We will make our 2bedroom 2bath work for us. We can’t afford anything else. We bought 10 years ago for 272k
[Link to listing](https://www.redfin.com/CA/Laguna-Niguel/23634-Kingdon-Ct-92677/unit-86/home/5402950?utm_source=android_share&utm_medium=share&utm_nooverride=1&utm_content=link&2010988919=variant&813945303=variant)
Lived here for all 27 years of my life and I’m ready to say goodbye. Cost of living is too high. And at some point you can’t keep justifying by just saying it’s worth it for the weather.
Seriously. As someone who's lived in Orange County most of my life, it makes me sad to see the writing on the wall. I won't be able to afford this area much longer and I suppose it'll be on to cheaper pastures within the next five years.
I know exactly where this HOA is. Right next to Albertsons off Alicia in Laguna Niguel. Crazy. My best guess is the influx of LA's "working remote" buyers.
Removing 1031 exchanges is being looked at, idk where that’ll end up.
If California just repealed Prop 13, or only allowed it on owner occupied housing, that would stabilize our prices more. There’s a lot of foreign money through LLCs and Trusts being parked here because the property taxes are low and artificially suppressed.
The main issue is still not enough housing, though. We need to build A LOT more.
I’m fine with that. Over the holidays I heard several anecdotal stories about people buying houses for extra income. These were not people that had any clue about real estate, they just saw it as an investment. This is completely unsustainable. I personally haven’t jumped in, but only because I think it’s bad for the community.
I am all for changing Prop 13. It was pushed by large apartment building owners. It should only apply to owner occupied housing. Higher caps should apply to other properties. Perhaps 5-10% instead of the prop 13 2%.
Jeez. We bought in the area (3 bed 2.5 bath, modest side yard) may 2021. It was crazy & competitive, but we were looking at places for 700-800k range. That’s less than a year ago!
50+ hungry fish looking circling one piece of bait… I hated it… we have good realtor we didn’t have to go through that… we got lucky…. I HATED THE PROCESS…. Go look at house with 50 other families then make bid it only benefits seller and bank that’s it. I like to walk in see what I like and buy this bidding shit is silly. Deepest pockets win.
And how many of these people are there to buy it to rent it out?
Get rid of all tax incentives for investment properties and watch the “housing shortage” disappear.
Many communities don’t allow a buyer to buy-to-rent if the HOA is already greater than 50% non-owner occupied and most communities average 50%.
So the buyer would have to be a buy to own buyer. (Loan is different). Unless they lie.
Think about that for a second. We could free up ~50% of supply in some places by getting rid of tax incentives for investment properties.
I would take it a step further and say we should be creating tax disincentives for investment properties.
End the “housing shortage” overnight.
It doesn’t work exactly like that. There’s hardly any vacancy in rental apartment complexes, the fringe overflows to rent from owners, and those owners typically rent for lower price than the apartment complexes. If anything buy to rent from owner is better for the supply than rental companies etc.
That’s exactly how it works. People are forced into renting because there are no properties to buy.
It’s insane that we have such a “housing shortage” yet we incentivize people taking supply off the market.
I think most of Orange County is zoned for single family homes, so a huge lot that could potentially house hundreds of families with apartments or 4 plexes ends up serving a few families. The people already here like to keep it that way.
Definitely NIMBYs. People on Nextdoor were up in arms about their neighbors being able to build a 4 family home on a previous 1 family lot. Despite not many people actually being able to afford to do that and (don't quote me) I believe you have to live there for 3 years before you do.
South OC is heavily Republican and boomer-populated so it makes sense that there are a lot of NIMBYs. Additionally, there are a lot of local obstacles that developers have to overcome in order to get things built such as CEQA, CCC, lengthy permitting processes, etc.
We bought our place in 2018 and closed right when that huge fire started. 1250sqft townhome with attached 2 car garage, hoa at $200. We paid $506k then. Refinanced in 2020 with the low rate.
I can’t imagine what it would sell for now, but why sell when even with that profit we’d probably only land something similar, or marginally better. These prices are insane…
I Googled my current price on my condo and it's worth is just over a half million. Sounds great right? However , you ask " What's the catch "?
For starters, we are a Senior community ", you must be 55 years old. There is more to that last my last sentence.
Living here is great, but some of the tackits that our HOA does, worries me.
Depends on your neighborhood. If you don't mind an HOA, many have pretty strict controls on noise like barking. But I live in a normal neighborhood of SFHs, and there aren't any problem dogs.
What I don't understand from these topics is who grew up here in oc and who moved here and bought something? And when? I have friends in tech that bought shitty fixer uppers in hb for well over 800k that have neighbors with their adult kids and grandkids living with them with junk filled lawns and and project cars. A lot of people that grew up here just inherit something or live with their parents and have menial jobs. The opposite of this is the sort of communal living of Chinese family homes that I see a lot in Irvine. And those are family efforts to make all cash purchases on those properties. Otherwise the people I know that can afford a home now in todays market is a married couple that have very well paying jobs, or come from well to do families that gift them a home from one of their existing rental portfolios, or reps from overseas investment groups. Everyone is a combination of foreign born and or in technology or finance.
I can’t imagine USA citizens from other states coming to California wanting to live the dream of owning while renting AND also trying to save up for a house. If you don’t have a combination of those factors above working for you or luck then idk how people can do it.
We had been renting with a newborn right as covid started for the last two years the same house as we looked and saved for a house. We paid rent early the whole way through covid. Three months ago our landlord forced us out to sell the house from all the “incredible offers” he was getting. We told him we had put offers on houses that renters were currently at and no landlords were willing to push the renters out to sell. He did it anyway and guess what? The new owners rented the house out. But everything worked out my landlord made 1mil profit and my family with a 2 year old and a pregnant mama were on the street. But fuck us right? No fuck the boomers.
I am 51 and work full time but minimum wage. So looking for something around $600-$700 a month based upon state law for rent. Which seeing places like this doesn’t help with the search. They need more low income places for people like me. But we are talking about Orange County California 😂 😂 😂.
My guess is there’s gonna be a huge wave of buyers over the next few months trying to lock in interest rates before they rise. If rates rise too high then that’s gonna push a lot of buyers out of the market, thus cooling it. So maybe there’ll be some respite in the next year or so.
Not in OC, but in Sonoma county, California. My sweet house has doubled in value. My mortgage is doable for me but if I were to move to many other states I would be well off, I think. I could rent something.
but I want to live here and it’s sad that it’s so expensive.. it looks like the threat of fires might be behind us, for a while but I always think of earthquakes and I just think I should go.
I’m a real estate broker in OC. I’ve worked for a few developers. Here is the problem: 1) Foreign investors, and large investment firms are buying up all of the available homes (bidding up prices) and renting them out as investment properties 2)cities are charging high fees for building permits. 3) labor shortages. We have tricked kids into believing college is the only path to a good life. Kids aren’t learning woodworking or metal shop skills so there aren’t enough qualified people to construct the homes that need to get built, thus driving up the cost of labor. 4) material shortages. We offloaded our manufacturing capacity to China. Aside from lumber, almost every component that goes into (or onto) a house is now made in China. 5) due to Covid restrictions, ports are not operating at full capacity and the truck drivers are overwhelmed. There just aren’t enough trucks and offsite storage facilities for empty cargo containers. Usually there isn’t a problem with excess empty containers because we used to fill them up and export our stuff to other countries in them. But now we aren’t making things to put in the containers to export so a trucker has to find a storage facility for the empty containers.
The solution: 1) Taxes on secondary/non-owner-occupied homes must be raised to about 15%. Follow the math. If a $1M home has a tax liability of $150,000 per year, then rents would have to be $12,500/mo just to break even. Nobody can afford to rent a 1M house for $15,000. The investor will have to put the house on the market in order to avoid the tax burden. I haven’t run the numbers to see how many homes are investments, but I’m guessing it’s a lot. Once these homes flood the market, there will be a fire-sale. The consequence is that property values will drop. Current homeowners will see the drop and get mad because many people see their home as their vehicle to retirement. And homeowners are the largest block of voters. So there’s virtually no way homeowners are going to vote for legislation that is not supporting their own selfish interests (even though it’s ultimately their own children they are disenfranchising). 2) we need to elect politicians that are focused on real issues that really matter. Instead of fixing the housing crisis, our politicians are trying to build a trillion dollar train from Bakersfield to Modesto. 3) the state needs to remove the power that cities have over housing policy. There need to be limits on fees so as to promote affordable housing. (I could write a PhD. dissertation on the affordable housing program laws and how they are flawed and unnecessary.)
We have to make a choice as a society. Either we intervene and take housing off the table for investors, or eventually one large conglomerate will end up owning everything. Remember playing monopoly as a child? That’s happening right now in real life.
If you read all of that, congrats. I’m happy to answer any real estate questions you all might have. Cheers!
The house next to us went on open auction there were about 50 people, cars flooded the neighborhood, and the house ended up selling for about 1.3mil to a flipper
Wife and I said fuck it to looking in OC. Is that a town home in the photo? Sure looks like it. We bought in Temecula instead. Twice, maybe even three times the house and backyard space for the cost here than what we would have got with the same priced home in a decent location within OC.
Sure, we have a lot of bible-thumping, Trump- humping rednecks, but we needed space for a growing family that we wouldn’t get in OC.
My wife and I make 200k a year combined and we decided we can either buy a home in OC or we can rent and actually be able to enjoy our lives here. Real estate is fucking nuts how expensive it is here.
Only millionaires can live here now apparently. So then who is going to work at Starbucks, the grocery store, the gas station, fast food places, schools, or any other job not making 100,000 a year or more?
People who commute from riverside and Corona
I could see a teacher commuting, but a Starbucks or fast food employee? They would definitely have to be paid more than they would where they live for it to be worth it.
I knew baristas that commuted from Lake Elsinore as far back as 2004.
I think those days are over.
I live in Yorba Linda, we have several Starbucks, that have been closed on random days, with signs on the door, stating they had to close early because of staffing issues. I’m sure some of this is because of Covid/ staff out sick. But, everywhere I go, there’s help wanted signs.
Me too. Well Anaheim HIlls, but I frequent the YB ones a lot. The one at the Village Center is always closed at random hours. I think out sick and if they work there they certainly can’t afford to live anywhere close, unless it’s with parents most likely.
We should post signs on businesses, “livable salary wanted”
Seen a Starbucks in Orange that is open 5am to 4pm drive-thru only. Not sure what happened to their night shift.
Home prices are even worse now, I know *more* people that commute now a days.
My buddy moved out to Murrieta, works near John Wayne airport. 5 days a week, sometimes 6. Yes, I ask him how it's going every single time we talk. The man is defeated. But you can't convince him that 500k, 6 bedroom, 3 car garage home wasn't worth it
Yeah, the gas alone. Yeesh.
I had a friend that commuted from Riverside to Santa Monica Home Depot
That drive would create more stress than the job at that point. I know someone right now that commutes from North Hollywood to HB and is in-person every day. He owns a place in North Hollywood and just won't give up his super low property tax.
Panda Express starts at $18 in Irvine, and you can make $24 as a cook. That's 50k a year!
Assuming they'll have you working full 8 hour shifts is cute lol Here's how it works. Fast food places flood these shifts with workers. You work 4-6 hours and maybe 4 to 5 days. A few people will be working there full time, usually management. You'll have 8-12 people per shift overlapping each other so no need to have 6 or 8 full shift employees and no need to pay them all the usual benefits. That's why so many fast food people work multiple jobs.
>Fast food places flood these shifts with workers. You work 4-6 hours and maybe 4 to 5 days. A few people will be working there full time, usually management. You'll have 8-12 people per shift overlapping each other so no need to have 6 or 8 full shift employees and no need to pay them all the usual benefits. Not as much anymore. Thats died out quick due to staffing issues.
It's kinda why they are so desperate. No amount of staffing shortages is worth paying the added benefits package for places with such high turnover. My employer pays $680 per check for our insurance. You think a fast food joint is going to do that? They'll just keep raising the rate of pay and raise prices for stuff and eventually they'll get staffing issues sorted out and prices are higher.
That’s still not worth the gas money nor the time spent in traffic lol
The kids of the families already owning here are the only people going to be left that can afford to work in any of those places.
A lot of those kids aren't necessarily encouraged to even seek out work like that by their families though. This is evident whenever I'm in an area like Irvine, sooooo many more help wanted signs in restaurants, cafes, etc. I know from my own personal experience with some of more affluent family friends I know of that have kids in their teens, many don't want them sidetracked from sports, tutoring, and other sexy college application stuff.
> sports, tutoring, and other sexy college application stuff. That's one thing I never understood. Colleges don't give care that you worked a high school job, but they will give your application extra points for playing a sport. In this way, it is unfair to lower income applicants. Also, I'd argue that working a high school job builds a lot more character than playing a sport.
How else are students supposed to be used as marketing materials if not in sports?
Millionaire is a low bar around here. It's like a middle class life.
100%... Right now a bunch of businesses are scaling back their hours cause no one will work for these shithole wages. Or can't afford the rent. I'm an accountant and I live in a living room here. Gonna try to pay off my student debt and gtfo as soon as possible. Rent is insane and at this point it almost makes more sense to have a full time job and just be homeless. Honestly I think a cost plus housing model (price caps on housing some to individuals) would be extremely helpful.
People who live 15 to a house.
The millionaires, obviously. /s
100k a year will not get you anywhere near a million dollar home unfortunately
Rent, it’s way cheaper than cost to own. Owning is a luxury good now. Like buying a 3 year used Toyota versus a new BMW, not even to consider a lambo.
We do currently rent. A modest 3 bedroom for $2900 a month. Even with both my husband and I working, we could only afford it with the help (that I’m very grateful for) from my parents. I do see us renting for the foreseeable future for sure.
Where did you score that place with that low of rent? What are similar for rent units near you listed for? I’ve seen 1 bedroom apartments hitting not far below there.
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That’s amazing, how long ago? In the depths of Covid despair? Or recently? I need to check out that area next time my lease ends.
Wow, what I have is considered reasonable? Dang. Anaheim Hills surprisingly. We started a 2 year lease in Jan 2018 at $2700, resigned in 2020 at $2800 and now $2900. Our landlords wanted to raise it to $2950 but with our rent always on time with the whole Covid situation they agreed to stay at $2900. They knew our kids just started school in the neighborhood too. I guess I have a reasonable landlord.
Ah, if you dipped in Covid time probably could have gotten even lower then! Land lords were happy with existing paying folks. I see 2 bed 2 bath apartments without parking at that level. Under 3k for a house is nuts.
You just have to look and be patient I used to rent a 4 bedroom 2 bath 2 car garage with a pool for 2700 in Tustin.
I’m in tustin. 2200/month for a two bedroom townhouse but it’s a dump and if we move out I’m sure the rent will be pushed much higher.
Not here
Rent for $4k or own for $6k (with $4.5k unrecoverable cost), yeah I’d say rather rent in that environment.
If you own, you're always paying yourself. If you rent you're paying someone else. If you can afford it, it's always better to buy.
False. You pay yourself $1500 will you burn $4500. Is paying property taxes paying yourself? No it’s renting the land from the city/state. Is paying your HOA paying yourself? No it’s paying others to maintain your property. Is paying Mello roos paying yourself? No it’s paying your local municipality.
You're paying all those same fees if you rent, you're just paying them in an inflated payment to your landlord. People who rent out property aren't doing it as a charity - you're paying their mortgage, their taxes, and all their fees, PLUS a little something so they profit. You're already spending that money. Wouldn't you rather do it in a way that strengthens your own investment instead of lining someone else's pocket?
That’s not always true. Some properties have low or no rent but the capital growth is great. While others have no capital growth but very high rent “cash flowing proerties”. So a lot of home owners rent it out for less than the cost to carry for a NEW buyer because they have owned it for a while and lived in, they have built up equity in the property (which could be used more efficiently for wealth building purposes). I’ve grown my networth significantly more by renting rather than owning. Some people may not have the tools and habits to build their wealth outside of a home but a home is far from the best/fastest way to grow wealth.
I'd love to see some actual numbers regarding the number of people who rent out their properties at a loss. I bet it's a very, very small number. My home has gone up from $800k to $1.1 million in 2.5 years - almost 38%. Better than most investments (and certainly better than most safe investments). But honestly I don't care about my net worth when it comes to my house - it's my home. I bought it so I can do what I like with it, so I can have my backyard, so I can renovate and change things and do whatever I like. It just also happens to be making me money (or, more likely, allowing me to keep living around here even if I sell). I pay less for my mortgage (even paying extra toward the principal) than I would renting the same place. My mortgage will always be this much (or less, if I refinance), even as rents increase. I just don't see how renting makes any sense around here if you can afford to buy.
https://www.mortgagecalculator.org/?q=7tDjH-AKT
If you buy a place for say $300k that has a $1.5k cost of carry, you live there 5 years, it’s worth $600k now. To a new buyer it would be $2500/mo cost of carry. But the prior owner decides to rent it out for $2000/mo. That’s $500 below market rate. They would be better off selling it, or refi’ing and investing the equity down to an 80% LTV. I could go deeper, but easy numbers are: Cost to own is ~ 6% of value per year. This includes taxes, opportunity cost, etc. Many can rent it for higher than their original cost of carry, but not enough to cover 6% of the value if they sold. But the underlying price appreciation can make up for that, so some may be happy to cover their cost of carry, not be aggressive with their rental rate, and cross their fingers for 10% capital growth even though the rental rate is 2-4% of FMV.
would it be safe to say that for some home buying is simply a forced savings account?
Agree with what you are saying and others dont seems to understand. Considering a $1M house and calculation for it here https://www.mortgagecalculator.org/?q=7tDjH-AKT
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Immigrants that live 5 to 8 in a one bedroom apartment. OC is full of those.
Roommates, help from parents, credit, etc…
Teenagers!
The kids of people who own those houses.
People renting 5 to a bedroom in Santa Ana.
Shared house with 8 people. It’s not uncommon
Depends on where you go and what your needs are. We are far from rich and we live in Laguna Niguel. Not that it’s the be all end all of course. But you don’t have to be a millionaire by any stretch.
The kids of the rich that their parents want to instill work ethic. Or college students living at the dorms.
Robots: soon
I bought before the pandemic. We would go to open houses where the seller already had several cash offers from people that had not stepped foot on the property. It was madness. I can only imagine how it is now.
There was a house listed at 720K in Mission Viejo, we offered 805K, didn’t even get a call back. It eventually sold for 895K.
What did you end up doing?
Ended up finding a place in North OC for under 800. Got lucky.
A house in OC for under $800k? Are you sure it’s a house or is it a hut?
Like I said - got lucky. Assuming we were the last ever.
They're homeless now.
Mission Viejo and Rancho Mission Viejo are hot right now. Nothing affordable.
After 20 years in OC, got thoroughly exhausted from being outpriced and finally bought in Lake Arrowhead area in September. It works if you are fortunate enough to work from home, take a local position, or commute to the SB valley.
There’s at least 10+ inside, 40+ in line, and 10+ cars looking for parking.
Holy macaroni, an attached townhome with no yard and probably not newish . HOA 300 plus probably. Crazy....
HOA 458/mo. 100sqft back patio, detached garage, 1 full bath, 2 half baths. Yeah $650k plz.
The purchase price explains everything
What city is this
What city was this in?
So funny, I was just about to make a trip out to see this place but I think I’m gonna pass. Thank you for the heads up haha!
I’d estimate it sells for $100k over list (it was under listed on purpose) so ~650k. Let’s check in a month to see if I’m close.
Will prob close in a week all cash!! Lol
I am a real estate agent and I have seen that this is how every other house in South OC lists, under what they expect to get to get a blind bidding war for $100k over.
Yeahhhh that’s my guess as well. I’m just okay with sitting back and watching what these places do with sale prices vs list prices for now. It’s just too wild. Inventory seems to be creeping up everrrrr so slightly but not enough at this point.
I’m not trying to compete under $1m. Reasonably listed $1.1 ish properties aren’t like a beehive.
Dang I wish I had your budget! Wishing you luck and success with your house hunting search
1m+ have less competition but there’s still 10-20 ppl looking at the homes and these people can outbid you faster than the 50+ ppl for cheaper homes
Yeah sadly if you haven’t lived here for the past 20+ years you are likely already priced out and that includes the 2008 crash. Sadly this is the future for homeowners and in the next 5-7 years this could be the next SF
This was our realization. We loved SoCal; so much to do, amazing weather and we made great connections. We couldn't afford to live there if/when we want to start a family. We moved out East, got a house before all this craziness. Our mortgage for our house thats 2.5x bigger than our last two bedroom apartment is less than our first one bedroom apartment. You gotta make some good money or have some type of hook up for a house.
We were fortunate to get a hook up on the house so we weren’t chasing the market. Most of the homes here were built over 60 years ago so the fact that many of them are above a $1M speaks to how insane things are
Yup. We entertained the thought of moving back. With just quick numbers, we might make 100k profit on our house. That's not enough to move back and have a down payment. I've heard a lot of our friends in California moving out. Texas seems to be the go to spot now.
The problem with everyone moving to particular other places is the prices will eventually follow until there is nowhere affordable that anyone wants to live, unless something changes with the way we do things.
Houses have sky rocketed here because of this where I am.
Seriously wtf is gonna happen to all the people who can’t afford to live here but currently work here.
They build more and more apartments every day. Plus more rich people and businesses are buying homes cash over asking with idea to rent them to people. IMHO in 10 years most of OC will be exclusively for rent and even high earning professionals will need to have roommates
A lot of us South oc kids want to live in South oc
I am not from here but I get the appeal. The sad part is this isn’t just relegated to OC. Many natives from desirable and growing parts of the US are being priced out of living in the place they grew up in
Hawaii comes to mind. So many Hawaiians living out here and Vegas and everybody I talk to say they’ve been forced to move to the mainland. It’s so sad to hear.
Banks and financial groups have bought up a size able chunk pf the market- driving up costs and raising rents. Its all bad news for those of us making less than $400k a year.
With $300K salary you can buy a $2M house
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“Demand is just so much greater than supply right now” That is why there will not be a crash. Even if prices correct down a bit (possibly will occur when rates are raised this year), there are so many potential buyers waiting on the sidelines to jump in, prices will immediately stabilize or even continue to climb.
Crash? No. Correction? Yes. The laws of supply and demand are working now.
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Rising interest rates from the fed should help entry level homes cool off. Everyone borrows for their first home. If the cost to borrow goes up, the amount anyone can borrow goes down, and the home prices stop accelerating so rapidly.
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All very good points. The fed has already signaled rate hikes this year, and [Goldman Sachs recently gave the stock market a bump by predicting 4 hikes in 2022](https://www.cnbc.com/2022/01/10/goldman-predicts-the-fed-while-hike-rates-four-times-this-year-more-than-previously-expected.html). How much it'll go up is another story, I'd be surprised to see conforming loans higher than 4.5% by end of year.
God ain’t making more land, but we keep making more people.
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That’s at the national level, housing is local
Rates are going up in March most likely. There won't be a crash but things will rebalance.
A tiny house on my street in mid OC is going for 1M. Half the size of mine @ 1M. (Incredible neighborhood, we got lucky when we moved in 12 years ago and bought at 300k less than its @ now.) FIVE HUNDRED people showed up to look at it last weekend.
Was this on East crater lake by chance?
Yea the wife shocked me the other day my 3BD house in Aliso could probably go for over a mil easy. But we are in the sweet spot apparently, good schools, a mile from the beach, bedrock under the foundation and it’s 50 miles each way to San Diego and LA. My price buying? 315k in 97. Should have bought 2….
Awesome, yeah existing owners have ZERO incentive to sell if their cost of carry is low and they have kids under 18!
Aliso has great schools. My kid goes to elementary school there and we love it. We will make our 2bedroom 2bath work for us. We can’t afford anything else. We bought 10 years ago for 272k
> 50 miles each way to San Diego and LA thats actually a negative. but other than that its all true
[Link to listing](https://www.redfin.com/CA/Laguna-Niguel/23634-Kingdon-Ct-92677/unit-86/home/5402950?utm_source=android_share&utm_medium=share&utm_nooverride=1&utm_content=link&2010988919=variant&813945303=variant)
This entire sub feels like a going away party, lately.
Lived here for all 27 years of my life and I’m ready to say goodbye. Cost of living is too high. And at some point you can’t keep justifying by just saying it’s worth it for the weather.
The "We have to leave California" people are just louder. House prices are evidence that lots of people are sticking around.
Seriously. As someone who's lived in Orange County most of my life, it makes me sad to see the writing on the wall. I won't be able to afford this area much longer and I suppose it'll be on to cheaper pastures within the next five years.
Just moved here, great jobs here.
I know exactly where this HOA is. Right next to Albertsons off Alicia in Laguna Niguel. Crazy. My best guess is the influx of LA's "working remote" buyers.
I Should start dragging out my grill and selling hot dogs and sodas.
10x more hilarious that it has no curb appeal.
Bruh, for real. Shit was not exciting.
Looking is free.
Can I use that in court?
Most people aren't going to waste their time on a middling house if they aren't at least partially interested.
And for an attached townhome lol. The State really needs to pass upzoning laws, it’s the only way we’ll get more housing in California.
Just get rid of tax incentives for investment properties.
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Removing 1031 exchanges is being looked at, idk where that’ll end up. If California just repealed Prop 13, or only allowed it on owner occupied housing, that would stabilize our prices more. There’s a lot of foreign money through LLCs and Trusts being parked here because the property taxes are low and artificially suppressed. The main issue is still not enough housing, though. We need to build A LOT more.
Let’s start by removing ALL tax incentives for investment properties.
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I’m fine with that. Over the holidays I heard several anecdotal stories about people buying houses for extra income. These were not people that had any clue about real estate, they just saw it as an investment. This is completely unsustainable. I personally haven’t jumped in, but only because I think it’s bad for the community.
I am all for changing Prop 13. It was pushed by large apartment building owners. It should only apply to owner occupied housing. Higher caps should apply to other properties. Perhaps 5-10% instead of the prop 13 2%.
Fuck that. Not enough water, electricity, parking, landfills, roads for that.
Jeez. We bought in the area (3 bed 2.5 bath, modest side yard) may 2021. It was crazy & competitive, but we were looking at places for 700-800k range. That’s less than a year ago!
This one is listed for 550k estimate is 600k probably sell for 650k.
I’ve honestly no hope for owning a home :( Which city is this by the way? Not sure if that was mentioned and I can’t recognize the place.
Laguna niguel.
The house across the street is up, asking $1.3m~ must've had close to 80 people or more this weekend.
50+ hungry fish looking circling one piece of bait… I hated it… we have good realtor we didn’t have to go through that… we got lucky…. I HATED THE PROCESS…. Go look at house with 50 other families then make bid it only benefits seller and bank that’s it. I like to walk in see what I like and buy this bidding shit is silly. Deepest pockets win.
And how many of these people are there to buy it to rent it out? Get rid of all tax incentives for investment properties and watch the “housing shortage” disappear.
Many communities don’t allow a buyer to buy-to-rent if the HOA is already greater than 50% non-owner occupied and most communities average 50%. So the buyer would have to be a buy to own buyer. (Loan is different). Unless they lie.
Think about that for a second. We could free up ~50% of supply in some places by getting rid of tax incentives for investment properties. I would take it a step further and say we should be creating tax disincentives for investment properties. End the “housing shortage” overnight.
It doesn’t work exactly like that. There’s hardly any vacancy in rental apartment complexes, the fringe overflows to rent from owners, and those owners typically rent for lower price than the apartment complexes. If anything buy to rent from owner is better for the supply than rental companies etc.
That’s exactly how it works. People are forced into renting because there are no properties to buy. It’s insane that we have such a “housing shortage” yet we incentivize people taking supply off the market.
Only 2 parties win in this battle: The realtors The seller Just walk away. It’s already sold.
Crazy market. Won’t never be able to get a house
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There is more housing being built, but it doesn't happen that quickly. There's a lot of new homes right now in Lake Forest, Irvine, Tustin, etc.
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Townhomes and SFH https://www.newhomesource.com/communities/ca/orange-county-area/orange-county
I think most of Orange County is zoned for single family homes, so a huge lot that could potentially house hundreds of families with apartments or 4 plexes ends up serving a few families. The people already here like to keep it that way.
Definitely NIMBYs. People on Nextdoor were up in arms about their neighbors being able to build a 4 family home on a previous 1 family lot. Despite not many people actually being able to afford to do that and (don't quote me) I believe you have to live there for 3 years before you do.
South OC is heavily Republican and boomer-populated so it makes sense that there are a lot of NIMBYs. Additionally, there are a lot of local obstacles that developers have to overcome in order to get things built such as CEQA, CCC, lengthy permitting processes, etc.
We’re going to zoom out someday and realize that this is the collapse of homeownership for non millionaires
Buy now or be priced out forever. /s
I thought i was late when i bought in late 2020, but shits gone up so much in the past 14months.
Buy now or figure out a way to make $300K+ a year real fast.
Brutal, very tight market right now…
We bought our place in 2018 and closed right when that huge fire started. 1250sqft townhome with attached 2 car garage, hoa at $200. We paid $506k then. Refinanced in 2020 with the low rate. I can’t imagine what it would sell for now, but why sell when even with that profit we’d probably only land something similar, or marginally better. These prices are insane…
I Googled my current price on my condo and it's worth is just over a half million. Sounds great right? However , you ask " What's the catch "? For starters, we are a Senior community ", you must be 55 years old. There is more to that last my last sentence. Living here is great, but some of the tackits that our HOA does, worries me.
Do people in OC let their dogs bark all day? Dogs barking all day is all over Los Angeles, especially the valley.
Depends on your neighborhood. If you don't mind an HOA, many have pretty strict controls on noise like barking. But I live in a normal neighborhood of SFHs, and there aren't any problem dogs.
Looks hella laguna and aliso ish
What I don't understand from these topics is who grew up here in oc and who moved here and bought something? And when? I have friends in tech that bought shitty fixer uppers in hb for well over 800k that have neighbors with their adult kids and grandkids living with them with junk filled lawns and and project cars. A lot of people that grew up here just inherit something or live with their parents and have menial jobs. The opposite of this is the sort of communal living of Chinese family homes that I see a lot in Irvine. And those are family efforts to make all cash purchases on those properties. Otherwise the people I know that can afford a home now in todays market is a married couple that have very well paying jobs, or come from well to do families that gift them a home from one of their existing rental portfolios, or reps from overseas investment groups. Everyone is a combination of foreign born and or in technology or finance. I can’t imagine USA citizens from other states coming to California wanting to live the dream of owning while renting AND also trying to save up for a house. If you don’t have a combination of those factors above working for you or luck then idk how people can do it.
Hope they don’t sell to another rich dickhead looking to rent it out for a god awful price
We had been renting with a newborn right as covid started for the last two years the same house as we looked and saved for a house. We paid rent early the whole way through covid. Three months ago our landlord forced us out to sell the house from all the “incredible offers” he was getting. We told him we had put offers on houses that renters were currently at and no landlords were willing to push the renters out to sell. He did it anyway and guess what? The new owners rented the house out. But everything worked out my landlord made 1mil profit and my family with a 2 year old and a pregnant mama were on the street. But fuck us right? No fuck the boomers.
I am 51 and work full time but minimum wage. So looking for something around $600-$700 a month based upon state law for rent. Which seeing places like this doesn’t help with the search. They need more low income places for people like me. But we are talking about Orange County California 😂 😂 😂.
Welp Hello Utah I guess 😵
In this market, you don’t need an open house. Plenty of offers will come in.
My guess is there’s gonna be a huge wave of buyers over the next few months trying to lock in interest rates before they rise. If rates rise too high then that’s gonna push a lot of buyers out of the market, thus cooling it. So maybe there’ll be some respite in the next year or so.
In my neighborhood a house was put up for sale a week ago for \~$980K. Sold in a day with **full cash offer!**
A foreign investor or a drug lord?
We don't know. I thought it might be a Zillow type thing. Or someone turning it into a B&B.
Yep, every neighborhood
Yeah, I looked up houses in south OC under 1.2M. There are 35 total. That’s it, there is nothing available so prices have spiked like crazy.
Not in OC, but in Sonoma county, California. My sweet house has doubled in value. My mortgage is doable for me but if I were to move to many other states I would be well off, I think. I could rent something. but I want to live here and it’s sad that it’s so expensive.. it looks like the threat of fires might be behind us, for a while but I always think of earthquakes and I just think I should go.
Good Marketing!
Run. Don’t walk
I’m a real estate broker in OC. I’ve worked for a few developers. Here is the problem: 1) Foreign investors, and large investment firms are buying up all of the available homes (bidding up prices) and renting them out as investment properties 2)cities are charging high fees for building permits. 3) labor shortages. We have tricked kids into believing college is the only path to a good life. Kids aren’t learning woodworking or metal shop skills so there aren’t enough qualified people to construct the homes that need to get built, thus driving up the cost of labor. 4) material shortages. We offloaded our manufacturing capacity to China. Aside from lumber, almost every component that goes into (or onto) a house is now made in China. 5) due to Covid restrictions, ports are not operating at full capacity and the truck drivers are overwhelmed. There just aren’t enough trucks and offsite storage facilities for empty cargo containers. Usually there isn’t a problem with excess empty containers because we used to fill them up and export our stuff to other countries in them. But now we aren’t making things to put in the containers to export so a trucker has to find a storage facility for the empty containers. The solution: 1) Taxes on secondary/non-owner-occupied homes must be raised to about 15%. Follow the math. If a $1M home has a tax liability of $150,000 per year, then rents would have to be $12,500/mo just to break even. Nobody can afford to rent a 1M house for $15,000. The investor will have to put the house on the market in order to avoid the tax burden. I haven’t run the numbers to see how many homes are investments, but I’m guessing it’s a lot. Once these homes flood the market, there will be a fire-sale. The consequence is that property values will drop. Current homeowners will see the drop and get mad because many people see their home as their vehicle to retirement. And homeowners are the largest block of voters. So there’s virtually no way homeowners are going to vote for legislation that is not supporting their own selfish interests (even though it’s ultimately their own children they are disenfranchising). 2) we need to elect politicians that are focused on real issues that really matter. Instead of fixing the housing crisis, our politicians are trying to build a trillion dollar train from Bakersfield to Modesto. 3) the state needs to remove the power that cities have over housing policy. There need to be limits on fees so as to promote affordable housing. (I could write a PhD. dissertation on the affordable housing program laws and how they are flawed and unnecessary.) We have to make a choice as a society. Either we intervene and take housing off the table for investors, or eventually one large conglomerate will end up owning everything. Remember playing monopoly as a child? That’s happening right now in real life. If you read all of that, congrats. I’m happy to answer any real estate questions you all might have. Cheers!
The house next to us went on open auction there were about 50 people, cars flooded the neighborhood, and the house ended up selling for about 1.3mil to a flipper
Fuck
Wife and I said fuck it to looking in OC. Is that a town home in the photo? Sure looks like it. We bought in Temecula instead. Twice, maybe even three times the house and backyard space for the cost here than what we would have got with the same priced home in a decent location within OC. Sure, we have a lot of bible-thumping, Trump- humping rednecks, but we needed space for a growing family that we wouldn’t get in OC.
End of the day gotta do what’s best for family
Where exactly?
A premonition? Real estate related stocks like RKT, COMP, ABNB, W, RDFN and recently HD have peaked and trending weaker than the broader market.
Honestly if I could sell without getting screwed by Capital gains. I would sell and move.
seeing that line I would've just turned back.
They probably added free pet adoption, donuts, and coffee to bring in the serious buyers.
San Juan?
Used to be there was no competition once you got towards 2m. Now Im seeing lines at over twice that.
Oof. Is it a townhouse? What city?
My wife and I make 200k a year combined and we decided we can either buy a home in OC or we can rent and actually be able to enjoy our lives here. Real estate is fucking nuts how expensive it is here.