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Immigration See other Immigration Articles Title: California Housing Bubble: Now Even Teachers Can No Longer Afford To Buy A Home Teachers are the symbol of the American middle class: they’re educated, they’re crucial to society, they help mold the future of America. In California, the average salary of the 300,000 or so elementary, middle, and high school teachers was 123.7% of the national average for the 2011-12 school year, according to the National Education Association, in fifth place among all 50 states and Washington DC. They currently earn on average $69,300. Not exactly a pittance. But it’s a ludicrous pittance if they’re trying to buy a home in California where the Fed has succeeded in blowing another fabulous housing bubble. This time, it wasn’t the middle class who live and work here who drove up prices, abetted by eager banks and mortgage brokers with their liar loans, but investors awash in nearly free money from the Fed – private equity firms, REITs, institutional investors, even individual investors – and the people in the tech scene that is awash in the same kind of limitless, no-questions-asked money. Nationwide, home prices soared 13.4% in 2013, the biggest jump since the bubble days of 2005, based on the S&P/Case-Shiller index. Only the Fed can explain why that kind of jump was a bubble back then but isn’t a bubble now. So in California, a teacher with the average salary of $69,300 is facing a housing market where the median home, according to a study by electronic real-estate broker Redfin, lists for $485,000: On an average annual salary of $69,300, a teacher should pay no more than about $1,600 a month. Given current interest rates, property taxes, home insurance, and home owners association expenses, a teacher can afford a $260,000 single family home or condo. Of the 50,559 for sale in California, just 17.4 percent are listed below $260,000. And it’s not just teachers for whom home ownership has been pushed out of reach: 71% of Californians are earning less than $100,000 per year. In the inland areas, teachers have more choices: in San Bernardino County in Southern California, 45% of the listings are within reach. In Riverside County, 28%. In the Central Valley, in San Joaquin County, 35% of the listings are within reach. In coastal areas, it’s tough: in San Diego 6.4% of the listings are affordable for the average teacher salary; in Orange County, 9.0%; in Los Angeles 8.7%. In the Bay Area, it’s even tougher. In the counties of Alameda and Contra Costa across the Bay from San Francisco – which include two of the most dangerous cities in the country, Oakland and Richmond – 9.7% and 8.6% of the listed homes are within reach of the average teacher salary. But that drops to 2.5% in Monterey County; to 1.2% in the counties of Marin just north of the Golden Gate Bridge and San Mateo in Silicon Valley; to 0.3% in Santa Cruz County; and in my crazy and beloved San Francisco, to 0.0%! If you’re teacher in San Francisco, forget home ownership. Redfin explains: In San Francisco County, the average teacher earns $59,700 per year, and there are zero homes for sale that we have calculated as affordable on such a salary. By comparison, there are 139 listings with price tags over $1 million. As a teacher, unless you’re married to a rich spouse, you’re out of luck trying to buy a home in San Francisco. You’re welcome to work here, but you can’t buy a home here. In San Mateo County, where the average salary for teachers is $70,600, Redfin found seven homes for sale that would be within reach. Not exactly a mansion but a “0 bed, 1 bath, 490 sqft condo.” Raising a family in place like that is going to be tight. But there were 254 homes listed for more than $1 million. That’s the granular detail of a housing bubble. But the Fed steadfastly refuses to acknowledge these bubbles. As they therefore don’t exist, the Fed continues with its easy-money policies, perhaps to stimulate its illusory “wealth effect” where the lucky ones feel richer and therefore might spend more. It never sees bubbles until after they implode. And then it awkwardly denies that anyone could have seen them beforehand. But teachers and middle-class working stiffs who are trying to buy a home in the coastal areas of California can explain this bubble to the Fed today. So if Fed Chair Janet Yellen has a minute, she should fly out here and look at what she and her colleagues have wrought before she promises more easy money. Normally, first-time buyers, a powerful economic energy, create real demand and make the housing market grow. We’ve been praying for their arrival like we’ve been praying for rain in parched California. But the more we pray, the fewer there are. Read.... Without Them, The Housing ‘Recovery’ Remains A Sham Poster Comment: To hell with California teachers. They are all Democrats and cheer every time another illegal aliens come across the border. Their wages are higher than non-government workers. The average worker might make the same wage and often less as someone in another state doing the same job. But taxes and fees are much higher. And then there is the rent driven higher by legal and illegal immigration. Before I left California I saw an ad in Craigslist for a 2 bedroom apartment in SF. There were 2 women sharing each bedroom paying $800 each. That is $3,200 total. Most affordable housing (i.e. below $450,000) in California is in gang territory where white people are not safe in the daytime. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 6.
#1. To: Horse (#0)
The exorbitant price of housing is due to a limited supply of land within a municipality, inefficient use of the land and a myriad of regulations governing construction. Land supply would be less of a factor if the house lot was used to accommodate several generations, including particularly older inlaws and open ground space was replaced by roof-top recreational and gardening area.
Land was not so limited when there were 7 million people living there in 1940 nor in the 1960s when housing was affordable and there were 17 million. The population has doubled. There are no new 3 bedroom homes for $25,000 in safe neighborhoods. That state is wall to wall legal and illegal aliens.
Without the aliens price of produce would be an order of magnitude higher; Canada would buying all its imports from south of the US border.
If Mexican produce will be so cheap, the USA should buy from Mexico too.
There are no replies to Comment # 6. End Trace Mode for Comment # 6.
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