OT Does LA want a Football team?

[rickortreat]

Tagliabue was on TV talking about how important it was for the NFL to have a presence in LA.

The question is, does LA even care enough to have a football team?  It's a big area with a huge population, but they don't seem to be a pro-football town.  The teams that were there left, presumably for a lack of support.  I didn't think the Raiders belonged there, they're not a bunch of pretty boys there mean and nasty and need to be in a place like Oakland or Chicago or Philly.  LA is a bunch of pansy-asses as far as we're concerned.  Or at least the Anglos there!

The NFL wants the additional ad revenue  that a local franchise will bring.  The Networks are probably very insistent on this.  But what about LA, does it care enough?

Also, how many of you left coasters are even going to watch the Super Bowl?  Do any of you even care which team wins?    

[guest-koast]

What makes you think people in LA dont care about the superbowl?  Arena football is the thing out here...I hear alot of people talking about going to see the Avengers.  Why is that?  Because there is no real pro game to goto.  The only problem is where are they going to play?  Dodger stadium?

LOL @ LA is pansies, maybe beverly hills......not sure if you know this but some of the most gang infested areas reside in Southern California lol.  Im glad I got enough money to move the hell out of the area I was in raised in.

[JoMal]

The LA region needs a viable, NFL quality stadium in a safer neighborhood before any serious talks can be made about moving a team there or bringing in a new franchise. Plus, Al Davis still insists the LA region belongs to him, so he will fight any attempt made by the NFL to bring a team there other then the Raiders.

So far, I don't hear too much about a high-level move to buck Davis on territorial rights.

As for the Superbowl, you bet I will watch it. Any Superbowl that does not have the Cowboys in it is worth watching. In this case, I was strongly rooting against the Patriots, and a bit for Philadelphia since I was born thirty miles north of there and lived in Cinnaminson, NJ for several years. If I have any affiliation for Eastern teams, I guess it would be for Philadelphia teams.

[WayOutWest]

I didn't think the Raiders belonged there, they're not a bunch of pretty boys there mean and nasty and need to be in a place like Oakland or Chicago or Philly.  LA is a bunch of pansy-asses as far as we're concerned.  Or at least the Anglos there!
 

LA fans just don't have the time or money to waste on loser teams.  I know that losing is part of the Oakland, Chicago and Philly mentatlity, what choice do they have, but that just doesn't fly in L.A.

L.A. fans just don't support nor tolerate losing franchises and they show that by not paying for tickets to the game.  A typical Clipper game is about 40 to 60 percent full, Dodger and Padre games are not much better until they starated winning.  The only exeption was the Chargers, even durring their horried years the stadium was packed and loud.  IMO the price of Laker

IMO if being a loser and/or accepting losers was ok then more people would probably be moving to places like Oakland, Chicago and Philly instead of places like L.A., San Diego and Orange county, all of which lead the way in real estate gains because so many people are moving there and driving the price of home sky high.  Same is true in parts of northern California.

[rickortreat]

So, LA fans suck because they only support a winner.  This implies a serious lack of character on their part.  Winning is only fully appreciated after you're learned what it's like to loose.

As for your real-estate gains, all that is is inflation.  The asset isn't worth more in real terms, the dollar is worth less.

In addition, because the price increases have risen faster than wages, the prices are absurdly high.

If you don't find loosing money acceptable, it would be wise for you to sell your house and get out of there before the market collapses.  If you have to live there, I would suggest selling and renting.

People will get real upset when they realize that the price appreciation on their homes that they were counting on for their retirement gets destoyed in a crash or a spate of inflation like the weimar.  Incidentally this is a problem in all the major population centers, particualarly on the coasts.  Predicting the time of the collapse is difficult, but IMO it's getting much closer.

[westkoast]

The property price is going up because we have less and less land by the month out here.  Team that up with those areas being filled up with brand new nicer housing tracks and then the nice brand new shopping centers built and you find you have a higher price per home.  The whole neighborhood my Mom and brothers live in has gone up a whole lot because of the housing tracks being built the next street up.  Orange County is running out of room now too so people are being pushed out to Riverside County.

The prices of homes out here in California have been rising for a decade plus.

[rickortreat]

The price of homes has been going up for over a decade everywhere.  Supply and demand are the factors determinant of price, along with the cost of financing,

Financing, or the cost of money has been below the actual rate of inflation for most of that time.  This undermining of the dollar is being supported by the US government and it's trading partners.  They are doing a dance with the devil, as many asset classes have been inflated during the same time.

Look at this chart of the US stock market:

http://tinyurl.com/4xz5z

Looks like it's been doing pretty well since the bottom in 2002 doesn't it?

Now look at this chart of the same market priced in Gold:

http://tinyurl.com/526jd

Entirely different appearance!

Your anecdotal evidence about land scarcity may justify the price increases in your mind, just as other people have stories or explanations for the out of range price increases.

Short-term interest rates are already rising.  Soon, long term rates will have to rise in harmony with them.  What do you think happens to people who are leveraged out to the hilt in order to buy these homes, particularly those with adjustable rate mortages?  They will be forced to sell, and the more of them in that situation, the worse it will be for the other home owners.

Your home is priced in Dollars.  Look at what the dollar has done over the past three years:

http://tinyurl.com/67zjc

See that decline!  That's every dollar you have owned for three years, and everything you have a loan on that you service in dollars.  The Dollar has gone down by over 30%.  Your home may have retained it's value so far, but the dollar isn't done declining by any means.

This is why I've been touting gold for the past few years.  It isn't that gold is worth anymore, just that the dollar is worth less.

The US is not competitive as a manufacturer anymore.  Labor costs, environmental regulations and the like along with Currency arbitrage make the US a bad place to build a business that makes anything.  The past several years has seen the rise of financial service businesses, which make nothing and profit by providing financing.  Even large firms that used to manufacture, like GE, Ford and GM are making uch if not most of their profit through providing financing for their products.

Unless people can be gainfully employed, they're not going to be able to afford to buy these absurdly priced homes.  And the wages they're paid have to be sufficient for them to service the loans on these homes.  The cost of servicing them has to rise because of interset rates.  The bond market must be on drugs to charge so little considering how fast certain asset classes has risen.

The US government is awash in debt, and the debt is getting worse not better.  This country is writing checks for money it doesn't have, so each dollar we have is loosing value to reflect the difference.  It's getting worse, not better.  So protect yourself!
 

[JoMal]

California's housing shortage is probably a bit unique compared to the rest of the country.

The state added 599,000 new citizens during the 2003-04 fiscal year and now stands at 36,591,000 as of July 2004. This was actually a lower overall growth rate then the previous year.

While 316,000 of the growth came from natural increase (births minus deaths), net migration added 283,600 new residents. This estimate includes all legal and unauthorized foreign immigrants, residents who left the state to live abroad, and the balance of hundreds of thousands of people moving to and from California from within the United States. Most of that change came from net foreign immigration.

Of note, the Southern California counties of Los Angeles, Riverside, San Bernardino, and San Diego accounted for over half of the State's growth. Los Angeles and San Diego grew mostly from natural increase, but Riverside and San Bernardino grew from net migration, including from other counties in California.

Currently, 10.1 million people live in Los Angeles County alone. That is 27.6% of the State's population. If you add Orange county to that, combined they make up 36 percent of the State's population.

To get a bit of the perspective of this growth in Southern California, here are the actual estimated population change during the 2003-04 fiscal year:

Los Angeles       132,309
Riverside            78,610
San Bernardino   60,188
San Diego           41,919
Orange               39,898

That is a one year growth of 352,924 for this part of California. That much population growth puts a huge demand on new housing being built. It also puts a huge demand on existing housing, and means there will be a ready supply of buyers waiting to snap up any available shoebox at exorbitant  prices.

To further confuse the issue, the number of new housing units that were added in CALENDAR YEAR 2003-04 was 159,417. That amounts to about 3.8 people per new unit, though that is truly a sloppy way of interpreting the two figures.

What all this amounts to is this. The demand for new housing and the resale of existing housing in California remains extreme. The number of new residents, regardless of their job prospects, flock to California in numbers the rest of the nation probably can not comprehend, especially on how it affects the quality of life and the infrastructure.

And housing costs.

[Guest_Randy]

Actually, I looked into taking a position in Merced, CA at the new university there several years ago.  Merced is "the entrance" into Yosemite National Park and is about 2 hours away from the Bay.  The housing costs had gone up steadily -- 2% per MONTH over the past two year (48% over the past two year -- and this was over a year ago).  People from the Bay area were actually DRIVING 2 hours in each direction every day because they couldn't afford the cost of a house in the Bay (even on the outskirts it's like $350,000 for a 1300 square foot home).  I asked why they didn't just build closer to the bay (there ARE farmlands between) but the state has rated much of this land as agriculture and it can't be sold for other reasons.

[rickotreat]

Thanks for that information, Jomal and Randy.  I didn't realize the demographics there were so extreme.

I'm also glad I don't live there.  The demand for housing will drive prices higher and higher, until people decide that there are better opportunities elsewhere.  There is definitely a local element to rising house prices, but this doesn't mean that Cali's price rises are rational.  It must absoulutly suck living in certain areas, with overcrowding and excessive competition for housing stock.  All those new people require more infrastructure as well, and the taxes must be getting even worse for a state that is bankrupt.

There is a ratio between how much people make and how much a house costs.  If houses rise faster than wages (don't forget interest rates)  eventually someone will be left holding the bag.  This is the way of things in a mania, prices rise farther faster and longer than anyone can belive and just when you think it will go this way forever, the situation reverses.  This is human nature and the same behavior occurs again and again.  It is very hard to see when you're in the middle of it, which is one of the reasons why it happens.

Housing is a commodity and it's value is dependent on many things besides location.  I would advise any of you holding homes there to watch the foreclosure rates closely.  

[WayOutWest]

Housing is a commodity and it's value is dependent on many things besides location.

Not really all that accurate.  While the actual home and interest rates impact prices a little 90% of a homes price is location.  I've lived here 35 years and have been dabbling in real estate for the past 12 years, it's all about location, even when it comes to rentals and commercial property (the next phase of real estate I'm dealving into).  

SoCal is different from the rest of the country for various reason, most of which JoMal pointed out, L.A., S.D. and Orange county in particular.  The Bay area is right up there as well.

[rickortreat]

All true, but that doesn't mean it's not a bubble.  Or that it can't collapse.  You have been speculating in real estate at the best possible time in decades.  Conditions have been ideal to do what you have done.

Just recognize that things change, and even though the real estate market genereally isn't as volatile as the stock market because of it's localized nature, nothing goes up forever.

If you have the time, take a look at Colorado's real estate market.  Or even better, look at rates in downtown Tokyo.  

If you've lived in Cali all your life you must have been there when the real estate market cracked and people just walked away from their homes.  

There are places in PA where there are mansions, beautiful homes that fell into ruin when the coal fields dried up.  There are places in Western PA near where oil was first discovered, where the homes are gone, and the place has turned back into open land.  It has happened in the past.  It will happen again.  

[JoMal]

Housing is a commodity and it's value is dependent on many things besides location.

Not really all that accurate.  While the actual home and interest rates impact prices a little 90% of a homes price is location.  I've lived here 35 years and have been dabbling in real estate for the past 12 years, it's all about location, even when it comes to rentals and commercial property (the next phase of real estate I'm dealving into).  

SoCal is different from the rest of the country for various reason, most of which JoMal pointed out, L.A., S.D. and Orange county in particular.  The Bay area is right up there as well.

WOW, if you have the type of real estate demand that exists in SoCal, there ARE no real "bad" locations, just less lucrative ones.

Something else to consider about the net immigration numbers for California. The strength of the economy has no affect on it. In the early 1990's, the economy in California did a major nose-dive - the worse one in decades. While over 1,000,000 Californians packed up and moved out of the state in a three year period, foreign migration into the state actually increases.

Why?

Because as bad as the economy was in California in those years, it was much, much better then the parts of Asia and Mexico and Central America from where the majority of the new immigrants were coming.

[westkoast]

Ya but Rick parts of  San Diego County, Orange County, and LA County have two things alot of other places in the US dont have.  Those things being the beaches and the other being the weather.  The beaches in those 3 areas are some of the nicest beaches in the whole US.  Plus the weather in this area is pretty good 80% of the time.  That right there is going to attract people no matter what.  The people are comming here for the weather, the image portrayed, jobs (alot of under the table jobs for immigrants), and the "California Lifestyle".  People are not out here for say coal or oil as they are for the location.

Almost all of Orange County is anywhere from 0 to 20 minutes from the beach.  There are only a few spots in OC that is not right next to the beach.  As people start forcing the poor people out of OC (which is happening as we speak) they start to move more and more inland.  Riverside County is BOOMING right now.  California is and always will be a hot spot inside the US.  I think that is enough to keep the bubble from bursting.  Even the Valley seems to be booming.  I remember when you could drive up thru Sylmar, Santa Clarita, etc and wonder if you were even going the right direction.  Now its filled with beautiful homes and brand new shopping centers.  I did a little work trip from San Diego all the way up to Fresno and its just amazing how quickly those "nothing" areas turned into something.

[rickortreat]

Well the area does have a lot going for it, with the weather and the immigrant populations there will continue to attract more people as long as they percieve the US to be a better place to live.

But no economy is recession proof, and I have lots of very sound reasons to be concerned about this one.  So far things appear fine on the surface, but debt levels are rising rapidly, and the basis for much of it= the current account deficit  (international trade balance) are getting worse, not better.

I anticipate that inflation will start to impact the economy seriously, with the costs for food, energy and so on rising faster than wages.  (largely because we import a lot more than we export)  

A certain amount of wage inflation would help keep Cali house prices strong, but that isn't what's happening.   As people find the cost of living rising, they may decide that as nice as So. Cal is as a place to live, they could live cheaper elsewhere and enjoy a better standard of living.

Mexican immigration will help. But as I understand many of them comming accross the border aren't exactly loaded with money.