Now, I live and invest in California, so I'm definitely not a California hater. However, I'm also no California fanboy. I'm actually pretty open-minded and enjoy listening to something like this to perhaps get a different perspective.
There are certainly benefits to investing in California. Like I said, I do it and I do quite well by doing so. However, there's also no arguing there are downsides to doing business here.
We have the #1 highest state income tax in the entire country! It's also very business unfriendly here. According to a CNBC study (mentioned in the story), we are ranked DEAD LAST in the country when it comes to the cost of doing business.
This is probably the reason we've actually been seeing a net migration LOSS of residents in this state to other states. Not to mention the thousands of companies that have left (or are leaving) the state, including big name companies like Hewlett Packard (moving to Houston), Oracle (moving to Austin), and Tesla (Elon and the next Gigafactory will be in Austin).
(Anyone see a theme there with Texas?)
Anyway, not trying to convince anyone of anything. Except perhaps our state legislators better wake up if they want to stop this mass exodus. Unfortunately, I'm not sure they get it yet. At least the laws that continue to be proposed and passed in this state don't seem to signal (to me) that they do.
I follow Bruce Norris also, so I understand what you are saying. It seems like at least in the short term there will be issues, although I feel hopeful about the coastal areas long term due to high tech jobs.
I see google, Amazon, Apple and others building offices in the SoCal area, so high paying jobs will tend to drive housing.
I think the growth and prosperity of CA will sustain and actually accelerate. The issues that are causing problems are fixable. Gov. Newsom has a recall petition pending. The other big driver of issues is Covid. Covid has halted commerce specifically tourism which is a big driver for the state. Covid has also created a widespread remote working model.
My read is in 12 months Covid may get contained in an emphatic manner. Vaccines will help. Fingers crossed.
Once that happens tourism bounces back and remote work starts to go out of fashion. Out migration will fall quickly and you will a lot of people migrate in, specifically international students, domestic students, Visa based tech workers, young people from all over the world.
I also think older people will continue to migrate out as retirement will be easier for them in cheaper states.
The issue of California competing with other high-tech centers in the world (instead of Rust/Bible Belt) may be easier to grasp for people who are reasonably familiar with geopolitics, global market trends, and the disruptive tech sector dependent on attracting the best talent. Perhaps watch this video excerpt: Start at 47:00 and end at 51:15
Also bottom line is companies move all the time.. other states offering great packages to get companies to move to them has been going on for ever and will never stop.. its normal. Its not some new thing.. other wise Detroit would still have a population of 1.5 million and growing instead of 700k and shrinking with 20 to 30,000 vacant houses that are there or used to be there.. whole neighborhoods have been bull dozed in that market.. I have yet to see a bulldozed neighborhood in CA.. that was not replaced by something greater.. not just an empty lot or field full of trash like you see in other markets.
This is true Jay but my point was, CA is such a large and beautiful state with tons of things to do, tons of amenities, etc., it only makes common sense (or at least common sense to me) that they would provide such "benefits" to businesses to better this state instead of allowing other states to pilfer our great businesses. I remember way back when in 1993 when I started my first small business. It is a struggle to start any business but when your state makes it so unnecessarily costly and cumbersome to survive, that just is wrong in my book. Small business is the backbone of this great country and there are plenty of states who understand that fact and show appreciation by helping them, not hindering them like CA does.
Also bottom line is companies move all the time.. other states offering great packages to get companies to move to them has been going on for ever and will never stop.. its normal. Its not some new thing.. other wise Detroit would still have a population of 1.5 million and growing instead of 700k and shrinking with 20 to 30,000 vacant houses that are there or used to be there.. whole neighborhoods have been bull dozed in that market.. I have yet to see a bulldozed neighborhood in CA.. that was not replaced by something greater.. not just an empty lot or field full of trash like you see in other markets.
This is true Jay but my point was, CA is such a large and beautiful state with tons of things to do, tons of amenities, etc., it only makes common sense (or at least common sense to me) that they would provide such "benefits" to businesses to better this state instead of allowing other states to pilfer our great businesses. I remember way back when in 1993 when I started my first small business. It is a struggle to start any business but when your state makes it so unnecessarily costly and cumbersome to survive, that just is wrong in my book. Small business is the backbone of this great country and there are plenty of states who understand that fact and show appreciation by helping them, not hindering them like CA does.
Man your preaching to the Choir Oregon is just as bad.. then you have the Antifa who hijacked BLM here in Oregon and bizzness which was already impacted by Covid is in real trouble in the PDX core.. foot traffic is down by 80 to 85%.. and its not because of Covid..
When you have city officials who cater to 300 to 500 wackos and let them run amuk then blame trump LOL.. its just insane here.
But back to CA.. there is no state as diverse both in the people and the opportunities and the just plain insane amount of physical beauty etc.
Many states have cool mtns like the Sierras and Trinity Alps. But they don't have the beach's Or world class agriculture that allows the best produce year round. Or world class wine although Oregon and Wa are not far behind.. then U have the weather oh man the weather LOL.
I lived in Palo Alto for 8 years and many said that was the best weather on the earth.. not to cold not to hot No humidity etc etc.. If you have the means CA is Not a bad place at all.. I have traveled the entire country only state I have not been to is WV and while all of them have their points none compare to CA for variety and opportunity.. Even though I have not lived in CA since 2001.. its still my home state.
Man your preaching to the Choir Oregon is just as bad.. then you have the Antifa who hijacked BLM here in Oregon and bizzness which was already impacted by Covid is in real trouble in the PDX core.. foot traffic is down by 80 to 85%.. and its not because of Covid..
When you have city officials who cater to 300 to 500 wackos and let them run amuk then blame trump LOL.. its just insane here.
But back to CA.. there is no state as diverse both in the people and the opportunities and the just plain insane amount of physical beauty etc.
Many states have cool mtns like the Sierras and Trinity Alps. But they don't have the beach's Or world class agriculture that allows the best produce year round. Or world class wine although Oregon and Wa are not far behind.. then U have the weather oh man the weather LOL.
I lived in Palo Alto for 8 years and many said that was the best weather on the earth.. not to cold not to hot No humidity etc etc.. If you have the means CA is Not a bad place at all.. I have traveled the entire country only state I have not been to is WV and while all of them have their points none compare to CA for variety and opportunity.. Even though I have not lived in CA since 2001.. its still my home state.
I hear that! Agreed, politicians in OR & WA are not much better and in dealing with those wackos, worse! It would be a wonderful dream to wake up and see that they all vanished and could be filled with better human beings.
Atlas Manhers, I figure it cost me zero and even paid me to live in California since all property has appreciated more than I've ever paid for it. Friends that went out of state for cheaper Property 20 years ago regret not staying to take part in Real Estate appreciation.
I left the Bay Area about 3 years ago. I already owned rentals in south puget sound and that's where we moved to. I lived in Ca for thirty years and held properties all that time. I retired about 5 years ago and we knew we were going to leave. The taxation is nuts and living in ca is just not what it used to be. There was a time you could walk for miles in San Francisco and never step into human waste can't do that today.
Our area is fine everything is very clean. I know what you mean about San Francisco same with Los Angeles lots of homeless with last four years of Dystopia people were sent here. I'm still on Prop 13 for my properties. So Taxes have all been very consistent over the last 30 years. Energy bills have all gone to near zero with our Solar. So see no reason to sell. I take all the tax avoidance I can like anybody we could always zero it out once every couple of years by spending to upgrade properties. I can only think you're paying a lot more to constantly flip properties since you would lose prop 13 lower tax rate on flips. i have only bought and held or sold with 1031 tax exchange.
1. I think you are underestimating just how many people live in California almost 40 million.
2. The jobs that are leaving a California are not main source of income for Californians. (Generally low paying Tesla starts at $15/hr) where the average salary medium in Palo Alto is 100k plus. The people working there are basically already living is poverty by wage standards
3. Your looking at 1 year versus historical data. The trend for 50+ years is 🆙
4. Majority of the people like Elon and others have been living off the tit of the progressive agenda of California and now that the state isn’t offering the same kind of subsidies. They want to take advantage somewhere else like Texas.
5. I don’t think making accusations of someone being “crazy” is a good way to start a conversation FYI.
6. If you want find out a trend history knows all 💰💰
If you want to look at the last 50 years as a way to feel better about what's happening now, that's your right. To me it sounds like "well my house may be on fire, but if you look at the trend of my house over the last 50 years, I'm not worried"
I just priced a 26ft Uhaul truck for one Way from Dallas Texas to San Francisco and it Costs more than from San Francisco to Dallas? Why would a one-way trip cost more from Uhaul if we actually had a mass exodus? suspect some only get certain news with alternative facts. Real Estate Prices in California also do not reflect a mass Ex
@Alan DeRossett Welcome. I just input the same information you did and received the exact opposite result. Dallas to San Francisco 26 ft=$1655..........San Francisco to Dallas 26 ft=$5290. This is direct from Uhaul site. Maybe I did something wrong but have double checked. Keep me posted if you see different.
You must have those fox news redcookies. Try from a new browser not infected. also, see today's landlord relief in the Stimulus bill. Renters relief goes directly into the landlords bank account https://twitter.com/mentorcapi...
@Alan DeRossett Welcome. I just input the same information you did and received the exact opposite result. Dallas to San Francisco 26 ft=$1655..........San Francisco to Dallas 26 ft=$5290. This is direct from Uhaul site. Maybe I did something wrong but have double checked. Keep me posted if you see different.
I know this thread is about CA. But overall there has been an undertone that people are abandoning big international coastal cities to live in smaller cities in middle America. Well it seems that trend has started to reverse if that was even a trend. Several media articles have been reporting on the upcoming resurgence of NYC as an example. People who moved to more slow paced areas in search for space and privacy seem to be moving back to the Big Apple. I think it’s early but if Covid starts to dissipate, cities are coming back like a coiled spring. I think SF needs to come along and it will have wind at its back but we cannot downplay the growing homeless problem and the rise in crime in this otherwise gorgeous city. My own theory is majority wins. Today fewer people venture out, there are fewer tourists etc leaving the streets wide open for the homeless. But as life normalizes, things could change. They could truly change if the present council and the governor are replaced in due course.
All property values still are rising despite the .018% of underemployed leaving California. Based on Stats and sales here in CA everything is still appreciating multiple offers on all listings very low inventory According to data released Friday by real estate firm DQNews, the median home sales price in the region rose by 10.1 percent from December 2019 to $600,000 in December 2020, with sales rising by 29 percent over 2019, So will Gamble and keep my Real Estate in California for the next 4 years mortgages are now all paid off and we have zero vacancies. my prop 13 property Taxes are much less than Texas is currently for the same valued structures.
Two weeks back one of my SF tenants gave notice. His wife is expecting and he hit gold in a recent IPO. He is not moving out until the end of May, that’s when the lease expires. I am super happy for him. It’s been a week since I listed the place back online with a June move in and the response has been amazing. My listing agent was telling me she is getting overwhelming interest from people looking to move in to SF from other parts of the country and the world “as usual”. She is right over the past 20 years, 80% of my tenants have been people from outside the area. She is also right that this is very normal for SF because that’s how it rolls. It’s quite unlike tier 2 and tier 3 markets that get celebrated here because a handful of CA residents moved into their city. Not just that the whole story then gets blown up as a “mass exodus” from CA and also the end of CA. For what it’s worth, with the falling cases in Covid and the frigid winter temperatures, rolling power downs, icy roads in many of these “destination” tier 2 markets, I am seeing fewer posts and noise on this topic. When winter comes people who moved out of CA have regrets, Id say the same about the harsh summers in many states as well. Heard this directly from people who moved to a “popular” destination city.
I'm a native Californian making the move to Texas in May. We just did a scouting trip out to the DFW area and escaped just before the worst of the storm hit, but there is just so much business opportunity out there it's exciting but it is making the housing market incredibly competitive. Luckily, TX is huge and there's still plenty of space to expand and grow. Also, as noted in the BP Magazine last month the High Speed Rail Train that will connect Dallas to Houston. I know people that have moved to other states too and they all left for better opportunities, but also particular freedoms that meant alot to them like health freedom, gun laws, etc.
For Californians relocating know that the property Taxes are Higher per $1,000 of county Appraisal Value in Texas and you may need to spend an extra $50k to Insulate, Changeout windows to triple pane, and set up your own sustainable Whole-home battery backup solutions without State help. Standard things that you might consider normal Buiding practices to save energy were never required of Builders in Texas. Thus the deep Freeze problems last week.
Agree with Tushar, this is a win-win for California Capitalism like what the two Billionaires both said in the Video, Chamath, and Vinod in one video wow! As some companies or people fail to thrive in a competitive Capitalist marketplace that's always evolving and leave we get many more new innovators. Have always held our properties in California and improve them each year utilizing the Rebates and tax credits. But wonder if Texas Landlords will be able to write off a bulletproof Cybertruck to collect the rents with all the Freedom & Gun laws allowing Tenants to open carry? What should Multifamily landlords do? The majority of Tenants would leave in the middle of leases to protect their own families if some started carrying guns in our complexes.
I agree, the term 'Mass Exodus' is an attempt by media companies to grab headlines and drive ad dollars, nothing new there. I don't think it's a good idea to dismiss the current migration numbers out of the state though, which is evident thru many sources. Arguments made that people keep moving to the state and the population of CA keeps rising are irrelevant, we should really be looking at YoY population growth rates, which in CA has declined for a 3rd straight year which is not in line with other states in the country. People will continue to flock to California for several reasons some of which include; popularity, climate/environment, opportunity (both for career and higher education), liberal migration laws, etc. So yes, migration to the state will continue, presumably the majority of this will be migrants coming through our borders and foreigners from oversees seeking educational and financial opportunity. This is a fact that can be seen in the growing racial diversity of California, it statistically being the most racially diverse state in the country. Whether this is good or bad is an argument for another day. I think migration out of the state is coming from middle to low income, native Californians, who can no longer afford to live here and have been pushed out directly or indirectly through poor political policies, and that should be of concern.
California has some of the highest income and corporate taxes in the country (regardless of brackets), highest housing to income cost ratios, 13th worst K-12 education, worst homeless population in the country, and an over regulated political/legal environment to name a few
- The government continues to take our money and provide little in return, poor education, poor roads, traffic, and transport systems (high speed rail failure), failing social services (rampant homelessness), poor oversight (EDD Fraud). It seems like so much of our taxes go to waste.
- Exorbitant housing costs. This due to regulations and fees. Driven through excessive permitting requirements, impact fees, code requirements (solar, fire sprinklers, rain water harvesting, over-engineering), EIRs, etc. This both raises the cost to build and limits supply, driving up home prices.
- Poor public K-12 education systems. Failure by our government to make any real changes to raise educational levels.
- Homeless population skyrocketing driven recently by unprecedented lockdown restrictions, small business fees, taxes, and regulations make employment of others exceedingly expensive in turn raising prices and reducing the affordability of goods, minimum wage hikes business run towards automation and layoffs to stay afloat
There's no doubt about it California has one of the highest concentration of millionaires and high income earners in the country, plenty of families who can live comfortably in this state. And it's a place where investors can make significant earnings. But it seems ineffective and damaging policies have driven a growing income divide that is now one of the worst in the country.
How do we hang on to the middle and lower classes who play such an integral role in the economics of any state when they can move to states where there dollar goes farther? It'll be interesting to see how California rebounds from COVID, I don't know if everyone will flood back to this state like so many on this thread think. The ability to work from home is undoubtably increasing, disregarding COVID, remote work will continue to grow as businesses look to lower costs and software continues to improve. A lot of people will return to offices but not like it was pre-COVID. I think another factor is age demographics, with the largest age groups coming into their early to mid thirties looking to grow a family do other states make more sense financially. Sure California is fun while you're young and dumb and spending all your money instead of saving, what happens when that starts to change.
California will always be a powerhouse for what is has, culture, environment, climate, tech, Hollywood, agriculture, tourism, etc. but it will be interesting to see how the next decade will payout. As a lifelong Californian I thought I'd never leave but no doubt about it I've been considering leaving now more than ever before and I don't think I'm alone. Just my 2 cents.
