Why do people Buy Property in California
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
Why do people Buy Property in California
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
1yWhere do you think people are growing richer with real estate.....Los Angeles or Cleveland? Owning just a few typical properties in California turns you into a multimillionaire very quickly. Owning a few typical properties in Cleveland gets you an extra $500 a month.
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- 1yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Scott Trench:
When I visit Manhattan, I'm amazed at how the world really seems to revolve around that city. The best acting, best jobs, best food, famous landmarks, best museums, best park, best comedy, etc are all arguably located there.
Are you sure you're in the right city? Lol, I don't see any of those as a New York 'best'......well you used the word arguably so you're in the clear I guess.... :-)
- Real Estate Broker · Barstow, CA · Member since 2024 · 15 posts · 8 votes1y
Many of those issues are more specific to big cities, but you can still enjoy the benefits of owning in California by exploring areas outside the urban core. High taxes and prices are pushing people further from the cities, which, in turn, drives up prices and appreciation in those surrounding areas.
For example, we’re seeing significant growth in cities hours outside of LA as people seek affordable housing, better quality of life, and more space. These areas can offer great opportunities for investors, often providing better cash flow and lower entry prices compared to LA itself.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes1y
Quote from @Guadalupe Batana:
Many of those issues are more specific to big cities, but you can still enjoy the benefits of owning in California by exploring areas outside the urban core. High taxes and prices are pushing people further from the cities, which, in turn, drives up prices and appreciation in those surrounding areas.
For example, we’re seeing significant growth in cities hours outside of LA as people seek affordable housing, better quality of life, and more space. These areas can offer great opportunities for investors, often providing better cash flow and lower entry prices compared to LA itself.
Good take. I like it. I live about an hour outside of Cleveland, Ohio and the quality of life where I live vs the city of Cleveland is night and day. Looks like two different planets. Sounds very similar to what you're saying. Only thing different is the cost of housing goes up outside of the city, not down like where you're at.
- It’s not for me either but I grew up outside of the city and know plenty of people who love it there and would never live anywhere else. It offers things that simply can’t be found anywhere else in the world and it’s clearly the best place for many things (finance, fashion, art, culture, Broadway/ theatre, diversity of neighborhoods and people, always something to do at all hours of the day and night, hundreds of amazing restaurants with all kinds of food (I would say the best foodie city in the world by far and I’ve been to a lot of places including Paris, Rome etc.), incredible live music, parks (not just Central Park either there are a lot of them), public libraries and bookstores, shopping, all kinds of entertainment… It would be an uphill argument to make that it’s not the best in the world in all of these categories. There’s a reason that the most expensive real estate in the world is there and that is bursting at the seems with people. The city is a lot safer now than it was when I was growing up as well. Grown men don’t need to be scared to ride the subway heck even little kids take it to get to school every day without their parents. I prefer AZ myself personally (lived in Prescott 4 years and Tucson for one and loved both places), but for many people NYC can’t be beat especially if they’re trying to make a name for themselves in careers in finance, art, theatre, music etc. it’s practically a requirement to live there for certain careers.
Quote from @Bruce Woodruff:
Quote from @Scott Trench:
When I visit Manhattan, I'm amazed at how the world really seems to revolve around that city. The best acting, best jobs, best food, famous landmarks, best museums, best park, best comedy, etc are all arguably located there.
Are you sure you're in the right city? Lol, I don't see any of those as a New York 'best'......well you used the word arguably so you're in the clear I guess.... :-)
- 1yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Steve K.:
It’s not for me either but I grew up outside of the city and know plenty of people who love it there and would never live anywhere else. It offers things that simply can’t be found anywhere else in the world and it’s clearly the best place for many things (finance, fashion, art, culture, Broadway/ theatre, diversity of neighborhoods and people, always something to do at all hours of the day and night, hundreds of amazing restaurants with all kinds of food (I would say the best foodie city in the world by far and I’ve been to a lot of places including Paris, Rome etc.), incredible live music, parks (not just Central Park either there are a lot of them), public libraries and bookstores, shopping, all kinds of entertainment… It would be an uphill argument to make that it’s not the best in the world in all of these categories. There’s a reason that the most expensive real estate in the world is there and that is bursting at the seems with people. The city is a lot safer now than it was when I was growing up as well. Grown men don’t need to be scared to ride the subway heck even little kids take it to get to school every day without their parents. I prefer AZ myself personally (lived in Prescott 4 years and Tucson for one and loved both places), but for many people NYC can’t be beat especially if they’re trying to make a name for themselves in careers in finance, art, theatre, music etc. it’s practically a requirement to live there for certain careers.Quote from @Bruce Woodruff:
Quote from @Scott Trench:
When I visit Manhattan, I'm amazed at how the world really seems to revolve around that city. The best acting, best jobs, best food, famous landmarks, best museums, best park, best comedy, etc are all arguably located there.
Are you sure you're in the right city? Lol, I don't see any of those as a New York 'best'......well you used the word arguably so you're in the clear I guess.... :-)
Well if you say so, I've been there and found it not my cup of tea. For one, Balboa Park in San Diego is superior to Central Park IMO. And you've not been watching the news lately? The subway is a death trap now. Weather sucks there and people are rude. No good Mexican food which is a huge black mark....
I'll give ya foodie/shopping/entertainment and housing costs (but is that a positive?)
- I mean I fully agree for myself personally I would never be able to live there. I can visit for a few days then I can’t wait to get out. But we’re just 2 people and something like 10 million people prefer to live there so we’re the minority. The subway is definitely not a death trap, you can’t believe everything you read in the news!
Quote from @Bruce Woodruff:
Quote from @Steve K.:
It’s not for me either but I grew up outside of the city and know plenty of people who love it there and would never live anywhere else. It offers things that simply can’t be found anywhere else in the world and it’s clearly the best place for many things (finance, fashion, art, culture, Broadway/ theatre, diversity of neighborhoods and people, always something to do at all hours of the day and night, hundreds of amazing restaurants with all kinds of food (I would say the best foodie city in the world by far and I’ve been to a lot of places including Paris, Rome etc.), incredible live music, parks (not just Central Park either there are a lot of them), public libraries and bookstores, shopping, all kinds of entertainment… It would be an uphill argument to make that it’s not the best in the world in all of these categories. There’s a reason that the most expensive real estate in the world is there and that is bursting at the seems with people. The city is a lot safer now than it was when I was growing up as well. Grown men don’t need to be scared to ride the subway heck even little kids take it to get to school every day without their parents. I prefer AZ myself personally (lived in Prescott 4 years and Tucson for one and loved both places), but for many people NYC can’t be beat especially if they’re trying to make a name for themselves in careers in finance, art, theatre, music etc. it’s practically a requirement to live there for certain careers.Quote from @Bruce Woodruff:
Quote from @Scott Trench:
When I visit Manhattan, I'm amazed at how the world really seems to revolve around that city. The best acting, best jobs, best food, famous landmarks, best museums, best park, best comedy, etc are all arguably located there.
Are you sure you're in the right city? Lol, I don't see any of those as a New York 'best'......well you used the word arguably so you're in the clear I guess.... :-)
Well if you say so, I've been there and found it not my cup of tea. For one, Balboa Park in San Diego is superior to Central Park IMO. And you've not been watching the news lately? The subway is a death trap now. Weather sucks there and people are rude. No good Mexican food which is a huge black mark....
I'll give ya foodie/shopping/entertainment and housing costs (but is that a positive?)
- 1yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesLots of stuff going on in the subways, it's never been in the news this much. Some of it has to be true I figure....
Quote from @Steve K.:
I mean I fully agree for myself personally I would never be able to live there. I can visit for a few days then I can’t wait to get out. But we’re just 2 people and something like 10 million people prefer to live there so we’re the minority. The subway is definitely not a death trap, you can’t believe everything you read in the news!
But yeah, different strokes for sure....a lot of people would freak out to wake up and have wild cattle on their property and cowgirls riding down the road (dirt roads, no streetlights) - 1yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Well, no one else has mentioned it, so I will......what about the current LA fires and the ongoing mis-managment of the forest and brush? A lot of people in the current fire area had their insurance canceled lately and are really screwed, Reminds me of Florida and the insurance problem caused by the hurricanes.
Quote from @Bruce Woodruff:
Lots of stuff going on in the subways, it's never been in the news this much. Some of it has to be true I figure....Quote from @Steve K.:
I mean I fully agree for myself personally I would never be able to live there. I can visit for a few days then I can’t wait to get out. But we’re just 2 people and something like 10 million people prefer to live there so we’re the minority. The subway is definitely not a death trap, you can’t believe everything you read in the news!
But yeah, different strokes for sure....a lot of people would freak out to wake up and have wild cattle on their property and cowgirls riding down the road (dirt roads, no streetlights)I’ve worked with a few clients moving here from NYC, some have actually freaked out that it’s too quiet. Different strokes. The subways used to be way sketchier than they are now, it’s the city, not for lightweights.
Quote from @Bruce Woodruff:
Well, no one else has mentioned it, so I will......what about the current LA fires and the ongoing mis-managment of the forest and brush? A lot of people in the current fire area had their insurance canceled lately and are really screwed, Reminds me of Florida and the insurance problem caused by the hurricanes.
The fires are terrible. Prayers for everyone in LA right now and God Bless America. I actually lost the house I lived in to a fire when I lived in Prescott (I was renting then but it's still devastating).
- Coupeville, WA · Member since 2016 · 93 posts · 73 votes1y" I literally want to vacation to San Diego"
Quote from @Scott Trench:
Also, I am on a work trip to Menlo Park, CA as I write this. It's 60 degrees. Humidity is gloriously perfect. Every coffee shop and restaurant has outstanding service. Transportation options are plentiful. People seem friendly.
At home, in Denver, which I also love, it is 18 degrees. I left with a sniffle, with bleeding fingers, cracked lips, and a perpetual risk of a nosebleed in the heart of Denver winters that get so cold, my toes start to turn blue after 5 minutes outside. These problems have completely evaporated in less than 24 hours. I return to my cocktail of winter moisturizers tonight when I land in Denver.
I understand why it is more expensive here. I'm also not even in the nice part of California, much farther down South. I understand why it is extremely expensive down there too. San Diego, and the strip of California between San Diego and California, is some of the most glorious land on this Earth. And, unlike other beautiful places, like the mountains near Denver, or those in Arizona, it's always a good time to live there (at least if you like the idea of long pants and/or a jacket being truly optional). Last time I visited San Clemente, my uber driver told me that he has not had a heater or an air conditioner functioning in his home for the last 16 years, and doesn't miss it, with very rare summer exceptions.
If you have the money, I imagine it's a pretty good place to be. All the opportunity, weather, food, and culture you can ask for. I literally want to vacation to San Diego. Somehow, Southern California, at least those areas right by the coast, also escape the discomfort of a large amount of insects. Not a lot of screen doors or porches. Those are a nasty surprise whenever I go to Texas or the South (we also don't really get a ton of bugs in Denver, though they are there in the mountains).
Problems? Of course. But, maybe not so large as the people out of state like to imagine them to be. California's economy, and real estate market, ain't going anywhere.
You should vacation in San Diego, it's a beautiful place to relax. The Beaches, Bays, Parks and some stunning view points like the Cabrillo National Monument or the Mount Soledad Cross. I grew up there and still go back there just to vacation sometimes. - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Bruce Woodruff:
Well, no one else has mentioned it, so I will......what about the current LA fires and the ongoing mis-managment of the forest and brush? A lot of people in the current fire area had their insurance canceled lately and are really screwed, Reminds me of Florida and the insurance problem caused by the hurricanes.
the current fire has nothing to do with forest management. Brush a little bit how do you handle brush usually with prescribed burns.. the issues are houses on mountains and I suspect there is a good amount of people that planted Euculyptus trees years ago those things are just like light a roman candle.. and 60 to 100 mile an hour winds.. Socal has big time brush.. the only way to manage that would be to constantly cut it back but then you erode the soils.. this one reminds me of the fires years ago in the Oakland hills that burnt down 4500. homes.. or the fires up in Napa and sonoma county a few years back that took out 6k homes. Now the water issue is something. But anytime you build in the mountains and the other thing I bet a lot of those houses had shake roofs. - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Bruce Woodruff:
Well, no one else has mentioned it, so I will......what about the current LA fires and the ongoing mis-managment of the forest and brush? A lot of people in the current fire area had their insurance canceled lately and are really screwed, Reminds me of Florida and the insurance problem caused by the hurricanes.
also thing of the Lahina fire on Maui there was no forest there freak down slope winds and buildings that were built with very dry timber with no fire protection in mind.. this stuff happens. - 1yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Whether or not this specific fire was entirely due to forest mgmt, Cali has a problem with this. They fight Federal attempts to remove old wood by suing. I know Fed people that have fought the state over this. It is fairly well known...
- Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes1y
CA, especially the Bay Area and other population centers, are great investment locations. The price is much more expensive than Midwest, but the yield or cap rate, particularly commercial properties, are similar to Midwest.
SFR may have a lower cap, in good area. However, if you are willing to go to the Central Valley, the price there are not much higher than the Midwest.
I only buy in CA, only in Bay Area.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @David Song:
CA, especially the Bay Area and other population centers, are great investment locations. The price is much more expensive than Midwest, but the yield or cap rate, particularly commercial properties, are similar to Midwest.
SFR may have a lower cap, in good area. However, if you are willing to go to the Central Valley, the price there are not much higher than the Midwest.
I only buy in CA, only in Bay Area.
I'm not gonna say your wrong David, but everything I know and have heard says your way-wrong.
I will lend an example via data.
Here in the "Midwest" of MN, we are getting $2,500 - $3,500mnth rents on "bread & butter" SFH. The purchase cost is on average $350k - $450k. That's new built or nearly new, so we don't have to run down the rabbit hole of condition costs.
In areas of sub 3% vacancy rates. Nobody should be shocked by this or argue it, it's the reality of shortage market.
Now I go to S.CA and randomly looked up similar property rental.
I randomly got 3208 39th St, San Diego, CA 92105
It's listed rent is $3,795. Yup, a touch higher than here in the Midwest. But the kicker is it was purchased Feb 2020 for $1,078,066
That gross rent revenues too price ratio of 4.2%
Vs here in Midwest a "median" ratio of the above of 9%.
I don't know about your idea of maths but to me that says Midwest performs at 2X of CA.
Now let's talk appreciation. Which 3br+ SFH do we think has more room to appreciate? One priced at a million+ dollars, or one priced at $400k?
Now keep in mind, median household income here in MN midwest and CA is almost exactly the same, just over $100kyr. So people are making almost the same incomes, which property has more room to appreciate going forward?????
It jumps out as rather obvious to me. I don't see this CA home having a sellable market value of $2million+ dollars in coming years but I sure as heck could see that $400k MN Midwest home being $800k, or even a million.
I get CA desirability but there is a simple factor of income and affordability. A property is only worth what people can afford to pay for it.
People making $100k or even $150k a year can NOT afford to pay for a $2million dollar home. But they sure as heck could afford to pay for an $800k home.......
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Jay Hinrichs:
Quote from @Bruce Woodruff:
Well, no one else has mentioned it, so I will......what about the current LA fires and the ongoing mis-managment of the forest and brush? A lot of people in the current fire area had their insurance canceled lately and are really screwed, Reminds me of Florida and the insurance problem caused by the hurricanes.
also thing of the Lahina fire on Maui there was no forest there freak down slope winds and buildings that were built with very dry timber with no fire protection in mind.. this stuff happens.If were gonna use fires as a measure of "good" or "bad" than Canada is hell and most of the country should evacuate because holly-heck do they have fires galore.
Fact is our human spawl has gotten to a point that we build in volume in places that are catastrophe prone. For some reason we human love to try fighting nature, thinking we can "tame" it, despite failing a whole lot at it.
We decided hurricane lane FL was a great place to build metropolis and than cry every time it's damaged. We build in fire cycle prone areas and lament when a fire happens.
Not to mention our building standards remain for most part that of colonial times, why, who knows, we just don't like to embrace brick block and cement for some reason and prefer sticks still.
Hell, even the Amish look at our construction methods and chuckle.
- Lodi, CA · Member since 2021 · 34 posts · 19 votes1y
Quote from @Russell Brazil:
Where do you think people are growing richer with real estate.....Los Angeles or Cleveland? Owning just a few typical properties in California turns you into a multimillionaire very quickly. Owning a few typical properties in Cleveland gets you an extra $500 a month.
😂😂😂 I have "10 doors" (not trying to sling the lingo); it's the easiest way to explain my properties in California. Yes, I am finally questioning my California investments, but what you say is so true that I laughed out loud. I love that you stated it so briefly and succinctly, to. I've always said if you can make it in California, you can make it anywhere, right?
- Lodi, CA · Member since 2021 · 34 posts · 19 votes1y
Quote from @Bruce Woodruff:
Well, no one else has mentioned it, so I will......what about the current LA fires and the ongoing mis-managment of the forest and brush? A lot of people in the current fire area had their insurance canceled lately and are really screwed, Reminds me of Florida and the insurance problem caused by the hurricanes.
I've got "10 doors" in Northern California, and my biggest SFR just had its homeowner's insurance canceled. Now, we have state insurance. It went from $120 a month to $670 a month because of the fires. And now Southern California is on fire. Does anyone want to buy a great rental property in the Napa Valley? It's a cash cow!! Tenants stay for 10-15 yrs. No vacancies. I rebuilt it in 2005-2006 and did a total rehab and massive mold remediation. Cost: $100,000 plus. Then "subdivided it" into 4 units. It's a big house w/attached granny unit and remodeled 1 bedroom garage studio - that's why it makes so much rental income. 15 mins outside of St. Helena.
- Lodi, CA · Member since 2021 · 34 posts · 19 votes1y
Quote from @James Hamling:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @Jonathan Small:
You've raised some valid concerns about California, and it's true that the state faces significant challenges. However, dismissing it entirely based on these issues overlooks several factors that continue to attract people and investment:
-
Diverse Economy: California boasts a massive and diverse economy, far beyond just Hollywood. It's a global leader in technology (Silicon Valley), agriculture (Central Valley), international trade (ports of Los Angeles and Long Beach), and tourism. This economic strength creates job opportunities and attracts talent from around the world.
-
Innovation and Entrepreneurship: California has a deeply ingrained culture of innovation and entrepreneurship. It's a hub for startups, venture capital, and cutting-edge research. This attracts ambitious individuals seeking to build the next big thing.
-
World-Class Universities: California is home to some of the world's most prestigious universities, including Stanford, UC Berkeley, UCLA, and Caltech. These institutions attract top students and faculty, contributing to the state's intellectual capital and driving innovation.
-
Natural Beauty and Diversity: While you mentioned the weather (which is undeniably a major draw for many), California's natural beauty extends far beyond sunny beaches. It encompasses diverse landscapes, including mountains (Sierra Nevada), forests (Redwoods), deserts (Death Valley), and national parks (Yosemite, Sequoia). This offers a wide range of outdoor activities and recreational opportunities.
-
Cultural Hubs: Cities like Los Angeles and San Francisco are major cultural centers, offering world-class museums, theaters, music venues, and diverse culinary scenes. They attract artists, creatives, and people who appreciate a vibrant urban lifestyle.
-
Real Estate Appreciation (Historically): @Dan H. points this out with his bathroom addition. While recent years have presented challenges, California real estate has historically seen significant appreciation, particularly in desirable coastal areas. This has made it an attractive investment for some, though high prices and increasing interest rates are currently impacting affordability.
Addressing your specific points:
- High Taxes: Yes, California has high taxes, particularly income tax. However, many high-income earners are willing to pay these taxes for the perceived benefits of living and working in California, such as access to opportunities, infrastructure, and services.
- Crime and Homelessness: These are serious issues in some parts of California, particularly in major cities. However, it's important to avoid generalizations. Crime rates vary significantly by neighborhood and city. While the homelessness crisis is a complex problem, it's not unique to California and is being addressed through various initiatives.
In summary: While California has its problems, it's not a simple case of "everything else sucks." The state's economic dynamism, natural beauty, cultural attractions, and educational institutions continue to draw people and investment. Whether these factors outweigh the challenges is a personal decision.
San diego, los angeles, and san Francisco violent crime rate is low compared to most large cities outside california. The 3 of them are below Cincinnati, cleveland, and toledo.
The lowest city on the list on wikipedia for violent crime is irvine, CA
https://en.m.wikipedia.org/wiki/List_of_United_States_cities...
Any violent crime is too high but i travel a bit. I feel far safer in the roughest parts of San Diego than i do in many large cities outside CA.
People seldom look at actual crime numbers. What they see is what their media presents to them. A crime in a low crime area may be media worthy but the same crime in a high crime area may be just another day.
in my neighborhood (poway), kids playing doorbell ditch or riding 3 on an electric bike warrants posting on social media and dozens of comments (no exaggeration). Must be nice that those “crimes” deserve so much attention.It is my belief that most RE investors are best served initially investing near their home. After they have some experience they can decide if other markets are likely to suit them better. I believe this is true for high price san Francisco and lower priced detroit and most markets in between.
Best wishes
San Diego, Los Angeles, and San Francisco having a lower violent crime rate than Cincinnati, Cleveland, and Toledo is not an accomplishment by any means. You are comparing 3 cities where you pay one of the highest premiums in the USA to live to 3 of the cheapest cities in the USA. This would be like me telling you my Escalade drives better than your KIA. Duhhhh, of course it does.
I am confused because here is what the data I find says:
Now I'm no expert on the topic but CA is still the only place I've ever been where people pop-out of the scrubery to ask if I want a BJ as entire family is loading back up (including grandkids) from a dinner out......
Only place I felt "safe" in CA was on base. Seems most in CA are rather desensitized to it all. That's my experiences.
MN #'s seem accurate to me. CA #'s, that's been my observation of things. OH, no idea, only ever passed through.
Ummmmmmm...I've lived in California since 1990 and own multiple investment properties there. Over the years, I've lived in South Central Los Angeles (while in design school), West Hollywood, Hollywood, downtown LA, Marina del Rey, Santa Monica, Napa, (in the Napa Valley), Angwin, (also in the Napa Valley) and I currently reside in Lodi, about 2 hours from SF. I have to ask, where did you take your family for dinner? Perhaps you should choose a restaurant in a better part of town next time. 😂 I have never even heard a joke about California that bad, haha! If you need some family-friendly dinning recommendations just ask 👍
-
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Julia Hagen:
Quote from @James Hamling:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @Jonathan Small:
You've raised some valid concerns about California, and it's true that the state faces significant challenges. However, dismissing it entirely based on these issues overlooks several factors that continue to attract people and investment:
-
Diverse Economy: California boasts a massive and diverse economy, far beyond just Hollywood. It's a global leader in technology (Silicon Valley), agriculture (Central Valley), international trade (ports of Los Angeles and Long Beach), and tourism. This economic strength creates job opportunities and attracts talent from around the world.
-
Innovation and Entrepreneurship: California has a deeply ingrained culture of innovation and entrepreneurship. It's a hub for startups, venture capital, and cutting-edge research. This attracts ambitious individuals seeking to build the next big thing.
-
World-Class Universities: California is home to some of the world's most prestigious universities, including Stanford, UC Berkeley, UCLA, and Caltech. These institutions attract top students and faculty, contributing to the state's intellectual capital and driving innovation.
-
Natural Beauty and Diversity: While you mentioned the weather (which is undeniably a major draw for many), California's natural beauty extends far beyond sunny beaches. It encompasses diverse landscapes, including mountains (Sierra Nevada), forests (Redwoods), deserts (Death Valley), and national parks (Yosemite, Sequoia). This offers a wide range of outdoor activities and recreational opportunities.
-
Cultural Hubs: Cities like Los Angeles and San Francisco are major cultural centers, offering world-class museums, theaters, music venues, and diverse culinary scenes. They attract artists, creatives, and people who appreciate a vibrant urban lifestyle.
-
Real Estate Appreciation (Historically): @Dan H. points this out with his bathroom addition. While recent years have presented challenges, California real estate has historically seen significant appreciation, particularly in desirable coastal areas. This has made it an attractive investment for some, though high prices and increasing interest rates are currently impacting affordability.
Addressing your specific points:
- High Taxes: Yes, California has high taxes, particularly income tax. However, many high-income earners are willing to pay these taxes for the perceived benefits of living and working in California, such as access to opportunities, infrastructure, and services.
- Crime and Homelessness: These are serious issues in some parts of California, particularly in major cities. However, it's important to avoid generalizations. Crime rates vary significantly by neighborhood and city. While the homelessness crisis is a complex problem, it's not unique to California and is being addressed through various initiatives.
In summary: While California has its problems, it's not a simple case of "everything else sucks." The state's economic dynamism, natural beauty, cultural attractions, and educational institutions continue to draw people and investment. Whether these factors outweigh the challenges is a personal decision.
San diego, los angeles, and san Francisco violent crime rate is low compared to most large cities outside california. The 3 of them are below Cincinnati, cleveland, and toledo.
The lowest city on the list on wikipedia for violent crime is irvine, CA
https://en.m.wikipedia.org/wiki/List_of_United_States_cities...
Any violent crime is too high but i travel a bit. I feel far safer in the roughest parts of San Diego than i do in many large cities outside CA.
People seldom look at actual crime numbers. What they see is what their media presents to them. A crime in a low crime area may be media worthy but the same crime in a high crime area may be just another day.
in my neighborhood (poway), kids playing doorbell ditch or riding 3 on an electric bike warrants posting on social media and dozens of comments (no exaggeration). Must be nice that those “crimes” deserve so much attention.It is my belief that most RE investors are best served initially investing near their home. After they have some experience they can decide if other markets are likely to suit them better. I believe this is true for high price san Francisco and lower priced detroit and most markets in between.
Best wishes
San Diego, Los Angeles, and San Francisco having a lower violent crime rate than Cincinnati, Cleveland, and Toledo is not an accomplishment by any means. You are comparing 3 cities where you pay one of the highest premiums in the USA to live to 3 of the cheapest cities in the USA. This would be like me telling you my Escalade drives better than your KIA. Duhhhh, of course it does.
I am confused because here is what the data I find says:
Now I'm no expert on the topic but CA is still the only place I've ever been where people pop-out of the scrubery to ask if I want a BJ as entire family is loading back up (including grandkids) from a dinner out......
Only place I felt "safe" in CA was on base. Seems most in CA are rather desensitized to it all. That's my experiences.
MN #'s seem accurate to me. CA #'s, that's been my observation of things. OH, no idea, only ever passed through.
Ummmmmmm...I've lived in California since 1990 and own multiple investment properties there. Over the years, I've lived in South Central Los Angeles (while in design school), West Hollywood, Hollywood, downtown LA, Marina del Rey, Santa Monica, Napa, (in the Napa Valley), Angwin, (also in the Napa Valley) and I currently reside in Lodi, about 2 hours from SF. I have to ask, where did you take your family for dinner? Perhaps you should choose a restaurant in a better part of town next time. 😂 I have never even heard a joke about California that bad, haha! If you need some family-friendly dinning recommendations just ask 👍
I already said, Oceanside.
We were staying in Pendleton (yes, on-base). We WERE in the "nice area". My son-in-law took me for a drive to see the nightmare that is the bus station there, with the hobo's galore. Right off the main drag.
That kind of thing, the homeless, tent camps, there all over the place in CA. I think it's that one just get's desensitized to it over time. I saw it near every beach (except on-base), highways, urban centers throughout CA.
Maybe you don't notice it, but it's notable to others who have experienced life outside of CA and don't have CA as the singular center and whole of the universe in their mind.
I have been all over the world and tour investment markets regularly throughout the US. CA is a standout in this regard.
The only other location that compares in such is South Africa, where "shanty towns" dot the landscape.
So as a NON CA world traveler, that was the "feel" of southern CA; tons of amazing potential and weather, views etc but with 3rd world problems that seem to be accepted and ignored by all.
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- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yIsn't this fire partially because the person in charge of the water for the fire hydrants forgot to turn the water on?
Quote from @Bruce Woodruff:
Whether or not this specific fire was entirely due to forest mgmt, Cali has a problem with this. They fight Federal attempts to remove old wood by suing. I know Fed people that have fought the state over this. It is fairly well known...
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yHmm, me thinks a strong case can be made for "confirmation bias" here. "Since I invest here, there must not be any problems". ;-)
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @Jonathan Small:
You've raised some valid concerns about California, and it's true that the state faces significant challenges. However, dismissing it entirely based on these issues overlooks several factors that continue to attract people and investment:
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Diverse Economy: California boasts a massive and diverse economy, far beyond just Hollywood. It's a global leader in technology (Silicon Valley), agriculture (Central Valley), international trade (ports of Los Angeles and Long Beach), and tourism. This economic strength creates job opportunities and attracts talent from around the world.
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Innovation and Entrepreneurship: California has a deeply ingrained culture of innovation and entrepreneurship. It's a hub for startups, venture capital, and cutting-edge research. This attracts ambitious individuals seeking to build the next big thing.
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World-Class Universities: California is home to some of the world's most prestigious universities, including Stanford, UC Berkeley, UCLA, and Caltech. These institutions attract top students and faculty, contributing to the state's intellectual capital and driving innovation.
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Natural Beauty and Diversity: While you mentioned the weather (which is undeniably a major draw for many), California's natural beauty extends far beyond sunny beaches. It encompasses diverse landscapes, including mountains (Sierra Nevada), forests (Redwoods), deserts (Death Valley), and national parks (Yosemite, Sequoia). This offers a wide range of outdoor activities and recreational opportunities.
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Cultural Hubs: Cities like Los Angeles and San Francisco are major cultural centers, offering world-class museums, theaters, music venues, and diverse culinary scenes. They attract artists, creatives, and people who appreciate a vibrant urban lifestyle.
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Real Estate Appreciation (Historically): @Dan H. points this out with his bathroom addition. While recent years have presented challenges, California real estate has historically seen significant appreciation, particularly in desirable coastal areas. This has made it an attractive investment for some, though high prices and increasing interest rates are currently impacting affordability.
Addressing your specific points:
- High Taxes: Yes, California has high taxes, particularly income tax. However, many high-income earners are willing to pay these taxes for the perceived benefits of living and working in California, such as access to opportunities, infrastructure, and services.
- Crime and Homelessness: These are serious issues in some parts of California, particularly in major cities. However, it's important to avoid generalizations. Crime rates vary significantly by neighborhood and city. While the homelessness crisis is a complex problem, it's not unique to California and is being addressed through various initiatives.
In summary: While California has its problems, it's not a simple case of "everything else sucks." The state's economic dynamism, natural beauty, cultural attractions, and educational institutions continue to draw people and investment. Whether these factors outweigh the challenges is a personal decision.
San diego, los angeles, and san Francisco violent crime rate is low compared to most large cities outside california. The 3 of them are below Cincinnati, cleveland, and toledo.
The lowest city on the list on wikipedia for violent crime is irvine, CA
https://en.m.wikipedia.org/wiki/List_of_United_States_cities...
Any violent crime is too high but i travel a bit. I feel far safer in the roughest parts of San Diego than i do in many large cities outside CA.
People seldom look at actual crime numbers. What they see is what their media presents to them. A crime in a low crime area may be media worthy but the same crime in a high crime area may be just another day.
in my neighborhood (poway), kids playing doorbell ditch or riding 3 on an electric bike warrants posting on social media and dozens of comments (no exaggeration). Must be nice that those “crimes” deserve so much attention.It is my belief that most RE investors are best served initially investing near their home. After they have some experience they can decide if other markets are likely to suit them better. I believe this is true for high price san Francisco and lower priced detroit and most markets in between.
Best wishes
San Diego, Los Angeles, and San Francisco having a lower violent crime rate than Cincinnati, Cleveland, and Toledo is not an accomplishment by any means. You are comparing 3 cities where you pay one of the highest premiums in the USA to live to 3 of the cheapest cities in the USA. This would be like me telling you my Escalade drives better than your KIA. Duhhhh, of course it does.
The post i was replying to implied a serious crime rate in CA cities. That is not true.
i also do not associate crime rate with cost of living and find it interesting that you do. If you look at the list, there is not a strong correlation between price and violent crime rate but more important, the large california cities are lower than most large cities in other states. The stats seem to indicate there is not a violent crime issue in large CA cities that some people believe exists. They have that belief in large part due to media sensationalizing certain crimes. The violent crime stats tell a different story.
best wishesWhat kind of person doesn't associate crime rate with cost of living? Of course one would and should assume that the cost of a property in a "safe neighborhood" would be more than the cost of a similar property in a "dangerous neighborhood." That's common sense.
I agree on a neighborhood basis. In general higher cost neighborhoods are safer than lower cost neighborhoods. Howevr, look at the stats on a city basis. There are LCOL cities with low crime rates and HCOL cities with high crime rates. There is not a tight coupling between price and violent crime rates. for example denton texas has one of the lowest violent crime rates. I highly suspect few people consider it a HCOL city. As indicated the correlation of LCOL cities having high crime rates and HCOL cities having low crime rates appears to not be strong.
Ca large cities have lower violent crime rates than many cities in other states that are a similar size.
California has the highest rate of investor homes in the nation because of the returns that can be achieved. There is nothing that trumps the return on why it has so many investor owned homes. Great appreciation, great cash flow on long holds, great value add opportunities, good tenants in most areas (my city delinquency and eviction rates are near the lowest in the country). There are lots of ways to make money in CA real estate for those that know what they are doing.
However, i recommend newbies start in or close to their home market. They need to identify the possibilities in their market. After that if they believe CA is the right market for them, they can join the plethora of investors that invest from all over the world in CA RE.
good luck -
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @James Hamling:
Quote from @David Song:
CA, especially the Bay Area and other population centers, are great investment locations. The price is much more expensive than Midwest, but the yield or cap rate, particularly commercial properties, are similar to Midwest.
SFR may have a lower cap, in good area. However, if you are willing to go to the Central Valley, the price there are not much higher than the Midwest.
I only buy in CA, only in Bay Area.
I'm not gonna say your wrong David, but everything I know and have heard says your way-wrong.
I will lend an example via data.
Here in the "Midwest" of MN, we are getting $2,500 - $3,500mnth rents on "bread & butter" SFH. The purchase cost is on average $350k - $450k. That's new built or nearly new, so we don't have to run down the rabbit hole of condition costs.
In areas of sub 3% vacancy rates. Nobody should be shocked by this or argue it, it's the reality of shortage market.
Now I go to S.CA and randomly looked up similar property rental.
I randomly got 3208 39th St, San Diego, CA 92105
It's listed rent is $3,795. Yup, a touch higher than here in the Midwest. But the kicker is it was purchased Feb 2020 for $1,078,066
That gross rent revenues too price ratio of 4.2%
Vs here in Midwest a "median" ratio of the above of 9%.
I don't know about your idea of maths but to me that says Midwest performs at 2X of CA.
Now let's talk appreciation. Which 3br+ SFH do we think has more room to appreciate? One priced at a million+ dollars, or one priced at $400k?
Now keep in mind, median household income here in MN midwest and CA is almost exactly the same, just over $100kyr. So people are making almost the same incomes, which property has more room to appreciate going forward?????
It jumps out as rather obvious to me. I don't see this CA home having a sellable market value of $2million+ dollars in coming years but I sure as heck could see that $400k MN Midwest home being $800k, or even a million.
I get CA desirability but there is a simple factor of income and affordability. A property is only worth what people can afford to pay for it.
People making $100k or even $150k a year can NOT afford to pay for a $2million dollar home. But they sure as heck could afford to pay for an $800k home.......
james I used your logic when I sold one of my homes in Palo Alta Ca. how could a 900 sq ft 3 and 1 go any higher than the 500k I sold it for in 91 ? Well last time it traded it sold for 3 mil or so.. 684 Encina Grande if you want to check it out.. now to be fair they added on to the back and added one bath so it was now a 3 and 2 :) I paid 180k for it in mid 80s huge sum then.. or at least I thought.. location location location
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Bruce Woodruff:
Whether or not this specific fire was entirely due to forest mgmt, Cali has a problem with this. They fight Federal attempts to remove old wood by suing. I know Fed people that have fought the state over this. It is fairly well known...
Every state and up into British Columbia has issues with fire.. its not a CA only problem I mean I spent 10 years in the timber business in the Northwest.. And have logged in CA OR and WA.. CA does prescribed burns all the time.. Look at Mount Konocti in Lake Co. CA its solid brush that is 5 to 15 feet tall and you can hardly walk through it.. they will burn it every few years to keep first from raging.. the brush is so thick one pilot who lost an engine put it down on the brush and it was like landing on a brillo pad no injuries :)
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