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I am very close to giving up on housing. Not for affordability reasons but mostly because of the current deficit facing California. We are rounding the corner (<1 yr) to freeing ourselves of ALL debt (car, student loan, CC) the money that have we saved so far is parked in the savings account. I have a feeling within in next couple years we will be buying a home....just not in CA. Knowing that we can pick and move at any time to chase a good opportunity is more compelling than buying a home in a down market.

Next week all the trial balloons become solid proposals. There are two; home mortgage deduction and prop 13 commercial that by their mere mention will cause irreparable harm.

I considered getting out in late '05 early '06 but settled for liquidating all my non-personal use real estate. Now I'm in my 40s so there's enough time to recover from the rest but were I even 5 years older the math would have changed favoring leaving. That's a lot of people even if most weren't thinking bubble, enough were.

My wife and I have spent most of our lives working and saving to have the finances to be able to make the stay or go decision independent of our home value, so it's all going to come down to whether we like where we're living enough to stay for as long as we're physically able compared to someplace else we might like better. All our potential "might like better" places have much lower home prices than CA metro areas because they are not employment centers...except for jobs that cater to the needs of retirees.

I have looked hard but can only come up with 1 city in Australia that I like better. Don't even know if I can own there but could get oceanfront with cool town for 500k.

I will modify your question to include "what will it take not to move back".

I have been stuck in Seattle for 10 years now (wife previously worked for the evil empire) but now she is on her own and doing well (I have been on my own for the entire time) we are doing everything to come back (I went to UCSD). But it is truly scary as is to move there given all of the increase in costs; we have a $1500 mortgage (bought 9 years ago), no income tax, property tax is $4300 a year, cost of living is a tad lower. Buying the 1.5 million house I want means going to an $8000 mortgage, more insurance costs, greater cost of living, 10% state income tax; but it will all be in San Diego!

So will a 10% property tax make a difference?
So will a 12% state income tax make a difference?
Will $8 a gallon gas make a difference?
Does declining home prices make a difference?

Probably, yes, no, and assuredly.
The taxes could indeed become brutal; might cause me to just visit more often. Increase in cost of gas is nominal given that we work out of our home and would be felt here too.
But all that could be overlooked if the 1.5 buys me 50% more house and land or the same house only costs me 1.1. So with a tad bit of guilt for wishing bad on someone else...bring on the housing crash! 50% decreases and we'll pack up our bags and move away from here.

We've lived in enough other areas of the country to know that we will never live anywhere outside of California ever again. It only takes a couple of days of visiting other areas before all the negatives of that area come flooding back to us.

Our real preference is to live in Northern Calif, but we made the trek to SoCal for employment reasons. After 20+ years down here, we have adapted and grown to love the conveniences that a large metro area offers (though it's hard to get used to all the Republicans!).

Others who don't yet own or who don't have a ton of equity, we sympathize and feel your pain (we have kids in that boat). We would probably be thinking hard if we were in your shoes. But we're not. This is our permanent home. Period.

Never. This place is phenomenal especially if you are ocean oriented. I agree with Todd about Australia but for those of us who are from here it would be difficult to sever those ties. Despite taxes, gas or whatever.

I have lived in Northern California and Los Angeles and literally travelled around the world to every continent. For me personally, I think San Diego is as good as it gets in the US.

Who knows, maybe a large exodus might be a good thing. I don't think anyone wanted the growth to continue in San Diego like it was.

I will be staying in San Diego and in real estate for the long run.

We sold our house in Clairemont in 2005 (luckily) and moved to Wilmington, North Carolina. Wilmington is a nice small town with a university right next to a very nice beach. We had a 3800 SF house with a marsh view, only 2 miles from the beach and we both had good jobs. It was fine, but having your money go further isn't everything. If the finances just wouldn't work in San Diego and if we were going into debt or if we were just stressed out about money all of the time, living somewhere other than San Diego would be the call.

However, knowing it was going to cost us a lot more to live, we opted to come back to San Diego earlier this year for the quality of life. The east coast is ok, but everyone tends to live for their 2 weeks of vacation, always looking forward to the next bit of time off. In San Diego, you have more to do every weekend than is possible and your recreation opportunities year round are incredible. I love flying back home to San Diego after a trip and hearing the buzz on the plane of all of the people that are excited to visit on vacation - it makes me appreciate being here full time. While it takes a lot more money to live here, I have to remind myself that as long as I'm not being irresposible with saving for retirement, debt, etc., you can't take your money with you when you die and you could die next week.

I'll take being able to go for a jog along the ocean in La Jolla every afternoon after work over scrapping and saving all year for a one week vacation anytime.

I like California, but public spending and already high taxes are on a collision course. The Vallejo bankruptcy is just the first of a tidal wave if nothing is done to contain public sector spending and payrolls.

We sold our house when the last child went off to college, and have rented since then. Very happy with that decision, mostly because we have complete flexibility, we're not tied down to a piece of property that might not be easy to sell. So if California becomes a "tax hell", as I fear it might, we'll be out of here. I'm not prepared to eat hot dogs and beans so the government employees can live the good life on my dime.

People leaving CA? Good. Less traffic & less pollution for me.

As for me, leaving CA? Are you kidding? Leaving all this surf, sun, beach, golf, endless summer, Hollywood, Melrose, Beverly, Montecito, Santa Barbara, Napa valley? No way. Where else can you ski & surf all in one weekend? Seriously, when we used to live in LA we would go to Frazier Park early in the morning so the kids can play in the snow then drive back & watch the sun set at Santa Monica beach in the evening. This is as close as it get to heaven for me.

We are going to retire here, you can bet on that. :-)

"I'm not prepared to eat hot dogs and beans so the government employees can live the good life on my dime."

Then you must really be looking forward to Obama!

Unless you're really poor or really rich, you can probably count on having to purchase a larger proportion of budget food during the next few years.

Leaving all this surf, sun, beach, golf, endless summer, Hollywood, Melrose, Beverly, Montecito, Santa Barbara, Napa valley?

I don't know how the bolded three got on that list. They are nothing more than arm-pits.

I think housebuyer listed these as CA places with entertainment value, like Sea World or Disneyland.

I don't think many people are aware that you can transfer your Prop 13 tax basis to another property. So properly informed, I think a lot of people in Santa Clara might want to downsize to a San Diego condo, get some money in the bank and keep their property tax basis (see example in website below).

http://www.wwlaw.com/prop60.htm

If I leave San Diego - it will be for Irvine.

Surveyor,

Thanks to you and those who emailed me about mentioning the benefit of those over 55 taking their old tax basis with them.

I have seen and heard very few people take advantage of it. It only applies to these counties: Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara, and Ventura, all high-dollar areas.

The reason older folks would move is to get their hands on all their equity - they want to buy way down. Moving from Carlsbad to Vista isn't enough of a change, price-wise, to make it worth it. You have to move from Carlsbad to Kingman to get your money's worth.

The Prop 60/90 would be an fantastic idea if all the counties in the state accepted it = then you could move to the boonies and at least stay in California. But that is not the case, so the benefit is muted, to say the least.

I'm all for eliminating Prop 13 protection on second & invetment homes, with the exception of multi-family rentals (so the tenants don't get "priced out" of their homes either).

It's funny that some people want to push people out of their own homes so they (the newbies) can move in. If we don't believe in private property rights (esp for primary residences), why buy?

The long-time owners have already paid their dues. It was THEIR money that built all the existing infrastructure. The increased burdens are caused by all the people moving here from other places, and they should be the the ones paying for their costs. Most Prop 13 money goes to schools, and the old-timers are NOT the ones using up all the resources.

I do NOT believe in pricing people out of their own homes, so very much in favor of Prop 13. However, we could certainly raise rates on secondary homes and should eliminate the protections used by commercial RE owners when selling (selling corp to avoid resetting tax basis).

Anyway, older people can transfer their Prop 13 taxes to another residence in most counties, so it's not Prop 13 that's keeping them in THEIR OWN homes, it's wanting to stay in THEIR homes which are surrounded by familiar people and places and decades of memories. Have no fear, when they pass away, you can have your "freed up" inventory. Either their kids will move in (freeing up wherever they lived), or rent them out (preferably w/o Prop 13 protection), or they will sell them.

In the meantime, as prices fall, taxes are falling with them. It's the buyers who CHOOSE to pay high taxes because they are CHOOSING to pay high prices.

Actually, there are very few counties that participate in the transfer, and as Jim mentioned, they're all high-price areas. If Prop 90 had been statewide I might never have moved out of my $120k starter home so that I'd be able to take the tax basis with me to Mendocino or Humboldt County on retirement. What's the point if all you can do is move within or between the SD, LA or SF areas?

Just for everyone's information, and it can change at any time, but the current counties participating in the Prop 90 tax basis transfers:
************

"I plan to relocate from Los Angeles County to San Francisco County, but San Francisco County says they don't allow base year value transfers from another county. I thought there was a law that allows that.
The law that allows for transfers of base year value between counties merely authorizes each county board of supervisors to adopt an ordinance accepting transfers from other counties. It is the discretion of each county to allow such transfers. The county in which your replacement property is located must have an ordinance that accepts intercounty transfers.

As of January 2007, the following seven counties in California have an ordinance enabling the intercounty base year value transfer:

Alameda Orange San Mateo Ventura
Los Angeles San Diego Santa Clara"

http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm#17

I left California once, in the mid-90's, and spent 10 years in Tucson. I still like Tucson, and might eventually consider retiring there, but California, despite high taxes and high cost of living, still means way more income. I took a cut in pay of about 15% when I moved, and had only regained it after 10 years in the Tucson labor market. When I moved back to California, my salary doubled, and it's now another 7% higher in just 4 years.

I got an asset manager from Countrywide on the phone today, and while he was inputting on his computer, I had to ask him how many files he was working on currently.

Answer? 408, as of this morning.

I'm in Vancouver on business for a couple of days and it's beautiful. But, I would personally never leave SD. There's just something about 350+ days of sunshine a year that keeps me tied down.

I'm originally from LA. I lived in Paris for 2 years, NY for 7 years, and Pittsburgh for 4 years. I've visited other parts of the country at different parts of the year,and I must say, I am looking forward to buying my starter home in San Diego and staying here forever. The high cost of living is the premium we pay for living in one of the nicest places around.

San Diego has a diverse and unusual job market. There would be few other places in the country where both my wife and I could get jobs as good as we have here, and there's no way I'm moving to the East Coast.

408? Already foreclosed and waiting to get an agent and MLS listing? Rather a lot really. A lot of us have been speculating about a little inventory manipulation that would get lost in the confusion of the takeover.

They have 60 asset managers in Simi too. 408 x 60 = 24,480.

Another AM told me that they have 45,000 in the system, and I found out today that they have another center in Chandler, Arizona - maybe the other 20,000 are processed there?

I need to ask more questions to get down to what's really happening, stay tuned.

I'm going to keep this stuff buried deep in the comments though. I already got flagged for using 'derogatory' language for calling a set of realtors/former owners 'deadbeats' for refusing cash-for-keys and working the system for free rent (two months worth so far, without an eviction notice).

"Flagged" by whom? By CW or another entity that can affect your business?

2:1 Simi vs. Chandler seems about right.

As to the implications... mien gott! It makes a perverse sense on a number of levels. Bottle up all the same issues in one point in the process to facilitate taking inventory for the takeover. Those of us less generous might call it putting all the unwanted kittens in a burlap sack for a drive over the river to their new jobs. It could be as simple as nervous AM depts ensuring job security with a puffed up workload.

As to the professional association who protects (hah!) their image with a registered copyright, do what Tanta does, call 'em Realitters. Let them threaten over the idea that realitter is deragatory. They'd have to claim ownership of that word as well. Then you get to go to court with thousands of examples of the difference between Realtor and Realitter that''ll have the jury in stitches. Then as the coup de gras, bring up the NAR code of ethics and oh say, the first 100,000 examples of it not being applied. They lose the right to use Realtor as a registered trademark because they obviouslt don't protect it themselves. You'd be an internet hero and be able to leverage that fame for your business.

A possible growing trend - a number of friends have bought a small home/condo in Nevada and have made that their official residence. . .they plan to just rent a place here in San Diego, or buy a small condo and split their time. . .the big savings for a lot of us in high income groups is NO Nevada income tax. . .for some of us it is over 15K a year difference between CA and NV. Also, other taxes there are lower.

I love CA, but my main concern going forward it the State budget problems - they have been pushed off into the future one too many times, and either taxes will have to soar, or spending cut to the point of riots.

Mark in SD,I guarantee you the number of individuals who get a Nevada address to avoid state income tax is nothing new, high income individuals like yourself have been doing it for decades. Google "vegas PO box" and you will see it is actually an industry in itself, they have individual street addresses (no PO or unit box#).

I don't care what it costs. I'm moving back to San Diego.

Here's an example to illustrate how Prop 13 and cap gains discourage empty nesters from downsizing.

Location; Cupertino (still a seller's market, BTW)

Purchase Price: $450K (1988)

Comparable Value: $1.2M (2008)

Downsizing from a $1.2M house to a $600K house in a non-participating county could increase property taxes by 33%. On top of that, the sellers would have to pay cap gains on their appreciation. A couple would have to pay cap gains on $250K. A single owner would have to pay cap gains on $500K. Those are significant disincentives to moving.

By discouraging retirees from moving away from job centers, our government makes job center real estate more scarce, driving up the cost of living which in turn affects our ability to compete in a global economy. Prop 13 was sold as a noble effort to keep retirees from being priced out of desirable neighborhoods like Cupertino, but the impact has gone beyond that simplistic objective.

As for capital gains taxes, I'm all for taxing the heck out of short term stock investors (anything under two years isn't investing in the health of a business, it's legalized gambling) while sparing homeowners who spent 15 or more years contributing to their community. Instead I'm hearing that capital gains taxes might be increased, which would create an even greater disincentive to downsize in retirement.

I don't want to force retirees into undesirable locations, but they should be able to live in nice areas that aren't centered around employers and they should have access to the appreciation they earned over many years without feeling like the government is stealing it from their heirs.

I am thinking about leaving due to the disaster that is state and local budget mismanagement, and the corresponding tax hikes they are likely to bring. I will likely hold my condo in CA, however, as a rental income property. I do like the climate and the environment in California, but the enormous level of financial irresponsibility at the state level, coupled with the fact that I make above the poverty level in income, virtually assures that if I stay, the state will try to bleed me dry. I could certainly see retiring to CA, though... the laws strongly favor people without jobs living in CA, so that could work well.

just thought I'd give everyone an update...

The housing bubble is about 2 years behind sd in Vancouver. All I can see is construction and people talking about flipping houses.

Interest rates are about 4.5 to 5.0 percent up here so that explains some of what's going on. But you definitely need 20% down.

It weird to be in a city that's booming economically again

Are you in Vancouver WA, or Vancouver BC? If BC, did they ever have subprime mortgages in Canada?

Vancouver canada

From what I understand they have low interest rate mortgages but I have not heard about any zero down io type loans. The people I spoke with said mortgages need to have ten to twenty percent down.

If I was looking to flip homes I'd do it in Vancouver. They seem to be around 3-4 years behind sd.

I'm wondering if they even had a bubble in Canada, or if any gains they saw in recent years were actually a genuine result of their normal economy at work. The US housing bubble was almost entirely fueled by timebomb lending, and I've yet to hear any news reports of similar loans or similar crashes outside the US, though that may just be our news media ignoring the rest of the world as it often does.

We already left. Not just because of the housing, but it was a contributing factor. I didn't see us buying a decent home in the good school districts inspite of about 140K a year.