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May 17, 2017

2017 Housing Market Red Flags

by Bob Schwartz

2017 Housing Market

The rise of HELOCs and shrinking down payments …

From housing prices to outrageous government pensions and an unbelievable underfunded state pension program  that is never talked about . . . Nothing in California  is rooted in good economics.

2017 Housing Market

San Diego real estate - 2017 Housing Market

The latest, just pased, huge California gas and vehicle registration fees are estimated to add $400-$500 in additional cost for every California motor vehicle owner! It seems to me that the main purpose of the California legislature is to pass new laws and restrictions to raise  taxes and fees and increase the government bureaucracy. The only good news on this front, is that there is a People’s uprising to fight the latest gas/registration fee increases which are scheduled to go into effect this November. to get involved and stop the gas tax and vehicle registration fees, visit this site.

The California state governments quest to reduce its citizens disposable income is definitely a factor in not only making it more difficult qualifying for the average California home, but also to force people to pack into urban areas with the ultimate goal of reducing  dependency on the automobile. It would also seem that the other goal of California’s political social engineering, is to see the demise of the single-family home.

It looks like more and more California construction (as far as the residential real estate real estate market goes), is focused on high density condominium style units. Perhaps, I’m being too cynical here, but if these trends continue, in 20 to 30 years the only people who may own a single-family detached home in California will be government bureaucrats.

 Stanford University’s pension study had California’s total pension debt at $1 trillion or $93,000 per California household in 2015.
San Diego home appreciation    2017 Housing Market Red Flags
 Let’s bring it home, and look at some top government salaries ( The City of San Diego does not provide the cost of pension benefits on an employee level and, as such, the “total benefits” value reported is incomplete and significantly understated) here in San Diego:

job title                                                                   total pay and benefits

Chief Operating Officer                                                 $319,235.00
Fire Captain                                                                     $305,420.00
Fire Captain                                                                     $299,322.00
Retirement Administrator                                            $280,423.00
I could go on and on with this list, but I think you get the idea there are dozens and dozens of San Diego city employees earning well over $200,000 a year in total pay and benefits!
When one looks at California and some of the highest pension payouts, some of these numbers are unbelievable . . . But they are true and public record:
One Los Angeles deputy police chief, after 33 years of service has total pension benefits that amount to $1,473,823.20
There’s an assistant Fire Chief in Los Angeles that retired just short of 33 years of service and has pension benefits of $1,457,638.62
A Los Angeles deputy fire chief retired in 2011 with pension benefits of $1,244,822.61
I’m going to skip down the list and go to an interesting job title of Boat Mate for the Los Angeles fire Department. The person with this job title retired in 2011 at just $918,376.54 in pension benefits!
Sure, I could go on and on with outrageous salaries and pension benefits paid out to California government workers, but it would run on for pages and pages. If you’d like to see what some of the California government salaries and pension benefits are you should take a look at a site called transparent California
When interest rates raise most people who qualified previously for a home mortgage will not quality for the same loans … When rates go up, all other debt like student debt, auto loans, credit card, personal loans will also become expensive … many people will be out of job … 2007-2008 may only a trailer of the real horror movie … The real bubble is the Debt bubble that is bound to explode!

 

2017 Housing Market

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