From: rcarter@gaudi.nas.nasa.gov (Russell L. Carter)
Subject: What's it worth? [ was Re: One Man's Survey ... ]
Keywords: lemmings madding crowds
Organization: NAS, NASA Ames Research Center, Moffett Field, CA
Date: Thu, 30 Jul 92 17:20:03 GMT
Summary: Invest in yourself, not in your bank
Distribution: usa


Since this is 'misc.invest.real-estate', and this thread started off
about the differences in the cost of housing between Cal. and places
elsewhere, *and* it seems to have drifted into the standard you-get-
what-you-pay-for spiel, I thought I'd add my two-pieces-o'-copper's
worth.

I work near Palo Alto, CA, and I live on the Embarcadero in San 
Francisco, with a beautiful view of a marina and the Bay Bridge
when I walk out the door.  The weather is fantastic.  The City's
air is clean, at least.  I don't see much crime.  The movie
theatres are wonderful, walking to North Beach is divine, biking
home from a Cecil Taylor concert at Grace Cathedral is Valhalla.
The bars are most gratifying in their variety and congeniality.

I've been to wonderful deserted beaches in half-a-dozen places,
climbed every mountain on the coast, discovered empty campgrounds
with running streams canyon-emptying into a red sunset-lit sea.

I guarantee that I've been places that are both beautiful beyond
compare, and unvisited by the other California posters, and no,
I'm not going to even hint where they might be.

It's been great.  Is it worth it?  Should I plan to grow old here?

Probably not.  Ya see, California-provincialites, there are other
things to life than watching (for a fee) other people do things,
and looking at interesting scenery, and enduring unending unstimulating
air-conditioned neutralized disembowled weather.  My problem, I
guess, is that I've lived all around the bottom edge of this country,
and I've experienced civilized communities outclassing anything I've yet
encountered after three years of CA, in places as disparate
as Wilmington NC, Gainesville Fl, Atlanta GA, Austin TX, Bisbee AZ,
Tuscon AZ, Moab UT, and Durango CO.  Of course, this is civilized
living created by people, and that requires, well, a bit of
civilization.  It doesn't grow on trees, or mountains, vinyards,
or beaches.  And wonderfully, it is not correlated to housing
costs.  (Oh all right, I'll sneer: quality living almost seems
inversely related to housing costs, in my experience)

And so I've reached the conclusion that it is possible to deceive
great numbers of people, whole metropolises, in fact, with
superficial attributes like 'great vus', nice weather, nice scenery.
So California-provincialites, pay your 3X housing costs (well actually 
four, except for Atlanta and Austin), enjoy your dual-income top-tax-brackets
oh-my-god-I-better-keep-this-job so-what-if-it's-two-hours-a-day-
bumper-to-bumper look-at-that-vu gotta-drive-to-daycare gotta-drive
to-get-take-out gotta-drive-three-hours-to-recreation lifestyles; 
I had fun wearing that hat, for a little while.  Just don't tell me 
it's worth it in the long run.

California:  Great place to visit, shitty place *to live*.

Clearly, the intangibles that are purported to contribute to the 
high absolute and historically monotonically increasing prices 
don't influence me very much when I look at values.  When I look at 
values, here is what I see in California.

If I had bought a flimsy 2-1 "starter home" for $220k a couple
of years ago, like I was contemplating, I would be *real* worried
right now.  All those unskilled people piling in, and all those
skilled jobs leaving.  Housing costs have historically been
volatile in many parts of this country, with (temporary) losses
of up to 50% of the purchase prices of houses.  This hasn't
happened so far in California, but there is absolutely no reason
to suppose that California is exempt from this volatility.
Given the financial incentives long term owners have to sit on
their (diaphanous) equity, one might expect that there would be
a lag of indeterminate but presumably modest length before factors
such as the poor economy, a rotten education system, bad air, 
the cost of living, and deaths start to drive the supply of
houses up and the prices down.  This lag seems to have happened.
One wonders, can you short real-estate?  What are the techniques?

Russell